Anyone familiar with ERISA might know that this complex federal law applies to certain employee retirement accounts maintained by employers. Many might not know that ERISA also applies to health insurance plans maintained by employers. While health insurance and retirement plans are not the same, they both represent accounts and funds maintained by employers for the benefit of employees. So, how does ERISA apply to health insurance in Pennsylvania, anyway? Under ERISA, employers owe a fiduciary duty to employees and must maintain health insurance plans for their benefit. Employees may have the right to take legal action if a health insurance plan is somehow mismanaged. Before you act, talk to a lawyer about whether ERISA even covers your plan. Some plans, such as those maintained by the government or churches, are not covered by ERISA. On top of it all, health insurance plans covered by ERISA may also be covered by COBRA, which allows people who lose their health benefits to extend them under certain circumstances. For help with an ERISA claim, contact our Pennsylvania disability attorneys for a free case review by calling Young, Marr, Mallis & Associates at (215) 515-2954. How ERISA Applies to Pennsylvania Health Insurance Plans The Employee Retirement Income Security Act (ERISA) is a federal law regulating how employers manage retirement accounts, disability benefits, health insurance plans, and other accounts or benefits for employees. Many Pennsylvania workers rely on the health insurance they get through their jobs to be able to afford any health care at all. Workers who might have disabilities or people who rely on disability benefits are especially vulnerable. ERISA creates a fiduciary duty in employers. A fiduciary duty requires the fiduciary (i.e., the person in charge of the accounts) to maintain those accounts for the benefit of others. As a fiduciary, your employer must put the needs of employees before their own when it comes to health insurance plans and other benefits. For example, employers who offer health insurance plans to employees must make sure that all employees can benefit, including those with disabilities whose healthcare costs might be greater. ERISA also gives employees legal recourse if employers violate ERISA rules and regulations. There may be an appeals and grievance process employees can follow to hopefully rectify the situation. Maybe your health insurance plan was altered without any notice, and now you cannot afford medical care for your disability. In such a case, our West Chester, PA disability lawyers will help you bring the issue to your employer’s attention and get it fixed. What Kind of Health Insurance Plans ERISA Covers in Pennsylvania Before taking your claims to court, speak to an attorney about whether your health insurance plan is even covered. While many workers throughout Pennsylvania rely on health insurance, not all plans are the same, and some are not governed by ERISA. However, even if ERISA does not cover your health insurance, that does not mean that your employer may do whatever they want regarding the management of the plan. If you believe your health insurance has been put in jeopardy, speak to our team about it. While many, if not most, health insurance plans fall under ERISA, certain employers are outside this federal law. First, and perhaps most surprisingly, government employers are not covered by ERISA. If you work for a government agency or entity, your health insurance might not fall under ERISA. Common examples of government employees include police officers, public school teachers, state-level administrators, and many others. If you work for a church or another religious group or organization and have health insurance through work, your health insurance plan is also not covered by ERISA. This can be tricky to figure out, as churches and religious groups tend to employ a mix of employees and volunteers. If you are a volunteer, you likely are not eligible for health insurance through the church. However, if you are an employee, your health insurance is not covered by ERISA. Health insurance plans maintained solely to comply with Workers’ Compensation, disability, or unemployment laws are also not covered. How ERISA and COBRA Affect Pennsylvania Health Insurance Plans A fear of many employees is losing their health insurance if they get laid off or choose to switch jobs. Many people stay in jobs they do not like so that they can keep their health insurance. If you find yourself in a position where you lose your health benefits, ERISA might help you. The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1986 and amended ERISA to require certain employers to provide a temporary continuation of group health benefits to employees under certain circumstances. In short, under COBRA, you might be able to keep your health benefits for a little while, perhaps until you are able to find a new job with health insurance. COBRA may only help extend group health plan coverage in light of a “qualifying event.” Such an event might be a reduction in an employee’s hours that might make them no longer eligible for benefits or the termination of the employee from their job. How long COBRA lasts depends on the nature of the qualifying event. For example, if you lose your health coverage because you are terminated, COBRA may extend your benefits for 18 months. Family members of employees who have lost jobs might also benefit from extensions of health benefits under COBRA. Pennsylvania has a law called “mini-COBRA” that applies to small business employees in the state. Under mini-COBRA, employees of a small business, defined as having 2-19 employees, have the right to purchase a continuation of health insurance after leaving employment. An eligible employee may purchase health insurance through their former employer for up to 9 months after their employment ends. Contact Our Pennsylvania Disability Lawyers for Assistance with Your Claims For help with an ERISA claim, contact our Philadelphia disability attorneys for a free case review by calling Young, Marr, Mallis & Associates at (215) 515-2954.

If bankruptcy is in your near future, don’t try to move your assets around or transfer them, even to your family. Instead of protecting your assets, such action could have the opposite result, opening your bankruptcy case up to scrutiny and yourself up to serious consequences. If a debtor transfers assets to their family, or anyone else for that matter, any time during the two years before they file for bankruptcy, the court might look closely at the transfer to see if it was done to hide the debtor’s assets, defraud creditors, or trick the bankruptcy court. This applies to asset transfers to irrevocable trusts as well. If you are concerned about losing assets during bankruptcy, and that is why you considered transferring them to family members before learning the issues it could cause with your case, there may be other alternatives. For example, if you file Chapter 13, your assets will not be at risk of liquidation at all. If you ultimately file Chapter 7, our lawyers can identify the right liquidation exemptions to make sure your home and other assets stay untouched during your bankruptcy case. To schedule a free case assessment with Young, Marr, Mallis & Associates, call our bankruptcy lawyers today at (215) 701-6519 or (609) 755-3115. Is it Okay to Transfer Assets to Your Family Before Filing for Bankruptcy? Certain bankruptcy chapters involve the risk of losing assets to liquidation, which could deter some debtors, making them wonder whether they can transfer assets to close family to avoid losing them entirely. The Bankruptcy Code addresses this under 11 U.S.C. § 548. Any recent transfers in the two years proceeding a bankruptcy case might be scrutinized. Transfers made during that time to intentionally defraud a lender or creditor to delay repayment or made to family members or others for less than the asset’s value might be avoided by the court, meaning stopped or undone. Transferring assets to a family member specifically might draw more scrutiny during your bankruptcy case and seem preferential because of the close nature of the relationship. If you sell property or other assets relatively close to when you file for bankruptcy, the court might consider how you use the proceeds from the sale. For example, the court might decide the sale is fine if you paid for reasonable housing and living expenses for you and your family using its proceeds. However, if debtors sell assets to make irresponsible purchases or intentionally misrepresent their financial situation during bankruptcy to get a discharge, they might face serious consequences for fraudulent transfers. Debtors might face similar issues when they put assets in irrevocable trusts too close to when they file for bankruptcy. If there is an issue with recent asset transfers in a bankruptcy case, the debtor could lose their discharge for unsecured debts. There are also criminal consequences for fraudulent transfers or intentionally concealing assets during bankruptcy, according to 18 U.S.C. § 152, including possible fines and up to five years imprisonment. How Can You Protect Assets During Bankruptcy without Transferring Them to Family? Transferring assets to family or friends is not the right way to protect them or benefit the most from the bankruptcy process. If losing assets is your primary concern, our lawyers can determine whether your income is high enough to support a repayment plan, taking into account your expenses and dependents. If Chapter 7 is better suited to your situation, we can strategically choose liquidation exemptions to keep assets safe. See if You Can File a Chapter 13 Bankruptcy Case The bankruptcy chapter dictates whether or not assets are at risk of being liquidated. To determine if you can file Chapter 13, a non-liquidation bankruptcy, our lawyers can create a full financial profile of your situation. To do this, we will need certain information, such as your monthly income, recent tax returns, number of dependents, and typical expenses. We will also identify all debt liabilities and to which creditors you owe which amounts. Certain debts are dischargeable, and bankruptcy will erase them. Furthermore, after negotiating with creditors or lenders, we may be able to lower what you owe and agree to a favorable repayment plan. When debtors file Chapter 13, all debts get consolidated under the same interest rate, which is typically low so that debt does not continue to grow unchecked during the repayment period. This repayment period could last anywhere from three to five years, depending on your monthly income and outstanding debts. While you repay creditors during your Chapter 13 case, they cannot come for your assets, like your car or house. Pick the Right Liquidation Exemptions for Chapter 7 Bankruptcy For debtors who cannot afford repayment plans on top of their monthly expenses, Chapter 7 bankruptcy may be necessary. In these cases, our bankruptcy lawyers can help debtors identify the most beneficial liquidation exemptions based on the specific assets they want to protect. Typically, debtors are most concerned about safeguarding their homes and vehicles. Some states have homestead exemptions debtors can claim, but others, like Pennsylvania and New Jersey, notably do not. If your state does not have a homestead or vehicle exemption, our lawyers can confirm if you can choose federal exemptions instead. Picking exemptions from the onset of your case is important so that you know exactly which assets you can feasibly protect before filing. Sometimes, the reason for the debtor’s financial issues is the asset they want to protect, like their home. For example, if you defaulted on your mortgage, you could face foreclosure, which you can stop with bankruptcy. However, if, during bankruptcy, you do not exempt your house from liquidation, it could be taken to repay the mortgage lender, which is precisely what liquidation exemptions can help debtors avoid during Chapter 7 cases. Call Our Lawyers to Talk About Your Bankruptcy Case To schedule a free case review from Young, Marr, Mallis & Associates’ Philadelphia bankruptcy lawyers, call (215) 701-6519 or (609) 755-3115 today.

In an opinion that resolves decades of circuit court splits, the Supreme Court ruled against allowing nonconsensual third-party releases. Harrington v. Purdue Pharma, LP, No. 23-124 (6/27/24) which can be found here.  While the opinion is emphatic in its rejection of extra-textual plan provisions, the 5-4 ruling and numerous caveats mean this won't be the last time creative lawyers will be testing the limits of the Code.What HappenedHow a narrative is framed can say a lot about how a case will end up. In the lower courts, the narrative was that the chastened Sackler family agreed to contribute billions to combat the effects of the opioid epidemic and surrender their company and that nearly everyone agreed. However, Justice Gorsuch told a much different story in his opinion. According to Justice Gorsuch, the Sacklers marketed a drug that killed 247,000 people and that when one of their subsidiaries accepted criminal liability for the scheme, they devised a "milking" scheme to transfer the assets of the company to the family who then transferred them to offshore trusts. Over a period of eight years, the Sacklers took $11 billion in distributions, draining the company's assets by 75%.  After the company was faced with thousands of suits, it proposed a plan in which the Sacklers would pay back $4.325 billion over a period of years. When you figure in time value of money, the Sacklers were proposing to repay about one-third of what they received after agreeing that the company had engaged in criminal behavior. The plan provided that the Sacklers would receive a release from the company for draining its assets and would also ban claims by anyone who could otherwise sue the company. The release was striking in its breadth. It would include claims for fraud and willful misconduct (which would be non-dischargeable in a personal bankruptcy) and would extend to hundreds, if not thousands, of Sackler family members and entities.  Most creditors who voted supported the plan. However, only about 20% of the eligible creditors actually voted. The  U.S. Trustee, who the court described as "charged with promoting the integrity of the bankruptcy system for all stakeholders," objected along with various states, municipalities, tribes and individuals. The Bankruptcy Court approved the plan. However, the District Court reversed in a firmly worded opinion. The Sacklers then agreed to contribute an additional $1.175 to $1.675 billion to the plan if the eight objecting states and the District of Columbia would withdraw their objections. As noted by Justice Gorsuch, "(t)he Sacklers' proposed contribution still fell well short of the $11 billion they received from the company between 2008 and 2016." Nevertheless, the objecting states and D.C. agreed to the new proposal.  A divided panel of the Second Circuit affirmed. When the U.S. Trustee asked for a stay pending appeal, the Supreme Court decided to treat the motion as a petition for cert, which they granted. An Unusual Alignment of Justices In a surprisingly close opinion, the Supreme Court reversed the Second Circuit. The lineup of justices voting for each side was a sharp contrast to the ideological splits of some of the court's more controversial decisions. Justice Gorsuch wrote the majority opinion, joined by Thomas, Alito, Barrett and Jackson. Justice Kavanaugh authored the dissent and was joined by the Chief Justice and Sotomayor and Kagan. Justice Jackson's vote to join the majority ensured that nonconsensual third-party releases would not be allowed. This may be the only case where she and Justice Thomas were on the same side of a 5-4 decision.  It is also worth noting that Justice Kavanaugh's 54-page dissent was longer than the majority opinion, indicating that this was not a casual disagreement.A Statement of PolicyOn page 1 of the opinion, Justice Kavanaugh offers a vision of the purpose of bankruptcy which illuminates the result he later reaches.The bankruptcy code contains hundreds of interlocking rules about “‘the relations between’” a “‘debtor and [its] creditors.. But beneath that complexity lies a simple bargain: A debtor can win a discharge of its debts if it proceeds with honesty and places virtually all its assets on the table for its creditors. Opinion, p. 1. This statement is almost as iconic as proclaiming that bankruptcy is intended to provide relief to the honest but unfortunate debtor. Expect to see this statement quoted in many bankruptcy opinions to come.It's the TextWhile many pages have been written on third-party releases, Justice Gorsuch narrowed the case down to one subsection and one canon of interpretation. The subsection was section 1123(b)(6) which states that a plan may "include any other appropriate provision not inconsistent with the applicable provisions of this title." He summarized the argument for allowing third-party releases saying:As the plan proponents see it, paragraph (6) allows a debtor to include in its plan, and a court to order, any term not “expressly forbid[den]” by the bankruptcy code as long as a bankruptcy judge deems it “appropriate” and consistent with the broad “purpose[s]” of bankruptcy.  And because the code does not expressly forbid a nonconsensual nondebtor discharge, the reasoning goes, the bankruptcy court was free to authorize one here after finding it an “appropriate” provision.Opinion, at 9-10.  He had little trouble dispatching this argument. He stated:This understanding of the statute faces an immediate obstacle. Paragraph (6) is a catchall phrase tacked on at the end of a long and detailed list of specific directions. When faced with a catchall phrase like that, courts do not necessarily afford it the broadest possible construction it can bear.  Instead, we generally appreciate that the catchall must be interpreted in light of its surrounding context and read to “embrace only objects similar in nature” to the specific examples preceding it.  So, for example, when a statute sets out a list discussing “cars, trucks, motorcycles, or any other vehicles,” we appreciate that the catchall phrase may reach similar landbound vehicles (perhaps including buses and camper vans), but it does not reach dissimilar “vehicles” (such as airplanes and submarines). This ancient interpretive principle, sometimes called the ejusdem generis canon, seeks to afford a statute the scope a reasonable reader would attribute to it. Viewed with that much in mind, we do not think paragraph (6) affords a bankruptcy court the authority the plan proponents suppose. In some circumstances, it may be difficult to discern what a statute’s specific listed items share in common. But here an obvious link exists: When Congress authorized “appropriate” plan provisions in paragraph (6), it did so only after enumerating five specific sorts of provisions, all of which concern the debtor—its rights and responsibilities, and its relationship with its creditors. Doubtless, paragraph (6) operates to confer additional authorities on a bankruptcy court. But the catchall cannot be fairly read to endow a bankruptcy court with the “radically different” power to discharge the debts of a nondebtor without the consent of affected nondebtor claimants.Opinion, pp. 10-11 (cleaned up).  To simply, the answer to the question can be found by reference to the Sesame Street song "One of These Things (Is Not Like the Other)."   Because 11 U.S.C. Sec. 1123(b)(1)-(5) all refer to the debtor while the proposed interpretation of section 112(b)(6) does not, third-party releases are the one thing that is not like the others. I could go on, especially as Justice Kavanaugh offers his rebuttal to the dissent, but that is really the heart of the opinion. What Was Not DecidedA feature of recent Supreme Court opinions with bold holdings is a list of caveats saying what is not being decided. While the Court might later decide these propositions, it is not doing so today since they weren't really part of the question the Court was asked. It shouldn't seem necessary to do so, but it does help to silence commentators who might be tempted to claim that the sky is falling.The Court did not call into question consensual third-party releases. Neither did it decide "what qualifies as a consensual release or pass upon a plan that provides for the full satisfaction of claims against a third-party nondebtor." Opinion, p.19. This brings to mind the evolution of Stern v Marshall.  First, the Court held that bankruptcy courts could not decide a claim that was not at the heart of the restructuring of the debtor-creditor relationship. Stern v. Marshall, 564 U.S. 462 (2011). Then it held that bankruptcy courts could decide these claims with consent of the parties. Executive Benefits Ins. Agency v. Arkison, 575 U.S. 665 (2014). Then it held that consent could be imposed by waiver. Wellness Int'l Network, Ltd. v. Sharif (2015). Just as Stern turned out not to significantly disrupt the functioning of the bankruptcy courts, so the Court in this case leaves a lot of room for deciding just how consensual a consensual release should be. The majority also said that it would not decide the impact of third-party releases in a plan that has  been implemented. This refers to equitable mootness, a doctrine the Supreme Court has steadfastly refused to take up. While it was not necessary to say that the Court wasn't taking up equitable mootness in a case that was not equitably moot, Justice Gorsuch indicates that he knows the issue is out there. The DissentSince the majority was able to dispose of the issue in 20 spare pages, the dissent should be as circumscribed as well, right? Not right. Justice Gorsuch's fellow Trump appointee, Justice Kavanaugh, wrote a  54-page rebuttal. A dissent can be a  lot of things. Justice Sotomayor's dissent in the Trump immunity case, Trump v. United States, 2024 U.S. LEXIS 2886 (2024), was a primal scream aimed more at the general population than the Court. On the other hand, some of the dissents of Justices Thomas and Alito became placeholders for future majority opinions. However, I do think it is significant that four Justices, including the Chief, sought to articulate an alternate ground for how the bankruptcy statute should be interpreted. Here are a few highlights from the dissent that may show up in future Supreme Court opinions. When citing this language, be sure to note that a dissent, while eloquent and persuasive, is still the opinion that did not prevail. The dissent's opening paragraphs lament the harm to the opioid victims that could have benefitted from this plan. Today’s decision is wrong on the law and devastating for more than 100,000 opioid victims and their families. The Court’s decision rewrites the text of the U. S. Bankruptcy Code and restricts the long-established authority of bankruptcy courts to fashion fair and equitable relief for mass-tort victims. As a result, opioid victims are now deprived of the substantial monetary recovery that they long fought for and finally secured after years of litigation. Bankruptcy seeks to solve a collective-action problem and prevent a race to the courthouse by individual creditors who, if successful, could obtain all of a company’s assets, leaving nothing for all the other creditors. The bankruptcy system works to preserve a bankrupt company’s limited assets and to then fairly and equitably distribute those assets among the creditors—and in mass-tort bankruptcies, among the victims. To do so, the Bankruptcy Code vests bankruptcy courts with broad discretion to approve “appropriate” plan provisions. 11 U. S. C. §1123(b)(6).  In this mass-tort bankruptcy case, the Bankruptcy Court exercised that discretion appropriately—indeed, admirably. It approved a bankruptcy reorganization plan for Purdue Pharma that built up the estate to approximately $7 billion by securing a $5.5 to $6 billion settlement payment from the Sacklers, who were officers and directors of Purdue. The plan then guaranteed substantial and equitable compensation to Purdue’s many victims and creditors, including more than 100,000 individual opioid victims. The plan also provided significant funding for thousands of state and local governments to prevent and treat opioid addiction. The plan was a shining example of the bankruptcy system at work. Not surprisingly, therefore, virtually all of the opioid victims and creditors in this case fervently support approval of Purdue’s bankruptcy reorganization plan. And all 50 state Attorneys General have signed on to the plan—a rare consensus. The only relevant exceptions to the nearly universal desire for plan approval are a small group of Canadian creditors and one lone individual. But the Court now throws out the plan—and in doing so, categorically prohibits non-debtor releases, which have long been a critical tool for bankruptcy courts to manage mass-tort bankruptcies like this one. The Court’s decision finds no mooring in the Bankruptcy Code. Under the Code, all agree that a bankruptcy plan can nonconsensually release victims’ and creditors’ claims against a bankrupt company—here, against Purdue. Yet the Court today says that a plan can never release victims’ and creditors’ claims against non-debtor officers and directors of the company— here, against the Sacklers.That is true, the Court says, even when (as here) those non-debtor releases are necessary to facilitate a fair settlement with the officers and directors and produce a significantly larger bankruptcy estate that can be fairly and equitably distributed among the victims and creditors. And that is true, the Court also says, even when (as here) those officers and directors are indemnified by the company. When officers and directors are indemnified by the company, a victim’s or creditor’s claim against the non- debtors “is, in essence, a suit against the debtor” that could “deplete the assets of the estate” for the benefit of only a few, just like a claim against the company itself. Dissent, pp. 1-3.  This is a big chunk of text. However, it felt that it was important to capture the spirit of the dissent. Reading it, I have to say WOW. What a full-throated defense of bankruptcy as a solution to a "collective action problem" from two members of the Court's Republican majority. The dissent is claiming that the majority is being mean in overruling this "shining example of the bankruptcy system at work." As a bankruptcy practitioner, it warms my heart to know that four members of the Supreme Court think so highly about what we do.So where did the dissent see the law differently? First, it viewed the word "appropriate" broadly in light of "the history of bankruptcy practice approving non-debtor releases in mass-tort bankruptcies." This seems to be a weird marriage of open-ended statutory interpretation favored by the left with the history and tradition opinions of the right. However, I can't get away from the view that the dissent is arguing that the ends justify the means. The dissent comes right out and says that because this was a really good deal, that the Court should find a way to make the legislative mandate work. That is shown by this excerpt:Throughout this opinion, keep in mind the goal of bankruptcy. The bankruptcy system is designed to preserve the debtor’s estate so as to ensure fair and equitable recovery for creditors. Bankruptcy courts achieve that overarching objective by, among other things, releasing claims that otherwise could deplete the estate for the benefit of only a few and leave all the other creditors with nothing. And as courts have recognized for decades, especially in mass-tort cases, non-debtor releases are not merely “appropriate,” but can be absolutely critical to achieving the goal of bankruptcy—fair and equitable recovery for victims and creditors.Dissent, p. 5. I know I am being overly dramatic here, but it is almost as if the dissent is saying "from each billionaire according to his ability to pay, to each creditor according to the common settlement fund." While my paraphrase of Marx may be a little cheeky, there are plenty of times when the Bankruptcy Code applies a common welfare model. An individual debtor's discharge does not depend on the consent of the creditors. It is granted unless a party in interest prevails in an action under section 523 or 727, If a plan is approved by the requisite majority (2/3 in dollar amount and more than one-half in number) it is binding on all of the creditors in the class if the plan is otherwise confirmable. Given the societal impact of mass torts, whether it is opioids, sexual abuse or asbestos, maybe a collective solution is desirable. That is certainly the view of the four dissenters. What Should the Answer Be?In writing about this issue for several years, I have come to the conclusion that the ability to resolve large societal problems requires the ability to marshal third party assets in return for third-party protections but that the Code does not currently provide the authorization to do so. On the other hand, the current ad hoc system of providing relief to third parties whenever it is necessary to make a plan work is too broad to be justified. I can think of a few instances which a functional legislative (meaning not the one we have right now) might endorse. The easiest case is for channeling injunctions for insurance proceeds. Arguably this is already authorized under current law. When an insurance company contributes the full policy limits to a plan, it should be free from other claims. I also think bar orders should be enforceable. When a third party settles estate claims, it should be released from third party claims based on the same facts. The same should be true where a third-party entitled to indemnity from the debtor makes a significant contribution to a settlement fund. That was at least a part of the issue in Purdue Pharma. Some circuits, but not the Fifth Circuit, allow for bar orders. Finally, I think that there should be some situations where the vote of a class to accept a plan, perhaps by a supermajority, should bind all the members of the class, even if it grants relief to third parties.Barring a legislative solution, creative lawyers will look for ways to make releases consensual. To paraphrase Dr. Ian Malcom in Jurassic Park, lawyers will find a way.   

Leaving assets out of your bankruptcy case, even if it is an honest mistake, could have serious consequences for you and your ability to repay creditors. For example, the court might deny you a debt discharge for not listing assets, meaning you could have to pay off unsecured debts you assumed would be erased. If the court has already discharged your debt, it might revoke the discharge for failure to disclose assets. Furthermore, there are criminal consequences for not listing assets, as this is typically considered bankruptcy fraud. To avoid this situation, let our lawyers completely overhaul your assets and finances before filing your bankruptcy petition. When preparing your case, we can identify all assets and the necessary exemptions to protect them from liquidation if you file Chapter 7. For a free case assessment from Young, Marr, Mallis & Associates, call our bankruptcy lawyers now at (215) 701-6519 or (609) 755-3115. Can You Get a Debt Discharge if You Forget to List an Asset During Bankruptcy? Intentionally or mistakenly leaving assets out of your bankruptcy case could seriously hurt it and your chances of getting a discharge. When you file your bankruptcy case, you must inform the court of all your assets. This is necessary whether you file Chapter 13 or Chapter 7. The list of assets helps to explain your financial situation and gives the court a better understanding of your ability to repay creditors. The court could deny you a discharge if you do not list all assets in your bankruptcy case. Debt discharges relieve debtors of their liabilities to repay certain creditors. For example, credit card debt is typically dischargeable in bankruptcy, regardless of the chapters debtors file. The appeal of a debt discharge is attractive to many debtors, especially those with considerable unsecured debts. Not getting a debt discharge when you expected to could make you liable for repaying more debts than you anticipated, which might derail or lengthen your case. If you have already received a debt discharge and the court learns you forgot to list assets, your discharge might be revoked. Neglecting to list certain assets, especially during Chapter 7, might be a serious issue. Chapter 7 is a liquidation bankruptcy. To repay creditors for non-dischargeable debts, debtors identify assets for liquidation. While creditors can protect some assets from liquidation, such as their homes or cars, they must use liquidation exemptions to do so. Some states, like Pennsylvania, let debtors choose between state and federal exemptions, as federal exemptions typically cover more assets. Is Forgetting to List an Asset During Bankruptcy Illegal? Bankruptcy is a legal process that goes through the courts and lets people struggling with debt address it. The process itself is highly regulated, and missteps, especially ones as egregious as failing to list assets, could result in criminal consequences for debtors. Under 18 U.S.C. § 157, bankruptcy fraud includes cases where debtors intentionally file fraudulent petitions with the court or make false or fraudulent claims or representations in their cases, including failing to list assets. Penalties for bankruptcy fraud include fines of $250,000 per violation and up to five years in jail, or both. These are serious consequences; even debtors who mistakenly leave assets out of their bankruptcy cases might be penalized. Fines associated with failure to disclose assets are not dischargeable should a debtor file for bankruptcy again shortly. How to Make Sure You List All Assets During Your Bankruptcy Case Debtors can rely on our lawyers to organize their assets and financial information, prepare their bankruptcy petitions, and identify state or federal exemptions that could shield their assets from liquidation in Chapter 7 to ensure they list all assets during their bankruptcy cases. Organizing Assets and Financial Information Our bankruptcy lawyers will start by reviewing your assets and finances in full. Tell our lawyers about all assets you hold, including any and all real estate, cash, investment accounts, vehicles, and other potential assets. You should list all secured and unsecured assets to ensure you do not leave anything out of the petition. Overhauling your financial information might take some time, and our lawyers must do this before filing the bankruptcy petition and getting an automatic stay to relieve you of creditors’ harassment. Because of this, you should not delay initiating your bankruptcy case if you are overwhelmed with debt. The longer you wait to file, the more interest might accrue on unpaid debts and the greater your repayment responsibility might become. Preparing the Bankruptcy Petition and Identifying Liquidation Exemptions Our attorneys can assess your household’s current income, number of dependents, and monthly expenses when preparing your bankruptcy petition to see how quickly you can repay creditors based on your present financial situation. While preparing a petition for Chapter 7, our lawyers can identify exemptions to shield assets from liquidation. Some debtors might not list assets for fear of losing them, like a home or car. Carefully picking liquidation exemptions or seeing if your income qualifies you to file Chapter 13 could let you keep the desired assets using the right channels without risking losing a bankruptcy discharge or facing criminal consequences for bankruptcy fraud. Before filing your petition with the court, our attorneys will ensure it is complete and accurate. In addition to listing all of your assets, our lawyers must also give the court a detailed assessment of your total debts, a full list of your creditors, and other financial information, like your monthly income and expenses. The court bases debt discharges and repayment plans on this information, so it must be wholly accurate. Because the bankruptcy process is extremely complex, debtors risk leaving out important information if they file without legal assistance. Call Our Attorneys to Start Your Bankruptcy Case Now Call Young, Marr, Mallis & Associates at (215) 701-6519 or (609) 755-3115 to discuss your case for free with our Philadelphia bankruptcy lawyers.

If you are hurt in a car accident during your chapter 13, tell your bankruptcy lawyer. During the five (or three) years of your Chapter 13, you are required to update the court if you’re injured in a car accident.I don’t see that written in the law anywhere, but judges say that’s so. Not doing it can really hurt you–especially if you’re hurt in a car accident. (Or medical mistake.)Hurst in a car accident during your Chapter 13? Tell your bankrutpcy lawyer.Under Virginia law, money you get from a personal injury–like a car accident or medical mistake--belongs to you. It does NOT belong to the bankruptcy court.  But it only belongs to you if you claim it belongs to you. And you have to tell the court about it so you can then claim it.If you don’t tell the court about it, then it belongs to the court. (Does that make your head spin? It is tricky.)The bankruptcy court is probably NOT going to notice on their own. But the insurance lawyer for the opposing party will. Because of that accident, you might have a lot of money coming to you. But when the insurance lawyer sees your bankruptcy–and they look–poof, that money is gone. The post Car Accident? Tell Your Lawyer appeared first on Robert Weed Bankruptcy Attorney.

North Carolina Bankruptcy Criminal Indictments Ed Boltz Tue, 07/02/2024 - 19:55 Attached are three criminal indictments  of bankruptcy debtors in North Carolina,  all of which largely relate  to undisclosed transfers or transactions after the filing of their bankruptcy. Status: Swicegood:  Mr.  Swicegood appears to have pleaded guilty as to Count One of  concealing property from the bankruptcy trustee,  with the other counts being dismissed.  He was sentenced  on April 24,  2024  to  four (4) years probation and a $100 special assessment. Purdy:  Ms.  Purdy pleaded guilty to making false statements to obtain a federally funded mortgage on May 22,  2024,  with sentencing in August. Colbert:  Ms.  Colbert's case is still pending,  with  trial  preliminarily  set for August. Additionally,  while  the creditor eventually made the wise decision to obtain legal counsel, who negotiated a resolution,  previously New Bro's Motors was  subject  to civil and not criminal contempt,  with the attached  order directing the United States Marshals Service to take its  owner into custody fortunately being avoided. Whether there are other criminal cases arising from bankruptcy,  against debtors or creditors,  is likely only known by the AUS As and perhaps the B As,  but hopefully this is neither a trend nor that any of these cases bleed over onto others, especially their attorneys. To read a copy of the transcript, please see: To read a copy of the transcript, please see: To read a copy of the transcript, please see: To read a copy of the transcript, please see: Blog comments Attachment Document colbert_indictment.pdf (264.32 KB) Document jerry_todd_swicegood_indictment_compressed.pdf (544.54 KB) Document purdy_criminal_information.pdf (49.48 KB) Document show_cause_order_3_castaneda_5-13-24.pdf (157.8 KB) Category Federal Cases

Bankr. M.D.N.C.: Robichaux v. Moses Cone Hospital- Motion In Limine regarding Expert Testimony Ed Boltz Tue, 07/02/2024 - 19:51 Summary: The defendants sought to preclude the plaintiff from presenting evidence and expert testimony on damages at trial, arguing that the evidence was allegedly undisclosed or insufficiently supplemented, violating Federal Rules of Civil Procedure 26(a) and (e). They also argued that the expert testimony from Stephen B. Darr was not relevant or helpful under Federal Rules of Evidence 401, 402, and 702. The court denied the motion to exclude Stephen B. Darr's testimony and reports, finding  that Darr's analysis of Randolph Health's changing enterprise value was relevant and helpful for understanding complex issues, thus meeting the requirements of Rules 401, 402, and 702.    The court  also found that there was not a sufficient basis to exclude the evidence due to nondisclosure, as  the plaintiff had taken sufficient measures to comply with Rule 26(a)(1)(A)(iii) by providing itemized statements and supporting documents for damages related to the loss of enterprise value and fees.  However, the court agreed with the defendants that the plaintiff failed to provide a computation or supporting evidence for damages related to the loss of physician referrals and procedures. As a result, the court granted the motion to exclude evidence and testimony regarding these damages, citing non-compliance with Rule 26(a)(1)(A)(iii) and considering factors of surprise, prejudice, and disruption. Commentary: This opinion could also be captioned as In re Randolph Hospital III,  as there have been at least two prior decisions issued in this case-  see In re Randolph Hospital I & II. To read a copy of the transcript, please see: Blog comments Attachment Document robichaux_v._cone_health_22-2002_-_order_on_motion_in_limine.pdf (579.04 KB) Category Middle District

Few situations are more stressful than having your home foreclosed on. If you have been notified of a home foreclosure, contact our firm today to get help stopping it. Home foreclosure is not an overnight process. They often take months before the final sale, giving you time to address the problem. Fighting foreclosure can be stressful at a time when you are already dealing with financial strain. Our lawyers can ease the burden by handling the important aspects of your case and explaining all the options available to save your home. After reviewing your finances, we might renegotiate the terms of your mortgage with your lender or get additional time to pay. If unfair practices are involved, we can help you file a lawsuit against your lender. Call our Pennsylvania foreclosure defense attorneys at Young, Marr, Mallis & Deane at (609) 755-3115 for your free case evaluation. How Can I Stop a Home Foreclosure in Pennsylvania? You should have received notice of your home foreclosure long before the final sale is initiated. A lender cannot foreclose on your home if you only miss a payment or two. However, if your mortgage is 120 days or more past due, 12 C.F.R. § 1024.41(f) allows lenders to file for foreclosure. You are entitled to be notified of your missed payments and the intention to foreclose on your home. In the interest of fairness, the law demands you have some time to fix the situation. Fortunately, several strategies can help fight the foreclosure and keep your home. Our Pennsylvania foreclosure defense attorneys have the experience to evaluate your case and determine the best path forward for you and your family. Some options will give you more time to get your finances in order. If you are completely overwhelmed, we might explore options to sell the home. In other cases, you were the victim of your lender and need to get justice in court. We will know the best course of action after reviewing the facts of your case. The following are ways to prevent your foreclosure in Pennsylvania: Pay Off the Debt One option is making the overdue payments to bring your mortgage current. While this might be challenging because of your financial difficulties, it is often the initial step our team takes. We can carefully review your financial situation to explore any potential sources of funds before considering other strategies. In some cases, tapping into your savings or retirement funds may provide the necessary funds. Alternatively, seeking assistance from family or friends could be an option. Our team can provide guidance and help you weigh these difficult decisions. During this time, we will also maintain open communication with your lender. Many lenders are willing to work with a client if they see your efforts to address the situation. In Pennsylvania, you have a right to redeem your mortgage up to one hour before your home is sold by the Sheriff’s Office. If you can pay what you owe on your mortgage plus any additional costs assessed, we can help negotiate your right to redeem. Request a Forbearance Another way to halt a home foreclosure is to work out a forbearance with your lender. However, forbearance is only a temporary solution. It will not prevent foreclosure on your home, but it will buy you some time to develop a strategy that will keep your home. With a forbearance, you will not have to make payments for up to six months. This is a good option if your financial issues are the result of an injury or being out of work. However, you will still need to make the missed payments, but it might be possible to have them added in installments to your monthly payments when they resume. Restructure the Mortgage Before Foreclosure Our lawyers could also help restructure your mortgage. If you receive a notice of foreclosure, contact our team immediately. The sooner we start negotiating with your lender, the more likely we will be able to negotiate favorable terms for a restructured mortgage. You are essentially renegotiating a new contract when getting a loan modification to your home mortgage. You can bargain for new interest rates and monthly payments that reflect your current economic situation. File for Bankruptcy Filing for bankruptcy might sound extreme, but certain types of bankruptcy can help prevent a foreclosure. Specifically, filing for Chapter 13 bankruptcy can stop the foreclosure proceedings against you. However, you will need to qualify for Chapter 13 bankruptcy. Our team will help you do this by developing a detailed repayment plan that shows the court your financial ability to make payments and the schedule you will use. Generally, these plans range from three to five years. You must be sure you can make your payments during this time, though, as missing even one payment can cause the foreclosure process to start back up. Negotiate a Short Sale A short sale can potentially eliminate your mortgage responsibilities through an agreement with your lender. This involves selling your property for an amount that is less than the remaining total mortgage. If the lender agrees, you will be able to sell for less than the property value. However, we will need to show that certain circumstances exist, such as a depressed housing market. We will also negotiate with your lender to waive the right to file a claim against you for the difference in the amount of sale, known as a deficiency judgment. Deed in Lieu of Foreclosure A “deed in lieu of foreclosure” works much like a short sale. It allows you and your lender to agree to transfer the deed in order to satisfy your outstanding mortgage debt. However, the lender can file a deficiency judgment to seek the difference in the debt and home value unless they waive the right. File a Lawsuit In some cases, you will need to file a lawsuit to fight your home foreclosure. This usually needs to be done when your lender acted unethically or illegally when foreclosing your home. For instance, foreclosure proceedings have many notice requirements that lenders are legally obligated to follow. This allows for due process, ensuring fairness by allowing you to be notified and have time to respond. If you only learned of the foreclosure right before it happened, your lender likely violated due process. In other situations, we would file a lawsuit on behalf of victims of predatory lending. Predatory lending happens when a lender lies or conceals important facts from a home buyer to secure the loan. Some lenders might misrepresent or outright lie about the interest rate. Other times, they approve borrowers who objectively should not have qualified for a home loan. Our Pennsylvania Foreclosure Defense Attorneys Can Help You Fight Your Foreclosure Today For a free case review, contact our Philadelphia foreclosure defense lawyers at Young, Marr, Mallis & Deane by calling (609) 755-3115.

SCOTUS: Harrington v. Purdue Pharma- No Third Party Releases in Chapter 11 CONSUMER EDITION Ed Boltz Mon, 07/01/2024 - 22:29 Summary: Rather than summarize a Chapter 11 case in exhaustive detail  that both has little directly to do with consumer bankruptcy cases and has been summarized in exhaustive detail elsewhere,  here are links to a few of those: Justia  NCBRC:  The Supreme Court Holds That the Bankruptcy Code Does Not Authorize a Nondebtor Discharge Without the Consent of the Claimants Rochelle's Daily Wire:  Supreme Court Reverses Purdue: No Nondebtor, Third-Party, Nonconsensual Releases SCOTUS Blog:  Supreme Court blocks OxyContin bankruptcy plan Commentary: The esjudem generis canon of  interpretation arises with fair regularity in interpreting the list heavy statutorily based Bankruptcy  Code (with that basis perhaps being   why the Supreme Court both seems to love to add bankruptcy case or two to its docket every term and why it then treats those cases like the dogs of that docket),  so its application in Harrington should inform bankruptcy courts going forward,  whether that is in terms of confirmation (of plans of whatever chapter)  or for  dismissal of cases under 11 U.S.C.  §707(a).  See for example,  In re Edwards  where the bankruptcy court read the list of bases for dismissal there in an expansive manner to include ability to pay. More specific to the Purdue Pharma case,  while the majority opinion holds that  the catchall provision of  §1123(b)(6)  allows that a plan may "include any other appropriate provision not inconsistent with the applicable provisions of this title."  (Emphasis added.)  To a large extent,  however,  it seems that the majority reverses this to require that the plan provisions  must be consistent  with applicable provisions of this title,  which is a small linguistic difference but a large procedural one. While inexplicably little attention was paid by either the majority or the dissent to my frequent complaints on these listservs and communities that the presence of a "co-debtor stay"  at 11 U.S.C. §1301  should at least be taken together with the treatment of asbestos related bankruptcies under §524(g) to inform whether, when and how courts should grant relief to non-debtors.   Beyond that,  however, this opinion also leaves unaddressed and unrecognized that  a similar,  but not identical,  catchall provision  in Chapter 13.  11 U.S.C. §1322(b)(11)  provides that a plan may "include any other appropriate provision not inconsistent with this title."  Absent from this provision is the requirement that the plan provision in question be inconsistent with the phrase "the applicable provisions".  Arguably,  this omission (and remember Congress is not, despite appearances to the contrary, a bunch of incompetent monkeys banging away on typewriters,  but drafts perfect legislation with unerring intent)  might get the Chapter 13 catchall provision   closer to what the dissent desired and the majority in vain required,  namely that a Chapter 13 plan can be confirmed if it is not inconsistent with the goals and aims of the Bankruptcy Code  without being explicitly tied to other specific statutory language.   Further,   the pending Trantham v.  Tate case at the 4th Circuit  looks to whether a non-standard plan provision,  as provided for in Federal Rule of Bankruptcy Procedure 3015(c) and derived from 11 U.S.C. §§ 1321 and 1322(b)(11), can depart from the Local Form Plan terms.  That case should also look to something of a compiled esjudem generis, with that "family"  include the plan confirmation requirements and options found throughout Chapter 13, but particularly that 11 U.S.C. §1322(b)(9)  takes as the default that assets vest in the debtor at confirmation.   To read a copy of the transcript, please see: Blog comments Attachment Document harrington_v_purdue_pharma_-_scotus_june_27_2024.pdf (547.69 KB) Category Law Reviews & Studies

Owning and managing rental properties in Pennsylvania is a massive responsibility, as you provide housing to tenants who need it. If you are at risk of mortgage foreclosure on a rental property, what happens to your tenants, and how can you protect them? Tenants who live in recently foreclosed-upon properties can typically stay there until their leases are over in Pennsylvania. If the new owner has standing to evict residents after a sheriff’s sale, they must give residents a 90-day notice to vacate. Property owners can prevent foreclosures from affecting their tenants and themselves by letting our lawyers negotiate new mortgage agreements with lenders that could potentially cure outstanding payments. If negotiations are unsuccessful, we can help property owners fight their cases in court or help them file for bankruptcy, as doing so can prevent mortgage foreclosures and sheriff’s sales. Call Young, Marr, Mallis & Associates for a free case assessment from our Pennsylvania mortgage foreclosure defense lawyers at (215) 701-6519. What Happens to Tenants Living in Foreclosed Properties in Pennsylvania? Tenants cannot control whether their landlords meet monthly mortgage payments and thus have no control over whether a property gets foreclosed. If this happens to tenants in Pennsylvania, they may be able to stay in their rental units until their current leasing agreement ends. Suppose you live in an apartment building or single-family home that has been foreclosed upon and auctioned off at a sheriff’s sale in Pennsylvania. In that case, you may be protected under the Protecting Tenants at Foreclosure Act (PTFA). Under the PTFA, tenants can stay in foreclosed properties for the remainder of their lease period, provided the new owner does not intend to utilize the property as their primary residence, in which case they must give tenants a 90-day notice to vacate. Month-to-month tenants also typically have 90 days to vacate foreclosed properties if the new owner does not wish to renew a lease. These protections only apply to bona fide tenants, which, under the PTFA, exclude any tenants who are a mortgagor’s spouse, children, parents, or tenants who pay substantially less than fair market value for rent. If the new owner does not have reason to evict tenants following a sheriff’s sale, tenants can likely stay in their units or homes until their current leasing agreement periods are over, provided they signed their current leasing agreements with the previous owner before foreclosure began. Whether or not tenants can renew their leasing agreements with the new owner after the lease ends is a different matter. If tenants meet the general qualifications property managers look for, they can often renew leases after rental properties change hands in Pennsylvania. So, more often than not, foreclosure has a greater impact on property owners than tenants, as their living situations might not change much. Preventing Mortgage Foreclosures from Affecting Tenants in Pennsylvania Property owners and managers in Pennsylvania provide housing to their tenants. Should their properties go into foreclosure, those same tenants risk losing their housing, and property owners risk losing an important income stream. Our attorneys can help property owners continue in their real estate endeavors and let them continue offering safe housing to tenants. Cure the Mortgage or Negotiate a New Plan Property owners are at risk of foreclosure after missing just a few months of payments. If your missed payment amounts are relatively low, you may be able to avoid foreclosure by curing the mortgage altogether. This will require you to pay all outstanding amounts fully. If you cannot cure your mortgage entirely, our lawyers can start negotiating with your lender to rework the existing mortgage agreement. When property owners successfully renegotiate agreements, they may be able to avoid foreclosure and a possible sheriff’s sale in Pennsylvania. Our attorneys can propose a new payment schedule and payment amounts that suit both the lender and the property owner. File for Bankruptcy If you need some relief to settle outstanding payments on a rental property mortgage in Pennsylvania, filing for bankruptcy can provide that. During a bankruptcy case, tenants can stay in their homes without fear of eviction or foreclosure, provided the debtor sees the case through. Even if foreclosure or a sheriff’s sale is imminent, filing Chapter 7 or 13 bankruptcy will stop those processes from continuing. Based on your income and the size of your debt, our Pennsylvania mortgage foreclosure defense lawyers will determine which bankruptcy chapter suits your case and start preparing your petition. If your primary creditor is your mortgage lender, we can devise a repayment plan that lets you settle your debts within three to five years. Because mortgage debts are not dischargeable, you must repay them during bankruptcy. If you file Chapter 7, the property you filed bankruptcy to keep could get liquidated, especially since Pennsylvania does not have a homestead exemption or exemptions for rental properties. If you file Chapter 7 and do not properly protect your assets, you could lose the property to repay the lender, and your tenants could be without a place to live once their lease terms are up or sooner if the new owner has reason to evict. Fight Foreclosure in Court Property owners can defend foreclosure cases in court in Pennsylvania. Lenders that fail to follow the necessary steps in mortgage foreclosure proceedings might see their claims dismissed. Banks that violate state and federal lending laws might not be able to foreclose on properties, even if owners miss several payments. If there is evidence of predatory lending practices or other egregious behavior, you may be able to win your foreclosure case, letting you keep your rental property in Pennsylvania. To prepare your defense against foreclosure, our lawyers will need all documents related to your current mortgage agreement, records of past payments, and copies of any correspondence with your lender. Call Our Lawyers in Pennsylvania Today Call Young, Marr, Mallis & Associates’ Pennsylvania mortgage foreclosure defense lawyers for a free case review at (215) 701-6519.