Summary: Mortgage Servicers argued that the bankruptcy court was limited to submitting proposed findings of fact and conclusions of law to the district court for de novo review unless the parties consent to the bankruptcy court hearing and determining the … Bankr. M.D.N.C.: Bivens v. NewRez- Authority of Bankruptcy Court to Enter Final Order for Discharge and Stay Violations Read More »

The crime of vehicular homicide can be complicated even more so by an accusation of the driver being under the influence of alcohol or drugs during the time that the crime was committed. The Bucks County homicide defense attorneys at Young, Marr & Associates explore the potential penalties – including jail time, fines, and sentencing […] The post What are the Penalties for Homicide by Vehicle While Driving Under the Influence (Pennsylvania) appeared first on .

   Regarding a matter in which there is a split of opinions Judge Halfenger ruled that the fees due to debtor's counsel to be paid through the chapter 13 plan reduced the amount required to be paid to unsecured creditors to meet the best interest of creditors test.  In re Buettner, 2021 Bankr. LEXIS 363, Case No 20-24696-GMH (Bankr. E.D. Wis. 16 February 2021).     The best interest of creditors test comes from 11 U.S.C. §1325(a)(4), also called the liquidation test.  This test requires that a chapter 13 plan pay allowed unsecured claims at least as much as they would receive in a hypothetical chapter 7 liquidation.  In the case at bar, the parties agreed Debtor had approximately $10,301.88 in nonexempt assets, and the chapter 7 trustee fee would be approximately $1,780.19, leaving  about $8,000 available to pay unsecured creditors if the case had originally been filed as a chapter 7 case.  The debtor asserted that the $4,486 debtor counsel fees must also be deducted.  The Court noted that allowed administrative expenses in a chapter 13 may include compensation to debtor's counsel under 11 U.S.C. §330(a)(4)(B).  Such compensation must be allowed a priority claim if the case is converted to chapter 7.  11 U.S.C. §§507(a)(2) & 726(a)(1).  The crux of the issue is whether the liquidation test compares a hypothetical 7 case in lieu of the filing of the chapter 13, or acknowledging the filing of the 13 and associated administrative expenses.  Pursuant to §1325(a)(4) the date of the test is 'the effective date of the plan.'   The Supreme Court has defined this term in a chapter 13 case to be the date the plan is confirmed.1   Further, as a practical matter a confirmed plan cannot be rewound back to the filing of the petition, but can only be modified or the case converted.    While no fee application had been filed in this case, the amount is not greater than the court's presumptively reasonable fee, and no objections to the fee had been filed.  Thus, when the plan is confirmed such fees will be allowed as an administrative expense in the chapter 13 case.  However, the plan provides that all attorneys fees will be paid prior to any payment to unsecured creditors, causing such unsecured creditors to have to wait over a year after confirmation before they start receiving payment on their claims.  Thus, due to the time value of money, creditors are not being paid the amount they would receive if the estate were liquidated in chapter 7.  The court denied confirmation on the basis of the delayed payment to unsecured creditors, allowing the debtor to file an amended plan.1 Hamilton v Lanning, 560 U.S. 505, 518, 130 S.Ct. 2464, 177 L.Ed.2d 23 (2010).↩Michael BarnettMichael Barnett, PA506 N Armenia AveTampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com   

A new decision from the Fifth Circuit holds that implied consent cannot overcome a formal denial of consent to entry of a final judgment by a magistrate judge, even when the objecting party expressly consented.  PNC Bank v. Ruiz, Case No. 20-50255 (5th Cir. 3/3/2021), which can be accessed here.  The decision is of interest to bankruptcy lawyers because the issue of consent is common to the actions of both bankruptcy judges and magistrate judges.Following Stern v. Marshall, 564 U.S. 462 (2011), bankruptcy courts retained most of their ability to function as normal. However, the bankruptcy courts could not enter a final judgment in a matter which was not directly tied to the restructuring of the debtor-creditor relationship absent consent of the parties. In those cases, the bankruptcy court could submit proposed findings of fact and conclusions to the district court which would have the authority to enter judgment. Thus, if a matter falls within the Stern ruling, the options are that the bankruptcy court may enter a final judgment with consent or it must submit proposed findings and conclusions to the district court.  Examples of matters which fall within the Stern doctrine are counterclaims to proofs of claim which seek affirmative relief against the non-debtor party, suits by a trustee under state law and fraudulent transfer claims.The jurisdiction for magistrate judges to enter final judgments is also based on consent. A magistrate judge may only enter a final judgment if the parties have consented. What HappenedIn PNC Bank, a bank filed suit in federal court seeking to foreclose a lien securing a Texas home equity loan. The Bank filed a statement in which it objected to entry of a final judgment by a magistrate.  The clerk mistakenly said that PNC had consented rather than objecting. Mrs. Ruiz, on the other hand, did consent.Some time later, PNC obtained new counsel and filed a motion for summary judgment. It apparently did not realize that it had previously denied its consent. The motion was referred to a magistrate judge based upon the erroneous docket notation. Mrs. Ruiz did not object to the magistrate judge's authority to enter a final judgment. The magistrate ruled in favor of the bank. At that point, Mrs. Ruiz realized the glitch in the process and appealed based on lack of authority to enter a final judgment. The Fifth Circuit's RulingIn an opinion written by Kurt Engelhardt (who was appointed to the District Court bench by President George W. Bush and to the Fifth Circuit by President Trump), the court ruled that the magistrate lacked authority to enter the final judgment. While consent may be implied from a party's conduct, it cannot overcome an express statement of lack of consent (even if the non-consenting party would have likely changed its election if it knew about the issue). Thus, the judgment was reversed and the case was remanded to the district court.The court recognized that Mrs. Ruiz was trying to overturn a decision by a magistrate whose authority she had consented to.  Nevertheless, it was too important of an issue to ignore. Judge Engelhardt wrote:To be sure, dismissing this appeal for lack of jurisdiction seemingly rewards what might be characterized as gamesmanship on the part of Ruiz. See Hester v. Graham, Bright & Smith, P.C., 289 F. App’x 35, 40 (5th Cir. 2008) (“Allowing parties to object to a [magistrate judge] and insist upon a new trial only when he issues an order unfavorable to them would allow a ‘gamesmanship’ of the system that the Supreme Court has sought to avoid.”). In other contexts, indeed, she might be estopped by her own acquiescence from now asserting PNC’s failure to consent. But not where, as here, fundamental questions of jurisdiction are involved. See Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996) (noting that “parties can never consent to federal subject matter jurisdiction, and lack of such jurisdiction is a defense which cannot be waived.”). Besides, we must raise the jurisdictional issue sua sponte if necessary. See Union Planters Bank Nat’l Ass’n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004) (“[F]ederal courts are duty-bound to examine the basis of subject matter jurisdiction sua sponte, even on appeal.”). We also recognize that gamesmanship is a two-way street, and, if the shoe were on the other foot, PNC might now be claiming non-consent based on its own initial refusal. Accordingly, inferring consent under these facts would not categorically eliminate the possibility of gamesmanship under similar circumstances with a different posture in future cases.  Opinion, pp. 6-7. What Does It Mean?So what did Mrs. Ruiz gain from her appeal? The legal answer is that she received a do-over. The motion for summary judgment will now be considered by the district judge. The district judge will likely rule the same way that the magistrate judge did unless there was a glaring defect in the magistrate's ruling. Maybe the do-over will allow Mrs. Ruiz to present arguments which were not originally presented to the magistrate judge. However, practicality is that district judges are busy people. When another judge, be it a magistrate judge or a bankruptcy judge, has taken the trouble to examine a legal issue in detail, the district judge is likely to reach the same decision. Thus, barring something unexpected like a winning argument that was not presented to the magistrate judge, Mrs. Ruiz will have only obtained a delay. There is a value to time. Perhaps Mrs. Ruiz won the lottery in the interim and will be able to pay off the house. Perhaps she would be able to file chapter 13 now when she could not have before. Maybe she just delayed the inevitable. This case illustrates the consequence of Stern (and similar decisions affecting magistrate judges). The consent regime did not eliminate the effectiveness of bankruptcy judges and magistrate judges. Instead, it merely created new procedural pathways which must be followed and which can create traps for the unwary.  

The Small Business Reorganization Act of 2019 (the “SBRA”) provides an expedited, simpler and less expensive route through chapter 11 of the Bankruptcy Code for small businesses. Plus, it preserves the owners’ equity interest in their company; even without paying creditors what they are owed. Initially, to qualify as a small business the debtor could have no more than $2,725,625 of debt. Responding to the Coronavirus Pandemic, Congress passed the CARES Act. The CARES Act recognized the SBRA’s debt cap was unrealistic. So, the CARES Act increased the cap to $7, 500,000. However, this increase lasts only until March 27, 2021.  Congress has yet to extend the increased cap beyond March 27, 2021. The Pandemic severely injured many business and their owners. Chapter 11 provides a means of reorganizing and rehabilitating businesses and their owners. You or your business may be considering reorganizing through chapter 11, If the debt exceeds $2,725,625, you should confer with a bankruptcy professional immediately. Otherwise, you will probably lose a remarkable tool to preserve your business or yourself, Remember, “Bankruptcy is a strategy for success.” If it can work for you, use it. The post Small Business Reorganization Act Deadline! appeared first on Wayne Greenwald, P.C..

Abstract:The federal student loan program is a disaster. Over five million people are in default even though Congress provides all borrowers with the right to affordable payments and to discharge of borrowers’ debts in specific circumstances. Many student loan borrowers … Law Review: Cox, Prentiss and Engel, Kathleen, Student Loan Reform: Rights Under the Law, Incentives Under Contract, and Mission Failure Under ED (October 6, 2020). Harvard Journal on Legislation, Forthcoming, Read More »

Questions about the fairness of the current credit reporting system have recently started to take new prominence with the National Consumer Law Center releasing a report The Credit Score Pandemic Paradox and Credit Invisibility and blog posts on Creditslips.org offering … News: Credit Invisibility and Chapter 13 Read More »

Abstract: In Whitlock v. Lowe (In re Deberry) (5th Cir. 2019), the Fifth Circuit court of appeals found it obvious that if a transferee gives back fraudulently transferred funds (which the debtor then dissipates), the transferee has a complete defense … Law Review: Carlson, David Gray, Giving Back a Fraudulent Transfer: A Defense to Liability? (July 1, 2020). Cardozo Legal Studies Research Paper No. 613, 94 Am. Bankr. L.J. (2020) Read More »

Substituting Bankruptcy For Other Options: Is It Viable? What Are The Alternatives To Filing For Chapter 7 Or Chapter 13 Bankruptcy? Bankruptcy is the most effective solution for debt relief available for most people. However, many people want to do whatever they can to avoid calling a bankruptcy attorney. Some try to avoid it because of the stigma associated with bankruptcy, thinking that others will judge them for it or that it somehow indicates a personal failing. Others avoid it because they are worried about how bankruptcy will impact them in the long term, such as by bringing down their credit score or making it difficult to buy a new home. The truth is often the opposite of what people think about bankruptcy. The truth is that bankruptcy is a legal right for those who qualify, and it is one of the best ways for many to get debt relief. Many people have to file bankruptcy because they lost a job, became seriously ill or injured, or were just led astray by credit card companies or predatory lenders – not because they were bad people. Filing for bankruptcy can also help you to restore your credit more quickly, by giving you fast debt relief instead of you continuing to struggle with debt that you can’t pay. Still, if you feel like you want to try out alternatives to bankruptcy before you call a bankruptcy attorney, these are some common options: Creditor Negotiation Many people who are considering bankruptcy are struggling with credit card debt. It’s no surprise – credit cards are easy to get, and they come with sky-high interest rates. It’s those interest rates that make it so hard for you to pay them off. You might try to make your debt more manageable by calling your credit card companies directly and try to negotiate better rates with them. Sometimes, the companies will agree if they think that you aren’t going to be able to pay otherwise. But most will refuse. Your other option for negotiating will be to offer a lump sum to settle your account. Again, many credit card companies are going to refuse. They are going to try to get the full amount owed whenever possible. If you have enough to offer a lump sum, chances are good that the company will think you have enough to pay the full amount, even if not immediately. Work With a Consumer Credit Counseling Agency Sometimes, you may not have any luck negotiating with credit card companies yourself, but you may be more successful if you are working with a credit counseling agency. The companies know that if you are at the point where you want to work with an agency that you are struggling, so they may be more willing to negotiate. Know that this will not always be true. Credit counseling agencies do not always get results, and they can also charge fees. If you file for Chapter 7 bankruptcy instead, you can get all your unsecured debt discharged and pay nothing. If you file for Chapter 13 bankruptcy, you’ll achieve the same results as the credit counseling agency would try to get for you, but you’ll end up with better terms and you won’t have to pay the agency on top of it. Attempt a Debt Settlement If your debt is very delinquent, your creditors may be willing to agree to a debt settlement in which you pay off your debt over a longer period of time. They may even agree to adjust the terms, such as lowering the overall amount you owe, lowering the monthly payment, or lowering the interest. But, again, it is not that often that companies will agree to this since their goal will be to get all the money they can. If you have secured debts, they also know they can still seize your assets to satisfy the debt. Filing for Chapter 13 bankruptcy is essentially entering into a debt settlement – without asking for your creditors’ permission or doing it on their terms. Instead, the bankruptcy court decides what you can afford to pay and sets the terms. You may even be able to have some debt discharged when the repayment plan is completed. While you may have options for debt relief besides bankruptcy, you will quickly learn that most of them will not work out or that they will not provide you the same debt relief that bankruptcy will. Certainly, look into these options, but also talk to a reputable bankruptcy lawyer. You will likely find that bankruptcy will offer you more comprehensive debt relief and more quickly. Contact Arizona’s Leading Bankruptcy Attorneys Call My AZ Lawyers today to talk with a bankruptcy attorney about how bankruptcy can help you get the debt relief you need. We help clients get debt relief through both Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll help you understand which will give you the most benefits based on your financial circumstances. We represent clients in Mesa, Glendale, Tucson, and the Phoenix areas. Contact us today to met with a bankruptcy attorney and 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/ 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 Substituting Bankruptcy For Other Options: Is It Viable? appeared first on My AZ Lawyers.

Generally speaking, police must have some valid reason to stop a driver on the road.  However, in Pennsylvania, police have the authority to set up DUI Checkpoints (or roadblocks) under Title 75 Section 6308(b) which specifically allows police to stop a vehicle in order to investigate or check the vehicle’s registration, proof of insurance, vehicle […] The post How Do DUI Checkpoints Work in Pennsylvania? appeared first on .