Before filing for bankruptcy, some people might move assets or transfer them to a family member. However, this practice is illegal and will be considered as hiding assets in a bankruptcy case. Individuals in Pennsylvania must give a full accounting of their assets when they file for bankruptcy. Any transactions or sales before filing for bankruptcy will be seen as suspicious. Fortunately, our attorneys can help you amend a bankruptcy filing if you made a mistake or overlooked assets you did not know you had. The state has a great deal of time to discover hidden assets, so it is best to be honest and forthcoming with your financial disclosures. If not, you could face criminal charges in addition to your case being dismissed. Our Pennsylvania bankruptcy attorneys at Young, Marr, Mallis & Deane can provide you with a free case review by calling us at (215) 701-6519. How Do Pennsylvania Courts Decide if Assets Are Being Hidden in a Bankruptcy Case? When you file for bankruptcy in Pennsylvania, some of your assets will usually be sold off to satisfy and discharge your debts. When the court accepts a bankruptcy filing, the person filing will need to make a full accounting of their assets to the court. However, some people think they can trick the court by hiding assets. There are a number of ways people attempt to do this, but the court is very good at discovering assets that do not want to be found. Unfortunately, some financial transactions might be legitimate but appear as if you are attempting to hide assets, which can jeopardize your entire bankruptcy case. Our West Chester, PA bankruptcy attorneys can help you accurately assess your assets so you can legitimately discharge your debts. We can also help you amend a filing if you discovered or inherited assets after making your financial disclosures to the court. The following will help you understand what actions the court might consider as hiding assets and how it discovers those assets: What the Court Considers Hiding Assets One of the most common ways people hide assets is by selling their property to family or friends. While this might seem like a clever bypass, it is also illegal. You might not be in possession of the asset in question, but the willful sale of property with the purpose of keeping it close is considered fraud. It will also drag your friends and family into the crime, as they can now be sued for the property to recover the asset and sell it in your bankruptcy case. Some individuals actually ask their attorney to hide assets. However, a lawyer who helps hide assets will likely not be practicing law for long and could end up criminally prosecuted along with their client. If another firm says that it can help transfer property before filing your bankruptcy claim, it should send up an immediate red flag. Other petitioners simply lie about the assets and finances in their possession. They might move financial assets to offshore bank accounts that cannot be tracked easily or lie about the value of an asset so its value is not factored into the discharge. Other times, petitioners fail to list an asset in the hopes that the court will overlook it. These are considered premeditated actions. At the very least, you might lose your right to use bankruptcy to discharge your debts. In the worst-case scenario, you could be criminally charged by the state and federal government. The court has a great deal of resources and time to find hidden assets. How Assets Are Found After filing for bankruptcy, the court will appoint a “bankruptcy trustee.” This person oversees the debtor’s estate during the course of the bankruptcy lawsuit. It is ultimately their job to look for and find a debtor’s hidden assets. To do this, the trustee will review your financial records, debts, payroll records, tax returns, bank records, and any other record they consider relevant to their search. In most cases, the trustee is looking for undisclosed income or property. They often use public records to determine whether a debtor undervalued their property in their filing. They will also compare your bank statements with your employment and pay records. If a trustee finds discrepancies between what you have claimed and what they have found, they can file a motion with the court to address it. From there, it will be up to the court to determine what the punishment should be. They might determine it was an honest mistake and amend the bankruptcy filing. Or, they might recommend the case for prosecution. A bankruptcy trustee also has a few years to find hidden assets. In Pennsylvania, a trustee has up to four years from the initial bankruptcy filing to discover hidden assets and report them to the court, according to 12 Pa.C.S. § 5109. This is commonly known as the “look-back” period. If you learn about assets you were previously unaware of or inherit property, you should report it immediately to the court if you are still within the four-year look-back period. What Are the Penalties for Hiding Assets in Pennsylvania Bankruptcy Case? The court considers hiding assets a serious offense and can punish a debtor for it in a number of ways. If the court or trustee discovers hidden assets before your filing is accepted, you will likely not be allowed to discharge your debts. Thus, your bankruptcy case will typically be dismissed. However, that does not mean you will keep the assets you hid. In some cases, your non-exempt property can still be retained by the court to satisfy your debts, and you will still be responsible for the remaining amount to your creditors. Your bankruptcy case can also be revoked after the court has approved it. If your case’s trustee finds hidden assets, they will petition the court to revoke your claim. Remember, trustees have up to four years to request that your filing be revoked. You might also harm future opportunities to file for bankruptcy. If the court sees that you hid assets in your last filing, it can deny your new case outright. Even if the court did allow the case, you would not be able to discharge the debts still lingering from the previous filing. The worst offenders hiding assets can expect to face criminal prosecution. Under 18 U.S.C. § 157, those guilty of bankruptcy fraud can be fined up to $250,000 as well as be imprisoned for up to five years. It is considered perjury to hide assets since the court is being lied to. Our Pennsylvania Bankruptcy Attorneys Can Help For a free case evaluation with our Philadelphia bankruptcy lawyers, contact Young, Marr, Mallis & Deane at (215) 701-6519.

When someone files for bankruptcy, the court needs to know what kind of accounts, assets, and other holdings they might have. This information is important as courts need to know if someone is eligible for bankruptcy based on their assets or if they can be liquidated during bankruptcy. When you declare your assets, you should also be prepared to prove they are accurate and truthful. Proving that your asset declarations in a bankruptcy case are truthful might be as simple as having official documentation or paperwork to back them up. Bank statements, receipts from transactions, or even documentation of appraisals of property might be necessary. If the court does not believe your declarations are truthful, speak to an attorney. If there is additional information you can present to the court, your lawyer should be able to help you do it. This is crucial in your case, as false or misleading declarations might land you in serious legal trouble. Get a confidential assessment of your case for no charge by calling our bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519. What Are Asset Declarations in Bankruptcy and Why They Must be Truthful When a person files for bankruptcy, they must submit information about their bank accounts, assets, property, holdings, and other financial interests. For some, this might be a rather short list. For others with more complicated finances, they might be longer and more difficult to compile. It is crucial that your asset declarations are complete and accurate, as the bankruptcy court needs to know the full extent of your financial situation, including assets and debts. The court will not be pleased if your declarations are less than accurate. Asset declarations are often included in typical bankruptcy forms. When our bankruptcy lawyers file your bankruptcy petition for you, forms where you can include asset declarations are likely already included. However, suppose you have a long and somewhat complicated list of assets to declare. In that case, we might need to add extra forms or attach additional information about your assets to your bankruptcy petition. If the court suspects a petitioner’s asset declarations are untrue, the petitioner might be accused of fraud. It is not uncommon for some petitioners to try to hide assets from the court. Their plan is usually to hide these assets so that when everything is liquidated, they have other secret assets to fall back on. Petitioners who do this often believe they are not doing anything wrong and are only protecting themselves. The truth is, this is highly illegal. How to Prove Your Asset Declarations Are Tue and Correct in a Bankruptcy Case Now that you know how important it is to ensure your asset declarations are truthful and accurate, the next step is to figure out how to ensure their accuracy. Again, people with rather straightforward finances will likely have little trouble assembling their asset declarations. Maybe you own a home, a car, and a few banking or investment accounts. If your assets are more complicated, speak to an attorney about how to make sure all necessary information is included in your declarations. Records and documentation are key to making sure asset declarations are truthful. Your bank is one of the first places we should go for such documentation. Bank records about all accounts you have with that bank should be collected and reviewed. If you have accounts or holdings with multiple banks, we need records of your accounts and holdings from each bank. The more recent these records are, the more accurate your declarations will be. We should also consider assets you might have acquired through transactions. For example, maybe you recently purchased a home or sold another property. We should get records and receipts of those transactions. These records should contain details about the transaction’s value and your gains or losses. Even relatively small transactions should be included. Even ordinary account statements may be helpful. People often receive bank statements monthly. We can obtain copies of your most recent statements to include in your asset declarations. This might be helpful for things like checking and savings accounts. Even if these accounts are small or empty, we should have the statements to prove it. If you own valuable personal belongings (e.g., jewelry, art, collectibles), itemized lists of those belongings might be necessary. We should also consider having these items appraised so that their value is accurately reflected in your asset declarations. What to Do if the Bankruptcy Court Suspects Your Asset Declarations Are False If the court believes that your asset declarations are not truthful, do not panic. While courts do not take fraud lightly, and the potential penalties might be serious, not all instances of false declarations are intentional. Tell your attorney if your false declarations were due to a clerical error or mistakes in record keeping. Your lawyer can explain the situation to the court and hopefully buy you some extra time to get your records in order and make sure everything is accurate. Another possibility is that you left certain assets out of your declarations because you believed they were exempt. Bankruptcy exemptions are not unusual, and petitioners exclude things all the time. However, you must inform the court about what exemptions you plan on claiming. You cannot simply leave those assets out. Penalties for Submitting False Asset Declarations in a Bankruptcy Case You might face some unpleasant consequences if you submit less than truthful asset declarations during bankruptcy proceedings. First, the court may reconsider your bankruptcy petition. In some cases, assets that were not declared make the petitioner ineligible for bankruptcy, depending on how they file. If this is the case, the court will deny your petition. Perhaps the problem with your asset declarations did not come to light until after the court discharged your debts. In such a case, the court may revoke the discharge, and you will again be liable for those debts. You might face criminal charges and penalties if court officials believe you intentionally misled them by submitting false asset declarations. You could be charged with crimes related to fraud and perjury, and your bankruptcy petition will likely be dismissed. Contact Our Bankruptcy Attorneys for Help with Your Case Get a confidential assessment of your case for no charge by calling our Philadelphia bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519.

You never know just how a client hears your advice, until you hear yourself quoted back to yourself as the reason for a client doing something stupid. In my case, I’m unclear about whether the message received was really as reported, but it’s made me think about my choice of words. I was asked in […] The post Bankruptcy and the “hard of hearing” appeared first on Bankruptcy Mastery.

Law Review (Economics) Legal, Diego and Eric R. Young. 2024. "Consumer Bankruptcy and Unemployment Insurance." Working Paper No. 24-09. Federal Reserve Bank of Cleveland. Ed Boltz Thu, 07/18/2024 - 16:26 Available at: https://doi.org/10.26509/frbc-wp-202409. Abstract: We quantitatively evaluate the effects of UI on bankruptcy in an equilibrium model of labor market search and defaultable debt. First, we ask whether a standard unsecured credit model extended with labor market search and matching frictions can account for the negative correlation between UI caps and bankruptcy rates observed in the data. The model can account for this fact only if estimated with the employment rate among bankruptcy filers as a target. Not matching this employment rate underestimates the consumption smoothing benefits of UI cap increases, as the model assigns too much importance to unemployment shocks for driving default, and implies large welfare losses from increasing the cap rather than negligible gains. Second, with bankruptcy available, there are significant welfare gains from increasing the replacement rate above the calibrated value, but not in the absence of default. Commentary: As  this paper finds that more generous unemployment insurance benefits reduce the number of bankruptcies,  it would seem that a reasonable conclusion to draw would be that for state governments,  many of which have for years, not decades, sought to privatize all kinds of public benefits - from underwriting public universities to ending fixed benefit pensions in exchange for 401ks to hints of privatizing Social Security,  to keep unemployment insurance benefits low,  shifting the costs of lost income onto private lenders through bankruptcy.  With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document consumer_bankruptcy_and_unemployment_insurance_compressed.pdf (900.89 KB) Category Law Reviews & Studies

Law Review: Antill, Samuel and Wang, Neng and Jiang, Zhaoli, Creditor-on-Creditor Violence and Secured Debt Dynamics (May 8, 2024). Ed Boltz Thu, 07/18/2024 - 16:05 Available at: https://ssrn.com/abstract=4821620 Abstract: Anticipating a borrower’s default, secured lenders have recently used aggressive legal tactics to extract value from other secured lenders. We model the implications of this new “creditor-on-creditor violence” trend. In our novel continuous-time capital structure model, secured debt enjoys higher priority in default. However, secured lenders take harmful actions to ensure their full recovery: they inefficiently push to prematurely sell assets and strip competing lenders of their priority. We show this creates a tradeoff between secured and unsecured debt that matches recent empirical evidence. While the creditor-conflict trend endogenously leads to higher secured credit spreads, it nonetheless increases investment and ex-ante firm value — creditor conflict enables ex-post debt reductions in states of the world with high expected default costs. Commentary: While excited from first reading just the title,  I was quickly  disappointed that this research was about corporate debt restructuring loopholes  and not actual gladiatorial combat between creditors: Also too bad that creditors in consumer cases seem to prefer to suffer losses of their own rather than inflict those on other creditors,  especially if that will help the consumer whatsoever.  If the authors of this paper could suggest how to get those creditors to start turning on each other,  that would be of tremendous  interest. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document creditor-on-creditor_violence_and_secured_debt_dynamics-1-23.pdf (407.99 KB) Document creditor-on-creditor_violence_and_secured_debt_dynamics-45-70_compressed.pdf (763.12 KB) Document creditor-on-creditor_violence_and_secured_debt_dynamics-24-44.pdf (571.46 KB) Category Law Reviews & Studies

Law Review (Economics): Baek, H. Young and Cho, David, Student Loan Relief and Home Purchase Ed Boltz Wed, 07/17/2024 - 19:10 Available at:   https://ssrn.com/abstract=4846753 Abstract: Amid the COVID-19 pandemic, the U.S. Department of Education implemented administrative forbearance for student loan payments from March 13, 2020 to September 1, 2023. This unexpected policy, affecting all eligible loans and preventing anticipatory plans or selective participation, ensures a sample free from selection bias or endogeneity. This study investigates the impact of student loan relief on home purchases using the 2022 Survey of Consumer Finances. We find that among the households with a student loan, those benefiting from relief were 71% more likely to purchase homes. Our findings suggest that student loan payments hinder homeownership and subsequent wealth accumulation. Commentary: While its is not  terribly surprising for this paper to find that student loans are a "barrier to home purchases and subsequent wealth accumulation",  this research does confirm that  assumption and can serve as support for advocates and policy makers about the impact of student loan relief. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document student_loan_relief_and_home_purcha.pdf (243.57 KB) Category Law Reviews & Studies

 After Dismissal of Bankruptcy Case, Here’s What’s Next for Giuliani? Without the protection of Chapter 11, the former mayor and Trump lawyer could have his assets seized and sold by creditors. See the article in the New York Times. The article can be found at https://www.nytimes.com/2024/07/13/us/politics/rudy-giuliani-bankruptcy-case.html?smid=nytcore-android-shareWhen Mayor Giuliani filed for Chapter 11 bankruptcy, he received the benefit of Section 362 of the Bankruptcy Code, which provides an automatic stay against lawsuits and enforcement of judgments so the debtor can reorganize. With the dismissal of the bankruptcy case, Mayor Giuliani loses the protection of the automatic stay, and his assets can be liened or levied by creditors. Individuals with questions about the automatic stay or personal bankruptcy should contact Jim Shenwick, Esq.Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!

Law Review (Economics): Zhou, Yijun and Wang, Qingchen, Artificial Intelligence and Debt Collection: Evidence from a Field Experiment (May 29, 2024). Ed Boltz Tue, 07/16/2024 - 16:02 Available at: https://ssrn.com/abstract=4847870 or http://dx.doi.org/10.2139/ssrn.4847870 Abstract: This paper examines the role of artificial intelligence (AI) in facilitating the non-judicial collection process of delinquent consumer debt. Leveraging a randomized field experiment in the Netherlands, we show that algorithmic calling decisions achieve higher repayment rates with fewer collection calls compared with human collection officers. Uncovering the black box of AI, we find that it extracts predictive signals from unstructured notes compiled by collectors. These signals not only predict whether the delinquent borrowers would repay during the non-judicial collection process, but also shed light on the underlying motivations or impediments of delinquent borrowers' repayment behavior. Commentary: While this research looks to increase the efficiency of debt collection through the use of AI,  it does also provide valuable insights for human consumer  bankruptcy attorneys,   because the motivations of consumers in filing bankruptcy is generally just the flip side of the same coin from encouraging repayment by debt collectors.  That "discussions on non-repayment consequences'' (an anodyne description to say the least)  between debt collectors and consumers has little impact on repayment might indicate that similarly such conversations would not otherwise exacerbate a consumer's fears sufficiently to overcome other impediments to filing bankruptcy. With proper attribution,  please share this post.    To read a copy of the transcript, please see: Blog comments Attachment Document artificial_intelligence_and_debt_collection_evidence_from_a_field_experiment_compressed.pdf (775.71 KB) Category Law Reviews & Studies

If your finances have become too much to handle on your own, you can file for bankruptcy for relief. However, you likely worry that this option will not be available to you if you filed for bankruptcy before. Fortunately, Pennsylvania does not put a set limit on the number of times a person can file for bankruptcy. If you have filed for Chapter 7 or Chapter 13 bankruptcy in the past, you can still file again if times get tough. However, you might have to wait several years before you will be able to file. Our attorneys can help you determine how long you are likely to wait as we prepare your new case. If the court dismissed your previous case, you might not need to wait at all. Our team can also help extend automatic stays if you are filing for another time in the same year. Call our Pennsylvania bankruptcy attorneys at Young, Marr, Mallis & Deane at (609) 755-3115 for your free case evaluation. How Long Do I Have to Wait to File for Bankruptcy in Pennsylvania if I Filed in the Past? Individuals who have filed for bankruptcy in the past might wonder if they can file again in Pennsylvania if they find themselves in more financial trouble. The short answer is yes. People in Pennsylvania can file for bankruptcy again even if they have filed in the past. However, how long you have to wait before filing again will depend on a few factors, like what type of bankruptcy you filed before and what you would like to file now. Our Philadelphia bankruptcy lawyers can determine when your previous case was filed and how long you will need to wait before filing your new one. If you do need to wait, our team can arrange your financial disclosures in the meantime. The following will explain exactly how long you must wait before filing again in Pennsylvania: When You Previously Filed for Chapter 7 Bankruptcy Many people file for Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, as a straightforward method of discharging their debts. If you need to file Chapter 7 bankruptcy but filed for Chapter 7 before, eight years must pass from the date your previous case was filed before filing a new case. While Chapter 7 bankruptcy generally stays on a person’s credit report for ten years, you will be permitted to file two years before the discharge is removed from your record. If you filed for Chapter 7 in the past but now plan on filing for Chapter 13 bankruptcy, you will only need to wait four years from the date you filed for Chapter 7. Chapter 13 bankruptcy is much different than Chapter 7. Instead of liquidating a debtor’s assets to satisfy their debts, the debtor creates a repayment plan to repay the debts over a three to five-year period. Thus, you do not need to wait as long if filing for Chapter 13 bankruptcy. When You Previously Filed for Chapter 13 Bankruptcy If you previously filed for Chapter 13 bankruptcy the first time in court, you can generally file for Chapter 7 bankruptcy after six years. However, you might be able to file sooner. As mentioned, Chapter 13 uses a repayment plan rather than liquidation to pay a person’s debts. If you satisfy the plan and repay all your unsecured debts in the time given, you can file for Chapter 7 bankruptcy in less than six years. It should also be noted that you can apply for Chapter 13 bankruptcy even if you did not receive a discharge in your Chapter 7 case. For those filing Chapter 13 bankruptcy for the second time, the waiting period is two years. However, if you paid off at least 70% of your unsecured debts and made a good-faith effort to pay the remaining amount, you might be able to file for Chapter 13 bankruptcy before two years have passed. How Long Will I Need to Wait if My First Bankruptcy Filing Was Dismissed by the Court in Pennsylvania? The timeframes discussed above typically only apply to bankruptcy filings that were accepted by the court. However, the court might have dismissed your case before initiating the process. Bankruptcy cases are complex, and cases are often dismissed because a document was not filed, trustees were not paid, or the debtor had no real plan to repay their debts. Fortunately, you will usually not need to wait long before filing your bankruptcy claim again. Regardless of which type of bankruptcy you are filing for, you should be able to immediately refile. However, you might have to wait up to 180 days before refiling if the court makes an order against you for failing to obey it in some way. The problem with refiling a bankruptcy case is that you might not get the full benefits of an automatic stay. Automatic stays are orders that put a stop to creditors’ and debt collectors’ collection attempts and lawsuits as soon as the bankruptcy filing has been approved by the court. For a first filing, no time limit is placed on the stay. If you are filing for bankruptcy a second time within the same year, your second automatic stay only lasts 30 days unless the court approves a motion to extend the stay that has some evidence that your case will be successful, like financial records. After the second bankruptcy filing, no automatic stay will go into effect upon the third filing in the same calendar year. To get an automatic stay in these situations and put a stop to debt collectors’ harassment, you will need to file a motion to impose an automatic stay. However, the court will not approve the motion if you cannot provide evidence that you are in a better financial position than before. When Should I Consider Filing for Bankruptcy Again in Pennsylvania? The reasons you might file for bankruptcy again could be the same reasons as before. For instance, if you had overwhelming credit card or medical debts, you might have filed for Chapter 7 bankruptcy to discharge those debts. You might need to file for Chapter 7 again if rent has gone unpaid or you suffered an injury and have new medical debt. However, Chapter 13 bankruptcy might be a better option this time if your financial situation is better than the last time you filed. It would also allow you to keep your assets where some might have been discharged in your previous case. Of course, the reverse could be true. You might not have the financial resources to complete a Chapter 13 repayment plan over a few years and simply want to discharge your debts through Chapter 7 and move on. Our Pennsylvania Bankruptcy Lawyers Can Help Prepare Your New Filing For a free case review, contact our Radnor, PA bankruptcy lawyers at Young, Marr, Mallis & Deane by calling (609) 755-3115.

E.D.N.C.: Atkinson v. National Credit Systems- Personal Jurisdiction for Consumer Rights Claim Ed Boltz Mon, 07/15/2024 - 23:37 Summary: Mr.  Atkinson  brought a pro se complaint against Penn Rose Management,  which appears to be an apartment management company with locations in numerous states,  but not North Carolina,  and National Systems alleging various violations of FCRA,  FDCPA and North Carolina UDTPA laws.  The court found it lacked personal jurisdiction over Penn Rose Management  as Mr. Atkinson did not plausibly allege any contacts between it and North Carolina, dismissing without prejudice claims against Penn Rose.  The district court then dismissed with prejudice Mr.  Atkinson's FCRA claim, stating there is no private right of action under 15 U.S.C. § 1681s-2(a),  his  defamation claim as  § 1681h(e)  preempts such , and  the FDCPA  claims  as Mr. Atkinson did not plausibly allege that NCS was  a debt collector as defined by 15 U.S.C. §1692a.   The court further declined to exercise supplemental jurisdiction over the state-law claims against NCS and dismissed them without prejudice  Commentary: Mr.  Atkinson's failure to plead that NCS is a debt collector  under the FDCPA would certainly seem to have been an inadequacy in pleading by a pro se Plaintiff and not a judicial determination that NCS is not actually a debt collector,  especially as it describes itself on its own webpage as being "a specialized collection firm helping apartment owners and managers recover money that is rightfully owed to them by former residents who have not fulfilled their lease obligations." With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document atkinson_v._national_credit_systems.pdf (233.52 KB) Category Eastern District