Law Review: Joseph Peter Gomez, Note, A Bona Fide Dispute: Can Bankrupt Debtors Sell Assets Free and Clear of Federal Civil Forfeiture Claims?, 29 Fordham J. Corp. & Fin. L. 587 (2024). Ed Boltz Fri, 06/21/2024 - 21:14 Available at:  https://ir.lawnet.fordham.edu/jcfl/vol29/iss2/4/ Abstract: Auctions are wheeling-dealing extravaganzas in which frenzies of bidders fight over shiny objects. What would happen if the government busted down the doors of the auction house, took the shiny objects, and sold them online? An asset sale through section 363(b) of the Bankruptcy Code provides a court-supervised opportunity to maximize economic value for the bankruptcy estate. To sell estate assets, the debtor must either (1) pay off each creditor holding an interest in the assets or (2) strip the creditor’s interest and attach it to the proceeds of the sale. When the government asserts a civil forfeiture claim against the asset being sold, it argues that its claim has superpriority over every other interest. If the debtor chooses option one, the government might demand the debtor pay up, or else it will seize the assets, leaving the debtor and its creditors with nothing. A debtor, naturally, might wish to choose option two: strip the government’s forfeiture interest from the asset and attach it to the sale proceeds. This Note examines the unique aspects of civil forfeiture claims and how those aspects conflict with asset sales through section 363(b). It identifies case law across jurisdictions to assist courts asked to determine whether to strip a civil forfeiture claim from assets sold through section 363(b). It proposes a three-step framework for courts to apply in analyzing this issue. Finally, this Note argues that bankruptcy courts should allow sales of assets free and clear of a federal civil-forfeiture interest if the interest is in bona fide dispute and the government’s interest can be adequately protected by attaching it to the sale proceeds. Commentary: 363 sales are certainly much more rare in consumer cases,  particularly  for Chapter 13  debtors- largely because unlike with commercial loans might  have an interest in helping the corporate debtor retain assets against other creditors,  where consumer lenders basically will cut off their own nose to spite the consumer debtor's  face-       This article could,  however,  offer a possible solution for debtors  facing the loss of assets resulting  from  drug asset forfeiture from co-owners (or even just adult children that reside in a home). With proper attribution,  please share this post.   To read a copy of the transcript, please see: Blog comments Attachment Document a_bona_fide_dispute_can_bankrupt_debtors_sell_assets_free_and_cl_compressed.pdf (495.46 KB) Category Law Reviews & Studies

People often spend years paying off mortgages, and their financial situation might change quite a bit during this time. If you find yourself unable to keep up with payments, talk to a lawyer about how to avoid foreclosure. One way of preventing foreclosure is to file for bankruptcy. While bankruptcy is not exactly an ideal solution, it might be a solution, nonetheless. Through bankruptcy, you might liquidate other assets to cure the default on your mortgage. You might instead devise a payment plan to help you catch up on numerous debts, including your mortgage. There might be alternative ways to prevent home foreclosure. You might sell the house and use the proceeds to repay the mortgage. You might instead work out an agreement with the bank or other creditors to buy extra time to get your finances in order. Perhaps the best thing you can do is to speak to a lawyer about your options. Your attorney might even help you challenge the foreclosure in court, as New Jersey is a judicial foreclosure state. Please ask our New Jersey mortgage foreclosure defense lawyers for a free review of your case by calling Young, Marr, Mallis & Associates at (609) 755-3115. Filing for Bankruptcy to Avoid a Home Foreclosure in New Jersey While most homeowners want to avoid foreclosure, they might think of bankruptcy as their way out. Most people consider bankruptcy to be the option of last resort. While it certainly comes with some drawbacks, bankruptcy might be the solution you are looking for. In some cases, it can help people avoid foreclosure. Chapter 7 Bankruptcy One option is to file for bankruptcy under Chapter 7, a common option for individuals with fewer assets. Under Chapter 7, a bankruptcy trustee may liquidate your assets to pay off your debts. In some cases, this might mean losing your home. However, the liquidation of your home avoids the foreclosure process. Depending on how things go, the money you get from your home might cover your mortgage and various other debts, allowing you to start over with a clean financial slate. If you have other assets you want to liquidate first in the hopes of keeping your home, talk to your attorney. Coordinating with the bankruptcy trustee might be possible so that other assets you do not mind parting with are liquidated instead of your home. This might be feasible if you have valuable assets like a vacation home or vehicles you do not need. You might also claim the federal homestead exemption under 11 U.S.C. § 522(d)(1), which may exempt up to $27,900 in your home’s equity. Chapter 13 Bankruptcy Chapter 13 bankruptcy works much differently than Chapter 7. Instead of liquidating assets and properties and potentially losing your home to bankruptcy rather than foreclosure, you might not have to liquidate anything. Instead, you and our Trenton, NJ mortgage foreclosure defense lawyers must come up with a payment plan to help you get back on the right financial track. Payment plans should be aggressive yet financially feasible. As such, people on Chapter 13 payment plans have very little wiggle room for superfluous or luxury purchases. Also, many people must spend quite some time on their payment plans. Many bankruptcy petitioners spend about 3 to 5 years adhering to their plans before their case is complete. Other Ways to Prevent Home Foreclosure in New Jersey If bankruptcy is not something you are ready to consider, your lawyer can help you explore other legal options for avoiding foreclosure. Some options might involve more formal legal procedures, while others involve informal agreements with creditors and lenders. Our team can help you figure out something that works for you. Selling the House One option is to sell your home and downsize. While you might have had plans to stay in your home for many years to come, it might not be financially possible. Rather than lose your home to foreclosure, you can instead quickly sell your home, use the proceeds to pay off your mortgage and clear your debt, and put any remaining money toward a different, more affordable home. While you cannot keep your home in this scenario, you may avoid foreclosure, which might save your credit so you can buy a more affordable home later. Talk to your attorney. It might be a wiser idea to cut your losses, avoid a massive hit to your credit, and begin planning for a different home in the future. Working Out Agreements with Creditors Talk to your attorney about how much money you owe toward your mortgage and how far behind you are on payments. It might be possible to work out some sort of deal with your creditors to avoid foreclosure. Creditors just want to be paid at the end of the day. If we can pay something now, we might convince creditors to delay foreclosure. Is there a way we can negotiate with creditors to make your payments more affordable? Maybe your creditors will agree to work out a new monthly payment that is more affordable. However, there might be some trade-offs, and you might have higher interest rates. Are you expecting a financial windfall in the near future? If we explain the situation to your creditors, they might hold off on the foreclosure until your money comes in. For example, maybe a family member just passed away, and you are expecting a large inheritance. Explaining this to your creditors might persuade them to hold off on foreclosure until your inheritance comes in. Remember, creditors just want to be paid. Challenging the Foreclosure in the New Jersey Courts Since New Jersey is a judicial foreclosure state, we might be able to challenge the foreclosure in court if there are no other ways of avoiding it. There might be numerous grounds on which to challenge the foreclosure. For example, according to 12 C.F.R. § 1024.41(f)(1), creditors may not foreclose until you are no less than 120 days behind on payments. Tell your attorney if you are not far enough behind for creditors to begin the foreclosure process. It is possible that your creditors made a clerical error and jumped the gun on the foreclosure. It is also possible they are using underhanded tactics to get you out of your house. You also have a right to cure the default, according to N.J.S.A. § 2A:50-57(a). This means that if you can come up with the money to cover your debts and various other costs before the sale of your home, you may keep your house and avoid foreclosure. Speak to Our New Jersey Mortgage Foreclosure Defense Attorneys Today Please ask our Union City, NJ mortgage foreclosure defense lawyers for a free review of your case by calling Young, Marr, Mallis & Associates at (609) 755-3115.

The Business Journals is reporting that SBA Loans have created a wave of bankruptcy filing.  The story can be found at https://www.bizjournals.com/charlotte/bizwomen/news/latest-news/2024/06/sba-covid-eidl-loan-bankruptcy-congress-banks.htmlJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Bankr. E.D.N.C.- In re Goddard- Denial of Confirmation due to Good Faith without regard for Means Test Ed Boltz Tue, 06/18/2024 - 20:03 Summary: Disregarding (with gratuitous  scorn) a long standing case law from its own jurisdiction,  including In re Alexander, 344 B.R. 742, 752 (Bankr. E.D.N.C. 2006),  the bankruptcy court held that even when the "mechanical requirements" of the Means Test at §1325(b)  do not mandate a dividend to unsecured creditors,  the "good faith"  obligations of  11 U.S.C. § 1325(a)(3)  precluded the debtor from retaining "luxury items"  while only providing a "meager projected dividend to general unsecured creditors when no dividend is required under  the disposable income test," Commentary: Hopefully,  as the bankruptcy court not only disregards Alexander,  but at best gives short shrift to Mort Ranta v. Gorman, 721 F.3d 241, 253 n.15 (4th Cir. 2013)  and Bledsoe v. Cook, 70 F.4th 746, 748 (4th Cir. 2023),  it and the Fourth Circuit will allow an interlocutory appeal.  Otherwise,  as Bullard v.  Blue Hills Bank prohibits the appeal of the denial of confirmation,  consumer debtors will be unable to safely and seek review of whether a "good faith"  analysis can relegate the Means Test to meaninglessness.   To read a copy of the transcript, please see: Blog comments Attachment Document in_re_goddard.pdf (149.29 KB) Category Eastern District

SCOTUS: UST v. John Q. Hammons- Remedy for Violation of the Bankruptcy Uniformity Clause Ed Boltz Tue, 06/18/2024 - 19:05 Summary: In the follow up to Siegel v. Fitzgerald, 596 U. S. 464,  where the Supreme Court found that  the disparity in bankruptcy fees between Chapter 11 debtors in U.S. Trustee districts and those in Bankruptcy Administrator districts violated the Bankruptcy Clause's uniformity requirement.,  here the Supreme Court addressed the remedy for that violation. The appropriate remedy was to require equal fees for all Chapter 11 debtors going forward (prospective parity), aligning with congressional intent and correcting the constitutional issue and that a refund (estimated $326 million burden on taxpayers)  was not due to those Chapter 11 debtors. Justice Gorsuch, joined by Justices Thomas and Barrett, dissented,  criticizing the majority for focusing on what Congress might have done to fix the issue prospectively, rather than addressing the past harm., and  contending that the majority's approach left the injured parties without adequate relief. Commentary: It would be  interesting to consider how these opinions might be shuffled  if,  instead of a constitutional  violation of the requirement of "uniform Laws on the subject of Bankruptcies"  this was a case of constitutional violations of the "equal protection"  clause of the 14th Amendment. Perhaps the majority could distinguish sufficiency of merely  prospective relief  based on whether the violation was  a "short-lived and small disparity",  but it would seem that Justice Gorsuch's  dissent could be used as a strong argument for reparations as an appropriate and even necessary remedy for any constitutional violation. But nobody else reads SCOTUS bankruptcy opinions anyways.   To read a copy of the transcript, please see: Blog comments Attachment Document ust_v._john_q._hammons.pdf (231.77 KB) Category Law Reviews & Studies

The real non mortgage expenses of home ownership are nothing like the means test allowances provided. Bankruptcy lawyers need to rise to the challenge of aligning the means test with today’s economic and legal realities. The success of bankruptcy cases may turn on it. What the means test allows The means test provision for non-rent/mortgage […] The post Re-examining The Means Test Cost of Home Ownership appeared first on Bankruptcy Mastery.

MDNC BK: In re Beverly- Reopening of a Case to Avoid Judgment Lien Ed Boltz Thu, 06/13/2024 - 16:26 Summary: Michael Vincent Beverley filed for Chapter 7 bankruptcy on May 24, 2019,   disclosing In his petition his ownership of  real property located at 6680 Ridge Bluff Drive, Rural Hall, North Carolina, valued at $208,000, encumbered by a deed of trust and several judgment liens, including to BMO Harris Bank..  Mr.  Beverley  received a discharge on August 29, 2019, and the case was closed on September 9, 2019, but without filing motions to avoid judicial liens. Subsequently,  BMO Harris Bank assigned the judgment to Guaranty Solutions Recovery Fund 1, LLC in July 2023, which pursued collection on the judgment against Mr. Beverley's  homestead,  including sending Mr.  Beverley a Notice of Right to Have Exemptions Designated. In response,  Mr. Beverley sought to have his original attorney  reopen the case to avoid this judgment lien,  but as that lawyer was retiring,  Mr.  Beverley hobtain new representation and filed that motion on on January 4, 2024.    Guaranty Solutions Recovery Fund 1  objected, citing unfair prejudice due to the time elapsed and expenses incurred. First the bankruptcy court held that reopening a case under 11 U.S.C. § 350(b) is discretionary and requires cause, such as avoiding judicial liens, which can provide relief to the Debtor. Then that the late avoidance of judicial liens "incorporates an equitable defense akin to laches" which  would prohibit the avoidance  if the creditor can show both a: Lack of diligence by the party against whom the defense is asserted; and  Prejudice to the party asserting the defense.”  Miller v. Hooks, 749 Fed. Appx. 154, 161 (4th Cir. 2018). Here the bankruptcy court found that  the delay substantial but not insurmountable, as the prejudice caused was monetary and curable by requiring Mr.  Beverley to  reimburse  Guaranty Solutions Recovery Fund 1  for its reasonable attorney’s fees and costs incurred due to the delay.  Further,  if Guaranty Solutions Recovery Fund 1 desired a retrospective appraisal  of the property to determine the value of the real property as of 2019,  when the case was filed,  Mr. Beverley would bear those costs as well. Commentary: This  decision does strike a fair balance in allowing debtors to avoid judgment liens,  which often go unnoticed especially as the three major credit reporting agencies no long list those.  (Although debtors attorneys should be getting judgment searches elsewhere- whether WestLaw,  Castle Branch or some other source). The balance is that the debtor is liable for any reasonable costs incurred by the judgment creditor in the time since discharge,  including  for a retroactive appraisal. To read a copy of the transcript, please see: Blog comments Attachment Document beverley_19-50528_-_order_reopening_case.pdf (589.19 KB) Category Middle District

4th Cir.: Todman v. Baltimore- Abandonment of Personal Property Following Eviction Ed Boltz Wed, 06/12/2024 - 22:21 Summary: Marshall and Tiffany Todman, tenants in Baltimore, were evicted and lost their belongings under Baltimore’s Abandonment Ordinance, which deems any property left behind at eviction as abandoned. The Todmans sued the City of Baltimore, alleging violations of their Fourteenth Amendment rights to due process,  asserting that they were deprived of their property without adequate notice and opportunity to be heard. The Court of Appeals,  relying primarily  on the SCOTUS bankruptcy decision in Tyler v. Hennepin County, 598 U.S. 631 (2023),  held that "when operation of a confiscatory statute is triggered by something other than long periods of nonuse, it starts to look less like abandonment and more like a government-induced forfeiture."   The Abandonment Ordinance, as applied, failed to provide sufficient notice or opportunity to contest the abandonment, was confusing, buried among other information, and did not clearly inform the Todmans of the risk of abandonment.  Further, the lack of a reclamation period further deprived the Todmans of a meaningful opportunity to reclaim their property. This resulted in the court affirming the district court’s finding that Baltimore was responsible for the due process violation since  the Abandonment Ordinance, a municipal policy, directly caused the deprivation of the Todmans’ property.  That Baltimore  did not control the eviction process was not relevant as the ordinance directly made Baltimore  responsible for ensuring the ordinance complied with constitutional requirements.  These violations,  accordingly,  subjected Baltimore to damages under § 1983. Commentary: Not only is this an expansion of a bankruptcy decision from the SCOTUS  into non-bankruptcy areas,  it points out the breadth and scope that  Tyler v. Hennepin County has.  This raises further possibilities that the disposition of personal property following a foreclosure by  government sponsored entities (GS Es)  such as Fannie Mae or Freddie Mac must also comply with due process or risk similar § 1983 being asserted.  That a property owner has rights following the loss of possession of a residence,  whether rented or owned,  now seems to require notice and disclosure of those rights in clear language,  separate from the actions,  whether eviction or foreclosure,  to take possession of the residence. Blog comments Category 4th Circuit Court of Appeals

Many clients have contacted us recently regarding Asset Protection Planning. This post discusses Asset Protection Planning and the strategies used in it. What is Asset Protection Planning? Asset protection planning refers to the legal techniques and strategies employed to protect an individual's assets from creditors or liabilities. Is Asset Protection Planning legal? Yes, provided that the strategies used are not fraudulent conveyances or made with the intent to defraud creditors. In counseling clients who request Asset Protection Planning, we review the property they own, their existing and future liabilities, and their budget. In counseling clients who request Asset Protection Planning, we review the property owned by the client, their existing liabilities, future liabilities, and their budget. For example, if a client is married and owns a house, is the house held as tenancy by entirety with their spouse? If a client owns a house, are they living in it so they can claim the NYS homestead exemption? If they have a pension plan (such as IRA, SEP, or 401(k)), are those plans fully funded? Other opportunities may exist as well. However, if a client is subject to a pending lawsuit or claim, the Asset Protection Planning opportunities are limited. Those clients with questions about Asset Protection Planning should contact Jim Shenwick, Esq. Jim Shenwick, Esq. 917-363-3391  [email protected]   Please click the link to schedule a telephone call with me: https://calendly.com/james-shenwick/15min   We help individuals and businesses with too much debt!  

Buying a home can be a very exciting moment in someone’s life. Foreclosure can feel like the worst. If you are afraid you might be edging closer toward foreclosure, talk to our legal team about what you can do. Foreclosure is not always an unstoppable force. An attorney can review your financial situation and help you determine if there are ways to prevent foreclosure. For example, your attorney might help you negotiate with creditors to make payments more affordable or delay foreclosure. You might instead sell the home and downsize. Still, you can file for bankruptcy. Bankruptcy often has a bad reputation, but it might actually be the solution you are looking for. You can take advantage of the automatic stay imposed by the court to buy yourself more time. Your lawyer can help you decide which bankruptcy chapter is best for your situation. In some cases, bankruptcy helps people avoid foreclosure and might even allow them to keep their homes. Our Philadelphia mortgage foreclosure defense lawyers can be reached at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519. How to Avoid a Home Foreclosure in Philadelphia There might be more than one way to fight foreclosure. To find the method that works best for you and your financial situation, you should speak to an attorney. Our Pennsylvania mortgage foreclosure defense lawyers can review your case and determine the best way to fight the foreclosure process. Contact a Lawyer Your first step should be to contact an attorney. Foreclosure proceedings tend to be rather complicated, and you need a lawyer to guide you through every step along the way. Remember, your creditor, perhaps the bank, likely has its own legal department to handle these kinds of things. You should also be legally represented to level the playing field. Your attorney can sit down with you and comb through your finances, bank records, and records about your home and mortgage. If you do not have the funds to catch up on your missed payments, your lawyer might identify other legal channels to go through. Negotiate with Lenders and Creditors One method many people facing foreclosure tend to overlook is negotiating with creditors. People are often surprised to learn that just because the bank is legally permitted to foreclose, it does not necessarily have to do so. Many creditors were willing to work with borrowers so that foreclosure does not have to occur. For example, maybe you are behind on mortgage payments, but you recently started a new job with a better salary, and you are expecting more income in the coming months to catch up on missed mortgage payments. Your creditor might be willing to hold off on foreclosure to give you time to start your new job and repay your debt. Remember, creditors usually would rather get paid what they are owed than foreclose on your home. Sell the Home Another option is to sell your home before you go into foreclosure. While this option does not allow you to keep your home, it does help you get around foreclosure, which might save your credit. By selling your home, you can get some quick cash to pay back whatever you owe on the house. If you have any funds left over from the sale, they can be put toward a different, more affordable home. This downsizing method can help you avoid the negative toll that foreclosure takes on your credit. As such, you might have an easier time securing a loan for a new home later when you are more financially stable. File for Bankruptcy While people often shudder to think of filing for bankruptcy, it might be just the solution you are looking for. Depending on how you file for bankruptcy, you might be able to hang on to your home and avoid foreclosure. As described in more detail below, there are different ways in which a homeowner can file for bankruptcy, and each method has different pros and cons you should discuss with a lawyer. How Bankruptcy Might Help You Prevent a Home Foreclosure in Philadelphia Filing for bankruptcy is not a punishment, contrary to what some might believe. Instead, bankruptcy is meant to be a solution for people facing insurmountable debt. Discuss bankruptcy options with your lawyer. Depending on how things go, you might be able to avoid foreclosure and keep your home. Automatic Stay The court may order an automatic stay when a person files for bankruptcy. According to 11 U.S.C. § 362(a), an automatic stay is a court order that prevents creditors and lenders from initiating legal action against you for debts. If legal action is already pending against you, such as foreclosure, the legal action must halt immediately. For some, this provides extra time to reassess their finances and possibly catch up on missed mortgage payments. Chapter 7 One of the more commonly filed forms of bankruptcy is Chapter 7 bankruptcy. This is often called liquidation bankruptcy because, according to 11 U.S.C. § 726(a), it focuses on liquidating your assets and using the money to pay outstanding debts. Whether Chapter 7 allows you to avoid foreclosure and keep your home depends on your circumstances. For some, their home ends up being sold, and the money is used to pay back the mortgage., While this might not be a perfect solution, it does help you avoid foreclosure. Another possibility is that you can claim a federal homestead exemption under 11 U.S.C. § 522(d)(1). Under this law, you may exempt up to $27,900 in equity in your home from the bankruptcy process. Whether this is enough to save your home depends on your situation. Chapter 13 Another common choice among those filing for bankruptcy is Chapter 13. Petitioners would not have to liquidate their assets, including their homes. Instead, they and their attorney may devise a payment plan to help them catch up on their mortgage and other debts, according to 11 U.S.C. § 1322(a). The plan should be aggressive yet financially feasible. People who file for Chapter 13 bankruptcy are often on payment plans for several years before their case is complete. While this might be a long time to live under a strict payment plan, it might be worth it if it allows you to keep your home and avoid foreclosure. Contact Our Philadelphia Mortgage Foreclosure Defense Lawyers Now Our Morrisville, PA mortgage foreclosure defense lawyers can be reached at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519.