To view an interesting article about proposed City council actions to overhaul the taxi medallion industry please see NY Post article below. Jim ShenwickNew York Post Article on City Council Proposed Overhaul of Taxi Medallion Industry

An excellent article on student loans and bankruptcy. Please review below. Jim ShenwickStudent Loans in Bankruptcy: What’s on the Horizon?

Taxi Drivers to get 10 Million Dollar Break and Lone Safeguards, reported by New York Times on June 12, 2019-IS THIS RELIEF TOO LITTLE TOO LATE!------------------The New York Times reported on June 12th 2019, that's facing ruin, taxi drivers to get 10 million dollar break and lone safeguards.While 10 million dollars sounds like a lot of money, in this author's opinion, that 10 million dollar break & loan safeguard will have little impact or benefit to the average Taxi Medallion owner, who owns an “under water” taxi medallion.The article further stated that Mayor Bill de Blasio announced a separate set of initiatives: The city is eliminating as much as $10 million in fees to taxi medallion owners, and drivers will be able to obtain financial counseling from a new “driver assistance center.”The mayor said that he would extend the city moratorium onapproving additional vehicles from ride-hailing services such as Uber and Lyft for another year.The fee waiver would aid all owners of the city’s 13,500 taximedallions, including large fleets, which operate about half of cabs. It would exempt them from paying $1,100 renewal fees due this year or next.While any waiver of fees would be appreciated by the beleaguered taxi medallion owners, it is this authors opinion that the waiver of $1,100 renewal fees for this year and next year is a drop in the bucket compared to the financial problems facing under water taxi medallion owners.It is this author's experience, that the average taxi medallion ownerowes approximately $500,00 to $600,000 in loans, on a medallionthat is now worth approximately $165,000, based on the latest TL Cdata, so the savings of $1,100 in renewal fees will have little to nofinancial impact on the troubled taxi medallion owner.Additionally, the ability to obtain financial counseling from a newdriver Assistance Center, while admirable is too little and too late formost taxi medallion owners, who owned under water taxi medallions.Moreover, extending the city moratorium on proving additionalvehicles for ride-hailing services has not helped increase the value of existing taxi medallions. Taxi medallions are either continuing to fall or have stabilized at an extremely low price, so the city moratorium has had and will have little impact in increasing taxi medallion values and will provide little relief to taxi medallion owners.These benefits, while providing good PR for the Mayor and goodsound bites will have little impact on under water taxi medallionowners-too little, too late! Jim Shenwick

15 Things You Should Know About a 341 Meeting of Creditors [2019] The Meeting of Creditors is an important step in the bankruptcy process.  It is a meeting that is Federally mandated by the U.S. Bankruptcy Rules and It is also one of the most misunderstood. This post is meant to clarify what a 341 Meeting is, what takes place at the 341 Meeting and to dispel a lot of common misconceptions about how they work. Judging by the questions people ask about 341 meetings, people seem to think they’re going to be very scary and intimidating. As long as you’re going in with a trusted bankruptcy lawyer on your side, there is no reason to be nervous. Here are fifteen things you should know to be comfortable with your 341 meeting for Chapter 7 Bankruptcy cases. 1. You Won’t Be Harassed or Humiliated at a Meeting of Creditors. A 341 meeting means you might have to sit down at a conference table with the Trustee.  Occasionally, meaning in less than one of every thirty cases, there will be a lawyer representing the companies, banks or creditors that you owe money to. This can sound scary, and many people are worried that these people will try to harass them or intimidate them. They won’t. That’s not what a 341 meeting is about. The meeting is a formality to get your bankruptcy case moving along, and the only questions asked will be about your financial assets, to determine if everything has been prepared properly and to make sure that all of your assets have been properly disclosed and listed in your bankruptcy.  The Trustee can also ask about your monthly income as well as your monthly living expenses to determine if you have sufficient monies left over every month to pay towards your debts and should have filed for a Chapter 13 Bankruptcy instead. You don’t need to worry about the meeting beforehand and you don’t need to take Maalox or Mylanta to put your stomach at ease the night before the meeting. 2. You Must Attend the 341 Meeting of Creditors. You have to attend a meeting of creditors to move your bankruptcy forward. This meeting is mandatory.  If you miss it, even if you have everything else in order, there is a very good chance your trustee will move to dismiss your bankruptcy case. The 341 meeting isn’t stressful or long. Many times creditors don’t even show up. Unless you did something that looks suspicious, like running up debts right before filing or suddenly selling valuable property, the whole question and answer session could be over in 15 minutes or less. Many times after the meeting is concluded people will comment – you mean that’s it.  All of my worrying was about that. The Trustee has probably held hundreds, if not thousands of these meetings.  He or she can usually get a good feeling in a matter of minutes if there any any issues with your Bankruptcy filing by looking at your Bankruptcy Petition and listening to your answers. 3. You Will Be Asked to Verify Your Identity. Many people share all or most of their name with others. Census data shows there are over 30,000 living examples for the top four most common combinations; John Smith, Robert Smith, Michael Smith, and Maria Garcia. Bankruptcy will create a legal record, and it is very important that the names be accurate and correct on all paperwork. To do this, your trustee will check your ID against the papers in your bankruptcy case to make sure everything matches exactly including your social security number. To proceed with bankruptcy you will also need a Social Security number or an Individual Taxpayer Identification Number from the IRS.  The trustee wants to make sure that the correct social security number is listed. Otherwise, if a wrong social security number is listed, it will connect to another person. Valid forms of ID for the Trustee at a 341 Meeting of Creditors include:   Driver’s License    State Photo ID    U.S. Passport    Armed Forces ID    DoD ID    Resident Alien Card   Social Security card as proof of social security number   Original w-2 as proof of your correct social security number 4. Chances Are None of your Creditors Will Be There. The U.S. Bankruptcy Court Clerk’s office will send a notice of the scheduling of the meeting to all of your creditors. The meeting of creditors is scheduled by the office of the clerk. The notices come from everyone of the creditors listed in your bankruptcy documents.  The creditors are given the opportunity to attend and ask any valid questions they may have. However, most will not attend. Unless you are trying to discharge a high-value debt, did something apparently fraudulent, or they plan to file a motion challenging your filing you generally should not expect a problem from your creditors. For most consumer bankruptcies, it does not make financial sense for a company to send their attorney to sit and watch you answer questions. It’s totally possible that no creditors might come, and it will just be you, your lawyer, and the bankruptcy trustee at a conference table. 5. The 341 Meeting is Not a Court Hearing. A lot of people are scared about going in front of a judge. They’re worried that their meeting is going to be like a high-stakes scene out of Law and Order. It’s not. The bankruptcy judge isn’t even allowed to be at your meeting. The 341 Meeting is just a formal meeting. It is not a courtroom, and you are not being interrogated or challenged. So you just need to go to your 341 Meeting, answer the questions asked, and get on with your bankruptcy. 6. You Must Tell the Truth. During your 341 Meeting, you will be asked to answer questions under oath. You are swearing that you are going to answer all of the questions truthfully. The only wrong answers to the questions asked is a dishonest answer. The point of the Trustee’s questions (and any posed by any creditors who appear) is to verify that you are aware of the content of your bankruptcy filing, and swear that it is true and correct. Some questions are meant to determine if you have any unexempt assets or if you have made any recent payments that might be reversible by the Trustee. The Trustee will also look to see if you tried to abuse the bankruptcy laws.  An example is where you go on a spending spree just prior to filing for bankruptcy.  There are different rules regarding if you take out a loan or purchase what is considered a luxury item within a certain number of days prior to filing for bankruptcy protection.  If you make these purchases or take out these loans, it may appear that you planned to file for bankruptcy. An example of an improper payment that the Trustee would attempt to uncover is where you have just paid your close friend the full $15,000 that you borrowed from him four years ago and now you have no money left to pay to any other creditors. Be careful and thoughtful with your answers, and don’t guess as to facts you don’t know. Just answer the questions honestly.  If something was left out of your bankruptcy you should immediately bring it to the attention of your bankruptcy attorney.  Most of the questions that you are asked are just to confirm the information in the Bankruptcy Petition that you already provided to your attorney. 7. Your Trustee Runs the Meeting. Before the 341 Meeting, the bankruptcy Trustee who was appointed to your case by the Bankruptcy Court will review your documents and prepare any secondary questions. At the meeting, he or she will run the meeting. The Trustee will record the meeting, introduce you and verify your identity, and ask questions. The Trustee will also determine what questions you may be asked by any creditors who appear for the meeting of creditors. 8. Trustees Are Required to Ask Standard Questions at the 341 Meeting. Everyone who files for Chapter 7 Bankruptcy will face similar questions from their Trustee no matter what the facts of their case are. These include things like: Did you review your bankruptcy schedules prior to signing? Are your bankruptcy schedules true and accurate? Did you supply this information to your lawyer? Do you have to make any changes to your schedules? Did you list all of your assets on the Schedules? Did you list all of your creditors on the Schedules? Did you list all of your income? Do you have any other sources of income? How did you get the figures for the value of your house or your auto? Have you taken the Financial Management class? Do you have any Life Insurance Policies that you can borrow against? 9. A Trustee Might Ask Other Questions. After working through the required questions, the Trustee may have additional questions that are intended to determine if you have any nonexempt assets that could also be claimed by the Trustee.  He or she may also be trying to find out if there were payments made to creditors or property transfers that happened before filing for bankruptcy. These questions could include: How did you value your home? How did you value your car? Do you have any claims against anyone?  Are you suing anyone? Are you expecting an inheritance? Did you recently sell any property Have you transferred any of your assets? Is the Tax Return that you have supplied a correct copy of your tax return? What is the reason for your filing for Bankruptcy protection? 10. You’re On Your Way To Zero Debt. It should take only a few minutes to ask and answer all the questions during the 341 Meeting of Creditors,  at which point you may finally feel the relief from debt. Typically, a person that files for bankruptcy will not have to face a court or judge. The only face-to-face interaction will be with the Trustee during this Meeting. Most of these 341 Meetings go smoothly if you have given your lawyer all of the information he or she has asked you for. 11. You Will Need to Supply Documents to Your Attorney for Supplying to the Trustee. The Trustee will want to see proof of the value of your assets.  You will need to supply this to your lawyer. Examples of these include bank account statements, real estate values, mortgage balances, auto loan balances, life insurance cash value, stock brokerage statements and other documents which let the Trustee know the value of your assets and the balances owed on any debts. 12. The Trustee Issues a Report of Your Assets. After the Trustee has concluded the 341 Meeting of Creditors, he or she will typically file a report that you have no non-exempt assets and then recommends that the Bankruptcy Court enters an Order which will discharge your debt automatically. Now is the time for a fresh start, a chance to move forward. 13. How to Dress for the Meeting of Creditors. When attending the 341 Meeting of Creditors, you should dress neatly, with the clothing that you have available to wear.  That means you should wear clothing that you own. It does not need to be a suit as many individuals don’t have the money for the same.  Your attorney however, is expected to wear a suit or slacks with a jacket, such as he or she would typically wear in a courtroom even though this is not a courtroom setting.  You should not fret or worry about what to wear. You certainly don’t want to borrow a friend or relative’s expensive clothing and expensive jewelry, when you just listed in your Bankruptcy filing that you do not own any expensive jewelry 14. Can You Ever Be Excused from Attending the Meeting of Creditors if You Are Ill or in the Hospital? If you are very ill, or you cannot get to Court due to a medical issue, there are several options. One is to file a Motion with the Bankruptcy Court asking the Court to permit a next friend – often a spouse or child – to appear on your behalf.  The person you are asking to appear on your behalf will need to appear before the Bankruptcy Court. If the Judge is satisfied that the interests of justice are best served if a next friend such as a spouse or a child appear for you then the Court can enter an Order permitting the same. In some cases, the Court may permit the meeting to be conducted via answering questions known as Interrogatories, however this method is generally not favored by the courts. 15. What to Avoid to Ensure that Your 341 Meeting of Creditors is a Positive Experience. What absolutely not to do at a 341 Meeting of Creditors: Lying to the Trustee.  That is a federal criminal offense. Hiding assets – i.e., thinking that you are the only one who knows the assets, and there is no way for the Trustee to find out about your vacation home or your secret bank account. Withholding information. If it comes out that you intentionally withheld information from the Trustee, or willfully gave false answers then what was a Bankruptcy proceeding to make your financial life better can then turn into a criminal proceeding. Always tell the truth to your lawyer when filing the Bankruptcy Petition and at the Meeting of Creditors and when answering the Trustee’s questions. Intentionally not listing that you have a stock brokerage account with stocks in it and then lying to the Trustee when he or she asks you if you own any stocks or bonds other than retirement accounts is a crime – something you certainly would wish to avoid. What to do if you inherit property, or you think you will inherit property soon. If you inherit property within six months of the date that you filed a Chapter 7 Bankruptcy Petition you need to let your lawyer and the Trustee know what type of property you have inherited, because any property that you inherit within six months of the date of filing the Bankruptcy becomes property of the Bankruptcy estate.  If you know that someone is leaving you property in their will, and it appears that they will die with in the six months of the filing, you need to let your attorney know this as bankruptcy may not be your optimal solution in that situation. Our experienced Philadelphia bankruptcy attorneys can help you. If you are struggling with debt and curious about your options, call The Law Offices of David M. Offen at 215-625-9600 for a free consultation. Located in Center City, Philadelphia David M. Offen has been helping people get the fresh start they deserve and move forward into a better financial future for more than 20 years, helping over 10,000 individuals and families navigate the path to a better financial life through filing Bankruptcy. The post 341 Meetings of Creditors: 15 Things You Should Know appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

The possibility of losing your home in foreclosure is enough to make any person extremely upset and stressed. However, if you believe that you cannot cure the default of your mortgage, you may have the ability to file for bankruptcy to save your home. While filing for bankruptcy may seem undesirable, it may be your […] The post Does Bankruptcy Stop Foreclosure in New Jersey? appeared first on .

A dismissal is the termination of a court action or case verdict, or the act of voluntarily ending a lawsuit by either party. There can be some confusion surrounding whether or not dismissals appear on background checks. Here, criminal defense attorney Jeffrey Scholnick explains what a dismissal is and whether or not they show up on background checks. What are Grounds for Dismissal? A criminal procedure, or one of its causes of action, can be dismissed if a judge rules that the lawsuit or charge can be legally ended; a dismissal can also occur if a plaintiff settles the case. A dismissal with prejudice can be described as a dismissal in which a conclusion has been reached and cannot be refiled, while a dismissal without prejudice has the possibility of being reopened. In addition, a dismissal with leave means that there is the opportunity to refile, while a dismissal without leave means that there is not an opportunity for a party to refile. Do Dismissals Show Up on Background Checks? Even though your charges may have been dismissed in court, they are not automatically removed from the Maryland Judiciary Case Search. Unless criminal charges have been expunged or sealed, you should be prepared for the possibility that a dismissed case will show up on a background check. Dismissals and not guilty verdicts typically appear on background checks; however, dismissed charged often indicate innocence, as you were not charged guilty under the guidelines of the law, so a dismissed case on your record may not necessarily impede you from employment, housing or other life opportunities. Are There Any Ways Dismissals Can be Cleared From Background Checks? There are a few ways to prevent a dismissal from appearing on your record. Your criminal defense attorney may be able to work out a deal with the prosecutor to prevent you from being charged and developing a criminal record. If you already have a dismissal on your record, there are methods you can follow for potentially sealing or expunging your record so that your dismissal is permanently removed or not visible. Speak to a criminal defense attorney, such as Jeffrey Scholnick, to learn more about this process. Discuss Your Rights with Criminal Defense Attorney Jeffrey Scholnick If you are facing criminal charges, it is essential to have an experienced criminal defense attorney on your side to make certain that your rights are protected and the best outcome is ensured. If you have further questions about the intricacies of dismissals, or if you have been charged with a crime and require a dedicated criminal defense attorney by your side, contact The Law Offices Of Jeffrey Scholnick today.The post What is a Dismissal and Do They Show Up on Background Checks? first appeared on Scholnick Law.

Are you behind on your car payments? Are you worried that your vehicle will be repossessed? Keep reading and learn what you can do to protect your car. For a free consultation on how to quickly get your financial situation under control call The Law Offices of David M. Offen at 215-625-9600. They are located in Center City Philadelphia – and are very easy to reach from Philadelphia and the suburbs. Call a Philadelphia Bankruptcy Lawyer When you receive a notice that your car is going to be repossessed, your first thought probably won’t be “Do I need to file bankruptcy?” — but it should be. Car repossession is a form of debt collection. And that means you have fallen behind on paying your car loan. What other bills have you not paid–or paid the minimum balance on, not even covering the interest? Losing your car may only be the tip of the iceberg. You have the ability to act and get your financial situation under control. If you are in debt, could losing your car make it worse? Maybe you’re lucky to live in the heart of the city and the car is a luxury for road trips. But if you’re in the suburbs, how will you get to work without a car? Think about the opportunity cost of having to replace the car with public transportation and wasting valuable time commuting, or with Uber and Lyft which offer similar convenience to a personal car, but are much more expensive for everyday commuting. Filing bankruptcy will save your car in the short term. But in the long term, it will do something more important: solve the financial crisis that put your car at risk in the first place. It behooves you to have the knowledge of what you can do to quickly improve your financial situation. PA Repossession Laws You don’t lose your legal rights and protections because you’ve fallen behind on payments.  Pennsylvania law requires creditors to follow strict regulations when it comes to repossessing the property.  If you are not properly notified, you may be able to recover your car during the bankruptcy process. Even if you are given proper notifications, Bankruptcy law gives you rights that in many cases permit you to recover a repossessed car.   Peaceful Repossession: Pennsylvania does not allow repo agents to breach the peace when retrieving cars. While they may legally enter open private property, it is a misdemeanor for repo agents to break any locks, force open garages, or use force against the purchaser if he or she refuses to yield the car.  The typical auto repo agents will never break into the residence or garage to get to the auto. Notice of Repossession: Sale of the Car: Proceeds from the Sale:   How Can Bankruptcy Save My Car? Filing bankruptcy triggers a very powerful protective measure: The Automatic Stay. Title 11 is the Bankruptcy Code and section 362 is the Automatic stay. From the minute you file for Bankruptcy protection until your bankruptcy is either successfully discharged or dismissed for failing to follow a payment plan, this protection will keep creditors from starting any kind of punitive collection actions. They can’t repossess your car or take any action against you without the permission of the Federal Bankruptcy Court—but that’s just the beginning of the protection. One important item for you to know.  A Chapter 13 Bankruptcy offers additional benefits to help lower or reduce your auto payments.  First, even though you may have an interest rate as high as 27.99%, by filing a Chapter 13 Bankruptcy the interest rate can many times be reduced to 6%. Second, if you purchased the vehicle and took out the loan more than 910 days ago – that is 30 months or 2 and ½ years – then the debt you owe can be reduced to the value of the vehicle. In other words, if the auto is worth $9,500.00 but you owe $22,000.00 on the vehicle, then the secured debt you owe can be reduced from $22,000.00 to $9500.00. As long as the stay is in place, mortgage lenders can’t start repossession actions against your home, auto lenders can’t go out and pick up your car and any ongoing repossession actions or sheriff’s sales are immediately frozen.   Why Is Your Car Really Being Repossessed? The simple answer is that you have defaulted on the car payments and now your car is being repossessed. But debt is not the problem–it’s a symptom of a problem. No matter how it happened, you’ve borrowed more than you can afford to pay back. Sometimes the problem is a medical crisis or a family emergency. A single large debt, like a funeral or a hospital bill, can push someone who was living at the edge of their means over the edge, into perpetual debt and mounting interest.  In some cases, the loss of a job by a family member has caused your finances to be thrown into chaos. An unexpected separation or divorce can also wreak havoc on the family’s finances. Other people might not have a single expense that’s killing their finances. Instead, it’s a pattern of behavior. Each line of credit is used as a blank check, and minimum payments are made each month to avoid delinquency. Sooner or later, this debt spirals, payments get missed, and your personal finances crumble. In addition, even though you are making payments, the interest can be so high that your payments are not accomplishing anything except paying the minimum payment each month. Whatever the case, filing for bankruptcy might be the smart choice. If you’ve just had a bad few months and are stuck with a crazy bill from a hospital or a funeral parlor, or an unexpected home repair, Chapter 13 bankruptcy can erase those unsecured debts and allow you to work out a payment plan to get back on track with your mortgage, car payments, real estate taxes or recent income tax debts. Chapter 13 can also freeze any collection activity against you for student loans.  Please note, however, that interest is still allowed to accumulate. And if you are simply overextended because of irresponsible spending habits, then a Chapter 7 bankruptcy can help give you a completely fresh start. A Bankruptcy Lawyer Can Help Stop Repossession of Your Car   If you need an expert to guide you through the bankruptcy process, call (215) 625-9600 for a free consultation with Philadelphia bankruptcy attorney David M. Offen. With over 20 years of experience, David M. Offen has helped more than Ten Thousand individuals and families go through the Bankruptcy process and move forward into a more financially secure future. Their offices, located in Center City Philadelphia, are very easy to reach from Philadelphia and the suburbs.   Many people don’t realize how Bankruptcy can help improve their financial life.  Knowledge is power and it pays to know the law. Learn what Bankruptcy can do to help you rapidly improve your financial situation The post How to Stop A Repossession in Philadelphia appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

  In In re Serignese, 2019 Bankr. LEXIS 1730, Case #19-10724 (Bankr. S.D.N.Y. June 3, 2019) the Debtor's landlord and two investors and members of a business in which he had an interest (Casual Hospitality) filed  request for a 2004 examination of the chapter 7 debtor asserting 'under information and belief' that the debtor may have taken five wrongful actions: 1) wrongfully removed property from the premises; 2) may have defalcated in his duties as the tax matters partner and member of Casual Hospitality; 3) may have currently or previously had an ownership in other restaurants not disclosed in the bankruptcy; 4) may not have reported all income or assets; 5) alleges to have claims not identified in the bankruptcy.   While the attorney for the landlord had appeared at the 341 meeting, he asserted he did not have sufficient time to conduct a fulsome examination.  Rule 2004(a) permits the examination of any entity upon court order.  The purpose of such examination is to assist a party in interest in determining the nature and extent of the bankruptcy estate, revealing assets, examining transactions, and assessing whether wrongdoing has occurred.  While finding that the movant's stated purpose for the 2004, to determine whether to file a complaint under §§523(a)(4) or (a)(6), is proper; the court found the movants failed to meet their burden of proof of showing good cause for the examination.  Good cause is shown if the 2004 examination is necessary to establish the claim of the party seeking examination, or if denial of such request would cause the examiner undue hardship or injustice.  The court must balance the competing interests of the parties.  Where parties are seeking to conduct an examination to challenge the dischargeability of debts, the creditor must show that based on information readily available to them from sources other than a 2004 examination, a reasonable bankruptcy attorney could conclude that a 2004 examination of the Debtor might establish grounds for a challenge to the Debtor's right to discharge.  Such sources may include the debtor's records, a reasonable inquiry at the 341 meeting, the bankruptcy court's file, and information gained through informal discovery.  The court rejected the Debtor's argument that the 2004 motion must be supported by testimony or affidavit.  The court agreed with the Debtor that the movants had not asserted anything in their motion that supports the notion that they hold a claim against the Debtor based on the Debtor's alleged 'willful and malicious injury' to them or their property, nor that the Debtor committed fraud or defalcation to the members of Casual Hospitality.  Thus the Court denied the request for the 2004 examination.Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703www.hillsboroughbankruptcy.com

  In a rare consumer bankruptcy case, the Supreme Court ruled on the standard for contempt for violation of the discharge injunction in Taggart v. Lorenzen, 2019 U.S. LEXIS 3890, Case #18-489 (3 June 2019).  Importantly, the case came on from an appeal of the decision of the 9th Circuit that a creditor's good faith belief that the discharge order does not apply the the creditor's claim would prevent a finding of contempt, a premise widely criticized by the legal community.  The Supreme Court rejected this conclusion, finding instead that courts may hold creditors in civil contempt for violation of the discharge injunction if there is no fair ground of doubt as to whether the order barred the creditor's conduct.  The underlying case involved a chapter 7 filing by Taggert, who formerly had an ownership interest in a company (Sherwood) that was suing him for breaching an operating agreement.  After the chapter 7 discharge the state court entered judgment against Taggert in the prepetition lawsuit.  Sherwood then sought attorneys fees incurred after the bankruptcy was filed.  Under 9th Circuit law, a discharge order would normally discharge post-petition attorneys fees on prepetition litigation unless the debtor 'returned to the fray' after filing bankruptcy.  The state court, finding this condition met, awarded Sherwood $45,000 in attorneys fees.  Taggert then sought relief from the Bankruptcy Court, which agreed that Taggert had returned to the frey, and determined that Sherwood had not violated the discharge order.  The District Court disagreed, determining that Taggert had not returned to the frey, and that Sherwood violated the  the discharge order by attempting to collect such fees.  On remand, the Bankruptcy Court applied a strict liability type standard, finding that as Sherwood had been aware of the discharge, and intended the actions which violated the stay, it was subject to contempt.  It awarded $105,000 in fees and costs, $5,000 emotional distress, and $2,000 punitive damages against Sherwood.   On appeal by Sherwood the Bankruptcy Appellate Panel vacated the sanctions, which was affirmed by the 9th Circuit Court of Appeals.  The 9th Circuit found that a creditor's good faith belief that the discharge order does not apply precludes a finding of contempt, even if such belief is unreasonable.  As it found Sherwood had such a good faith belief, it held contempt sanctions were improper.  Taggert filed for certiori to the Supreme Court, which was granted.  In a unanimous decision delivered by Justice Breyer the Supreme Court reversed and remanded.   11 U.S.C. 524 provides that a discharge order operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset a discharged debt.  11 U.S.C. 524(a)(2).  §105 of the bankruptcy code authorizes a court to issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of the bankruptcy code.  The unanimous court found that the appropriate standard for a court to hold a creditor in contempt is when there is no objectively reasonable basis for concluding that the creditor's conduct might be lawful under the discharge order.  This is a change from general practice in bankruptcy which had been more akin to the bankruptcy court's strict liability standard for discharge violations.  To support this conclusion, the Court referenced prior precedent on contempt outside of the bankruptcy arena.  In these decisions the Court has found that civil contempt should not be resorted to where there is a fair ground of doubt as to the wrongfulness of the defendant't conduct.1  This is based on the fairness doctrine, that those enjoined receive explicit notice of what conduct is outlawed prior to being held in contempt.2   Such a standard is generally an objective analysis, a parties subjective belief that they are in compliance will not insulate them from civil contempt if such belief is objectively unreasonable.  A party may also be held in civil contempt if a party acts in bad faith.3A record of continuing and persistent violations and a persistent contumacy justifies placing the burden of any uncertainty on the party violating the order.  Even when it does not justify relieving a party of sanctions, the party's good faith may help to determine an appropriate sanction.   The bankruptcy discharge context supports following this analysis, as the discharge order is not detailed; though Congress has carefully delineated which debts are exempt from discharge.  Under this standard, civil contempt may be appropriate where the creditor violates a discharge order based on an objectively unreasonable understanding of the discharge order o the statutes that govern its scope.  The Court found that the 9th Circuit's standard looking solely at the creditor's good faith belief is inconsistent with traditional civil contempt principles, where parties cannot be insulated from such contempt based on their subjective good faith.  It also relies too much on difficult to prove states of mind, allowing creditors to force debtors back into litigation to protect the discharge that it was the very purpose of the bankruptcy proceeding to protect.  The Court also found the strict liability standard of the Bankruptcy Court, simply requiring a finding that the creditor was aware of the discharge and intended the actions that violated the order, may lead to risk-averse creditors to seek an advance determination in bankruptcy court even where there is only slight doubt as to whether a debt has been discharged; leading to frequent use of this procedure.  However 11 U.S.C. 523(c)(1) notes only a small class of cases in which this advance determination is needed. It would also move the determination out of state court, which has concurrent jurisdiction, into federal court.  The Court recognized Taggert's argument that the courts often use a strict liability standard to remedy violations of the automatic stay per 11 U.S.C. 362(k)(1).  However, the language of that statute differs from the more generalized language of §105(a).  Also, the purpose of the automatic stay differs from that of the discharge injunction.  The automatic stay prevents damaging disruptions to the administration of a bankruptcy case in the short run, while the discharge entered at the end of the case binds creditors over a much longer time period.  The Court specifically declined to rule whether the strict liability standard was proper for violations of the automatic stay, given the statute's use of the term 'willful'.  This decision is likely to result in additional litigation over what is an objectively reasonable belief by a creditor, and seems to disregard the fact that lower courts had generally been using the strict liability standard for discharge violations, without all the problems of excess litigation cited by the courts.  It also fails to recognize the disparate financial positions of creditors, generally with very deep pockets, and debtors just emerging from bankruptcy who are likely no longer represented by counsel and have minimal funds to employ counsel to enforce the discharge injunction, especially if such counsel are less likely to be paid upon the finding of a violation.1 California Artificial Stone Paving Co. v. Molitor, 113 U. S. 609, 618, 5 S. Ct. 618, 28 L. Ed. 1106, 1885 Dec. Comm'r Pat. 295 (1885).↩2 Schmidt v. Lessard, 414 U. S. 473, 476, 94 S. Ct. 713, 38 L. Ed. 2d 661 (1974) (per curiam).↩3 Chambers v. NASCO, Inc., 501 U. S. 32, 50, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991).↩ Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703www.hillsboroughbankruptcy.com 

A common misconception about bankruptcy is the idea that transferring the title of an asset to another person will protect it from repossession or from being sold to pay for outstanding debts. Under the U.S. Bankruptcy Code, there is a provision known as the “look-back period” that will effectively reverse certain pre-bankruptcy petition transfers occurring […] The post What is the Look Back Period on a New Jersey Bankruptcy? appeared first on .