Those who are considering bankruptcy oftentimes have questions regarding the various terminologies – as it can be confusing. When going through the bankruptcy process, it is important to understand the difference between a bankruptcy discharge and a reaffirmation agreement.   How Does a Bankruptcy Discharge Work?  Many people view bankruptcy because it discharges, or releases them from their debts. This discharge is a type of court order that allows people to have permanent relief for some or all of their debts. However, not all debts can be discharged.  Debts that cannot be discharged include: • Some Taxes, including income taxes and property taxes if they are owed for specific time period • Alimony and child support • Certain student loans • Court fines • Criminal penalties • Personal injury as a result of driving under the influence of alcohol or drugs. • Property received as a result of fraud. In addition, debts incurred after you file your bankruptcy are not able to be discharged.  Before filing your bankruptcy petition, make sure that you have ALL of your debts listed, as these are in general the only debts allowed to be considered for discharge. If you forgot to include a debt that you owe, you might not be able to add it later. Your discharge could also be denied if it discovered that you hid assets or did other fraudulent or dishonest things in conjunction with your bankruptcy filing. You also must be sure that you are in a position to comply with the terms of the bankruptcy because once you file a Chapter 7 bankruptcy and are discharged from your debts, you are not allowed to file another Chapter 7 for eight more years. In addition, some of your creditors may hold a secured claim. The bank that holds the mortgage on your house or the loan company that has a lien on an auto that you own are the most likely creditors to do so. You are not required to pay the amount of the secured claim if that debt has been discharged. However, the creditor is still allowed to repossess the property.  How Does A Reaffirmation Agreement Work?   In certain situations, even though you have been discharged from having to pay a particular debt, you may still want to pay it. A good example is you car. You may need to keep your car in order to get to your job. Therefore, if you continue to pay your car loan, even if you have been discharged, it is less likely that the bank that holds the car loan will come and repossess your car.  In order to do so, however, you need to work out an agreement with that particular creditor. In doing so, you will be required to sign a reaffirmation agreement with the court. This states that you promise to pay that debt.  Reaffirmation agreements:  • Are not mandatory. Only you decide if you want to sign a reaffirmation agreement. • Should not place you into another hard financial situation. • Must only be signed if it benefits you in some way. • May be canceled at any given time prior to the time that the court issues your discharge or within the 60 days following the time that the agreement is filed with the court – whichever option allows you the most time. Although you may sign a reaffirmation agreement and agree to pay the negotiated debt to the creditor, the court must still hold a hearing in order to approve the agreement. (This is done in cases where you are not represented by an attorney). If, after you sign a reaffirmation agreement, you are still unable to pay the debt, your debt balance reverts back to what it was before you claimed bankruptcy, as if you had never claimed bankruptcy at all. In this case, your creditor has the right to come and repossess the item, as well as take legal action against you. It is also important to note that bankruptcy trustees are not qualified to give you legal advice. Only an attorney who is experienced in the matter of bankruptcy is truly qualified to provide you with this information.

If you are seeking to avoid bankruptcy and truly are attempting to pay off all of your debt, then a debt settlement program could be an option for you. Debt settlement companies typically can negotiate a settlement for you with your creditors and oftentimes this helps to reduce your debts to approximately half of their current amount. How Debt Settlement Works Once a debt settlement company has negotiated a settlement amount with your creditors, then you will need to begin sending in one monthly payment to the debt settlement company. At that point, the debt settlement company will forward the appropriate amount of money that is due every month to each of your creditors. Some debt settlement companies will require that a type of escrow service or other account be set up. In addition, the debt settlement company will normally require that you transfer power of attorney to the creditors. By transferring power of attorney, this will actually force your creditors to work directly with the debt settlement company. This should also stop your creditors and / or collection agencies from continuing to call you. Debt Settlement Services  It will typically take up to two years in order for all of your debtors’ accounts to be settled. This time frame, however, will be based on a number of factors such as the affordability of payments, the number of creditors that you have, and who the creditors are. Settlement with your creditors can cost money, too. For example, the debt settlement companies normally charge somewhere in the range of between 15 and 30 percent in fees for their services. However, your new payment to pay off your debts will still likely be approximately 25 percent less than the payment that would have originally been required by paying each of your creditors separately every month. What is a Debt Management Program? One of the primary differences between a debt settlement company and a debt management program is that through a debt management program, your creditors are paid on a regular monthly basis. In a debt settlement program, however, the creditors are no longer paid until you have built up enough money that will subsequently allow for the debt settlement company to start the negotiation procedures in order to move towards reducing the amount of your debt and to then secure a lump sum settlement. A debt settlement program can also have a negative effect on your credit score and your credit rating, as versus a debt management program that – after a certain amount of time has passed – could actually have a positive effect on your credit score. In any case, however, either option may still be damaging to your overall credit worthiness.  There is one other alternative that could be an option. This is called a 60/60 settlement option whereby, under certain circumstances, you may be able to make an offer to repay at least 60 percent of your debt over the course of 60 months. It is important to discuss this option with an attorney that specializes in bankruptcy or debt settlement prior to moving forward though. Debt Settlement Pros and Cons Overall the pros and cons of debt settlement include the following: Advantages  • Your payments are roughly half of what they were prior to debt settlement • You cut the time until you are out of debt from approximately 18 years down to 5 years • You will no longer be charged high credit card fees and interest charges • You will likely no longer receive calls from collection agencies or your creditors • It will decrease your overall amount of debt Disadvantages  • It can harm your credit score • You can no longer use your credit cards • You must rebuild your credit

Print PageA Montana blogger has learned that First Amendment freedoms do not extend to saying that a bankruptcy trustee is “guilty of Fraud, Deceit on the Government, Illegal Activity, Money Laundering, Defamation, Harassment” among other things. In Obsidian Finance Group, LLC and Kevin D. Padrick v. Crystal Cox, 2011 U.S. Dist. LEXIS 137548 (D. Ore. 11/30/11), the Court ruled that the blogger was not entitled to protections accorded to traditional media and found that the trustee was not a public figure. You can read the opinion here. (PACER registration may be required). While the case is no doubt welcome news for trustees who can be exposed to some bizarre public criticism, it is troubling for its constricted definition of “media.”What HappenedSummit Accomodators dba Summit 1031 Exchange was a company that was supposed to facilitate tax free 1031 exchanges. The company filed for chapter 11 relief on December 24, 2008 amid allegations that it had used customer’s money to fund insider ventures. At least four persons associated with the company have been indicted or convicted. The Debtor initially employed Terry Vance as Chief Restructuring Officer. It also employed Obsidian Finance Consultants, LLC as financial adviser and paid it a retainer of $100,000. Shortly after the case was filed, the Debtor sought to replace Mr. Vance as CRO with Obsidian Finance. At the hearing to replace the CRO on February 11, 2009, the Court entertained an oral motion from the U.S. Trustee to appoint a Chapter 11 trustee. The Court granted the U.S. Trustee’s motion and suggested that perhaps Obsidian Finance or Kevin Padrick, who was one of its principals, could be appointed as Chapter 11 trustee. The U.S. Trustee did appoint Kevin Padrick as Chapter 11 trustee.On May 12, 2009, the Court confirmed the First Amended Joint Plan of Reorganization filed by the Official Committee of Unsecured Creditors and the Chapter 11 trustee. The Plan provided for establishment of a Liquidating Trust with Kevin Padrick as Liquidating Trustee.Crystal Cox is the daughter of one of the creditors of Summit Accomodators. She was present at the hearing on February 11, 2009 and subsequently met with Padrick on February 12, 2009. She became convinced that Mr. Padrick had used his position as financial adviser to undermine the CRO and get the job as Chapter 11 Trustee. She also was convinced that Mr. Padrick should not have been appointed Chapter 11 Trustee because his status as a principal of the Debtor’s financial adviser made him an insider and therefore ineligible for appointment. On July 19, 2009, Crystal Cox started a blog with the URL www.obsidianfinancesucks.com. The headline of the blog reads “Kevin Padrick, Obsidian Finance Group, I Demand Transparency in the US Bankruptcy Courts.” In her blog, she described herself as follows:I am the Self Appointed Real Estate Industry Whistleblower. I am a Self Appointed Real Estate Consumer Advocate. I want to be a voice for Real Estate Victims that are not being heard, that are Powerless, and that Have no voice.My, Self appointed job or mission, have you is to get the TRUTH out so that real estate victims can get justice, get "made whole", get their MONEY and get on with their REAL LIFE...Ms. Cox wrote hundreds of articles for her blog, many of which made accusations against Kevin Padrick and Obsidian Finance. In some cases, she would post ten or more articles in a day. She also wrote for:www.BankruptcyCorruption.comwww.LiquidatingTrustee.comwww.BankruptcyTrusteeFraud.comwww.RealEstateIndustryWhistleblower.comOn January 14, 2011, the Trustee’s counsel filed a defamation action against Ms. Cox in the United States District Court of Oregon. The case went to trial on November 29, 2011. Ms. Cox represented herself. The jury found that Crystal Cox was liable for defamation to both Obsidian Finance Group, LLC and Kevin Padrick. It awarded damages of $1,000,000 to Obsidian and $1,500,000 to Mr. Padrick. The Court entered judgment against Ms. Cox on December 8, 2011.Prior to trial, the Court made several rulings from the bench which were incorporated into a memorandum opinion on November 30, 2011. The Trustee Was Not a Public Figure, Not Even a Limited OneThe defendant argued that the trustee was a “public figure” so that proof of actual malice was required under New York Times Co. v. Sullivan, 376 U.S. 254 (1964). A person can be a public figure if they “occupy positions of such persuasive power and influence that they are deemed public figures for all purposes” or an individual may “voluntarily inject() himself or (be) drawn into a particular controversy and thereby become() a public figure for a limited range of issues.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 (1974). The Court found that the Trustee and his corporation were not “all purpose” public figures and that that they had not thrust themselves into a particular controversy so as to be limited purpose public figures. While the bankruptcy of Summit Accomodators itself received attention for its failure, agreeing to serve as trustee did not constitute “thrusting” oneself into a controversy. Moreover, a person must be a limited purpose public figure prior to the alleged defamatory statements rather than because of them. In this case, Ms. Cox could not create controversy over Padrick’s handling of the estate through her blog and then contend that this made him a public figure. The case would have been a closer call if the Trustee had sought out publicity about the job he was doing. While many lawyers are publicity shy, some actively seek to keep their names in the news, issuing press releases and taking out ads trumpeting their successes. The lawyer who blows his own horn too much in a case of public interest may find himself to be a limited purpose public figure.The Blogger Was Not Entitled to Protection As a Member of the “Media”The Court noted that “plaintiffs cannot recover damages (against media defendants) without proof that (the) defendant was at least negligent and may not recover presumed damages absent proof of ‘actual malice.’” Opinion, p. 9. This would have made it more difficult for the plaintiffs to recover. However, the Court rejected the contention that the “investigative blogger” in this case qualified as media.First, the Court noted that Defendant had not cited any cases giving media status to bloggers. “Without any controlling or persuasive authority on the issue, I decline to conclude that defendant in this case is ‘media,’ triggering the negligence standard.” Opinion, p. 9. This appears to be a bit of a cop out by the court, since blogging is a relatively new phenomenon. By holding that bloggers do not qualify as media because Courts have not previously granted them this status creates a self-fulfilling prophecy. However, the Court did go one step further and lay out a test for what evidence would establish someone’s standing as a journalist.Defendant fails to bring forth any evidence suggestive of her status as a journalist. For example, there is no evidence of (1) any education in journalism; (2) any credentials or proof of any affiliation with any recognized news entity; (3) proof of adherence to journalistic standards such as editing, fact-checking, or disclosures of conflicts of interest; (4) keeping notes of conversations and interviews conducted; (5) mutual understanding or agreement of confidentiality between the defendant and his/her sources; (6) creation of an independent product rather than assembling writings and postings of others; or (7) contacting "the other side" to get both sides of a story. Without evidence of this nature, defendant is not "media."Opinion, p. 9. Unfortunately, the Court did not cite any precedent for this test. However, there is a growing body of case law which rejects this narrow definition.Other Views on Bloggers and JournalistsMoreover, changes in technology and society have made the lines between private citizen and journalist exceedingly difficult to draw. The proliferation of electronic devices with video-recording capability means that many of our images of current events come from bystanders with a ready cell phone or digital camera rather than a traditional film crew, and news stories are now just as likely to be broken by a blogger at her computer as a reporter at a major newspaper. Such developments make clear why the news-gathering protections of the First Amendment cannot turn on professional credentials or status.Glik v. Cunniffe, 655 F.3d 78, 84 (1st Cir. 2011)(rejecting qualified immunity for police officers who arrested citizen for filming them with a cell phone camera).In another case, the Court refused to recognize a claim to a “reporter’s privilege” not to divulge sources on the grounds that it could lead to a slippery slope which would include bloggers.The press in its historic connotation comprehends every sort of publication which affords a vehicle of information and opinion.'" (citation omitted). Are we then to create a privilege that protects only those reporters employed by Time Magazine, the New York Times, and other media giants, or do we extend that protection as well to the owner of a desktop printer producing a weekly newsletter to inform his neighbors, lodge brothers, co-religionists, or co-conspirators? Perhaps more to the point today, does the privilege also protect the proprietor of a web log: the stereotypical "blogger" sitting in his pajamas at his personal computer posting on the World Wide Web his best product to inform whoever happens to browse his way? If not, why not? How could one draw a distinction consistent with the court's vision of a broadly granted personal right? If so, then would it not be possible for a government official wishing to engage in the sort of unlawful leaking under investigation in the present controversy to call a trusted friend or a political ally, advise him to set up a web log (which I understand takes about three minutes) and then leak to him under a promise of confidentiality the information which the law forbids the official to disclose? In re Grand Jury Subpoena (Miller), 397 F.3d 964, 979-80 (D.C. Cir. 2005)(Sentelle, Concurring).Finally, one Court got it right when it held that “not all bloggers are journalists. However, some bloggers are without question journalists.”Further, there is no published case deciding whether a blogger is a journalist.However, in determining whether Smith was engaged in news reporting or news commentating, the court has applied the functional analysis suggested by commentators and the Plaintiffs in their memorandum in support of a preliminary injunction, which examines the content of the material, not the format, to determine whether it is journalism. (citation omitted). In addition, the court has considered the intent of Smith in writing the article. The court agrees that not all bloggers are journalists. However, some bloggers are without question journalists. (citation omitted).Bidzerk, LLC v. Smith, 2007 U.S. Dist. LEXIS 78481 at *16-17, 35 Media L. Rep. 2478 (D. S.C. 2007).Applying the Obsidian Test to A Texas Bankruptcy Lawyers BlogIt is a shame that the Judge in Obsidian v. Cox used an intellectually lazy definition of journalist when it probably did not influence the outcome of the case. The statements made by Ms. Cox in her blog were so outrageous that they likely would have failed a negligence or actual malice standard. I take personal offense because I like to think that the work that I do on this blog bears a passing resemblance to journalism. However, I doubt that I would qualify under Judge Hernandez’s test.1. Any education in journalism. I took three years of journalism in high school and wrote for both my high school and college papers. Is that enough? 2. Any credentials or proof of any affiliation with any recognized news entity. My blog is distributed by the State Bar of Texas, the American Bankruptcy Institute and the LexisNexus Bankruptcy Community. However, these are all legal organizations rather than recognized news entities.3. Proof of adherence to journalistic standards such as editing, fact-checking, or disclosures of conflicts of interest. I do edit my pieces, although my partner says that I should do more of it. I do fact check my posts, which are mostly based on court opinions and thus pretty easy to document. Finally, if I have involvement in a case I write about, I disclose that.4. Keeping notes of conversations and interviews conducted. I rarely do interviews. However, when I do, I don’t necessarily keep my notes after the post is published unless it is because I have a messy desk and they get buried under something else.5. Mutual understanding or agreement of confidentiality between the defendant and his/her sources. Sort of. If someone asks me not to use their name, I respect that. However, it just doesn’t come up that often.6. Creation of an independent product rather than assembling writings and posts of others. Yes.7. Contacting “the other side” to get both sides of a story. Generally, I write about judicial opinions. I do not contact the losing party to get their side of the story. If a party to a case contacts me and points out a factual error, I will correct it. Sometimes I will allow the other side to tell their side of the story in the comments. However, I did not contact Crystal Cox or Kevin Padrick about this post.Out of seven criteria, I qualify completely under two, partially under four and not at all under one. However, if you compare my writing to that of Bill Rochelle, who writes for Bloomberg and is definitely a real journalist, you will see that we frequently write on the same topics and discuss the same issues. The difference is that he is better at it than I am and gets paid for it, while I still have my day job. The Ironic Conclusion—It’s All in How You Say ItIn reading through Crystal Cox’s rambling and often obsessive blog, there is occasionally some solid reporting and good questions raised. It certainly raised my eyebrows that the Court would appoint a trustee based on an oral motion without any prior notice to parties in interest. It also was unusual for the Court to suggest an individual to the United States Trustee. It was also a very close call as to whether the principal of the Debtor’s financial adviser qualified as a disinterested person eligible to be appointed as trustee. These were all good questions. However, from my personal review of the lawsuit and the blog, it appears that Ms. Cox took a wrong turn when she took the unusual circumstances of Mr. Padrick’s appointment and her personal dislike of him and constructed a narrative of wrongdoing and fraud. Blogs that traffic in rumor, innuendo and unsupported allegations make the rest of us look bad and bring disrepute to blogging in general. On top of that, rumor, innuendo and unsupported allegations belong on talk radio, where they can be advanced by serious journalists like Rush Limbaugh, Alex Jones and Glen Beck, not on blogs.

First, what is a chapter 20? One files first a chapter 7 to discharge all unsecured debt. After receiving a discharge which takes around 4 months, one can file a chapter 13 if it benefits the debtor. One benefit has been pointed out by the U.S. Bankruptcy Appellate Panel (PAP) of the Eight Circuit, on August 29, 2011. The panel pointed out that a debtor can file a chapter 13 after a chapter 7 to strip a wholly unsecured junior lien (meaning a second or third mortgage, the first mortgage would be older and higher in rank and would be senior) from his residence. The word "residence" is important, it cannot be a rental property, in order to strip off (meaning wiping out or eliminating) the second lien, the debtor must live in the property. The fact that the debtor does not receive a discharge in the chapter 13 (because one would have wait 4 years from after filing the chapter 7 in order to receive another discharge in a chapter 13) does not bar the effective lien avoidance. What happens if the case gets dismissed? Then, the lien would not be avoided even though the adversary proceeding was approved by the court, the plan must complete in order to avoid the lien. What does it mean if the lien is avoided? Who pays for the mortgage (lien) that is stripped off? Nobody, the mortgage company has the loss. The holder of the avoided lien is an unsecured creditor.

Everyone has heard the term “bankruptcy,” and many believe that it is a simple matter of going before a judge and ridding themselves of all of their debt.  This is not the case, and both traditional and newer laws may impact one’s decision to file.Definition of BankruptcyAt its core, bankruptcy is a legal filing, in which an individual declares that s/he does not have the money to pay existing debt.  The filing is put before a federal judge, who then determines how the debt will be discharged (“wiped out”).  For individuals, there are two types of bankruptcy – Chapter 7 and Chapter 13.  Which chapter to select depends on some very specific factors.Bankruptcy law has it beginnings at the federal level, and the types of filings and criteria are generally established by Congress.  Each state has added to those federal laws, however, and now, all states have their own “rules of play” as well.Chapter 7 BankruptcyThe majority of people who cannot pay their debts file for Chapter 7, often known as the “wipe the slate clean” bankruptcy.  Generally, there cannot be steady wages that provide any disposable income to the person, and the goal is to be rid of all “unsecured’ debt, such as credit card accounts, personal loans and medical bills.  The debtor must prove, however, that s/he does not have the assets or the regular income to pay off even a portion of the amount owed.  Social Security, insurance proceeds, and certain other types of income cannot be considered income.The Chapter 7 filer must list all assets, including jewelry, artwork, stocks/bonds, and even pedigreed pets. (Note:  Generally, clothing, furniture, basic personal items and an older or un-paid for car will not be considered assets).  State law determines how much equity you may have in a newer car and home, in order to keep them. It is important not to “fudge” or hide assets, because “bankruptcy fraud” carries serious consequences. If you have valuable assets, the judge can appoint a trustee to dispose of them for distribution to your creditors.  If not, and you qualify for Chapter 7, your bankruptcy will be “discharged” by the judge, and you are free of the debt you have listed in your filing.  Chapter 13 BankruptcyIf individuals have steady income, and an analysis of their income shows that they have some amount to pay on debt, they must file for Chapter 13.  In this filing, the person keeps all of his/her assets and agrees to a repayment plan to creditors, usually amounting to less than the original debt amount and spread over 3-5 years.  The debt is “discharged” once the final payment is made.  Payments are usually made to a court-appointed trustee who in turn distributes the correct amounts to each creditor.Important Changes to Federal Bankruptcy Law:  In 2005, Congress passed a law intended to make bankruptcy filing more difficult.  Important parts of that law are the following:1.     Individuals must wait 8 years between two chapter 7 bankruptcies.  2.    Chapter 7 requires a “means test”, a formula for determining debt vs. income.  If there is a specific amount of disposable income, the debtor will have to file for Chapter 13.3.    Anyone filing for bankruptcy must receive a credit counseling certificate as a condition of the debt discharge. The certificate can be obtained through the internet or a phone consultation with an approved credit counseling agency.In this economy, filing for bankruptcy is common and does not carry the “stigma” it once did.  Your credit score will suffer, but there are specific things that you can do to repair that credit faster than you think. Clients who filed bankruptcy have often a better credit score one or two years later than they had before filing.

In these trying financial times, many clients are calling Shenwick & Associates and asking about pre-judgment or asset protection planning. While it is always best to do asset protection planning or pre-judgment planning as far in advance as possible, many clients are concerned about planning opportunities after they have been served with a summons and complaint or in cases where a judgment is soon to be entered. Again, it must be emphasized that pre-judgment planning should be done years in advance of a lawsuit or entry of a judgment.However, New York law does allow for some planning opportunities:1. The New York State Debtor and Creditor Law provides for a $150,000 homestead exemption (in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam counties). This allows a debtor who owns real estate to retain up to $150,000 in equity if his or her primary residence is foreclosed upon after payment of mortgages on the property. If the debtor is married, then the debtor’s partner (if he or she also holds title to the property) would also receive a $150,000 homestead exemption, for a total of $300,000.2. If a couple is in fact married, and they are contemplating a divorce, a debtor may be able to transfer non-exempt property to his or his spouse pursuant to New York State’s equitable distribution law. The granting of the divorce would be deemed consideration for the transfer of the property from both spouses to one spouse pursuant to a New York divorce.3. Whole life life insurance policies. New York State law provides that the cash surrender value component of whole life life insurance is exempt from the reach of creditors.4. A motor vehicle is exempt up to the amount of $4,000 in equity.5. A debtor may want to consider purchasing an annuity. A debtor is allowed to purchase a $5,000 annuity within six months of an action, and an unlimited amount if the court determines that that amount is necessary for the reasonable requirements of the debtor and the debtor’s dependent family. Accordingly, if a debtor is a senior citizen and/or is married and supporting minor children, exemption of an annuity greater than $5,000 may be upheld by a court.6. Finally, qualified retirement plans (401(k)s, pensions, Roth IR As, IR As, 457(b) plans for government employees and Simplified Employee Pension Plans (SE Ps)) are all deemed spendthrift trusts under New York law. Accordingly, if a debtor has an existing qualified retirement plan and a history of making payments to that plan, they may want to consider continuing to fund that plan.Pre-judgment planning is a complicated area of the law, and is heavily dependent on the facts and circumstances of each individual case. Individuals who feel that they may be in need of pre-judgment planning are encourage to contact Shenwick & Associates.

The Bankruptcy Code, which is listed in the United States Code as Title 11, has undergone various amendments since its enactment. The Bankruptcy Code ensures a well laid out legal procedure to deal with the debts of both individuals and businesses and forms a common federal law to govern all bankruptcy cases.   Typically a major part of the bankruptcy processes is carried out away from the courthouse and the debtor need to appear only once for the trustee’s meeting, which is not in a court room.   A Massive Number   The present bankruptcy law, which came into effect in 2005, offers ample opportunities for the general public to rebuild a credit score and ensure a stable future. In the current economic down turn, bankruptcy has become a common issue as  people grapple with  various issues such as massive layoffs, hospitalization expenses, or factors not in their control. In the current year, it is expected that over 1,500,000 Americans might be going through bankruptcy procedures.   The Honorable Thing   Though bankruptcy continues to be a dreadful choice for many, in reality it is a safe and legal way to start rebuilding credit history and  begin again. People burdened with debts may find bankruptcy a superlative option for putting things back in order.   Advantages of Bankruptcy Filing   There are many advantages for those who have decided to file relief under the Bankruptcy Code. Filing for bankruptcy automatically relieves obligation from paying off debts such as credit cards, unsecured loans, hospital bills, and certain types of taxes. In most cases school loans are not dischargeable. Debtors also have the option of reorganizing car (and other types of loans secured by personal property) which the debtor wishes to keep after bankruptcy filing, making payments more manageable.   Another benefit of filing for bankruptcy is the automatic stay on law suits, repossessions, foreclosures, IRS seizures, etc., which also prevents creditors from harassing borrowers for debt collection. In the event of bankruptcy cases, the borrower also obtains a respite from eviction from a past mortgage. Lastly, you can prevent  a driver’s license from being taken away for any unpaid bills resulting from a car accident.   Realistic Outcome   Often people end up in bankruptcy as they wait until foreclosure, which might leave them with little time to react and salvage the situation. If you have defaults of more than three months, or you have dues in the form of enormous medical bills, it is high time you take stock of your finances and avail professional help to set things in order. Timely intervention could go a long way in avoiding hard hitting measures such as bankruptcy, which may cost you your home!

Mounting debts and a slow economy have made the repayment of loans an uphill task for most debtors. Debts may spiral out of hand especially when faced with unforeseen incidences, such as the loss of a job or significant hospitalization. There are many options to bail you out of these tight spots, such as debt management plans, refinancing options, and bankruptcy. If assets are at rock bottom and there are no immediate solutions to make the loan payments, then bankruptcy could be the only choice for many.   Most consumers file for Chapter 7 bankruptcy which provides a fresh opportunity for the lenders as it wipes off a lion’s share of unsecured debt. Chapter 7 bankruptcy is an ideal option for those with limited or no income to pay off the severe debt they find themselves in.   There are many benefits of filing a Chapter 7 bankruptcy, which can be completed within 3-6 months from the filing date. Once the process is concluded, the debt will be removed and the lender can start afresh. This also provides the borrower with immunity from the nagging calls coming from creditors in their attempt to collect the debt as well as ending the possibilities of repossession and other foreclosure proceedings.   The Expected Process   Chapter 7 can be filed easily and typically includes the petition, schedule of debts, a statement of finances, and a listing of property and assets. Once accepted, a meeting with the trustee assigned to the case is conducted. Normally the cases are closed and the debt discharged (wiped out) within four months from the filing date. With the discharge, all debts are erased from credit history.   Chapter 7 bankruptcy is often the simplest option to eliminate debts. It is recommended to engage a lawyer who can ensure the bankruptcy papers are filled properly and the procedure of bankruptcy is completed swiftly.   A Powerful Teammate   Filing Chapter 7 bankruptcy also protects you from any collection procedures initiated by creditors, which in turn allows you to safeguard valuable possessions. Chapter 7 bankruptcy is thus designed to remove unsecured debts and is well suited for debtors with heavy unsecured debt. It’s a perfect option for those who have minimal properties, merchandise, and material objects of value but wish to retain essential items such as a car or home. Having a bankruptcy attorney by your side will help protect your financial position by showing the court chapter 7 bankruptcy is the most feasible option in combating your dues.

Filing for a Chapter 13, also known as a wage earner’s plan, can help those who have tried all the other means in ditching their outstanding debt. By filing for Chapter 13, the debtors can not only avoid foreclosure or repossessions but can also pay back a part of  their debts over three to five years depending on their income.   Home at Risk  Most people file Chapter 13 bankruptcy to save their homes. If the foreclosure proceedings are completed before filing the bankruptcy proposal the debtor can still lose his home.   Chapter 13 could be particularly useful for debtors stuck in the following situations:   Those wanting to protect their assets from liquidation. Those wishing to pay off secured debts. Debtors unable to pay their monthly mortgage payments. If a property lien far outweighs the value of your collateral. If you are unable to discharge your debts by filing Chapter 7 bankruptcy. Income is more than the prescribed limit for a Chapter 7.   By the Numbers   Anyone with regular income can file for Chapter 13 if unsecured and secured debts are not more than $336,900 and $1,010,650 respectively. Before filing for bankruptcy, you will need to complete a credit counseling course which can be done over the phone or through the internet. It takes approximately 30 minites to complete.  If you have filed for Chapter 7 earlier, you have to wait for at least 4 years before filing for Chapter 13 again in order to discharge your debt. However, in order to stop a foreclosure or repossession, you can get bankruptcy protection immediately.   As a first step for filing for Chapter 13, your attorney has to work out a repayment plan that includes all debts, which will then be submitted to the court.   The Advantages of Filing for Chapter 13   Filing Chapter 13 will make you immune to any legal action initiated against you. You can remove your debt while retaining your personal property and real estate. The debt can be paid off through an easy repayment plan based on your income. You can be relieved from the intimidating calls from collection agencies and creditors.   It is recommended that you complete documentation under the guidance of a bankruptcy lawyer because any errors while filing may result in the rejection of your bankruptcy plan. Also, if you fail to attend trustee’s meetings or don’t submit required documents the court can prevent you from filing for Chapter 13 bankruptcy.

On Wednesday November 23, 2011, friends, colleagues and family members gathered at First Baptist Church in San Marcos, Texas to remember the life of John Worthy Alvis who passed away on November 19 after a brief battle with pancreatic cancer. John practiced bankruptcy law in Austin for thirty-six years and left behind a legacy of profound respect. This post, taken largely from the eulogies given by James Hoeffner, brothers James and Thomas Alvis, and son, John Reagan Alvis, will remember a few stories about John. Please feel free to add your own in the comments section. Early Years John was born on August 22, 1945 in Austin, Texas. His son read from an autobiography an autobiography that John wrote at age ten entitled “The Amazing Adventures of Atomic Age Alvis” in which he said that he didn’t know whether he or the atom bomb made the biggest bang, but that he had been “popping off ever since.” He also revealed that he always wanted to be a garbage man when he grew up. John also had a bit of Tom Sawyer in him. Their family owned a lot which was covered in vegetation. His father offered his two older boys $11 to clear off the land. This should have required the use of a scythe and a lot of hard work and sweat. However, John found a farmer with a tractor mower who would do the job for $6 and he pocketed the difference without lifting a finger (until his father found out). John once told younger brother Tom that he would buy him a Lionel Santa Fe Super Chief if he could run a mile. When Tom, who loved Lionel electric trains, easily completed the mile, John was faced with honoring the bet. Since he didn’t have the cash, he offered to go double or nothing if Tom could run a four minute mile. Since Tom didn’t know that no youth had ever run a four minute mile (that mark was broken by Jim Ryun shortly thereafter), he gamely tried his best. He didn’t run a four minute mile and John narrowly escaped having to pay off. FBI Career After completing law school at the University of Texas in 1970, John surprised his family by joining the FBI. His fellow agents nicknamed him Special Agent McGoo because of his glasses. He once shot out the tires of a hijacked 727 as he dodged gunfire coming from the cockpit. John received a commendation from the FBI for his heroics. However, much to the astonishment of his law partners, he never displayed it. In another case of bravery, John stood guard alone at a bank with his snub-nosed .357 after he was told that robbers were en route. One of the less glamorous aspects of being a G man was picking up draft dodgers. One time John and a particularly obnoxious partner were dispatched to the poor side of town to look for a man at his parent’s house. When the boy’s mother answered the door, the aggressive agent went into his Barney Fife routine demanding to know where he was. Pointing to a closet beneath the stairs, he demanded to know what was in there. The following exchange took place: “Oh sir, you don’t want to go in there.” “Why, you hiding something?” “You don’t want to go into that closet.” The agent smugly replied, “Because your son is in there” and forced his way past. When he opened the door and pulled the light switch on, he found more cockroaches than in an Indiana Jones movie. As roaches began to cover the startled agent, the mother said, “I told you you didn’t want to go in there.” John said that it took all of his self-control not to burst out laughing. According to Jim Hoeffner, “John was a lover of justice whether it was federal court justice or cockroach justice.” Law Practice in Austin In 1975, John’s father died. John took a sabbatical from the FBI to return to Austin to clean up his father’s files. John never returned to the FBI and instead took up his place in his father’s firm Alvis & Carssow (later Alvis, Carssow & von Kreisler and Alvis, Carssow & Ingalls). Jim Hoeffner remembered “We always had fun at Alvis, Carssow & von Kreisler practicing law and visiting in general. John was always the first to laugh and always had a pleasant disposition.” He also said, “Unlike Marcellus in Pulp Fiction, if you did something wrong to him, he did not go medieval on you.” According to James Alvis, “The practice of law was his passion in life. . . . He genuinely liked to help people, to give the ordinary person an even break.” However, John was not without his faults. His one shortcoming was sending out monthly bills and billing for what he did. When Jim Hoeffner joined the firm, he was told, “You get John to bill on a monthly basis and I will immediately make you an equity partner.” On another occasion, when John was president of the Travis County Bankruptcy Bar and the names of the nominees for director positions were being read, a woman lawyer demanded to know “is there any reason why there are no females on the ballot.” Without batting an eye, John replied, “Because our bylaws prohibit that.” While this answer was not politically correct and also not true (our bar has had many female council members and several female presidents), it showed a mischievous side to his personality. Final Days John’s battle with pancreatic cancer was brief but intense. His brother James noted that John had a few minor stomach pains on Labor Day and was gone before Thanksgiving. He said that John’s passing was a “reminder of our own mortality” and that, “all we really have is the life we make today.” However, in his illness, he continued his interests. John was a huge nature lover. When told that a fox had been seen in their yard, he wanted to know “red or gray?” When his colleagues insisted that he sign a Durable Medical Power of Attorney, he was asked, “John, do you know what a Durable Medical Power of Attorney is?” In response, he started making choking motions around his throat, indicating the indignity of having to read another legal document. Nevertheless, through the fog of the pain medication, he read through line by line. He checked off the box for no heroic actions to sustain his life, but when it came to terminating food and water if he was in a coma, “being the independent, ever hopeful, did not approve of this provision.” John passed away on November 19 at 10:45 a.m. in his own bed in the arms of his wife. His breath became more shallow until it was gone. According to Mr. Hoeffner, “He died in peace, the same way he lived.” Comments from Colleagues Since John’s untimely passing, many of his colleagues have remarked about his life. Here are some of their comments. Please feel free to share your own. I very much remember John and consider him one of the very best. He had a great disposition, was always courteous and respectful to all participants and their legal counsel, was well informed on the facts and the law and I considered it a privilege to be able to work with lawyers when they were of that caliber. I know he will be missed by all of his friends and family and I will miss him also. --Former U.S. Bankruptcy Judge Larry Kelly John was a superb attorney with a first-rate temperament. I remember dealing with him during my first week of practicing law, and my first impression was that John was one smart and stellar guy. Needless to say, my positive impression never changed; indeed, my respect and admiration for him grew each time I dealt with him (and he and I were almost always on adverse sides). To say that his passing is a loss is a woeful understatement; and it is no overstatement to say that his departure leaves a huge void in the Central Texas bankruptcy bar in particular and the Central Texas community in general. --U.S. Bankruptcy Judge Jeff Bohm As the many e-mails have indicated, the Austin Bankruptcy community has lost a true gentleman and friend. He will be sorely missed. --Yvonne Knesek, President, Austin Bankruptcy Bar I had the privilege of being a law clerk for John while still in law school and before passing the bar exam. He was one of the kindest and most honorable men I have ever met. I am glad to have known him and sad at his passing. --Craig Smith He was the most professional attorney I ever met. God love him. --Steve Turner