If you don’t respond properly to a foreclosure notice, your lenders may get a default judgement and take your home. We know what lenders need to hear after sending foreclosure notices or filing complaints, and can help you respond to news of a possible foreclosure. We can respond to a foreclosure notice by contacting your lender about a loan modification. Not all lenders are open to modifying current loans, especially if the borrower has fallen very far behind. If the lender follows the foreclosure letter with a foreclosure complaint, we can file an answer on your behalf, addressing each aspect of the lender’s complaint. For many homeowners, the best way to stop foreclosure is to file for bankruptcy, and we can oversee your case. For a free and confidential case evaluation from our Philadelphia foreclosure defense attorneys, call Young, Marr, Mallis & Associates now at (215) 701-6519. How Do You Respond to a Foreclosure Notice Letter in Philadelphia? When homeowners default in Pennsylvania, lenders must inform them of their intent to foreclose, typically by sending them an Act 91 notice of foreclosure letter. Promptly responding to an Act 91 foreclosure notice is crucial, as the bank may move forward with foreclosure after about 30 days. Read the Notice First, you should carefully read the notice from your lender with our attorneys. The notice will state that you are at least 3 months delinquent on your mortgage and that you are at risk of foreclosure if you cannot make the outstanding payments soon. It will also have information about potential state-funded assistance that we can see if you qualify for. The notice may even warn of the earliest possible sheriff’s sale of your property if you don’t stop foreclosure. Review Mortgage Documents To respond appropriately to a foreclosure notice, we must review all of your mortgage documents. These documents provide more information about your monthly mortgage payments, your income at the time of approval, interest rates, the total loan amount, the loan term, and more. The mortgage documents may even reveal predatory lending, which we can use to prevent foreclosure. Apply for HEMAP Assistance Suppose you qualify for help through the Homeowners’ Emergency Mortgage Assistance Program (HEMAP). If you cannot “cure” your mortgage or make all outstanding payments through no fault of your own, HEMAP may help. You have 33 days from receiving the notice to have a face-to-face meeting with an HEMAP-approved consumer credit counseling agency in Philadelphia. Negotiate with Lender An Act 91 notice tells you that your lender intends to file an official foreclosure complaint against you within the coming weeks or months if you cannot catch up. Lenders may send this letter as soon as they can after borrowers default, but they may still be open to renegotiating mortgage contracts. Avoiding a foreclosure case saves your lender time and resources, too, which they often prefer. When we negotiate with lenders, we suggest new arrangements that are more feasible for you, but that your lender can be happy with. For example, we may propose extending the loan term to achieve more affordable monthly payments. File for Bankruptcy Suppose you do not qualify for HEMAP assistance or your lender refuses to renegotiate the mortgage. In that case, we may advise you to respond to a foreclosure notice by filing for bankruptcy in Philadelphia. When you file your bankruptcy claim, any attempts to collect debt must cease, including foreclosure cases. How Do You Answer a Foreclosure Complaint in Philadelphia? You respond to a foreclosure notice or a complaint filed against you by filing an official answer with the court yourself. Party Information When drafting an answer to a foreclosure notice, our Pennsylvania foreclosure defense attorneys will include both the defendant’s and plaintiff’s information. In this type of case, the homeowner would be the defendant, and the mortgage lender would be the plaintiff. Address Complaints We must then respond to each paragraph of the complaint filed by the plaintiff. In an answer, the defendant may admit to a specific issue raised, admit and deny it in part, deny it, or deny it because they do not have enough information. New Matter The final “new matter” section of an answer to a foreclosure complaint is where our lawyers can present the affirmative defense we plan to use in the foreclosure case, such as predatory lending. If a lender took advantage of you when initially providing your mortgage loan and you have since defaulted, the judge may decide the lender cannot move forward with foreclosure. FA Qs About Answering a Foreclosure Notice in Philadelphia What if You Ignore an Act 91 Notice of Foreclosure Ignoring an Act 91 notice of foreclosure eliminates any potential for negotiating new mortgage terms with your lender. Instead, it may move forward with filing an official foreclosure complaint in court as soon as possible. How Long Do You Have to Answer an Official Foreclosure Complaint? You have only 20 days to respond to an official foreclosure complaint filed in court by your lender. If you do not answer within that timeframe, the judge may enter a default judgment against you, and the lender may proceed with foreclosure. What Chapter of Bankruptcy is the Best Answer to a Foreclosure Notice? Chapter 13 bankruptcy is better for addressing non-dischargeable debts, such as outstanding mortgage payments. You do not have to liquidate assets during Chapter 13 bankruptcy, but you do if you file Chapter 7 bankruptcy in Philadelphia. There isn’t a specific homestead exemption for Chapter 7 bankruptcy filers in Philadelphia, who may end up losing their homes through liquidation to repay lenders. Call Our Philadelphia Lawyers for Help with a Foreclosure Case Call the Allentown, PA foreclosure defense attorneys of Young, Marr, Mallis & Associates at (215) 701-6519 for a free case assessment.

Bloomberg Law has an excellent article titled “Covid Loans That Boosted Businesses Now Push Them to Bankruptcy” concerning SBA EIDL loans and the bankruptcy filings by the businesses that received them and the guarantors who guaranteed those loans. The article can be found at https://news.bloomberglaw.com/bankruptcy-law/covid-loans-that-boosted-businesses-now-push-them-to-bankruptcyThe article states that many businesses that received SBA EIDL are filing for chapter 7 bankruptcy and the guarantors of those loans are filing for bankruptcy as well.  SBA EIDL loans over $200,000.00 required a personal guarantee from the principal.The article states that by the end of 2024, the SBA had charged off 370,000 EIDL loans worth about $47 billion and was trying to collect on another $14.7 billion in loans that had been delinquent for at least three months.At Shenwick & Associates we are receiving many phone calls from SBA EIDL loan borrowers who cannot repay those loans.Clients or advisors who have questions about SBA EIDL loans or the SBA enforcement remedies should contact Jim Shenwick, Esq at 917 363 3391 or [email protected] click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

N.C. Ct. of Appeals: Irish Creek HOA v. Rogers - Foreclosure Set Aside as Covid-Era Service was Insufficient Ed Boltz Wed, 10/01/2025 - 18:05 Summary: Trenita Rogers bought her Winterville home in 2010, subject to the Irish Creek HOA. In 2021, after allegedly failing to pay $1,391.23 in assessments, the HOA filed liens and moved forward with foreclosure. Notice was attempted by certified mail during the USPS’s Covid-19 “contactless” protocol—where carriers often signed “C19” themselves instead of obtaining the addressee’s signature—and by sheriff posting without a proper court order. Rogers never appeared at the foreclosure hearing, and the property was sold at auction in 2022 after a lengthy upset bid process, ultimately bringing over $221,000. Rogers claimed she had never actually been served, that she did not recall receiving HOA bills, and that she would have cured the arrears had she known of the hearing. She moved to set aside the foreclosure under Rule 60, but both the Clerk and Superior Court rejected her arguments, finding service sufficient and her neglect “inexcusable.” The trial court even ordered her to pay over $26,000 in attorney’s fees to the HOA, the trustee, and the purchaser for bringing a “meritless” motion. When Rogers attempted appeal, the Superior Court dismissed it for failure to timely serve the proposed record on appeal under Rule 11(b), citing her supposed lack of diligence and candor. Holding: The Court of Appeals reversed. First, it found the trial court abused its discretion by dismissing the appeal without applying the Dogwood framework for whether a procedural violation was a “substantial failure” or “gross violation.” More importantly, it held that USPS Covid-19 contactless protocols did not satisfy the strict requirements of Rule 4 service by certified mail. With no signature of Rogers or even her initials, there was no valid service, and thus no jurisdiction for the foreclosure order. The Court reversed the denial of Rogers’ Rule 60 motion, vacated the attorney fee awards, and remanded for consideration of remedies, including whether the purchaser was a good-faith buyer and whether the foreclosure price was adequate. Commentary: This case illustrates how procedural shortcuts in service can unravel an entire foreclosure years later, especially when courts and trustees relied on the USPS’s makeshift Covid protocols. The appellate court rightly emphasized that the purpose of certified mail service is to prove actual notice, and “Covid-19” scrawled by a mail carrier does not create jurisdiction. It is also a cautionary tale about the tendency of trial courts to punish homeowners with crushing attorney fee awards when they contest foreclosures. Rogers was saddled with nearly $30,000 in fees for daring to argue she had not been served—a position ultimately vindicated by the Court of Appeals. The panel’s decision to vacate those awards restores some balance. Finally, the case tees up important questions on remand: what happens to the purchaser, who paid over $220,000 in upset bids, and whether the sale price was “grossly inadequate” under North Carolina law. This tension between protecting homeowners from defective process and protecting finality for bidders will continue to play out. To read a copy of the transcript, please see: Blog comments Attachment Document irish_creek_hoa_v._rogers.pdf (213.29 KB) Category NC Court of Appeals

Bankr. M.D.N.C: In re Rogers- Postpetition Fees, Rule 3002.1, and N.C.G.S. § 45-91 Ed Boltz Mon, 09/29/2025 - 17:40 Summary: Following In re Owens and In re Peach from the W.D.N.C.,  Judge Kahn weighed in on the increasingly thorny interplay between Rule 3002.1 notices of postpetition fees and North Carolina’s Mortgage Debt Collection and Servicing Act (§ 45-91). Here, the debtor, Christopher Rogers, was not personally liable on the mortgage note—his non-filing spouse was—but the couple’s residence was encumbered by a deed of trust in favor of SIRVA Mortgage. The loan was contractually current at filing, yet SIRVA filed a proof of claim asserting a projected escrow shortage and, later, a Rule 3002.1(c) notice claiming a $400 “proof of claim fee.” At the same time, SIRVA sent the debtor’s spouse separate state-law notices under § 45-91 listing over $950 in “BNK ATTY FEES & COSTS.” The debtor, relying on In re Owens (Whitley, J.) and the recent In re Peach (Beyer, J.), objected, arguing that this “dual booking” practice violated Rule 3002.1’s disclosure mandate. Court’s Ruling Violation of Rule 3002.1(c): Judge Kahn held that SIRVA’s conflicting notices ran afoul of Rule 3002.1, which was designed to prevent hidden or undisclosed fees from ambushing Chapter 13 debtors after plan completion. Interpretation of § 45-91: The court rejected SIRVA’s strained reading that the statute requires servicers to “assess” every conceivable fee, even those never intended to be collected. Instead, “assess” means impose—not merely “note” or “disclose.” Thus, notices of waived or phantom fees were not required. No Safe Harbor in Federal/State Regulations: Other federal mortgage servicing regulations (e.g., RESPA’s Reg. X, TILA’s Reg. Z) only require reporting of transactions that actually credit or debit the account, not ghost fees. Adoption of Owens and Peach: Like Judges Whitley and Beyer, Judge Kahn ruled that subjective creditor intent is irrelevant; if fees are assessed to the account, they must be noticed under Rule 3002.1. Remedy: The court disallowed both the $400 proof of claim fee and the undisclosed $551.69 of additional charges, and prohibited SIRVA from ever seeking to recover them against the debtor or the property. Commentary: This decision reinforces a bright-line “use it or lose it” approach to Rule 3002.1. Servicers cannot play a double game—filing sanitized notices in bankruptcy court while simultaneously sending borrowers conflicting state-law statements padded with attorney’s fees. The ruling also provides much-needed clarity on § 45-91, reading it in its plain sense as a consumer protection measure designed to limit fees, not generate paperwork for phantom charges. This aligns with legislative intent to protect homeowners from abusive servicing practices and avoids the absurdity of requiring disclosure of fees the creditor admits it cannot collect. Practically, this case is a reminder that debtor’s counsel must stay vigilant. Here, counsel Koury Hicks deserves praise for spotting the discrepancy and forcing judicial review. Without objection, those $951 in “assessed” fees might have lurked as a future foreclosure trap, exactly the problem Rule 3002.1 was enacted to prevent. The opinion joins Owens and Peach in building a solid body of North Carolina precedent insisting on full transparency and accountability from mortgage servicers. One suspects that repeated violations may soon warrant harsher sanctions under Rule 3002.1(i) and § 45-91, especially if servicers continue to shrug off the rule as mere paperwork.  Whether those arise in bankruptcy courts or through class action lawsuits elsewhere remains to be seen. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_christopher_rogers.pdf (714.61 KB) Category Middle District

M.D.N.C.: Danny K. v. Experian- FCRA Claim Forced into Arbitration by Credit Monitoring Click-Through Ed Boltz Fri, 09/26/2025 - 15:17 Summary: In this case, a veteran found his home purchase delayed because Experian could not generate his credit report—an error caused by Experian’s system refusing to recognize his legal last name, “K.” As a result, he was forced into a higher-rate variable mortgage and an extra month of rent. He sued under the Fair Credit Reporting Act. Experian’s defense, however, was not to correct the obvious error but to argue that the case should never see the inside of a courtroom. Relying on its “CreditWorks” monitoring product, Experian claimed the plaintiff had agreed to binding arbitration when he clicked through an online enrollment form. That arbitration clause was drafted with sweeping reach, explicitly covering FCRA claims, and even included a delegation clause that gave the arbitrator—rather than the court—the power to decide whether Experian had waived arbitration by waiting nearly a year to raise it. Judge Schroeder, following Fourth Circuit precedent in Austin v. Experian and similar cases, agreed with Experian, compelled arbitration, and stayed the case. Commentary: This decision highlights the collision between consumer rights under the Fair Credit Reporting Act and the near-ubiquitous arbitration clauses buried in credit monitoring services. What begins as a straightforward FCRA violation—wrongly reporting a consumer’s name and costing him thousands of dollars—ends not in open court but in private arbitration. For consumer bankruptcy attorneys, the lesson is clear: our clients often unwittingly give up their right to sue when they sign up for “free credit monitoring” or identity theft protection products, sometimes encouraged by creditors themselves after a data breach. The arbitration clauses in these agreements are drafted to funnel virtually every dispute, including FCRA and FDCPA claims, out of the courts. And once in arbitration, damages are often narrower, discovery more limited, and precedent nonexistent. Is arbitration so bad? Consumers and their advocates almost uniformly resist arbitration clauses, seeing them as creditor-friendly traps. The perception is that arbitration denies transparency, limits discovery, and stifles precedent, all to the detriment of consumers. But this perhaps reflexive aversion deserves closer thought. If arbitrators are truly neutral and professional, consumers might  actually welcome arbitration. Speedier and lower-cost adjudications would benefit debtors much more than protracted litigation. If, on the other hand, arbitrators are venal and corrupt—as many suspect—then consumers might still find a silver lining or two . Self-interested arbitrators,  seeing a gravy train of  consumer rights claims,  might decide that favoring those consumers is likely to keep more cases coming.  Additionally, because the creditor pays the filing and administrative fees, flooding arbitration providers with FCRA, FDCPA, and consumer finance claims could impose massive costs on repeat players like Experian, forcing either quicker settlements or systemic change.  This paradox underscores that arbitration need not be the end of consumer remedies—it might, if strategically embraced, become a tool for pressure. Still, the loss of public precedent is profound, especially in areas like credit reporting and debt collection where systemic patterns matter. For now, district courts remain the only reliable venue for shaping consumer protection law—but only if consumers can avoid clicking “I Agree.” For instructions on how to get a credit report but avoid  "click-through",  see my previous post  regarding Austin v. Experian. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document danny_k_v._experian.pdf (220.28 KB) Category Middle District

If you file for bankruptcy in Pennsylvania, you may be able to claim a homestead exemption to protect some of the equity in your home. However, there is no homestead exemption under Pennsylvania law. Instead, you must claim federal bankruptcy exemptions to get the federal homestead exemption. If this exemption is insufficient, your attorney may help you determine other ways to protect your assets. Homestead exemptions may help you protect some of the equity in your home from the bankruptcy process. Unfortunately, these exemptions often do not protect all your equity, and some bankruptcy petitioners might find the homestead exemption insufficient. If this is the case, you may consider whether your home is protected under tenancy by the entirety protections. Alternatively, filing under Chapter 13 bankruptcy may help you retain your home and avoid liquidation entirely. Get a free, private case review from our Berks County, PA bankruptcy lawyers by calling Young, Marr, Mallis & Associates at (215) 701-6519. Does Pennsylvania Have a Homestead Exemption? When filing for bankruptcy, there may be numerous exemptions that allow you to protect certain assets or properties from creditors. There may be different exemptions offered by the State of Pennsylvania and the federal government. While a homestead exemption may help you protect some of the equity in your home, this exemption only exists in the federal list of exemptions. Since Pennsylvania law doesn’t have a homestead exemption, your only option is to claim federal exemptions. When you do this, you have to take the rest of the federal exemptions, too; you cannot use some state and some federal. If you claim the federal homestead exemption, you are limited on how much equity in your home you can shield from creditors. Limits to the Homestead Exemption The federal homestead exemption under 11 U.S.C. § 522(d)(1), you may exclude up to $31,575 of the equity in your home if you file for bankruptcy on your own. If you file jointly with your spouse, the exemption limit doubles. However, if your equity in the home exceeds the exemption, you may lose money through liquidation. In that case, it may be better to protect your home with your spouse by claiming tenancy by the entirety protections. This usually means only one of you can file for bankruptcy. If the home is protected under tenancy by the entirety protections, the spouse who did not file for bankruptcy can sell it and use the proceeds to pay your creditors. As long as you have not yet entered bankruptcy proceedings, you can sell your home on your own to avoid having it liquidated. What Happens if the Homestead Exemption is Too Low? If the homestead exemption is too low to shield your home from bankruptcy completely, creditors may force the sale of your house. While the homestead exemption may help you protect some of the equity in your home, it might not protect all of it. This means that when the home is sold, you may only receive the amount allowed by the exemption, and creditors will take the rest. Options Other Than the Homestead Exemption to Protect Your House in Pennsylvania If the exemption limits are too low for you, talk to our Philadelphia bankruptcy lawyers about other ways you may protect your home during bankruptcy. It is possible that other legal options may help you completely shield your home from creditors. Tenancy By the Entireties Exception If you are married, and your spouse owns your home with you, you may be considered tenants by the entirety. This means you each own 100% of the house, rather than splitting ownership 50/50. In that case, creditors cannot force the sale of the home if you file for bankruptcy independently from your spouse. Since your spouse also owns 100% of the house, and they did not file for bankruptcy, the house cannot be seized and sold. Use Chapter 13 Instead of Chapter 7 Since liquidation only occurs under Chapter 7, and exemptions are only needed under that chapter, another option to protect your home is to file for Chapter 13 bankruptcy. Under this chapter, your assets and properties are not liquidated and sold to pay your debts. Instead, you devise an aggressive (yet feasible) payment plan to catch up on your missed payments. No assets would be sold off, and you might be able to keep your home. How Your Marriage Affects the Homestead Bankruptcy Exemption Under federal law, a person filing for bankruptcy may protect up to $31,575 in their home’s equity during the bankruptcy process. If you are filing for bankruptcy jointly with your spouse, this limit is doubled. Since each spouse claims the full federal homestead exemption, you can each protect $31,575 of equity in your home for a total of $63,150. Are There Other Exemptions I Can Use to Protect My House from Bankruptcy? While other exemptions exist, they might not necessarily be designed specifically for your house or other real property. For example, you may claim exemption for various items of personal property, your vehicle, retirement accounts, and other assets. However, there is usually only one homestead exemption. How an Attorney Can Help You with Homestead Exemptions During Bankruptcy If the homestead exemption is not enough to help you, talk to your attorney. They may help you evaluate other legal options. One possibility is that your attorney may negotiate with your creditors to hold off on seizing your house. In some cases, creditors may be persuaded to avoid taking adverse legal action against bankruptcy petitioners in exchange for at least a portion of the debt owed and proof that you can keep up with a payment plan going forward. If retaining your house is just not possible, you may consider selling your house before entering bankruptcy. This might help you net a larger profit from the sale and pay your debts without worrying about assets being seized and liquidated. Contact Our Pennsylvania Bankruptcy Lawyers About Protecting Your Home Get a free, private case review from our West Philadelphia, PA bankruptcy lawyers by calling Young, Marr, Mallis & Associates at (215) 701-6519.

M.D.N.C.: Joyner-Perry v. Selene- FDCPA & NC Debt Collection Claims Survive Motion to Dismiss by Mortgage Servicer Ed Boltz Thu, 09/25/2025 - 17:12 Summary: Three North Carolina homeowners brought a putative class action against Selene Finance, alleging that Selene’s standardized “default and intent to accelerate” letters violated the FDCPA, the North Carolina Debt Collection Act, and the North Carolina Collection Agencies Act. They also asserted negligent misrepresentation under state law. Selene moved to dismiss. Judge Schroeder denied most of Selene’s motion, allowing the FDCPA and state debt collection claims to proceed. He held that even though Selene used the conditional word “may,” its threats of acceleration and foreclosure could still mislead the least sophisticated consumer if Selene did not, in fact, intend to follow through on such threats. As the court explained, “conditional language does not insulate a debt collector from liability” when the practice is to never actually accelerate or foreclose under the terms described. The court likewise sustained claims under the NCDCA and NCCAA, noting that “informational injury” suffices to show harm. Only negligent misrepresentation was dismissed for lack of allegations of pecuniary loss. One plaintiff, Joyner-Perry, was dismissed from the FDCPA subclass because her loan was not in default when Selene acquired it. Commentary: While this case is framed as a consumer protection class action under the FDCPA and North Carolina debt collection statutes, it should not be overlooked that many of the putative class members almost certainly also passed through the bankruptcy courts—most often Chapter 13—during their struggles with Selene. Selene is a frequent filer of proofs of claim in Chapter 13 cases in North Carolina, and the standardized letters at issue here would have overlapped with bankruptcy filings. That raises two important concerns. First, damages from these improper collection communications should include not just emotional distress and informational injury, but also the very real costs imposed when any of these  borrowers resorted to bankruptcy protection: attorneys’ fees, Chapter 13 trustee commissions, court filing fees, and the years-long burden of repayment plans. Any settlement or award must account for those harms, which flow directly from Selene’s practices.  Second, if there is a class wide recovery, its distribution should reflect the difficulty of getting relief in bankruptcy court itself. As practitioners know, consumer rights claims—particularly FDCPA and state law claims—tend to see stronger outcomes in federal district court than when brought in bankruptcy courts, where they are too often minimized as tangential to case administration. Given these realities, coordination between any recovery in this case and parallel or past bankruptcy proceedings is critical. NACBA (the National Association of Consumer Bankruptcy Attorneys) is well-positioned to assist in such coordination, ensuring that debtors who filed Chapter 13 are not overlooked, and would be an appropriate recipient for any cy pres award if direct distribution proves impractical. This case underscores the importance of federal district courts in vindicating consumer rights against mortgage servicers, and it highlights the need for thoughtful resolution that takes into account the full spectrum of damages suffered by homeowners—including the costs of bankruptcy itself. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document joyner-perry_v._selene.pdf (165.75 KB) Category Middle District

Bankr. W.D.N.C.- In re Gilbert- Sua Sponte Dismissal Hearing for Third Filing, Despite no Automatic Stay Ed Boltz Wed, 09/24/2025 - 16:32 Summary and Commentary (In re Gilbert, W.D.N.C. 2025) Russell Wade Gilbert filed his third Chapter 13 case in just over fourteen months, all pro se and without an attorney. His first case (June 2024) was dismissed for failure to propose a feasible plan, make initial payments, and file required tax returns. His second case (November 2024) was dismissed in July 2025 for defaulting on plan payments. Just six weeks later, he filed the present case in August 2025. Under 11 U.S.C. § 362(c)(4), when a debtor has had two or more bankruptcy cases dismissed within the preceding year, no automatic stay goes into effect in the new filing. Instead, the debtor must request that the court impose a stay, and only after notice and hearing can the court do so if the debtor shows the case was filed in good faith. Judge Ashley Austin Edwards’ show cause order specifically noted that, because Gilbert had two prior dismissals in the past year, “the automatic stay is not in effect in this case”. The claims filed in his prior case were modest. The IRS and N.C. Department of Revenue were owed less than $1,000 in total. The only significant creditor was the Kania Law Firm, holding a $9,776.83 secured claim for attorney’s fees and costs from a tax foreclosure proceeding. That raises the practical question: is a hearing even necessary here? Since no stay exists, both Kania (as foreclosure counsel), the IRS, and NCDOR are free to pursue collection and enforcement remedies immediately, without needing relief from stay. Unless Gilbert requests and persuades the Court to impose a stay under § 362(c)(4)(B), the creditors are not restricted. Commentary: This case highlights how serial pro se filings often operate less as genuine efforts to reorganize than as attempts to forestall inevitable foreclosure or collection.  The Bankruptcy Code already provides a built-in safeguard against abuse—§ 362(c)(4) strips repeat filers of the automatic stay. Here, where the debtor owes only small amounts to taxing authorities and the bulk of the claim lies with foreclosure counsel, the practical effect of the third filing is minimal. Creditors can simply proceed as if no bankruptcy had been filed at all. The Court has nonetheless scheduled what appears to be an unnecessary show cause hearing, since absent a motion for stay protection by the debtor, the outcome seems foreordained: dismissal or at best, a stern warning that without good faith (and without counsel), Chapter 13 offers no refuge. With proper attribution,  please share this post.    To read a copy of the transcript, please see: Blog comments Attachment Document in_re_gilbert.pdf (219.11 KB) Category Western District

When you file a bankruptcy petition, you get an “automatic stay.”  This halts collection efforts from creditors and gives you breathing room.  While the stay is in place, they cannot call you, threaten you, or initiate other collection or enforcement efforts.  But what about utility bills and tax liens? Utility bills aren’t the same as a debt, because each month, a new service is carried out and new payment is issued.  While they are not strictly covered under the automatic stay like other debts are, there are rules that can help prevent a shutoff, at least for a while.  Similarly, tax liens can continue to be calculated and move forward, but they cannot actually go into effect or be applied until your automatic stay ends. For help stopping shutoffs and liens, call the Philadelphia bankruptcy attorneys at Young, Marr, Mallis & Associates at (215) 701-6519. How an Automatic Stay Stops Collections As soon as you file your bankruptcy petition in court, an automatic stay is put in place.  This is a court order to stop collection efforts.  You can show the creditor proof that you filed for bankruptcy, and they have to stop everything they’re doing to try to get money from you. This applies to all kinds of debts and collection efforts, and it can stop many of the enforcement mechanisms that creditors use.  For example, wage garnishment can be stopped, forced sale of your residence can be stopped, and liens can be stopped from going into use. But while it is powerful, an automatic stay doesn’t stop everything. Does the Automatic Stay Apply to Utility Bills? An automatic stay sort of applies to utility bills.  In the sense that back payments are debts you now owe the utility company, they become creditors and can try to enforce the back payments through collections efforts.  This can negatively impact your credit score and lead to collections, and all of those can be stopped like with any other creditor. However, utility companies also have ongoing contracts with you.  You pay them each month for the services they rendered, and a new bill is going to come around, likely before your automatic stay ends.  Are they expected to just continue services while you rack up more debt? This is all a bit different from something like a debt to a mortgage company or credit card company, where there are no additional services they render, and interest continues to accrue while you aren’t paying. How Bankruptcy Affects Utilities Utilities services are instead governed by the rules of 11 U.S.C. § 366. This law puts two major requirements on the utility company when you file bankruptcy proceedings: They cannot stop service to discriminate against you solely because you filed for bankruptcy. This is impermissible discrimination. They cannot stop service at all until 20 days have passed and you haven’t taken steps to pay future bills. The antidiscrimination protections are tough to enforce, since they can potentially point to other excuses, like the fact that you are not paying them.  But if you follow all the necessary steps for option two, then you can halt shutoffs. Section 366(b) stops shutoffs if you have given the utility company “adequate assurance of payment.”  This means setting up a plan with them to pay your ongoing bills and figuring out how to pay past bills.  It usually requires a deposit or other surety. You can also have the court modify the amount you have to pay, potentially helping you make adequate arrangements to avoid a shutoff.  Our Pennsylvania bankruptcy lawyers can help you arrange these kinds of things, when possible. If you don’t do this, then they can shut off your utilities.  You may also need to continue to stay in touch with them and follow through with your promises, or else they can eventually shut off your utilities under this section. Can the Government Create Tax Liens While I’m in Bankruptcy? While an automatic stay might stop tax collection efforts against you, it does not require the government to sit on its hands.  The government can take proactive steps to continue with collections on their end, they just can’t actually enforce those tax collection efforts against you while the automatic stay is in place. This ultimately means that they can start the process of obtaining a lien, calculate liens, and then hit pause.  Those liens would only go into effect and actually attach once the automatic stay ends. This also does not apply if the tax debt in question won’t actually be discharged under your bankruptcy.  For example, new tax debts that arose while you were in bankruptcy proceedings aren’t covered under the existing bankruptcy petition. Because of this, it is important to stay on top of new tax payments, withhold the proper amounts at work, and avoid going into additional tax debt during and after bankruptcy. When is My Tax Debt Discharged? At the end of your bankruptcy case, whether you paid through Chapter 13 or underwent liquidation through Chapter 7, the debts will be paid or discharged.  That includes the tax debts you went into bankruptcy with. However, new tax debts are not covered under this.  If liens were created to cover your new debts, they can go into effect and lead to property being seized under those liens. Which Bankruptcy Stops My Utility and Tax Debt Collections? Most individuals and couples filing for bankruptcy will do so through Chapter 7 or Chapter 13.  Chapter 11 might sound familiar, but this is usually a business bankruptcy. In Chapter 7, you can only apply with a low income level.  Instead of you paying back debts as you go with your income, assets are instead liquidated to help cover your debts, then anything left is discharged.  With Chapter 13, you typically have a higher income and can allocate that toward one payment to pay off debts as you go. In both cases, automatic stays are granted.  In addition, these other rules about getting 20 days to give assurances for utilities also apply to both types of bankruptcy. Call Our Bankruptcy Lawyers in Pennsylvania Today Call (215) 701-6519 for a free case review with Young, Marr, Mallis & Associates’ Berks County, PA bankruptcy lawyers.

Bankr. E.D.N.C.: Sanderson v. Gross Family Trust- Avoidance of "Estate Planning" Transfer Ed Boltz Tue, 09/23/2025 - 17:50 Summary: This adversary proceeding arose out of the collapse of Wireless Systems Solutions, LLC, a company almost entirely owned and controlled by Susan and Laslo Gross. In 2019, Wireless entered into a Teaming Agreement with SmartSky Networks, which carried potential damages of up to $10 million for breach. By early 2020, the relationship with SmartSky was unraveling, and Wireless faced mounting liabilities. At the same time, Mrs. Gross created the Susan L. Gross Family Trust, naming her husband as trustee and their children as beneficiaries. On March 6, 2020, Wireless transferred $1 million into that Trust. Within weeks, the Trust used much of those funds to buy real estate in Watauga County, while Wireless’s finances spiraled further downward. The Chapter 7 Trustee sought to claw back the transfer under 11 U.S.C. § 544(b) and North Carolina’s Uniform Voidable Transactions Act. The court found that the transfer bore numerous badges of fraud: it was made to an insider, for no consideration, while Wireless faced mounting debts and litigation with SmartSky, and under the complete control of the same insiders who ran the company. The supposed justification—“estate planning”—was dismissed as a post hoc gloss on what was in reality an asset-protection scheme. The court concluded that the transfer was both an actual fraudulent transfer (§ 39-23.4(a)(1)) and a constructively fraudulent transfer (§ 39-23.4(a)(2)) and entered judgment for the Trustee, avoiding the transfer. Commentary: This case is a reminder that calling something “estate planning” does not immunize insider transfers when creditors are already circling. The Grosses’ attempt to move $1 million out of their closely held company into a family trust—right as litigation with their only major customer loomed—was almost a textbook case of fraudulent transfer. Judge Callaway was especially critical of Mrs. Gross’s shifting testimony, noting her “selective memory issues” and tendency to shape her story to the moment. The defendants implicitly invoked the idea that they were acting on professional advice when setting up the trust. Here, the “advice of counsel” defense, as discussed by the Fourth Circuit in Sugar v. Burnett (2024), is instructive. The Fourth Circuit emphasized that reliance on counsel can negate fraudulent intent only where the debtor (1) fully discloses material facts, (2) seeks advice in good faith, and (3) reasonably relies on that advice. In the Grosses’ case, those elements were lacking: Mrs. Gross downplayed or denied critical facts about Wireless’s deteriorating relationship with SmartSky, their timing showed asset-protection motives rather than good-faith estate planning, and no reasonable person could believe that siphoning $1 million from an operating business on the brink of litigation would be immune from avoidance simply because it passed through a lawyer’s hands. The lesson for debtors and their counsel is clear: a debtor cannot launder fraudulent intent through an estate planning lawyer. Estate planning advice may provide a veneer of legitimacy, but without candor, good faith, and reasonableness, it will not withstand scrutiny. For practitioners, two points stand out: Badges of fraud add up. Insider transfers, lack of consideration, and impending liabilities will overwhelm “estate planning” rationales. Advice of counsel is not a shield without transparency. Following Sugar v. Burnett, courts in the Fourth Circuit will demand evidence that the debtor disclosed the whole picture to their attorneys,  both in bankruptcy and otherwise, and reasonably relied on the advice given. In short, when “estate planning” collides with creditor exposure, it is almost always the creditors who will win. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document sanderson_v._gross_family_trust.pdf (312.55 KB) Category Eastern District