See the post at https://www.cnn.com/2023/02/27/politics/us-student-loan-debt-timeline/index.htmlJim Shenwick, Esq.  917 363 3391   jshenwick@gmail.comAt Shenwick & Associates we help people and businesses with too much debt!Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15min

The Western District of Texas crosses two time zones, has a population of 7.6 million and contains 93,000 square miles.  It is larger than the State of Oklahoma but smaller than the State of New Mexico. It contains the 7th, 11th and 24th largest cities in the United States (San Antonio, Austin and El Paso respectively). Since the Bankruptcy Code was adopted, the Western District has been served by 12 judges.  The judges of the Western District have come from San Antonio, Houston, Waco and El Paso. I have appeared in front of nine of them (which will increase to ten as soon as I appear in front of Judge Robinson).Bert W. ThompsonBert W. Thompson was born in 1917. He served as a Bankruptcy Referee from 1971-1979 and a Bankruptcy Judge from 1979-1985. He commanded a PT Boat during World War II.  After the war, he returned to San Antonio where he was an Assistant Criminal District Attorney, secretary to the mayor, Manager of LaVillita, City Judge for Terrell Hills, Special Assistant U.S. Attorney and Enforcement Director of the Office of Price Administration. He passed away in 2001.Joseph C. ElliottJoe Elliott served as a Bankruptcy Referee from 1975-1979 and a Bankruptcy Judge from 1979-1986. He clerked for U.S. District Judge John Wood and worked for the San Antonio firm of Plunkett & Gibson, Incorporated. He became a Bankruptcy Referee in 1975 at age 33. The Elliott Cup is named in his honor. R. Glen AyersR. Glen Ayers was born in 1947. He served as a Bankruptcy Judge from 1985-1988. He was commissioned as an armor officer in the United States Army. He received his law degree from the University of South Carolina in 1975. He taught law at the University of Mississippi and St. Mary's University School of Law. You can find a tribute to Judge Ayers written by Bankruptcy Judge Craig Gargotta and Dick Davis here. My post about him can be found here. He passed away in 2017. Larry E. KellyLarry E. Kelly was born in 1946. He served as Bankruptcy Judge from 1986-2007. He served as a communications specialist in the Navy for three and a half years. He graduated from Baylor Law School in 1974 and practiced with Pakis, Cherry, Beard & Giotes until he was appointed to the bench in 1986. He shepherded the implementation of CM/ECF in the Western District as one of the beta testing districts in the county. The Larry E. Kelly Inn of Court is named in his honor. I wrote remembrances of Judge Kelly which can be found here and here. He passed away in 2014 (but only after he finished grading his final exams for the semester).Leif M. ClarkLeif M. Clark served as a Bankruptcy Judge from 1987-2012. He earned a M. Div. (with Honors) from Evangelical Lutheran Theological Seminary in 1972 and earned a law degree from the University of Houston Bates College of Law in 1980. He worked at Cox & Smith, Inc. in San Antonio before taking the bench. I wrote two posts discussing some of his 300 opinions here, and here While a sitting judge, he was a trainer and program designer for the USAID Judicial Training Program in Romania, Latvia, Poland and Ukraine. He also taught U.S. Constitutional Law to students in Austria.  Since retiring, he has served as a mediator, arbitrator and consultant.  Ronald B. KingRonald B. King was an active Bankruptcy Judge from 1988 to 2021. He graduated from UT Law School in 1977, then clerked for Justice James G. Denton of the Texas Supreme Court. Before taking the bench, he worked for Foster, Lewis, Langley, Gardner & Banack, Inc. He took the bench at age 35 which made it possible to serve for 33 years.  Since taking senior status, he has continued to hear cases and serve as a judicial mediator.  He was featured in the Bankruptcy Law Section Newsletter of the State Bar of Texas which can be found here. Frank R. MonroeFrank R. Monroe served as a Bankruptcy Judge from 1989 to 2009. He graduated from the University of Texas School of Law in 1969. Prior to being appointed as a judge he was a partner with Sheinfeld, Maley & Kay in Houston, where he served as managing partner. During his tenure on the bench, he was the presiding judge over a multitude of cases including real estate related cases and golf courses to name a few. After retiring, he practiced with Graves, Dougherty, Hearon & Moody in Austin.Craig R. GargottaCraig R. Gargotta has served as a Bankruptcy Judge since 2007. He graduated from St. Mary's School of Law in 1989.. Prior to taking the bench, he was a law clerk to Bankruptcy Judge Ronald B. King and was an Asst. U.S. Attorney from 1990-2007. He is currently the Chief Judge for the Western District of Texas and holds court in San Antonio. He taught at St. Mary's School of Law from 2002-2006.H. Christopher MottH. Christopher Mott has served as a Bankruptcy Judge since 2010. He graduated from Texas Tech Law School in 1983. He practiced law with the firm now known as Gordon, Davis, Johnson and Shane in El Paso, Texas for 27 years. I wrote a profile of him here.  Judge Mott presides over cases in the Austin and El Paso divisions of the Western District of Texas. His chambers in El Paso include a holding cell left over from when the U.S. District Court occupied the premises. He refers to this as the "Pancho Villa Conference Room." Tony M. DavisTony M. Davis has served as a Bankruptcy Judge from 2013-2023. He received his J.D. from the University of Virginia School of Law in 1983. He spent much of his legal career as a partner at Baker Botts, LLP in Houston, Texas. I wrote a profile of him here which discusses his career prior to taking the bench.  Judge Davis's opinion in In re D'Avila, 498 B.R. 150 (Bankr. W.D. Tex. 2013) was later followed by the Fifth Circuit in Hawk v. Engelhart (In re Hawk), 871 F.3d 287 (5th Cir. 2017) and Lowe v. DeBerry (In re DeBerry), 884 F.3d 526 (5th Cir. 2018).Michael ParkerMichael Parker has served as a Bankruptcy Judge since 2021.  Judge Parker holds four degrees: B.S. in engineering from the University of Colorado; M.S. in engineering, M.B.A., and J.D. from U.T. Austin. He graduated from the University of Texas School of Law in 1993. He clerked for Judge King from 1993-1995 and worked for Norton Rose Fulbright for the entire time from when he left his clerkship until he took the bench.  I wrote a profile of Judge Parker here.  Judge Parker holds Court in San Antonio and Waco.Shad RobinsonShad Robinson is the newest judge in the Western District of Texas, having taken the bench on February 21, 2023. He received his law degree from Baylor University Law School in 1999. From 1999 to 2000, he was a law clerk for the Honorable Leif M. Clark, retired United States Bankruptcy Judge for the Western District of Texas-San Antonio. He has also served as an Adjunct Professor at Baylor Law School for over 18 years.  He practiced with Haley & Olson in Waco, Texas and was General Counsel for Alliance Bank Central Texas. Judge Robinson holds court in the Austin and Midland divisions. I hope to have a profile for him soon.  

Question: What do Akorn Pharmaceuticals and the Corner Bakery Café have in common? Answer: Both recently declared bankruptcy.  The economic uncertainty brought on by the global pandemic has led to an increase in bankruptcy filings, with companies and individuals alike struggling to stay afloat. Meanwhile, the Chicago Loop Alliance says office occupancy is only about half+ Click Here For Read More The post With bankruptcies expected to surge, here are 5 tips to stay solvent appeared first on David M. Siegel.

 Falling behind on federal student loans can lead to other major financial problemsA story on CNBC reports that "more than 80% of borrowers who experienced default stated that they’d faced at least one additional consequence as a result. The most common impact was a drop in their credit score (62%) followed by being subject to collection fees (47%) and losing eligibility for future federal financial aid (37%)."The story can be found at https://www.cnbc.com/2023/02/22/falling-behind-on-student-loans-can-lead-to-other-financial-problems.htmlWe help individuals & businesses with too much debt!Jim Shenwick, Esq   917-363-3391   jshenwick@gmail.com

While we often recite that bankruptcy is for the honest but unfortunate debtor, a new case from the Supreme Court shows that getting into bed or business with the wrong person can lead to a non-dischargeable debt for an innocent spouse. The case is No. 21-908, Bartenwerfer v. Buckley, which you can find here.What HappenedThe case involved David Bartenwerfer and his then-girlfriend, later wife, Kate. They jointly bought a house to remodel in San Francisco. Their first mistake was that they apparently formed a general partnership to buy the property. Kate's second mistake was leaving the construction and sale of the property to David. David failed to disclose defects in the construction which led to both of them getting sued and being hit with a judgment for over $200,000. When they filed bankruptcy, the judgment creditor brought a non-dischargeability case against them. The Bankruptcy Court found that David had committed fraud and that Kate was liable for David's fraud due to their partnership. The Bankruptcy Appellate Panel found that Kate could not be held liable based on imputed intent. On remand, the Bankruptcy Court found that Kate did not have fraudulent intent. Unfortunately the Ninth Circuit reversed and reinstated liability against Kate.The Court's RulingA unanimous court ruled that non-dischargeability under 11 U.S.C. Sec. 523(a)(2)(A) is based on the type of debt, not the actions of the debtor. Here, the exception to being dischargeable turned on whether there was a debt for money "obtained by . . . fraud." Supreme Grammarian Justice Amy Coney Barrett decreed that because the exception was written in the passive voice rather than the active voice that the debt was non-dischargeable. She stated:The provision obviously applies to a debtor who was the fraudster. But sometimes a debtor is liable for fraud that she did not personally commit—for example, deceit practiced by a partner or an agent. We must decide whether the bar extends to this situation too. It does. Written in the passive voice, §523(a)(2)(A) turns on how the money was obtained, not who committed fraud to obtain it.Opinion, p. 1. While the opinion goes on for twelve pages, everything a practitioner needs to know is on page 1. If someone obtained money through fraud and that person is liable for the debt, then the liability will not be dischargeable in bankruptcy. What Does It Mean?I have two thoughts about this case. The first is that it is so typical of the types of bankruptcy cases that the Supreme Court hears. This was a narrow, technical issue. We just don't see the Supreme Court taking up the big issues of bankruptcy practice, such as equitable mootness or third party releases Instead, they take up these smallish cases that can be decided by looking at a small amount of statutory text. The other way this decision is similar to other Supreme Court decisions on bankruptcy is that we don't know whether this will have a big impact or a teeny tiny one. Justices Sotomayor and Jackson wrote a concurrence stating that they joined the opinion because "(t)he court here does not confront a situation involving fraud by a person bearing no agency or partnership relation to the debtor." If the decision is limited to those parameters it will have a small impact because most people are savvy enough not to enter into a general partnership when an LLC can be formed for a few hundred dollars. However, the concurrence may be trying to impose a limitation not present in the majority opinion. Justice "passive voice" Barrett did not place any limits on how a person might be liable on a debt for fraud. Yes, partnership and agency ensure that the person being held liable has a legal relationship to the person committing the bad acts, but is not the only way someone can be held liable for the debts of another. What is the most common way that someone can be held liable for someone else's debt? By signing a guaranty. Assume a company has a CEO actively involved in the business and a financial partner. The firm takes out a bank loan guaranteed by the financial partner. Under Bartenwerfer, if the CEO lied to get the loan and the bank justifiably relied on those misrepresentations, a debt for money obtained by fraud is created. The innocent guarantor could be held liable just as the innocent girlfriend was in this case. If that is how the cases develop, then Bartenwerfer will have dramatically expanded the universe of debts that can be excluded from discharge.   

The New York Post is reporting that “A growing number of office landlords are defaulting on loan payments as the rise of remote work causes more corporate tenants to rethink long-term leases". The story can be found at https://nypost.com/2023/02/21/office-landlord-debt-defaults-rise-as-remote-work-takes-hold-report/?utm_source=gmail&utm_campaign=android_nyp  If New York City office landlords are defaulting on their mortgages, should commercial tenants in New York City with surplus space due to remote work or the recession also be asking for concessions such as a reduction in base rent or additional rent or seek to exit or terminate their leases? At Shenwick & Associates, we believe they should be, and we have helped many commercial tenants surrender, exit, or terminate their leases. We also work with their good guy guarantors to reduce or eliminate their exposure.We recently helped a garment center company surrender their lease on very favorable terms and the post can be found at https://shenwick.blogspot.com/2023/01/office-lease-closing-termination-or.htmlJim Shenwick Esq. has office leasing, bankruptcy & workout experience and an LLM in Taxation from NYU Law School.  "Jim Shenwick, Esq helps individuals & businesses with too much Debt!"

Foreclosure is a legal process where a lender tries to recover the amount of money they are owed by taking ownership of a mortgaged home and selling it. Losing a home can be an extremely distressing experience for anyone. Thankfully, there are ways to avoid having your home taken from you. You may be able to stop foreclosure on your home in New Jersey by filing for bankruptcy. There are two general types of bankruptcy that can be filed by debtors. Guidance from our attorneys can be highly valuable when determining which form of bankruptcy is right for you. If you need to file for bankruptcy in order to prevent foreclosure on your home, seek assistance from our experienced New Jersey bankruptcy lawyers at Young, Marr, Mallis & Associates by dialing (609) 755-3115 today. Bankruptcy Can Prevent a Foreclosure on Your Home in New Jersey By filing for bankruptcy, you may prevent a foreclosure on your home in New Jersey. During your free case review, our legal team can thoroughly explain what will happen when you file for either of the following types of bankruptcy: Chapter 7 Bankruptcy This type of bankruptcy is a potential option for those who do not maintain steady employment or do not produce enough income to pay off their debts. When you file for Chapter 7 bankruptcy, be prepared for someone else will take ownership of valuable items that you own in order to sell them. The proceeds will be used to clear debts with your creditors. By filing for Chapter 7 bankruptcy, your creditors will be temporarily stopped from collecting on most of your debts. This can afford you time to catch up on mortgage payments or submit a mortgage modification to a loan company. If you suspect that you need to file for Chapter 7 bankruptcy, contact our bankruptcy lawyers for help initiating the process. Chapter 13 Bankruptcy This is another type of bankruptcy that you may file to prevent your home from being foreclosed on in New Jersey. Chapter 13 bankruptcy is intended for those who maintain steady income but are still unable to keep up with the debts they owe. Rather than having all of your debt absolved, filing for this form of bankruptcy will simply afford you time to create a repayment plan. This plan has to be approved by your creditors and the court. As long as you make payments on-time according to your repayment plan, the mortgage company cannot foreclose on your home. Our experienced Cherry Hill bankruptcy attorneys can help you file for Chapter 13 bankruptcy and form a reasonable plan for repayment. Can Anyone File for Bankruptcy to Stop Home Foreclosure in New Jersey? There are certain conditions that must be met in order to successfully file for bankruptcy in New Jersey. First, if you have previously filed for bankruptcy, you must ensure that sufficient time has passed for you to file again. The amount of time you have to wait can vary depending on the type of bankruptcy you filed in the past and the type you wish to file. Additionally, to qualify for Chapter 7 bankruptcy, your family’s gross income has to be less than the median income for other families of the same size in New Jersey. During a free evaluation of your case, our bankruptcy attorneys can help you determine if you meet this requirement. Further, to qualify for Chapter 13 bankruptcy, there are several conditions that must be adhered to. For instance, there are maximum amounts of secured and unsecured debts that you can have. Also, you will have to show that you filed your federal and state income taxes for each of the previous 4 years. Thankfully, our legal team can also help determine if you are able to file for Chapter 13 bankruptcy. When Will Your Home Be Foreclosed on in New Jersey? If you fail to keep up with your mortgage payments, your home can be foreclosed on. Foreclosure is a process where the party you owe money to will take ownership of your home and sell it in order to satisfy your debt. According to federal laws protecting homeowners, your lender is prevented from initiating the foreclosure process until you have been delinquent for a minimum of 120 days. Does Your Lender Have to Let You Know that Your Home is Being Foreclosed on in New Jersey? Before homes are foreclosed on, lenders have to provide borrowers with notice of their intent to initiate such processes. This notice must be provided through registered or certified mail with return receipts requested. You should be notified of a foreclosure on your home at least 30 days before the formal foreclosure complaint is filed, but less than 180 days in advance. This notice should provide a great deal of information pertaining to your case. For example, all of the following has to be included in a foreclosure notice: A description of your lender’s interest in your property A reasoning behind the foreclosure such as missed mortgage payments An outline of what you must pay to cure your debts Information pertaining to your right to default Still, there are copious amounts of additional information that must be included in your foreclosure notice. Our experienced East Brunswick, NJ bankruptcy lawyers can help determine if you were served proper notice regarding a foreclosure on your home. Will Filing for Bankruptcy Eliminate Debts Other Than Mortgage Payments in New Jersey? In addition to preventing foreclosure on your home, filing for bankruptcy can also alleviate your financial burden as it pertains to many other debts. For example, filing for bankruptcy can eliminate your obligation to pay overdue credit card balances, doctor’s bills, utility payments, and personal loans. Still, there are certain debts that cannot be wiped away. For instance, your domestic support obligations and tax debt cannot be absolved through bankruptcy. Additionally, it is difficult to eliminate debt for student loans. Our experienced Egg Harbor, NJ bankruptcy lawyers can help explain whether certain debts you owe are dischargeable or not. If You Need to File Bankruptcy to Stop a Foreclosure on Your Home in New Jersey, Contact Our Law Firm for Help If you wish to file for bankruptcy to prevent foreclosure on your house, get help from our experienced Mount Holly bankruptcy lawyers at Young, Marr, Mallis & Associates today by calling (609) 755-3115.

If you missed the bar date and filed your claim late, your claim will most likely be disallowed.

If you determine that the debtor does, in fact, owe you money, you will need to prepare and file a proof of claim.

 Relief of Indebtedness Income and Workouts under Section 108 of the Internal Revenue Code.Shenwick & Associates performs many workouts for clients, and one point that is often overlooked during negotiations is relief of indebtedness income. Section 108 of the Internal Revenue Code provides that income from discharge of indebtedness is income to the Debtor, unless otherwise provided for in that section. The following example illustrates the point: If a debtor owes a creditor $100,000.00 and the creditor agrees to accept $50,000.00 as payment for that debt, the debtor has been enriched by the sum of $50,000.00 and the Debtor must report $50,000 of income on its tax return.Answers to many relief of indebtedness income questions are provided below:Question: Do creditors really report relief of indebtedness income to the IRS?Answer: Yes they do and the income is reported on IRS Form 1099-C Question: Which creditors report income to the IRS? Answer: All banks and financial institutions do. Landlords, hospitals and trade vendors generally do not report relief of indebtedness income, although they should.     3. Question: Is the income ordinary income or capital gain? Answer: Sadly, it is ordinary income.     4.  Question: Is relief from indebtedness income recognized by the guarantor of a debt?            Answer: The IRS generally holds that a guarantor (whether or not the primary obligor has defaulted and the guarantor has become liable for the indebtedness) does not realize relief of indebtedness income on release of a liability. IRC 108(e)(2)5. Question: Do I have to recognize relief of indebtedness income if I file for bankruptcy? Answer: No. See section 108(a)(1)(A) of the Internal Revenue Code. This is why many debtors elect to file for bankruptcy rather than do a workout.6. Question: If I am insolvent (my Liabilities exceed my Assets also known as the Balance Sheet test) do I have to pick up relief of indebtedness income? Answer: No. See section 108(a)(1)(B) of the Internal Revenue Code7. Question: What if I am a member, partner, or shareholder of a company that defaults on an unpaid debt? Answer: A member, partner, or shareholder of an LLC, partnership, or S corporation (a pass-through entity) must report income unless an exception applies.Clients or their advisors with questions regarding relief of debt income should contact Jim Shenwick, Esq.   jshenwick@gmail.com   917 363 3391 "We held individuals and businesses with too much debt!"