Here at Shenwick & Associates, an increasing part of our law practice involves workouts of loans for borrowers with taxi medallions as collateral for the loan.   Over the past three months, we’ve noticed a trend in which the bank or secured lender repossesses the taxi medallion(s) when the loan is in default, instead of allowing the borrower to retain the medallions during workout negotiations.Under New York law, the security agreement and other loan documents, lenders can repossess taxi medallions, which usually happens on nights or weekends when the cab is not in use.  Typically, the Marshal will crowbar the medallion off the dashboard and take the rate card.  Although the cab is not repossessed, if the cab is subject to a vehicle loan that is in default, the cab may also be repossessed. Some borrowers have asked us why the lenders repossess the medallions without notice to the borrowers.  New York law and the loan documents signed by the borrower provide that no notice is required for the lender to exercise its remedy of repossession.  And if borrowers were noticed in advance of the repossession, lenders would run the risk of the collateral medallion(s) being hid from the lender!  Accordingly, if you own a medallion and the loan is in default, you may want to park the taxi in a garage or in a location other than on the street. For borrowers whose medallions are in default, many workouts will ultimately end with surrender or repossession of the medallion.  In certain cases, surrender or repossession of the medallion can end litigation or other collection efforts by the lender.Taxi medallion loan borrowers and guarantors whose medallion(s) were repossessed still run the risk of a deficiency judgment for the balance of the loan by the borrower or a judgment against the guarantor.  Some lenders may forbear from seeking a deficiency judgment once the medallion is repossessed, but borrowers need to be aware that loan documents allow for that remedy until the statute of limitations has run.  In New York, the statute of limitations for a lender to seek the deficiency balance from a borrower is six years.  In many cases when a lender obtains a deficiency judgment, we negotiate a discounted settlement by threatening bankruptcy or by having the client file for bankruptcy. Another factor that repossessed taxi medallion owners must consider is relief of indebtedness income pursuant to § 108 of the Internal Revenue Code. Simply stated, if a taxi medallion owner owes a bank $1,000,000 and only repays the bank $500,000, then the tax law provides that they must recognize $500,000 of income on their tax return. Borrowers need to discuss this potential issue with their accountant or tax advisor during settlement negotiations.For more information about defaulted taxi medallion loans and repossessed medallions, please contact Jim Shenwick.

Nov. 21, 2018 by Seth Kaufman On the heels of the NYC Council passing (and the mayor signing into law) a bill requiring minimum payments for ride-sharing drivers and a one-year freeze on the number of ride-sharing vehicle licenses issued, the NYC Council just passed another six new bills aimed at protecting both taxi drivers and ride-sharing drivers. The bills, approved by the Council on November 14 and expected to soon be signed into law by Mayor DeBlasio, are focused not only on drivers’ pay, but also on the financial and mental well-being of drivers in the wake of a spate of recent driver suicides and some of the more macro-economic issues facing the taxi and ride-sharing industries in NYC. Two Bills Focused on Drivers’ Pay Int. No. 1062-A ensures that the risk of loss for a transaction that fails on a completed ride-sharing trip is placed on the ride-sharing service. If a transaction fails for a completed trip, the ride-sharing service must ensure that the driver still receives the entire amount owed for the completed trip. A ride-sharing service that violates the law is liable for a civil penalty of between $250 and $500 for each offense. Int. No. 1096 requires that ride-sharing services will not make automatic deductions from driver earnings to make payments for the rental, lease, or purchase of a vehicle, unless the automatic deduction is optional and has been chosen by the driver. Two Bills Focused on Drivers’ Financial and Mental Well-Being In the last year, eight drivers have committed suicide, with large debt incurred from being a driver cited as the reason. In order to combat this growing crisis, the NYC Council passed two bills. The first would require the Taxi and Limousine Commission to engage in financial education and outreach for drivers concerning financial arrangements relating to taxi medallions and ride-sharing services (Int. No. 1068), and the second would provide financial counseling, mental health services, and referrals to non-profit organizations that could offer additional assistance (Int. No. 1081). Two Bills Focused on Macro-Economic Issues in the Taxi and Ride-Sharing Industry and Diversity and Inclusiveness Int. No. 0304 would establish a task force to study the sale prices of taxicab medallions by reviewing sale prices of taxicab medallions and their impact on NYC’s budget, and, within six months, recommending to the Council and Mayor changes to laws, rules, regulations, and policies related to medallions. Finally, Int. No. 1079 would establish an Office of Inclusion within the NYC Taxi and Limousine Commission, which would be responsible for promoting diversity, inclusion, and cultural sensitivity in the taxi and ride-sharing industry. What’s Next? These six new bills, along with the new laws passed by the NYC Council in August, demonstrate that NYC is determined to increase regulation of all aspects of the taxi and ride-sharing industry, from pay to economics to discrimination. NYC has often been at the forefront of employment regulation (for example, its Earned Sick and Safe Time Act), so It is important for businesses to monitor these developments as they could serve as a roadmap for other jurisdictions to regulate the ride-sharing industry, or even for NYC to regulate other gig businesses. © 2018 Fisher & Phillips LLP.  All rights reserved.

There are several steps to the court process for a legal summons in Pennsylvania. Consult with a Pennsylvania criminal defense lawyer at Young, Marr & Associates today if you need help navigating important details about your upcoming court hearing. Call our law offices today at (215) 372-8667 for a free consultation. Criminal Process for Receiving a […] The post What Happens When a Pennsylvania Traffic or Police Officer Says “You Will Receive a Summons in the Mail”? appeared first on .

   A cattle and tobacco farmer was denied discharge on summary judgment for failing to explain a reduction in value of cattle of nearly $200,000, equipment of nearly $65,000, and tobacco of nearly $150,000 between a balance sheet  and the schedules when the case was refiled under chapter 13 about four years later.  In re Tingle, 2018 Bankr. LEXIS 3654, Case #17-30531, Adv # 18-3001 (Bankr. E.D. Ky, 21 November 2018).   The Debtors had taken out loans from Farm Credit from 2009-2011 secured by a lien on all equipment and crops.  Farm credit obtained a judgment against Debtors for $305,159.82 on 12 September 2014, and Debtors filed for relief under chapter 13 on 7 October 2014, which was dismissed in 2016.   Debtors ceased farming during the chapter 13 case, and liquidated his remaining farming assets after the case was dismissed.  Farm Credit sought to a nondischargeability determination under §523(a)(2)(A), (2)(B), (4), (6) and to deny discharge under §727(a)(3), (4), (5), and (7).   The court heard the matter on summary judgment, and determined that a trial was required on the §523 counts, finding that evidence would have to be taken on these issues.  However, the court granted summary judgment on §727(a)(3) and (a)(5).  Section 727(a)(3) provides that a court shall grant a discharge unless:the debtor has concealed, destroyed, mutilated, falsified, or failed to [*9]  keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case ... .11 U.S.C. §723(a)(3).  Section 727(a)(5) provides that a court shall grant a discharge unless "the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor's liabilities ... ." 11 U.S.C. § 723(a)(5).    §727(a)(3) is intended to insure creditors have enough information to ascertain the debtor's financial condition and track his financial dealings with substantial completeness and accuracy for a reasonable period to the present. 1   §727(a)(5) goes on to impose a strict liability when the debtor cannot explain a material loss of assets. 2  The objecting party has the initial burden of proof under these sections to 1) offer evidence of the general nature of the debtor's business or personal financial position, and the types of transactions about which the recorded information is sought, 2) present evidence identifying the recorded information he alleges has been concealed, destroyed, mutilated, falsified or not kept or preserved by the debtor, and 3) show how the missing information might enable the debtor's actual financial condition or business transactions to be ascertained under the circumstances of the case. 3  Once Farm Credit has shown that the missing records are material to understanding the debtor's financial status, the burden shifts to the Debtors to explain the failure to produce such records.   Under §727(a)(5) the plaintiff must identify assets which the debtor at one time owned and claims, in his schedules, to no longer possess.4  Farm credit satisfied this initial burden by showing the large difference between the assets the Debtors showed on the their December 31 2010 balance sheet and the schedules filed in the chapter 13 case filed 7 October 2014.  This showed the value of equipment being reduced from $204,666 to $139,750, cattle from $198,200 to $0, and tobacco from $148,750 to $0 as of the time of the filing of the chapter 13 case; a net decrease of $411,866.  Then, the schedules filed in the chapter 7 show elimination of the remaining value of the equipment.   Such decreases are material as they exceed the amount of the debt.  Further, the assets present the primary assets used in and created by the farming operations, thus requiring records as to such losses are necessary to understand the business.   The Debtors did not specifically respond to the demand for judgment under §727(a)(3) and (a)(5).  Even so, the court must examine the evidence to determine the facts in the light most in favor of the Debtors.  Their prior testimony explaining for the disappearance of assets is of little help as to §727(a)(3).  It is reasonable to expect someone conducting farming operations to maintain records of sales, yet he is unable to produce documentation regarding cattle or crop sales, or transfers of equipment.  Debtor has a duty to preserve such records for a reasonable period of time.  As to §727(a)(5) testimony may not be enough to meet their burden, but must provide some proof there is a triable issue of fact.   Specifically, Debtors showed an expected sale of $43,500 of equipment in the December 31, 2010 balance sheet.  In the bankruptcy Debtors testified that the equipment was sold prior to the filing of the chapter 13 case, but did not provide the date of the sale, the amount of any proceeds, or link the proceeds of the sale to any payment to Farm Credit.  The debtors did explain the decreased value of the equipment after the chapter 13 case by referencing an auction on 4 April 2016 for $84,088.25, and noting that several pieces of equipment valued at $3,500 fell into disrepair.  The court found that the $9,000 remaining discrepancy was not material.   The Debtor's were unable to explain a $114,000 loss from cattle.  The total cattle loss was $198,200.  Debtor explained that approximately one-third of the cattle died in 2011 and 2012, and that he transferred some cattle to his father in 2012 in exchange for help paying expenses.  They produced checks showing the parents paid $17,250 in expenses.  But this only explains $83,250 of the loss.  Debtors also asserted they sold some cattle to stockyards, and that such proceeds went to Farm Credit, but Debtor failed to provide any record of the sales or link any payments to the proceeds of such sales.  Nor does Debtors tax returns show any proceeds received from livestock sales.  Similarly there was $17,992 in losses in tobacco not explained.  Debtor's testimony that 2011 and 2012 were drought years may account for some of the loss value, but they provided no evidence to account for how much of the loss is attributable to a drought.  As the Debtors have no records to explain a $198,000 loss in collateral on a debt that exceeds $315,00; losses of almost two-thirds of the obligation, the amount involved is material.  Debtor did not link deposits shown in the checking accounts to any sale proceeds.  Their assertion that the loan officer assigned the values used for assets in the balance sheet was unavailing as they did not provide any information to show the true value of those assets.  The debtors did not offer sufficient financial records or other evidence to justify the failure to keep, preserve, or produce records, and failed to sufficiently explain losses.  The court denied discharge under §727(a)(3) and (a)(5).1  Turoczy Bonding Co. v. Strbac (In re Strbac), 235 B.R. 880, 882 (B.A.P. 6th Cir. 1999)). ↩2  Baker v. Reed (In re Reed), 310 B.R. 363, 368 (Bankr. N.D. Ohio 2004).↩3 McDermott v. Neff (In re Neff), Case No. 14-33442, Chapter 7, Adv. Pro. No. 15-3026, 2015 Bankr. LEXIS 4361, at *5 (Bankr. N.D. Ohio Dec. 28, 2015)↩4 See Crocker v. Stiff (In re Stiff), 512 B.R. 893, 900 (Bankr. E.D. Ky. 2014).Michael Barnett506 N. Armenia Ave.Tampa, FL 33609-1703https://hillsboroughbankruptcy.com

  The District Court for the Middle District of Florida affirmed the bankruptcy court's finding that a chapter 7 debtor's 2001 tax liability was nondischargeable under 11 U.S.C. 523(a)(1)(C) in Feshbach v. Dep't of Treasury, IRS, 2018 U.S. Dist. LEXIS 193945, Case #8:17-CV-02671-T-02 (M.D. FL, 14 November 2018).   Debtor had filed chapter 7 bankruptcy in June 2011.  While normally taxes that old can be discharged, there is an exception for 'a tax . . . with respect to which the debtor . . . willfully attempted in any manner to evade or defeat such tax.'  §523(a)(1)(C).    Mr. Feshbach was a financial manager and private investor.  He was liable for $1,950,827 in income taxes for the year 1999.  In 2001 he liquidated other securities to pay this tax, but this triggered income recognition taxes in the amount of $3,247,839.   Debtors then made a series of offers in compromise, some of which were denied as the government felt the offers were too low as they were living beyond their means.  Debtors entered into an installment agreement to pay this, and paid a total of $1.2 million through January 2008 after which they defaulted in the agreement.  The court noted that during the period they made these installment payments, 2005-2008, Debtors reported income of $10,459,762, and a total of $13,056,518 in the nine years prior to filing.    From 2001 through the first quarter of 2010 Debtors spent more than $8.5 million on personal and household expenses and charitable contributions; including $721,809 in personal travel, $503,607 on clothing, $370,856 on groceries, $124,226 on entertainment, and over $233,000 on a rented house in Aspen.     To prevail under §523(a)(1)(C) The government must prove by a preponderance of the evidence that 'the debtor engaged in (1) evasive conduct with (2) a mental state consistent with willfulness.'1  More specifically, rather than simply showing nonpayment of taxes, the government must prove that the debtor engaged in affirmative acts to avoid payment or collection of taxes, either through commission or culpable omission.  Excessive spending may qualify as the only affirmative act supporting such evasion of taxes.  A showing of a modest lifestyle would be a defense against such an action. 2    The bankruptcy and the appellate courts both rejected Debtor's argument that their opulent lifestyle was necessary to attract high worth investors for Mr. Feshbach's financial advisory business.  They also found that it was irrelevant that the Debtors were unable to pay off the entirety of the debt; but rather whether they prioritized paying some of their taxes over non-essential expenditures.  As to willfulness, the creditor must show the attempt to avoid tax liability was done voluntarily, consciously, or knowingly and intentionally. 3  There is no requirement to show fraudulent intent.  Discretionary spending on a lavish lifestyle can evidence willful intent.  As noted by one court: "[b]y prioritizing the maintenance of her comfortable lifestyle and repeatedly failing to pay her income taxes," the debtor "knowingly and deliberately ignored her tax obligations."4   While some circuits require a showing that the government must show that the conduct was for the purpose of evading the tax, there is no such requirement in the 11th Circuit.  Finally, the courts concluded that §523(a)(1)(C) does not allow for a partial discharge.  The section itself is unambiguous and absolute.  Once the determination is made that the nondischargeability provision is satisfied, the court cannot go further in determining which portion of the debt can be discharged.  Congress did not use a limiting phrase such as 'to the extent' or impose additional hardship inquiry such as with student loans. 1 In re Mitchell, 633 F.3d 1319, 1327 (11th Cir. 2011)↩2 In re Kight, 460 B.R. 555 (Bankr. M.D. Fla. 2011)↩3 In re Mitchell, 633 F.3d at 1327↩4  Price-Davis v. United States, 549 B.R. 537, 545 (S.D. Fla. 2015)↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703https://hillsboroughbankruptcy.com

There is a very common misconception that filing a bankruptcy case will create a lifetime ban on obtaining new credit. It’s a question that gets asked all the time, and rightfully so. While the relief of bankruptcy may resolve many issues one is dealing with, such as pending law suits, foreclosure, or bank freezes, it […] The post Can I Still Get a Credit Card After Bankruptcy in Pennsylvania? appeared first on .

Each year, the Social Security Administration (SSA) updates its rules for receiving Social Security benefits. This includes the benefits for retirees claiming Social Security, but also for disabled Americans receiving benefits for their conditions. The Pennsylvania and New Jersey disability lawyers at Young Marr & Associates explain some of the changes you may see coming […] The post What Are the Changes to Social Security Disability Benefits for 2019? appeared first on .

Three months later, Mike’s After Bankruptcy Credit Score is 681 Last Friday, Mike sent me this screenshot, showing his after bankruptcy credit score is 681.    A 681 credit score is, barely, considered a “good” score by Experian and CreditKarma.  Mike had filed bankruptcy with me in April and it was approved and done in September.  […] The post Three months later, Mike’s After Bankruptcy Credit Score is 681 by Robert Weed appeared first on Robert Weed.

Filing bankruptcy is a huge decision. And, there are a lot of smaller, yet extremely important choices to be made regarding the process. Should you file bankruptcy? What type of bankruptcy should you file? When should you file bankruptcy? The post Benefits and Disadvantages of Filing Chapter 7 Bankruptcy appeared first on Tucson Bankruptcy Attorney.

Here at Shenwick & Associates, as an adjunct to our bankruptcy and debtor/creditor practices, we also offer credit repair services.  Although the three major credit reporting agencies (Experian, Equifax and TransUnion) (“CR As”) have received positive press recently for implementing the National Consumer Assistance Plan (NCAP) in March (which, among other things, prohibits reporting of medical debts until after a 180-day waiting period and prevents traffic and parking tickets or fines from appearing on credit reports), clients still complain about receiving credit reports that are riddled with errors, particularly after a bankruptcy filing.The first step in the process is to obtain a copy of the credit report from each of the three CR As.   AnnualCreditReport.comallows you to request a free copy of your credit report every 12 months from each CRA.  Credit Karma also provides individuals with free Equifax and TransUnion credit reports. Credit reports need to be carefully reviewed and any erroneous information marked with a clear explanation of what is incorrect.Once we have copies of the credit reports, we can analyze them and prepare letters to the CR As requiring that errors on credit reports be corrected pursuant to federal law and/or New York State law.  CR As are governed by the federal Fair Credit Reporting Act and the New York Fair Credit Reporting Act. These statutes detail the consumers’ rights to dispute information on their credit reports and how long negative information can remain on their reports.Once we mail the CR As a letter disputing the erroneous information, it usually takes about a month for the CRA to investigate the dispute and send the consumer the results of the investigation.  We then advise the client to obtain another credit report and review that credit report for errors. We’ve often found that it takes two or more letters to fully correct erroneous information.  Another option is to add a one hundred word personal statement to your credit report.For more information about our credit repair services, please contact Jim Shenwick.