Bob needs to do a blog on this. Here’s this on confidentiality. http://www.scbar.org/MemberResources/EthicsAdvisoryOpinions/OpinionView/ArticleId/834/Ethics-Advisory-Opinion-10-04.aspx. It’s an ethic violation for lawyer to sign–client can sign and direct lawyer to keep his mouth shut. That’s the same opinion I’ve cited on non-disparagement.The post Settlement Agreements, Confidentiality and Non-Disparagement by Robert Weed appeared first on Robert Weed.

People are understandable concerned about obtaining credit after filing for bankruptcy.  It is a real concern for many people.  We have become so used to credit and the leeway that it provides in making purchases.  The good news is that you will be able to obtain credit within a very short time after filing bankruptcy. + Read MoreThe post Credit After Bankruptcy appeared first on David M. Siegel.

Personal Bankruptcy Filing Fees As of today, the court filing fee for a chapter 7 bankruptcy case is $335. The court filing fee for a chapter 13 bankruptcy case is $310. You should plan on having those funds available at the time you meet with your lawyer. The lawyer that you meet with is going+ Read MoreThe post What Does It Take To File Personal Bankruptcy In Chicago? appeared first on David M. Siegel.

The Facts A former client contacted me recently in an effort to obtain an official transcript for her daughter’s first year of high school at a private school. The facts of the case are undisputed. The debtor filed a chapter 7 bankruptcy in 2010. Later that year, the debtor’s daughter attended her first year at+ Read MoreThe post Private School Withholding Transcripts Despite A Bankruptcy Filing appeared first on David M. Siegel.

The answer, as always, is “It depends”.  Take two recent examples we’ve seen. The first person is a woman in her mid-40s.  She’s placed about $30,000 into her company’s 401K plan over the last 10 years.  Because she’s recently divorced, she’s struggled with bills and is short a few hundred dollars every month.  She’s relied on credit cards to keep her afloat and creditors are now demanding payment.  She owes about $15,000 in medical and credit card bills, a $1000 payday loan, and has a $400 per month car loan. The second is a married couple who together earn $65,000.  They have two kids and one is about to enter college.  They have nearly $100,000 in credit card debts because of a nasty accident and a failed small business.  The husband has $20,000 in his company’s 403(b) plan and his wife has $40,000 in her 401k and $2,000 in a small IRA. Every case is different, but when we first meet with these folks, we mention a few things: 1.  ERISA qualified retirement accounts (401K plans, 403(b) plans, similar accounts) are exempt from creditors.  That means judgment creditors can’t touch it and your bankruptcy trustee can’t make you liquidate your retirement to get a discharge in bankruptcy. 2.  Figure how much you take home now, then deduct the cost of a loan repayment (or two, or three) to determine what you’d live off of. 3.  IR As may be entirely exempt depending on when they were opened and how much was recently funded. 4.  Calculate how long it took to build up the retirement plan and how long it would take to start over or pay off a loan – remember, you won’t be working forever. In both cases, the debtors described may be eligible for a Chapter 7 bankruptcy filing, in which they’d eliminate the debt as well as keep the retirement accounts.  Bankruptcy is never something anyone’s thrilled to do, but it protects your future and allows you a chance for a fresh start, instead of borrowing from one place to pay another. Before pulling money from a retirement account, call us at Lakelaw to set up a free consultation and discuss what the best way to handle your debt is for you and your family.  

Your creditors can’t simply take money out of your paycheck just because they feel like it.  They need a reason, and there are only a few reasons these companies can do that.  One of those reasons is a judgment from a court that rules the debt is valid and that a wage garnishment is allowed.  The second reason is that you agree to it.  A voluntary wage assignment is one of those agreements where you sign a contract that allows the creditor to take funds from your paycheck by sending a request to your job’s payroll. We don’t recommend you ever agree to this, because this takes your money and allows them to be paid even if you can’t afford it and you fall behind in other debt.  But if you fall behind in your payments on a loan and a company sends a notice to your employer and to you to trigger the wage assignment, here’s a few things you need to know: 1.  A bankruptcy will eliminate the debt and prevent the lender from using a wage assignment to take your money. 2.  You can revoke a wage assignment because it’s voluntary.  There’s no such thing as slavery or voluntary servitude allowed anymore.  But to stop a company from taking your hard earned money, you should always send a letter by certified or registered mail to the company and keep a copy for yourself to get to payroll. 3.  If you do stop the wage assignment, prepare for a lawsuit to collect the money from you and force a wage garnishment. If you’re in trouble and have a voluntary wage assignment threatening your pay, please call us at Lakelaw to discuss how to help you out.

If you have no assets and your sole income is Social Security, then you may not have to file chapter 7 bankruptcy. It really depends upon your level of stress and aggravation that you can handle. Creditors are going to attempt to collect on a debt until they realize that they have no means to+ Read MoreThe post I’m On Social Security And I Have No Assets, Should I File Chapter 7 Bankruptcy? appeared first on David M. Siegel.

I am seeing any increase in potential bankruptcy clients who have parking tickets owed to the city of Chicago on their creditors list. It seems that it’s hard to live in the city of Chicago and not be subject to the wrath of parking tickets. And when you don’t pay those tickets on time, the+ Read MoreThe post City of Chicago Parking Tickets On The Rise appeared first on David M. Siegel.

In the follow-up to Stern v. Marshall, the Supreme Court concluded that it didn’t need to answer the primary questions addressed to it, leaving open (on the surface at least) the issue of whether parties can consent to final adjudication by a bankruptcy court in situations where the court could not otherwise issue a final decision.   The Court also assumed but did not decide the question of whether a fraudulent conveyance action would violate Stern.   In fact, the only issue the Court did decide was that bankruptcy courts may issue reports and recommendations in core proceedings where they lack authority to make a final ruling.   While the decision is not as expansive as many practitioners would have liked, it doesn’t do any violence to the bankruptcy system and has some helpful subtext.  The case is Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency, Inc.), No. 12-1200 (June 9, 2014).   You can find the opinion here.What HappenedNicholas Palaveda and his wife owned Bellingham Insurance Agency, Inc. (BIA).   Palaveda used Bellingham’s assets to set up a new business, Executive Benefits Insurance Agency, Inc.  (EBIA).   When BIA filed bankruptcy, its trustee, Arkison, sued EBIA to recover the assets as a fraudulent transfer.   EBIA did not assert its right to a hearing before an Article III judge and either consented to adjudication by the Bankruptcy Court or waived its right to district court review.   Arkison filed a motion for summary judgment which was granted.   The District Court affirmed the Bankruptcy Court.   Because this was a review of a summary judgment, the District Court’s review was necessarily on a de novo basis.    The Ninth Circuit, after inviting amicus briefs, affirmed.   It found that while a fraudulent conveyance action was not within the Bankruptcy Court’s authority to enter a final decision, that EBIA had consented to the Bankruptcy Court’s authority and could not question it on appeal.   Thus, the Ninth Circuit answered two important questions:  1) did the Bankruptcy Court have final authority to rule on a fraudulent conveyance (no); and 2) could the parties consent to the Bankruptcy Court’s ability to enter a final ruling (yes).The Supreme Court’s RulingUnless the contentious ruling in Stern, Bellingham was a 9-0 decision comprising a scant 13 pages of text.    The Court avoided ruling on either of the main conclusions of the Ninth Circuit, assuming without deciding that fraudulent conveyance claims violated Sternand finding that it need not reach the consent issue.   As will be discussed below, the opinion is more significant for what it implies than what it decided.The court began with a history of bankruptcy jurisdiction, taking practitioners through the familiar history of summary vs. plenary jurisdiction under the Bankruptcy Act, the expansive but unconstitutional jurisdiction granted under the Bankruptcy Reform Act of 1979 and the core vs. non-core dichotomy enacted by the Bankruptcy Amendments and Federal Judgeship Act of 1984.   The core vs. non-core distinction attempted to remedy the finding of unconstitutionality contained in Northern Pipeline Construction Co. v. Marathon Pipeline Co., 458 U.S. 50 (1982).    According to Justice Thomas, The 1984 Act largely restored the bifurcated jurisdictional scheme that existed prior to the 1978 Act.   The 1984 Act implements that bifurcated scheme by dividing all matters that may be referred to the bankruptcy court into two categories: “core” and “non-core” proceedings.Opinion, p. 6.  In a footnote, Justice Thomas noted that the “core” designation tracked language used by the plurality opinion in Northern Pipeline.Justice Thomas summarized the current working of the bankruptcy system as follows:Put simply:  If a matter is core, the statute empowers the bankruptcy judge to enter final judgment on the claim, subject to appellate review by the district court.   If a matter is non-core, and the parties have not consented to final adjudication by the bankruptcy court, the bankruptcy judge must propose findings of fact and conclusions of law.   Then the district court must review the proceeding de novo and enter final judgment. (emphasis added).Opinion, p. 7.In several brief passages, the Court addressed what the Sterndecision did and did not address.  According to Justice Thomas, Stern “considered a constitutional challenge to the statutory designation of a particular claim as ‘core.’”  The answer was that “some claims labeled by Congress as ‘core’ may not be adjudicated by a bankruptcy court in the manner designated by §157(b).”    Left unanswered in Stern was “how the bankruptcy court should proceed in those circumstances.”   Id.   This led up to the main question actually addressed by Bellingham(as opposed to the ones it granted certon):  whether there is a gap in the statutory scheme of core vs. non-core.   BAFJA allowed entry of final orders on core matters and proposed findings in non-core.   What to do with core proceedings in which bankruptcy courts cannot constitutionally enter a final judgment?   Are these matters left in limbo, incapable of being resolved?   The sensible answer from the Supremes is no.    BAFJA, like most statutes, contains a severability clause.   The Court concluded that any matter upon which the bankruptcy courts cannot properly enter a final judgment should simply be treated as non-core.    The plain text of this severability provision closes the so-called “gap” created by Stern claims.   When a court identifies a claim as a Stern claim, it has necessarily held “invalid” the application of §157(b)—i.e., the “core” label and its attendant procedures—to the litigant’s claim.   (citation omitted).    In that circumstance, the statute instructs that “th[e] remainder of the Act . . . is not affected thereby.  (citation omitted).   That remainder includes §157(c), which governs non-core proceedings.   With the “core” category no longer available for the Sternclaim at issue, we look to §157(c)(1) to determine whether the claim may be adjudicated as a non-core claim—specifically, whether it is “not a core proceeding” but is “otherwise related to a case under Title 11.”    If the claim satisfies the criteria of §157(c)(1), the bankruptcy court simply treats the claims as non-core:  the bankruptcy court should hear the proceeding and submit proposed findings of fact and conclusions of law to the district court for de novo review and entry of judgment.Opinion, pp. 9-10.In the particular case, the bankruptcy court should have submitted proposed findings and conclusions to the district court which would then conduct a de novo review and enter judgment.  As Justice Thomas noted, “(a)lthough this case did not proceed in precisely that fashion, we affirm nevertheless.”    Opinion, p. 12.    When a court grants summary judgment, its order is reviewed as a matter of law, which is de novo review.   Thus, the district court did conduct a de novo review and did enter a judgment affirming the bankruptcy court.   As a result, the substance of the law was satisfied.In light of the procedural posture of this case, however, we need not decide whether EBIA’s contentions are correct on either score.   At bottom, EBIA argues that it was entitled to have an Article III court review de novo and enter final judgment on the fraudulent conveyance claims asserted by the trustee.   In effect, EBIA received exactly that.Opinion, p. 12.   Thus, the opinions of the lower courts were affirmed and Mr. Palaveda’s scheme remained unraveled notwithstanding the detour to the Supreme Court.So What Did the Court Decide?Prudentialism is the school of supreme court jurisprudence that says that the court should decide as little as possible to conserve the court’s power and prestige.  It can also be described as passive-aggressive judging. This was certainly an example of prudential review.    No doubt it is frustrating to the litigants to go all the way to the Supreme Court without receiving answers on the main questions that they briefed.   However, the Court’s non-answers to the larger questions may speak volumes.First, the court preserved the core vs. non-core system that we have been operating under since 1984.   In the wake of Stern v. Marshall, many commentators had declared this structure to be a dead letter, since it was unconstitutionally overbroad.   Not so, says the high court.  It simply needs to be fine-tuned by our friend severability.   This should properly be viewed as a signal, although oblique, that the Supreme Court does not wish to throw out the bankruptcy system as some had feared.Second, while the court did not expressly decide the consent issue, it did so indirectly.   By saying that core but unconstitutional matters should be treated as non-core under the statutory procedures of 28 U.S.C. §157(c), the court referred to a statutory provision which included consent.   Indeed, Justice Thomas’s discussion of the statutory scheme expressly stated that proposed findings and conclusions are only necessary where the parties have not consented.   If consent was not constitutionally viable, the Court would have been expected to at least drop a footnote stating that they were not opining on that portion of the law.    When Justice Thomas said that courts should follow §157(c), which includes consent, he was implicitly upholding consent.Finally, while the Court did not rule on whether fraudulent conveyance claims failed the Stern test, it noted that no party had disputed this conclusion.   Thus, while it is not a direct holding, it is a clear signal.    In my opinion, Bellingham is a signal from a unanimous Court that the BAFJA core vs. non-core system still works, although it needed to be tweaked.   The new “core” proceedings will look somewhat like the old summary jurisdiction under the Bankruptcy Act.   Proceedings intended to augment the estate which are not necessary to determination of a claim, will now be considered non-core matters regardless of how Congress classified them in 1984.However, I do see one big issue that remains to be decided.   What happens if a Bankruptcy Court enters a final judgment on a matter that is constitutionally non-core and no party seeks de novo review from the District Court?   Is that an invalid judgment that can be collaterally attacked or does the failure to seek de novo review constitute consent?    Must there be actual de novo review or merely the opportunity for de novo review?  There are certainly other questions lingering out there as well.   This means that while the boat has not been capsized (at least for today), we have not felt the last ripples from Stern v. Marshall.

Most people are under the misconceptions that if they file for bankruptcy, then they will lose all of their property.  This is simply not the case.  Most people who file for Chapter 7 bankruptcy retain all of their personal property.  That is because the state of Illinois provides exemptions as it related to personal property. + Read MoreThe post You Can Keep Property When Filing Chapter 7 Bankruptcy appeared first on David M. Siegel.