Watching your property get sold to the highest bidder at a sheriff’s sale is generally not a pleasant experience. Sheriff’s sales are the final step in the foreclosure process, where property is sold to pay debts that a debtor owes to various creditors. The proceeds from the sheriff’s sale are used to pay these debts. However, since sheriff’s sales are auctions, sometimes the highest bid for a property will not be enough to pay off every debt owed to creditors. When properties sold at sheriff’s sales are not sold for enough to pay all debts, those debtors actually end up out of luck. The proceeds of a property sold in a sheriff’s sale pay off creditors in order of priority, so those creditors lower on the list will not get paid if the proceeds from the sale are not enough to satisfy all debts. If you need assistance, speak to the foreclosure defense attorneys with Young, Marr, Mallis & Associates by calling (215) 701-6519 for Pennsylvania matters or (609) 755-3115 for New Jersey matters. Do Creditors Get Paid if My Property Does Not Sell for Enough in a Sheriff’s Sale? If your property sells for less than what your creditors are owed, the creditors are paid in order of priority. In general, creditors who obtained an interest in the property earlier in time get paid before creditors who obtained their property interest later, barring some exceptions like mechanic’s liens. Those creditors who are lower in priority do not get their debts satisfied if not enough money is made from the sheriff’s sale. What Happens at Sheriff’s Sales? Whether a sheriff’s sale is happening because of a “tax sale” or after foreclosure proceedings, the process remains largely the same. A property that is being sold to pay for debts is put up for auction, and people bid on it. The highest bidder gets the property, and the proceeds from the sale are used to pay the creditors who initiated foreclosure. You are also allowed to bid on your own property. If you are the highest bidder, you will re-obtain your own property without any liens or encumbrances. That being said, it is not a good idea to use a sheriff’s sale as a way to get rid of debt, as having a property foreclosed on can still have negative consequences, so discuss your situation with our foreclosure defense attorneys. What if My Property is Not Sold at All in a Sheriff’s Sale? If your property is not sold, it becomes what is called “real-estate-owned property.” Essentially, the bank or other creditors get ownership of the property instead of getting paid. It may be surprising to know that this is generally a bad outcome for the creditor. In most cases, the creditor will be a bank or other financial institution. Those entities are not in the business of possessing ownership of errant properties, so they would prefer that the property be sold rather than get possession of it. Ways to Prevent Sheriff’s Sales If you are concerned that your property will be foreclosed on and go up for auction at a sheriff’s sale, there are, fortunately, options available to you to prevent that from happening. Each person’s situation is different, so it is best to talk with our foreclosure defense attorneys about what option is right for you and your property. Right of Redemption When a property you own is being sold at a sheriff’s sale, you can exercise your “right of redemption.” When you exercise this right, you are stating that you have the entire balance of outstanding debts against you ready to be paid to creditors right away. Of course, it can be difficult to come up with the amount of capital needed to pay off all debts at the same time, so this option may not be practicable in all circumstances. Injunctive Relief Another way to prevent sheriff’s sales is to request injunctive relief. Injunctions are court orders that prevent a party from doing something. In this instance, the injunction prevents a sheriff’s sale. In order to have a successful claim for injunctive relief, you must show the court you are more likely than not to win the case if it went to a full trial. Another thing the court takes into account in a request for injunctive relief is whether the requesting party will suffer hardship if they do not issue an injunction. For example, if failure to issue an injunction would result in you losing your home because it is sold at auction, a court is likely to see that as hardship and may be more inclined to give you the injunction to stop the sale until circumstances change. Bankruptcy An option to stop a sheriff’s sale from taking place is to file bankruptcy. When someone files for bankruptcy, an “automatic stay” is placed in effect, which prevents any efforts to collect a debt against the person filing bankruptcy. Bankruptcy prevents sheriff’s sales by stopping the foreclosure process so that things never get to that point in the first place. However, you should not think of bankruptcy as a “magic bullet” that can be used without much consideration. Filing bankruptcy can have significant consequences for your credit score, and depending on the Chapter of bankruptcy you file under, your property may be able to be liquidated in any event. Filing bankruptcy is a serious decision that you should discuss with our attorneys before you make it. Chat with Our Foreclosure Defense Attorneys About Your Case For any foreclosure or sheriff’s sale-related concerns you have, call Young, Marr, Mallis & Associates’ foreclosure defense attorneys at (215) 701-6519 for Pennsylvania and (609) 755-3115 for New Jersey.

When one parent can no longer work because of a disability, the other, along with their children, might be eligible for auxiliary benefits from the Social Security Administration (SSA). Also known as family benefits, auxiliary benefits are paid in addition to Social Security Disability Insurance (SSDI) benefits and do not reduce a primary beneficiary’s SSDI benefit amount. Each eligible family member might be able to get up to 50% of the primary beneficiary’s benefit amount, though that it is not guaranteed. There is no limit to how many family members can get auxiliary benefits, though the SSA might reduce their individual benefit amounts if they exceed the maximum family benefit allowance. Auxiliary benefits can change to survivors benefits if primary beneficiaries die, possibly resulting in larger monthly benefits for surviving spouses or children. Auxiliary benefits are not factored into a primary beneficiary’s overall income, meaning recipients can stay below substantial gainful activity (SGA) limits while getting additional financial support from the SSA. To schedule a confidential and free assessment of your case from our disability lawyers, call Young, Marr, Mallis & Associates now at (215) 515-2954 or (609) 557-3081. What Are Auxiliary Benefits? If you were recently approved for Social Security Disability Insurance (SSDI) benefits, your immediate family members might be eligible for additional auxiliary benefits from the Social Security Administration, also known as family benefits. The SSA pays auxiliary benefits in addition to SSDI or other disability benefits, not in place of them. These benefits are paid to immediate family members of SSDI recipients to increase the family’s total monthly income. This is often necessary for families of SSDI recipients, as the maximum monthly SSDI benefit is just $3,822. For some, that might be enough to support themselves. For others with large families, additional financial support might be necessary and can come in the form of auxiliary benefits. Furthermore, it is important to note that the maximum monthly SSDI benefit is not available to all recipients, just those near retirement age. Your specific SSDI benefit amount will be calculated according to your work history, which will also help determine the auxiliary payments your family gets. While the SSA pays auxiliary benefits in addition to SSDI payments, it will not automatically do so. Your spouse or children must apply for family benefits to get them, which our disability lawyers can assist with by preparing the necessary information and submitting it to the Social Security Administration. Who Can Receive Auxiliary Benefits? Auxiliary benefits are only available to primary beneficiaries’ children, spouses, and ex-spouses. Furthermore, these individuals must meet additional criteria to show the SSA they are entitled to family benefits. Spouses Those currently married to disability recipients can get auxiliary benefits if they are 62 or older or are any age and have an in-house child. This means that they have a child who is 16 years old or younger or qualifies as a disabled adult child (DAC). Ex-spouses can also get auxiliary benefits through an ex’s record if they were married for at least ten years, are at least 62 years old, are unmarried, and are ineligible for benefits on their own record or someone else’s. This can get confusing, especially in situations involving ex-spouses, and our lawyers can help you determine whether you are eligible for auxiliary benefits based on your specific situation. Children Children of disability recipients can also get auxiliary benefits, provided they meet the various criteria. To get family benefits, children of SSDI recipients must be unmarried and under 18. Alternatively, if the child of a disability recipient is disabled themselves and was diagnosed with their disability before the age of 22, they can get family benefits even if they are older than 18. The SSA classifies such individuals as DA Cs, and they can get SSDI benefits themselves through a parent’s earning record if they require financial support. In addition to being under the age of 18 or otherwise being classified as a DAC, children seeking auxiliary benefits must show the SSA that they meet extra criteria. For example, they must meet the definition of “child” as defined by the SSA, meaning they must be the biological, adoptive, or, in some cases, step-child of the primary beneficiary. Furthermore, the child must have been dependent on the primary beneficiary during at least one of three points in time. For example, a child must have been dependent on the primary beneficiary at the beginning of the worker’s disability, when the worker was last entitled to disability benefits, or when the child’s application for auxiliary benefits was filed. Depending on the specifics of a case, there might be additional dependency requirements a child has to meet in order to prove their eligibility for auxiliary benefits. Are You Eligible for Auxiliary Benefits? In order for the SSA to consider someone’s eligibility for auxiliary benefits, that person must have the necessary relationship with an insured worker. This means that there must first be a primary beneficiary who is eligible for SSDI benefits for there to be a family member who is eligible for auxiliary benefits. Eligibility for SSDI benefits is based on two factors: a person’s work history and disability. Work history is of greatest concern when it comes to auxiliary benefits, as that is how our lawyers estimate a family’s additional income. To have a sufficient earning record for SSDI, an applicant must have work credits. Individuals can earn up to four work credits per year, which is done when workers earn $6,920 in income. To be eligible for any disability benefits, an applicant must have at least 40 work credits, 20 of which were earned in the last ten years preceding their disability diagnosis. Once we have established that a primary beneficiary is, in fact, eligible for SSDI, we can help their immediate family members apply for auxiliary benefits, the amounts of which will be calculated according to the primary beneficiary’s benefit amount. That amount is ultimately based on their earning record, or the number of work credits they have accrued, which is why examining their history prior to applying is important. When Are Auxiliary Benefits Not Payable? When applying for auxiliary benefits, primary beneficiaries or their spouses might leave out crucial information or fail to meet certain standards, resulting in their applications being denied. Spouses under retirement age can typically only get auxiliary benefits if they have a child under 16 in their care. The Social Security Administration might deny applications for auxiliary benefits in cases where spouses are separated or a minor child has been removed from a parent’s care. Child benefits are not payable in specific situations, which our lawyers can explain in the event that they apply to your case. Generally speaking, the biggest issues with applications for auxiliary benefits occur when parents leave out important information required by the SSA. Maximum Auxiliary Family Benefit Amounts Auxiliary benefits are based on several factors, such as a recipient’s relationship to the primary beneficiary and the primary beneficiary’s benefit amount. Our lawyers can explain how the SSA calculates auxiliary benefits and what might happen if your family’s total benefit amount exceeds the limit allowed by the SSA. Generally speaking, each family member who is eligible for auxiliary benefits can receive up to 50% of the primary beneficiary’s benefit amount. That said, there is a maximum when it comes to how much the SSA will pay to one family. In most cases, the maximum total family benefit amount is between 150% and 180% of the primary insurance amount. Suppose a disability recipient has a spouse and several children and the auxiliary benefits payable to them would be above the maximum family benefit allowed by the SSA. In that case, the SSA might reduce each of their individual auxiliary benefit amounts as necessary. Suppose you have recently applied for SSDI and are interested in how auxiliary benefits can increase your family’s overall income. In that case, our attorneys can estimate the total benefits your family might be eligible for by reviewing your income prior to sustaining a disability and your work history to calculate your likely SSDI benefit amount and, by extension, your family’s auxiliary benefits. When to Apply for Family Benefits Many SSDI recipients are unaware of the existence of auxiliary benefits when they originally apply for support from the SSA. Even if it has been years since you’ve been approved for SSDI benefits, it is not too late for your family to apply for auxiliary benefits. Applications for SSDI benefits are usually subject to a five-month waiting period. After the SSA informs you of your approval, you can immediately begin the application process for auxiliary benefits for your spouse and children. By doing this as soon as possible, you can get the greatest financial support from the SSA from the get-go. The SSA may pay auxiliary benefits to children retroactively for up to 12 months. How to Apply for Auxiliary Benefits Applying for auxiliary benefits is similar to applying for SSDI benefits. Our attorneys can gather the necessary information for a child or spouse’s application for family benefits so that the Social Security Administration approves it without issue. Family Benefits for Children If you are applying for auxiliary benefits on your child’s behalf, there is information and documents you will need to provide to the SSA along with the application. This will include your child’s birth certificate or proof of adoption and proof of your child’s U.S. citizenship, among other information. The SSA might ask questions to verify your relationship with your child, such as whether or not they live with you at home. If your child qualifies as a DAC, you might need to complete additional forms and provide information about their medical condition. Family Benefits for Spouses When applying for auxiliary benefits as the spouse of an SSDI recipient, you must provide the SSA with certain information. This will include your birth certificate, marriage certificate, and W-2 forms for the last year. The SSA will also ask you various questions, such as information about your spouse, children, and current employment status. You should also be prepared to give the SSA your banking information so that you can easily receive your auxiliary benefits after getting approved. How Long Does it Take to Get Approved for Auxiliary Benefits? The Social Security Administration is not necessarily known for its efficiency when handling claims. Because of this, it might be several weeks or months before the SSA approves an application for auxiliary benefits. Generally speaking, those who apply for auxiliary benefits are not subject to the same five-month waiting period after approval as SSDI benefit recipients. That said, there is no telling how long it will take for the SSA to review an application for auxiliary benefits. If an application lacks certain information, the approval process might take longer. Suppose you, your spouse, or your child applied for auxiliary benefits months ago and have not heard back from the Social Security Administration. In that case, our Allentown, PA disability lawyers can contact the SSA to determine the status of your application. If the SSA has additional questions or requires more information, we can help you respond promptly so that the SSA approves your application as quickly as possible. Do Auxiliary Benefits Impact SSDI Benefit Amounts? Upon learning that their family members are eligible for auxiliary benefits through their records, disability benefit recipients might wonder if their monthly payments will be affected. The answer is no. Auxiliary benefits increase the overall income for an SSDI recipient’s family. You will get your normal monthly payment from the SSA, but that’s not all. On top of that, each eligible member of your family will get their own monthly auxiliary benefit. In the event that your family’s computed benefit amount is greater than the maximum family benefit allowed by the Social Security Adiminstration, it will reduce their individual benefits proportionally as necessary. The primary beneficiary’s benefit will be unaffected in these cases, as it is calculated separately from the maximum family benefit. Auxiliary Benefits for Surviving Family Members If a primary beneficiary dies while on disability, their family’s auxiliary benefits will likely convert to survivors benefits. When this happens, monthly benefit amounts might change. Survivors benefits are calculated differently than auxiliary benefits and are generally greater. For example, a surviving spouse who is at full retirement age or older may receive 100% of a decedent’s benefit amount. Surviving spouses caring for a child under 16, regardless of their age, can receive up to 75% of a decedent’s benefit amount, as can dependent children under 18. There are additional survivors benefits available to dependent parents of decedents and surviving spouses with disabilities. Eligible family members can apply for survivors benefits after a primary beneficiary’s death. If family members already received auxiliary benefits before a decedent’s death, their benefits should easily convert to survivors benefits. If your benefit amount has not changed since the death of a primary beneficiary, our lawyers can contact the SSA to update the agency about the situation. Payment Schedules for Auxiliary Benefits The Social Security Administration follows a regular payment schedule for SSDI and auxiliary benefits. This means that after getting approved, you can expect to receive your benefits at the same time each month. Apart from Supplemental Security Insurance benefits, which are paid on the first of each month, the SSA pays all other Social Security benefits on either the second, third, or fourth Wednesday of every month. Which day each individual recipient gets their auxiliary benefits will depend on their birthday. If your birthday falls between the 1st and the 10th of the month, you’ll get your benefit on the second Wednesday. If your birthday falls between the 11th and the 20th of the month, you’ll get your benefit on the second Wednesday. And finally, if your birthday falls between the 21st and the 31st of the month, you’ll get your benefit on the fourth Wednesday. Generally speaking, it’s easiest to opt to get SSA payments through direct deposit, whether they are SSDI benefits or auxiliary benefits. There’s a greater chance that recipients experience delays when the SSA sends checks out by mail. When the SSA sends payments via direct deposit, it does so at midnight on the correct payment date. How Long Can Eligible Family Members Get Auxiliary Benefits? If your immediate family members qualify for auxiliary benefits through your record, how long they can continue to receive payments could depend on several factors, such as their age, marital status, and your continuing eligibility for disability benefits. Child benefits typically last until a primary beneficiary’s child turns 18. That said, if a primary beneficiary’s child is also a DAC, they can continue to receive benefits for as long as necessary. Because the SSA allows people to get auxiliary benefits through an ex-spouse’s earning record in certain situations, some individuals might be able to keep receiving family benefits even after getting divorced. If a primary beneficiary is no longer eligible for SSDI benefits, auxiliary benefits will also stop. The SSA assesses recipients’ continuing eligibility for SSDI benefits routinely and, during one of these reviews, might learn new information about a recipient’s medical condition that disqualifies them from getting further benefits. If you get auxiliary benefits as a spouse, they will stop once you no longer have an in-house child under the age of 16. They might resume once you reach age 62 or if you meet other criteria for auxiliary benefits for spouses in the future. Auxiliary Benefits and Social Security Disability Income Limits When the SSA approves an SSDI application, it is because the applicant can no longer work because of an injury, illness, or disability. To reinforce the importance of this point, the SSA has set substantial gainful activity limits for disability benefit recipients, preventing them from earning a certain amount in additional income each month. If your family gets auxiliary benefits, will those payments count toward your SGA? Fortunately, the answer is no. The SGA limit is only an issue when it comes to money earned from working. For example, if you tried to work a part-time job while getting SSDI, and that job generated too much income, you might be over the SGA limit for the month. For 2024, the monthly SGA limit is $2,590 for blind individuals and $1,550 for non-blind individuals. Even if your family’s overall auxiliary benefits exceed the SGA limit, you will have nothing to worry about, as it does not count toward your income in the eyes of the SSA. That said, auxiliary benefits are taxable income, which is something for eligible family members to keep in mind. Similarly, auxiliary benefits do not impact trial work periods (TW Ps). Disability benefit recipients automatically trigger TW Ps whenever they earn upwards of $1,110 in a month. If left unchecked, TW Ps could cause SSDI recipients to lose their benefits and their family members to lose their auxiliary benefits. To prevent this from happening, our attorneys can identify a TWP and address it with the SSA promptly. Even if you and your family are at risk of losing SSDI or auxiliary payments, we may be able to prove your continuing eligibility for benefits despite a recent TWP. Call Our Lawyers to Learn More About Auxiliary Benefits Today To get a free case review from our attorneys today, call the Berks County, PA disability lawyers of Young, Marr, Mallis & Associates at (215) 515-2954 or (609) 557-3081.

N.C. Ct. of App.: Smith Debnam v. Muntjan- Statute of Frauds Ed Boltz Sat, 03/23/2024 - 01:51 ​​​​​​Summary: Smith Debnam sued Paul  Muntjan for amounts owed for legal services provided to Paul Muntjan's son,  Nick Muntjan.  The parties disagreed about whether, at the initial meeting between Brian Saintsing and Nick Muntjan,  Paul Muntjan volunteered to be responsible for Nick Muntjan's legal fees.  Nick Muntjan was then sent an  engagement letter that provided that “[u]pon receipt of the signature page and the retainer, we will begin work in this matter.”  The Muntjans denied receipt of this letter, but Smith Debnam nonetheless commenced representation without it.   For the next several months,  payments were made to Smith Debnam using Paul Muntjan's credit card. When subsequent payments were not made,  Nick Muntjan requested that Paul Muntjan be included in email correspondence from Smith Debnam,  to which Paul Muntjan responded by email,  including his name or signature block.  When payments were still in default,  Smith Debnam commenced suit against Paul Muntjan. Paul Muntjan defended arguing that the Statute of Frauds prevented enforcement of any obligation.  In reversing the district court,  the North Carolina Court of Appeal  assumed arguendo that there was a valid contract form but then that it was unenforceable.   A “statute of frauds” requires certain contracts be written and signed to be enforceable,  with the applicable statutory provision being N.C.G.S.  § 22-1  which states: No action shall be brought . . . to charge any defendant upon a special promise to answer the debt, default or miscarriage of another person, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party charged therewith or some other person thereunto by him lawfully authorized.  The Court of Appeals held that even if Paul Muntjan had promised to be responsible for his son's legal fees,  that  “collateral promise” is a guaranty and not an “original promise”.  A collateral promise is one where  the credit was extended to a party other than the promisor, but an original promise is where “credit was extended directly and exclusively to the promisor.  The latter is "not within the statute of frauds.”  As any promise made by Paul Muntjan was made in addition to Nick Muntjan's obligation,  it was a collateral promise.  A guaranty, however, may still avoid the statute of frauds if the main-purpose rule applies,  which requires that  its main purpose is to benefit the guarantor.  Here no evidence suggested that the benefit of the legal services was for Paul Muntjan. Next the Court of Appeals reviewed whether any subsequent correspondence constituted a  “memorandum of the contract",  which   “though it may be informal, must be sufficiently definite to show the essential elements of a valid contract.”  While the inclusion of Paul Muntjan's  name at the end of his emails did satisfy the requirement of a signature,  those still did not  contain “the essential elements of a valid contract"  as the price of the services was not included or acknowledged.  Further,  while Paul Muntjan's emails did explicitly reference invoices,  with the price of services included,  those list only Nick Muntjan as the client, again not Paul Muntjan.  Accordingly,  these emails,  while "close case",  did not satisfy the Statute of Frauds. Further, the Court of Appeals rejected Smith Debnam's argument that Paul Muntjan was liable for the debt under the theory of quantum meruit,  as that requires as showing that: Services were rendered to defendant;  The services were knowingly and voluntarily accepted; The services were not given gratuitously; and A benefit must pass from the plaintiff to the defendant.   Here however,   the benefit of Smith Debnam's legal services were  to Nick Muntjan, not to Paul Muntjan. The dissent,  largely relying on the same case law,  but oddly dismissing older precedent as of diluted value,  would have reached the opposite conclusion. Commentary: As the majority stated,  "[a]ll [Smith Debnam] needed from [Paul Muntjan] was a signed writing saying, for example, 'I promise to pay Nick’s debt.'”    Even before 2005,  when BACPA added the explicit requirements in 11 U.S.C.  §§ 526, 527 and 528 that consumer bankruptcy attorneys provide clients "with a copy of the fully executed and completed contract" having a written contract was such an obvious necessity that it barely would have risen to being noted as a "best practice".   That such might not be similarly understood by all attorneys,  especially by debt collection lawyers,  is surprising and perhaps indicates that  the Statute of Frauds,  which as an affirmative defense,  may be so rarely raised in response to the churn of debt collection default judgments and barely documented Proofs of Claim  that it has been forgotten by the creditor's bar,  even for amounts owed to them.   To read a copy of the transcript, please see: Blog comments Attachment Document smith_debnam_v._muntjan_1.pdf (152.27 KB) Category NC Courts NC Court of Appeals

N.C. S.Ct.: Taylor v. Bank of America- Statute of Limitations for Fraud in Mortgage Modification runs from Foreclosure Date Ed Boltz Fri, 03/22/2024 - 21:28 Summary: The plaintiffs, a group of homeowners from various states, alleged that Bank of America had engaged in a fraudulent scheme to deny them mortgage modifications under the Home Affordable Modification Program (HAMP) and subsequently foreclosed on their homes. They argued that Bank of America's actions prevented them from receiving permanent modifications to their mortgage terms, despite making required trial payments and repeatedly submitting necessary documentation as requested by the bank. The SCONC reversed the decision of the Court of Appeals, holding that the plaintiffs' claims were time-barred by the applicable statutes of limitations. The Court found that the plaintiffs knew or should have known of their injuries and the alleged fraud at least four to seven years before filing their complaint, at the latest by the date each plaintiff lost their home to foreclosure. Consequently, the plaintiffs' claims were beyond the permissible period for bringing such claims. The Court underscored the importance of statutes of limitations in striking a balance between a party's right to assert a claim and another's right to be free from stale claims. It noted that the discovery rule, which tolls the statute of limitations for fraud claims until the aggrieved party discovers the fraud, did not extend beyond the foreclosure dates because the plaintiffs' experiences with the HAMP application process should have alerted them to the need for further investigation. The dissenting opinion argued that the majority's application of the discovery rule was too narrow and did not align with the jurisprudence surrounding it. The dissent suggested that the statute of limitations for the fraud claims should be equitably tolled for plaintiffs who lost their homes after Bank of America executed a consent judgment, which publicly affirmed its commitment to proper administration of the HAMP program,  while internally working to deny as many HAMP modifications as possible. Commentary: The SCONC has basically said out loud that no one can reasonably rely on  what banks say publicly and that bankster fraud should always be assumed.    Oh, and that the banks will face no consequences. But we all knew that already. To read a copy of the transcript, please see: Blog comments Attachment Document taylor_v._boa.pdf (164.36 KB) Category NC Supreme Court Cases

Bankr. W.D.N.C.: Smith v. DeSeveria- Repayment of Short-Term Loans to Insiders was not a Fraudulent Conveyance Ed Boltz Fri, 03/22/2024 - 16:00 Summary: Matthew W. Smith, the sole manager of the reorganized debtor BK Racing, LLC, sought recovery of  four prepetition transfers totaling $227,000 made to DiSeveria, alleging these were fraudulent transfers under both federal bankruptcy law and North Carolina state law. Smith contended these transfers were either made with actual intent to hinder, delay, or defraud creditors, or were constructively fraudulent because they were made without receiving reasonably equivalent value in exchange. The court analyzed the case under both theories of actual and constructive fraudulent transfer. Under the actual fraudulent transfer claim, the court considered various "badges of fraud" but ultimately found that the transfers appeared to be repayments for short-term loans made by DiSeveria to BK Racing, rather than transfers made with intent to hinder, delay, or defraud creditors. Under the constructive fraudulent transfer claim, the court focused on whether BK Racing received reasonably equivalent value for the transfers. The court concluded that the transfers were repayments for actual short-term loans provided by DiSeveria to BK Racing, and therefore BK Racing did receive reasonably equivalent value in exchange for the transfers. The court also noted that while DiSeveria and Foxboro were, given DiSeveria's officer position within BK Racing, insiders, the transfers were not made to benefit Foxboro Financial Services, LLC, as it received none of the transfers directly. Ultimately, the court found in favor of the defendants, concluding that the transfers were not fraudulent under either the actual or constructive fraudulent transfer theories based on the evidence suggesting that the transfers were in repayment of legitimate, short-term loans and not made with the intent to defraud creditors or without receiving reasonably equivalent value. Commentary: Despite none  of the short term loans in this case appear to have been documented (either in writing or contemporaneous emails),  secured by collateral, subject to accruing interest and were made by family, friends wholly owned companies or family trusts. This seems identical to nearly every repayment of a short-term loan by consumers  to their friends and family before filing bankruptcy.   As the court  concluded, "At best, some of the Transfers may have been 'preferential' in that DiSeveria was repaid while outside creditor checks were bouncing."  at p. 37. (Emphasis added.) This shows that the Trustee's burden in avoiding a transfer  under  11 U.S.C. § 548(a)(1)(A)    or (B) and N.C.G.S. § 39- 23.4(a)(1)  is not a light one.  Nor one that Chapter 13 trustees should be allowed to assert and demand under a chimeric Best Interests of the Creditors and Good Faith objection to confirmation  without actually litigating those claims. To read a copy of the transcript, please see: Blog comments Attachment Document smith_v._diseveria.pdf (938.69 KB) Category Western District

Now that I have hit double digits as a neutral, I thought I would share some mediation practice tips for attorneys based on lessons learned over the last 10 years. Be Prepared.  I prepare for every mediation, and you should too.  You should know the case and also your client.  You should consider the information you will need to evaluate settlement offers, including how to access that information.  You should consider different settlement contours, including any potential nonmonetary components. Be Informed.  Being informed is an important part of preparing for mediation.  Preparation involves more than understanding the facts and law of the dispute, it includes being informed about the business implications of the dispute and any possible settlement, as well as the compounding risks if the case does not settle. Be Candid.  Help me to help you.  I generally talk to counsel for each party before mediation.  These discussions are an opportunity for me to learn not only about the case but also about the dynamics at play.  Please be candid. Be Flexible.  While advocacy is part of every mediation, remember that you are there to settle, not to try your case.  Agree to disagree about the facts and the law.  Focus instead on the common goal of resolution and be open (flexible) to ways to reach resolution. Every mediation is unique.  Being prepared, informed, candid, and flexible increases the likelihood that we will find a path to a fair and sustainable resolution. Disclaimer:  Nothing contained herein constitutes legal advice nor does anything contained herein create a professional relationship. Mediator Insights - Practice Tips for Attorneys Based on Lessons Learned in Over 10 Years as a Mediator The post Mediator Insights: Practice Tips for Attorneys Based on Lessons Learned Over 10 Years as a Mediator appeared first on Sylvia Mayer Law.

Now that I have hit double digits as a neutral, I thought I would share some arbitration practice tips for attorneys based on lessons learned over the last 10 years. Be Prepared:  I prepare for the preliminary case management and scheduling conference, the final hearing, and each of the hearings in between. You should too.  Preparation includes reviewing the applicable arbitration clause and arbitration rules and understanding how they impact the relief you are requesting or the process you are hoping to establish. Be Focused:  Arbitration is not an endurance competition.  Be focused both in your writing and presenting.  More is not better.  It is just time-consuming.  Concisely explain to the arbitrator(s) what you want and why you should get it. Be Realistic:  As a general rule, neither the rules of evidence nor the rules of civil procedure apply in arbitration.  There may be specific instances where there is a compelling need to challenge a specific exhibit or specific testimony.  Similarly, there may be cases where extensive discovery is warranted.  However, as a general rule, in arbitration discovery is more limited and evidentiary objections are overruled. Be in Touch:  Not with the Arbitrator(s), but with the other side.  The parties should meet and confer regularly throughout the arbitration, including before the preliminary case management and scheduling conference.  Arbitration allows parties the flexibility to work together to tailor the process to the needs of their dispute. While every arbitration is different, being prepared, focused, realistic, and in touch (with the other side) can help the parties in all arbitrations.  Disclaimer:  Nothing contained herein constitutes legal advice nor does anything contained herein create a professional relationship. Arbitrator Insights - Practice Tips for Attorneys Based on Lessons Learned in Over 10 Years as an Arbitrator The post Arbitrator Insights: Practice Tips for Attorneys Based on Lessons Learned Over 10 Years as an Arbitrator appeared first on Sylvia Mayer Law.

Ten years ago, I shifted my practice from serving as an advocate (an attorney representing parties) to primarily serving as a neutral (an arbitrator or mediator).  Those 10 years went by in the blink of an eye.  Now that I have hit double digits as a neutral, I am pausing to reflect on the lessons that I learned over the last 10 years. Whether as a mediator or an arbitrator, here are my top 10 lessons learned: AB Cs: As a neutral, I rely heavily on the AB Cs.  Not the alphabet, but AB Cs as an acronym for analyst, bartender, and chameleon.  Like an analyst, I analyze the facts, the law, and sometimes the people.  Like a bartender, I listen patiently, I listen early, and I listen often.  Like a chameleon, I adapt throughout the process to meet the needs of the moment. Patience: I bring my patience with me to every mediation and arbitration.  Dispute resolution is a process, and any process takes time. Timing: Each dispute is unique and finding the right timing varies depending on the parties (client and counsel), the nature of the dispute, the status of the dispute, and myriad other factors.  Patience and the AB Cs help as I evaluate timing considerations in both mediations and arbitrations. Mindset: A flexible, open, and curious mindset is a critical aspect of dispute resolution.  Participants’ mindsets often evolve throughout the process.  While true in arbitration, it is often starker in mediation as participants’ mindsets shift from adversaries and advocacy to conciliation and closure. Emotions: People are people and people have emotions.  Regardless of whether the dispute is business, consumer, or deeply personal, it is often driven by emotions.  While emotions may not change the facts or the law, emotions often impact the path to resolution. X-Factor: Most disputes have an x-factor – meaning the thing that sways the ultimate outcome.  The x-factor varies by dispute and sometimes, within a dispute, by party or perspective.  Identifying, understanding, and exploring the x-factor is critical to reaching resolution. Receptivity: Receptivity refers to being open or receptive to resolution.  Receptivity is a critical component of both mediation and arbitration.  In mediation, the process is used to help parties move from conflict to resolution.  In arbitration, while the resolution may not be consensual, the flexibility of the process and the ready access to a forum for resolution may help parties become receptive to closure. Candor: Candor with the neutral aids the process.  In arbitration, during the preliminary hearing and scheduling conference, candor about the needs of the case allows me to tailor the schedule and process to fit the unique aspects of that dispute.  In mediation, candor from counsel about the undercurrents, dynamics, and barriers to resolution aid in my ability to help the parties find a path to resolution. Authority: In mediation, there is no settlement without settlement authority.  However, the settlement authority someone comes with to mediation may not be all of the settlement authority they can get.  Do not let settlement authority become the barrier to resolution. Preparation: As Benjamin Franklin famously said, “by failing to prepare, you are preparing to fail.”  I consider preparation to be an integral part of my role as a neutral, so I prepare for every mediation and every arbitration.  The parties should too. Disclaimer:  Nothing contained herein constitutes legal advice nor does anything contained herein create a professional relationship. ADR Insights - 10 Lessons Learned in 10 Years as a Mediator and Arbitrator The post ADR Insights: 10 Lessons Learned in 10 Years as a Mediator and Arbitrator appeared first on Sylvia Mayer Law.

 HOW TO USE ARTIFICIAL INTELLIGENCE IN YOUR LAW PRACTICE (“BE AN IMPLEMENTER) CLE OUTLINE  DELIBERATE  SOLOS PRESENTED ON  03-2008-2024Why You Should You Use Artificial Intelligence in your Law Practice:1. Effectively using technology can make the practice of law easier, more enjoyable and more profitable!2. Failing to use technology in your law practice may be considered "malpractice" by many State Bar associations.3. Artificial Intelligence is the most significant development in Legal Technology in the last 50 years: It will turn out to be more impactful to lawyers than the personal computer, email, smartphones, the Internet or Google Search4. It is also a “Disruptive Technology”-it will sneak up on and displace existing technology at a quick pace5. One argument against using Artificial Intelligence in law practice concerns confidentiality. Similar issues were raised years ago regarding email, but many State Bar associations ruled that email did not violate confidentiality.-My thoughts about Hallucinations are discussed below6. Google Search has become less reliable, according to reports from many users and a study by researchers in Germany.I have a Pixel phone, I use Google Docs, Google Drive  & many Google products, but I am dissatisfied with many Google Search results.Advertising, Spam & Artificial Intelligence have corrupted Google searchesPaid placement ads have negatively impacted Google Search results***When you do a Google Search you get 10 blue squiggly lines, not answers to questions!Artificial Intelligence is an “Answer Genie”-you do not get 10 Squiggly Lines, you get answers to your questions in real time!Artificial Intelligence searches allow you to refine your search prompts after each search rather than having to do new searches in Google.7. On an average day I use Artificial Intelligence 20 times a dayII. HOW I USE ARTIFICIAL INTELLIGENCE PRODUCTS ON A DAILY BASIS:a. Flawlessly AI - Free AI Writing Checker-will review text up to 1000 characters long.It is free. You copy & paste text into the app to have it review or edit your writingI do not send out a lengthy email or blog post without using itIt is the best grammer checker program I have used b. Wordtune: Free AI Writing Assistant | Write Better Today https://www.wordtune.com/ c. chatLAW Q&A with AI Trained on Bankruptcy Law for Bankruptcy Research1. Free chatbot dealing with Bankruptcy law, created by a PHD in Computer Science with no Bankruptcy law experience2. Best Bankruptcy law research program I have ever used-in my opinion better than Lexis, Westlaw or Google Scholar3. You type in a question, it provides an Answer, citation to cases and a “SHOW AUDIT” link that directs you to the cited casesd.   Image Creator  from Microsoft & Google-these products are free, easy to use, you enter text and they produce an image that you can use for Blog posts, emails or social media.Microsoft Designerhttps://designer.microsoft.com/image-creatorGoogle ImageF Xhttps://aitestkitchen.withgoogle.com/tools/image-fxe. CLAUDE & PERPLEXIT Yi. In my opinion these are the 2 best free Artificial Intelligence search botsii. Claude by Antrop/c -incredibly easy to use & very accurate search results-it also has a “paper clip” icon that allows you to upload & search documents-Real life example: I uploaded a 65 page Bankruptcy Petition and asked  Claude how many secured creditors and how many unsecured creditors were referenced in the Bankruptcy Petition and the average dollar amount of the claims: the results came back in 13 secondsiii Perplexity -results include footnotes -very accurate results-Jeff Bezos Amazon founder recently invested $250 million dollars into the companyiv. How  I use Claude & Perplexity on a Daily Basis:-Legal Research-Document Drafting-Learning new areas of the law-Developing or implementing legal strategies in cases-As “Co-Counsel to bounce questions or strategies off-Suggesting documents to request in Discovery & Questions to ask at a deposition-Troubleshooting technology problems or issues-Recommendations for new tech apps to use-Training Tips: I am training for a half marathon. How do I train for that event?-Food recipes -General Searches in place of Google Searchf. Craft document Creator Artificial Intelligence  i. Get a personalized document in secondsg. Podcast Search thru Artificial Intelligence Dexa & Listen Notes Dexa:https://dexa.ai/?utm_source=substack&utm_medium=emailListen Notes:https://www.listennotes.com/search/?q=Israel%20AND%20Gaza&sort_by_date=0&scope=episode&offset=0&language=Any%20language&len_min=0h. Canvahttps://www.canva.com/“Canva is a free graphic design platform that allows you to easily create invitations, business cards, flyers, lesson plans, Zoom backgrounds, and more using professionally designed templates”I used it recently to create a Zoom and Google Meet Background-easy to use & freeIII. How to Learn to Use Artificial Intelligence in your Law Practice:1. Use “Kaizen” Japanese approach of continuous gradual improvement2. Spend 15 minutes each day learning Artificial Intelligence-google alert web searches on Artificial Intelligence topics, read articles & youtube videos3. Sign up & read Dr Jeremy Caplan Wonder Tools Professor of Journalism at CUNY Wonder Tools  Tools helps you discover the most useful sites and apps https://wondertools.substack.com/4. Sign up & read The Rundown  Learn AI in 5 Minuteshttps://www.therundown.ai/subscribe?utm_source=www.therundown.ai&utm_medium=newsletter&utm_campaign=openai-changes-the-ai-video-world5. Learn the difference between “Prompt Engineering vs Search Queries” HOW TO WRITE AN EFFECTIVE PROMPT:-A Prompt needs background information and context to be useful!-Tell the Chatbot what you want it to do (give it Instructions) Example of a Prompt: I am a Bankruptcy attorney. I have a client, a Debtor, that    wants to file a chapter 13 Bankruptcy Petition in the SDNY. The Plan will be a 5 year plan, if all creditors, including a creditor who got a judgment for an intentional tort, are not paid in full over 5 years, will the Debtor get a discharge?-The more prompts you write and use, the better you will  become at Prompt Engineering!6. Go cold turkey: do not use Google Search for one day. Instead, only conduct searches on Claude, Perplexity, or ChatGPT and compare the results. 7. How to Prevent Hallucinations-BE ESPECIALLY CAREFUL & CHECK CITES TO LEGAL CASES WHEN USING ARTIFICIAL INTELLIGENCE FOR LEGAL RESEARCH!A. Use Perplexity which provides footnotes to its answers & is considered the most accurate chatbotB. Copy & paste your prompt into Claude, Perplexity, ChatGPT & Google and review the results from all searches to determine if the results are accurate or correct. If you are using Artificial Intelligence for legal research or to write a Motion or Brief check & shepardize the cited casesDo not let Hallucinations be a crutch to prevent you from using or learning Artificial Intelligence.Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com https://calendly.com/james-shenwick/15minPersonal & Business Bankruptcy, Bankruptcy Litigation, Workouts, Asset Protection Planning & Defaulted SBA EIDL Loans.We held individuals & businesses with too much debt!

E.D.N.C.: Lewis v. EquityExperts.org- Excessive Fees illegal under FDCPA Ed Boltz Thu, 03/21/2024 - 16:16 Summary: After allegedly falling $314  behind on her homeowners association dues,  the HOA  retained EquityExperts.org  to "aggressively" collect and it eventually  ran up costs by an additional $6,035, threatening sale of the property. Kimberli Lewis brought suit against  EquityExperts.org, LLC  alleging improper debt collection practices by EquityExperts.org in connection with delinquent homeowners association dues. Lewis's claims were based on violations of the Fair Debt Collection Practices Act (FDCPA), North Carolina Collection Agency Act (NCCAA), North Carolina Debt Collection Act (NCDCA), Unfair and Deceptive Trade Practices Act (UDTPA), and for common law unjust enrichment. She also sought class action certification, damages, and attorneys' fees. EquityExperts.org moved to dismiss her claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The court granted the motion in part and denied it in part. The court found sufficient facts to support Lewis's FDCPA claim, focusing on the allegations that EquityExperts.org misrepresented the immediacy of foreclosure and attempted to collect fees not authorized by law or the association's covenants.,  following the 6th Circuit in holding that "the FDCPA prohibits collection of costs that exceed 'actual costs of collection,' or costs that are unreasonable or excessive beyond any relation to the value of the principal amount of the debt."  Sparks v. EquityExperts.org, LLC, 936 F.3d 348, 352 (6th Cir. 2019).  The claims under the NCCAA and NCDCA were also allowed to proceed, based on similar reasoning applied to the FDCPA claim. However, the court dismissed the stand-alone UDTPA claim, concluding that the allegations did not independently indicate "egregious or aggravating circumstances" beyond those necessary to support the other statutory claims. The unjust enrichment claim was also dismissed, as the court found that the payments made by Lewis did not constitute unjust enrichment. The court denied the motion to strike class action allegations, indicating that it was not clear from the complaint that class certification requirements under Rule 23 could not be met. Commentary: Start of course with the observation that most Homeowners Associations are evil. Secondly,  this case and the holding that legal fees and collection costs violate the FDCPA if "unreasonable or excessive beyond any relation to the value of the principal amount of the debt", may also be relevant in bankruptcy.  For example,  when a mortgage servicer seeks $1,200 in attorneys fees for completing Proof of Claim for a debtor who is not delinquent on the mortgage,  those fees might not only be unreasonable and subject to disallowance,  but also could,  subject to Midland Funding, LLC v. Johnson,  give rise to counterclaims under the FDCPA.   Blog comments Attachment Document lewis_v._equity_experts.pdf (263.75 KB) Category North Carolina Bankruptcy Cases Eastern District