Summary: Calmore & Hygiena George, residents of St. Croix in the U.S. Virgin Islands, purchased a townhome in Charlotte for their four daughters, all of whom were attending college there. There were no mortgages or liens against the property. Ms. … N.C. S.Ct.: In re George- Insufficient Service for Non-Judicial Foreclosure Read More »

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When the National Rifle Association filed for bankruptcy in Texas, some pundits speculated that the gun advocates might have been seeking a firearm friendly forum. However, on May 11, 2021, Judge Harlin "Cooter" Hale dismissed the case based on lack of good faith. In re National Rifle Association of America and Sea Girt, LLC, No. 21-30085 (Bankr. N.D. Tex. May 11, 2021). You can find the opinion here. The opinion demonstrates the vitality of the good faith doctrine, which requires debtors’ filings for relief to advance a proper bankruptcy purpose. In the NRA's case, the answer was no. What Happened The National Rifle Association is a non-profit company organized under the laws of New York in 1871. In August 2020, the New York Attorney General filed suit to dissolve the NRA, alleging that: (1) the NRA exceeded the authority conferred upon it by New York law, conducted its business in a persistently illegal manner, and abused its powers contrary to the public policy of the state of New York by operating without effective oversight or control by its officers and directors; and (2) the directors or members in control of the NRA looted or wasted the corporate assets, perpetuated the corporation solely for their personal benefit, or otherwise acted in an illegal, oppressive, or fraudulent manner. The NRA perceived this suit as an existential threat to its mission to promote responsible gun ownership and the Second Amendment. The NRA wanted to escape the jurisdiction of the New York courts which it believed were biased against it.  On November 23, 2020, the NRA hired the Neligan Law Firm to advise it on bankruptcy and restructuring options. The next day, it formed Sea Girt, LLC, a subsidiary which it incorporated in Texas. On January 7, 2021, the NRA’s board granted considerable powers to Wayne LaPierre, the entity’s executive vice-president. The board was not told that LaPierre planned to use these powers to file bankruptcy. On January 15, 2021, Sea Girt, LLC and the National Rifle Association filed Chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas. Various creditors cried foul. A long-time donor moved for appointment of a trustee. Ackerman McQueen, one of the NRA’s largest creditors, moved to dismiss or appoint a trustee. The attorneys general of New York and the District of Columbia filed their own motions to dismiss. Sixteen states filed amicus briefs in support of the NRA, as did Texas. The Court conducted a twelve-day trial beginning on April 5, 2021 and heard from twenty-three witnesses. On May 11, 2021, the Court issued its memorandum opinion granting the motion to dismiss and denying the motions to appoint a trustee or examiner. The Court’s Ruling The Court summarized its ruling as follows: The question the Court is faced with is whether the existential threat facing the NRA is the type of threat that the Bankruptcy Code is meant to protect against. The Court believes it is not. For the reasons stated herein, the Court finds there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme. Opinion, p. 2. A Detour Into the Meaning of Good Faith Section 1112(b) of the Bankruptcy Code allows a court to dismiss a chapter 11 case for “cause.” There is a long line of Fifth Circuit cases holding that cause includes filing in bad faith. When a creditor makes a prima facie showing of bad faith, the burden shifts to the debtor to demonstrate good faith. The essence of good faith/bad faith is whether the filing “serves a valid bankruptcy purpose.” Opinion, p. 12. In the Fifth Circuit, the bad faith doctrine developed largely in the context of single asset real estate filings.  In the case of In re Little Creek Dev. Co., 779 F.2d 1068, 1072-73 (5th Cir. 1986), the Court held that it was not bad faith to file a chapter 11 petition to avoid posting a supersedeas bond. The court ruled that good faith was determined by the totality of the circumstances. However, in dicta, the Court included a checklist of factors indicating that a case was filed in bad faith. Unfortunately, these factors defined most single asset real estate filings. While this provided a handy guide for creditors’ lawyers seeking to lift the automatic stay, it did not shed light on the doctrine. Several years later, the court decided In re Humble Place Joint Venture, 936 F.2d 814, 816-17 (5th Cir. 1991). Humble Place involved a debtor that owned raw land. Its representative made the unfortunate comment that the debtor’s business consisted of mowing the grass and waiting for the market to turn. The Fifth Circuit noted that the primary purpose of the plan was to relieve the guarantors from liability on their guarantees and not to benefit the debtor—an impermissible purpose. More importantly, the Court gave examples of when a single asset real estate filing (or any other case) might be made in good faith. It stated: There are several instances in which even one-asset real estate ventures would invoke Chapter 11 in good faith: the asset may be an operating business, like a ranch or a hotel; the development might be nearing the end of construction whose completion would markedly enhance the asset's value; and even a venture including undeveloped property might file to protect true owner equity when market conditions suggest the remedy of a debt restructuring, as opposed to simple liquidation, and the likelihood of prompt resale. In re Humble Place, 936 F.2d at 818.   The Third Circuit captured the essence of the doctrine when it stated: A debtor who attempts to garner shelter under the Bankruptcy Code, therefore, must act in conformity with the Code's underlying principles. Official Comm. of Unsecured Creditors v. Nucor Corp. (In re SGL Carbon Corp.), 200 F.3d 154, 161 (3rd Cir. 1999). Or as stated by Judge Hale, “a Chapter 11 petition is not filed in good faith unless it serves a valid bankruptcy purpose.” Opinion, p. 12. Why Was the NRA Bankruptcy a Bad Faith Filing? The NRA’s argument for having a good faith filing was stated in a brief where it said: The NRA filed for protection under chapter 11 in good faith, not to circumvent judgments in other courts (in fact, no judgments have been rendered), nor to escape an impending trial (because there is none), but because it is in a situation where it must be able to continue its operations in the face of existential threats, in order to maximize the value of its estate and to protect the interests of its members, employees, vendors, and legitimate creditors. Opinion, p. 16. So, what was the “existential threat”? Judge Hale found the following testimony from Mr. LaPierre to be illuminating: Q: Okay. So it comes down to the reason you filed Chapter 11 is because you have this New York attorney general enforcement action which is asking for dissolution of the NRA; is that correct? [Counsel for the NRA]: Objection; misstates his testimony. [Counsel for the Movant]: Well -- THE COURT: Well, I’m going to go ahead and let him answer that. Try to give an answer to that, Mr. LaPierre. THE WITNESS: Yes, Your Honor. Yes, we filed the Chapter 11 to -- because the New York State attorney general is seeking dissolution of the NRA and [seizure of] its assets, and we believe it’s not a fair, level playing field. . . . . Q: So really what we’re down to is that it’s -- the New York attorney general action is the reason you believe you need to be in bankruptcy, and, really, solvency and all your other litigation, those are not issues that would require you to be in bankruptcy; is that correct? A: That’s correct. Opinion, p. 23. The Court concluded that obtaining a litigation advantage over the New York Attorney General was not a good faith ground for filing. (T)he Court believes the NRA’s purpose in filing bankruptcy is less like a traditional bankruptcy case in which a debtor is faced with financial difficulties or a judgment that it cannot satisfy and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme. The purpose of this bankruptcy filing may not have been to end the NYAG Enforcement Action immediately, but it was to deprive the NYAG of the remedy of dissolution, which is a distinct litigation advantage… The Court does not know what specific mechanism the NRA plans to use, but its intention is clearly to “take dissolution off the table.” Opinion, p. 29. While the NRA may have hoped to find a friendly forum for its gun rights mission in the Lone Star State, this Texas judge found that its justification was all hat and no cattle. What It Means My personal hope is that Judge Hale’s decision in National Rifle Associationwill cause practitioners and courts to focus on whether a debtor has a proper bankruptcy purpose and that I will never have to see the Little Creekchecklist again. To summarize some of the lessons from this case: ·        Trying to find a favorable venue is not necessarily bad faith; ·        Trying to evade a state regulatory scheme is almost certainly bad faith; ·        Trying to gain an unfair litigation advantage is almost certainly bad faith; and ·        Trying to file bankruptcy when you are not having trouble paying your creditors is almost certainly bad faith. On the other hand, the quintessential valid bankruptcy purposes are to maximize value and pay creditors.  Many years ago, I wrote In Chapter 11, faith refers to a belief in reorganization. Debtors who are pilgrims on the path to reorganization exhibit good faith; debtors with other purposes or motives display bad faith. Stephen W. Sather & Adrian M. Overstreet, The Single-Asset Real Estate Debtor: A Selective Overview, 2 J. Bankr. L. & P. 343,358 (July 1993). This was a case where the debtor had other motives or purposes and thus, its bankruptcy case was properly dismissed.  

After Bankruptcy, are you getting your mortgage statements? After you file bankruptcy, you are still supposed to keep getting your mortgage statements.  But, are you? This question came up at the 29th Annual Meeting of the National Association of Consumer Bankruptcy Attorneys.  (I’m at that meeting this week, which was supposed to be in Orlando, […] The post After Bankruptcy, are you getting your mortgage statements? by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

Debt Collection Harassment: How To Stop Calls After Bankruptcy How To Deal With Creditor Calls & Letters After a Bankruptcy Filing In Arizona One of the first signs that you’re having problems with debt is that you are getting letters and phone calls from your creditors asking you to pay and warning you about the penalties for failing to do so. As the debts continue to be unpaid, you may start getting incessant phone calls and letters. You may dread answering the phone or heading to the mailbox. When you file for bankruptcy, you can put an end to those calls and letters. A bankruptcy filing triggers what is known as an automatic stay. That means that all debt collection activity has to cease until your bankruptcy filing is resolved, which is usually through a discharge. Even legal action like foreclosure or a lawsuit will be paused during this time. If the bankruptcy is discharged, it may be that the legal action is permanently suspended. Any debts that are discharged in the bankruptcy will no longer be legally collectable. You should not get any calls or letters about those debts ever again. The Bankruptcy Notice To Creditors: Miscommunication & Improper Timing Sometimes, you may get calls or letters after your automatic stay has gone into effect simply because the creditors have not received the notification or because they have not entered it into their systems yet. They have people working in call centers off lists, and it can take a bit for information to trickle down sometimes. These creditors may not be intending to violate the automatic stay; their representatives just may not realize that it’s in place. If you get any calls, you can gently but firmly notify them that you have filed for bankruptcy and refer any questions to your Glendale bankruptcy attorney. If you get any letters, call the number on the correspondence and notify them of the same. Take Notes & Keep Records Of Creditor Harassment Notifying the creditors that you have filed for bankruptcy in Glendale should be enough to put a stop to the phone calls and letters, even if they did get their wires crossed about the automatic stay in the first place. But some creditors will still push boundaries and do things they aren’t supposed to do. You need to keep records of the calls and letters you receive. Take notes about what is said during the phone call. Then you can have a record of what information has been shared to use in any legal action you need to take. Take note of the date and time that you receive calls or letters. Write down the name of the person you talk to, as well as notes about what they say. Talk To Your Arizona Bankruptcy Attorney About Legal Action If creditors persist in harassing you about the debt, you have legal options. You may be able to sue the creditor, and you may be able to get restitution for the harassment. Talk to your bankruptcy attorney about what you are experiencing and what your options are. Typically, contact from your Gilbert bankruptcy attorney will be enough to put an end to the action. But you may need to file a lawsuit against especially aggressive creditors. Filing for bankruptcy should give you immediate relief from harassing phone calls and constant correspondence from creditors. Once your bankruptcy is discharged, you should also get great financial relief. However, if your creditors persist in harassing you after your bankruptcy filing, you do have legal options. Always work closely with your Ahwatukee bankruptcy attorney to navigate this process and to understand what your rights and your options are. You don’t have to continue to suffer under the weight of debt or the constant harassment of creditors. Get Help From Professional Bankruptcy Lawyers In Glendale, AZ Call My AZ Lawyers today to learn more about bankruptcy protection and how it may offer you the debt relief you need. Our bankruptcy attorneys represent clients in both Chapter 7 bankruptcy, offering a total discharge of unsecured debts, and Chapter 13 bankruptcy, offering a restructuring of debt into an affordable payment plan. We’ll help you understand which option is right for you based on your income and the kind of debts or assets that you have. We serve clients throughout the Phoenix metro area, including Mesa, Glendale, Tucson, and Avondale. We have several offices and flexible hours for your convenience. Contact us today to schedule a consultation with a bankruptcy attorney to learn more.   Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: https://myazlawyers.com/ Phoenix Location: 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: (602) 609-7000 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Debt Collection Harassment: How To Stop Calls After Bankruptcy appeared first on My AZ Lawyers.

Abstract: Grifters take advantage of situations, latching on to others for benefits they do not deserve. Bankruptcy has many desirable benefits, especially for mass tort defendants. Bankruptcy provides a centralized proceeding for resolving claims, making it a forum of last … Law Review: Simon, Lindsey, Bankruptcy Grifters (April 1, 2021). Yale Law Journal Read More »

For most people, bankruptcy works. For most people “debt settlement” doesn’t work. One reason.  The debt settlement people charge enormous fees–FDR and NDR charge at least $6,000 to “settle” $40,000 in credit cards (and you still have to pay the settlement). Plus, they usually don’t work . See this email I got this email today […] The post For most people bankruptcy works. For most people, debt settlement doesn’t. by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

   It is fairly rare to see a case brought alleging employment discrimination due to the filing of a bankruptcy.  This allegation gave rise to a complaint under 11 U.S.C. §525(b) in Johnson v. Speedway, LLC, 2021 U.S. Dist. LEXIS 80891, Case no 7:21cv00100 (W.D. Va. 28 April 2021).   The factual situation asserted was that the Johnson worked as an assistant manager at a speedway store.  Due to becoming homeless, with the manager's permission, he had his mail sent to him at the store.  When he subsequently filed a chapter 13 bankruptcy, listing the store's address as his address for the bankruptcy, another employee opened the bankruptcy notice and notified his manager and 'corporate' who determined that Johnson was too much of a liability given the bankruptcy filing, fearing that he would steal money from the store, and terminated his employment (after allowing him to work his final shift, upon which he locked the store and turned in his keys).  Johnson filed an adversary proceeding against Speedway under 11 U.S.C. §525(b), which was transferred to the district court pursuant to 28 U.S.C. §157(d).    Section 525(b) of the bankruptcy code prohibits a private employer from terminating an individual's employment 'solely because' that individual filed for bankruptcy.   The first issue on the motion to dismiss is that §525(b) does not create a private cause of action for such suits.  In order to find such a cause of action courts must consider whether congress intended to create both a private right and a private remedy for violations.  This then requires consideration of whether the statute includes 'rights-creating language.'1   As §525(b) protects filers from discriminatory employment termination, it explicitly confers a right directly on a class of persons including the plaintiff.  The statute includes no language suggesting that Congress intended to preclude a private remedy for the violation of the statute.  The court thus concluded that Congress intended to provide a private right of action and private remedy which the court can award under 11 U.S.C. §105, which gives the court authority to issue any order, process, or judgment necessary or appropriate to carry out the provisions of the Bankruptcy Code.  The court did grant Speedway's motion to dismiss the breach of contract claims, given Virginia's employment-at-will doctrine.  The court likewise dismissed the count for intentional infliction of emotional distress based on Virginia law requiring the showing that the conduct of the defendant be outrageous in character and extreme in degree.  Under Virginpa law the plaintiff must also show that defendant had the specific purpose of inflicting emotional distress or intended the specific conduct knowing emotional distress would likely to result.  The allegations did not meet this standard, resulting in dismissal of that count.  The court allowed the counts under §525(b) to proceed to trial.1 Alexander v Sandoval, 532 U.S. 275, 288, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

How Crippling Medical Debt Contributes To The Growing Bankruptcy Problem How Filing For Bankruptcy Can Put An End To Your Medical Debt Problems In Arizona Medical debt is one of the biggest contributors to bankruptcy filings. There are a lot of reasons that people can get into financial trouble and seek bankruptcy protection. Some people get too easily swayed by the ease and convenience of credit card purchasing. Some people lose a job and aren’t able to find another quickly. Some people get divorced and struggle to put together their financial lives. Some are already struggling with these issues, and then they are made worse by medical debt, while others just sink into debt because of medical costs. It is important that you talk to an experienced Ahwatukee bankruptcy attorney as soon as you can when you realize that you are struggling with debt. Attempting to pay off the debts or find other strategies to deal with the problem on your own can only prolong the problem, making it worse by incurring interest and penalties and maybe even pushing you to take on loans and other debt. Filing for bankruptcy protection in Glendale can put an immediate end to your debt problems. High Medical Costs One reason that medical bills are contributing so heavily to Avondale bankruptcy filings is that medical care just costs so much. If you’ve ever had to see a doctor without insurance coverage, you know this. Even a “simple” visit to get checked out for a cold or infection can cost you hundreds of dollars between the medical visit and the medications prescribed. If you don’t have insurance for a long time, you can easily rack up the medical bills until they become overwhelming. You don’t need to sacrifice your health or your finances. You can get the medical care you need and then protect your finances through filing for bankruptcy. Long-Term Medical Care Can Increase Your Bills Medical bills can add up just from routine visits, but most people end up saddled with high medical costs because of a bigger problem. They get into a serious car accident that requires surgery or ongoing physical therapy. They get cancer and have to get chemotherapy or radiation. They quickly get tens of thousands of dollars in medical debt – if not more. Even if you have insurance, these kinds of medical bills can add up if you are seriously injured or become ill. Insurance doesn’t cover some treatments, and many have limits to how much they will cover. Many people end up selling their house or other belongings just to pay off their medical bills. You don’t have to do that. You just need to talk to a good Gilbert bankruptcy attorney about your options. Medical Costs Continue To Rise The situations that can lead to big medical bills will not end, nor will the costs of medical care come down any time soon. In fact, trends have shown that the cost of medical care has only continued to rise -and dramatically so. Data from the Peterson-Kaiser Health System Tracker showed that medical costs were $3.6 trillion in 2018. They rose from $355 per capita in 1970 to $11,172 per capita in 2018. There are no signs that will be different any time soon. You may be able to protect your finances and your health by shopping for better health insurance or signing up for programs that can bring your costs down, such as prescription discount programs, but you cannot protect against the possibility that you will get seriously ill or injured entirely. There may come a day when you, too, will have insurmountable medical bills. Instead of raising money from strangers on the Internet or trying to sell your house or other things, you can get debt relief by filing for bankruptcy in Tempe. Contact Our Bankruptcy Attorneys To Overcome Your Medical Debts In Phoenix, AZ Call My AZ Lawyers today to talk to a bankruptcy lawyer about your options if you are struggling with overwhelming medical debt or other debts. We represent clients in both Chapter 7 bankruptcy and Chapter 13 bankruptcy, depending on your circumstances and which would give you the maximum benefits. We’ll help you understand how they differ and help you choose which will give you maximum debt relief. We represent clients throughout the Mesa, Phoenix, Glendale, Tucson, and Avondale areas. Contact us today to schedule an appointment with a bankruptcy lawyer to learn more.   Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: https://myazlawyers.com/ Phoenix Location: 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: (602) 609-7000 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post How Crippling Medical Debt Contributes To The Growing Bankruptcy Problem appeared first on My AZ Lawyers.

Disability benefits are there to help people who are seriously ill or injured pay for their medical bills and other expenses while their health keeps them out of work. At the end of 2019, the SSA (Social Security Administration) reported over 16 million Americans were receiving some form of disability with an average monthly benefit […] The post Appealing a Social Security Disability (SSDI) Denial in Pennsylvania appeared first on .