Law Review (Economics): Hollenbeck, Brett and Larsen, Poet and Proserpio, Davide, The Financial Consequences of Legalized Sports Gambling Ed Boltz Thu, 10/30/2025 - 16:55 Available at:   https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4903302 Abstract: Following a 2018 ruling of the U.S. Supreme Court, 38 states have legalized sports gambling. We study how this policy has impacted consumer financial health using a large and comprehensive dataset on consumer financial outcomes. We use data from the University of California Consumer Credit Panel, containing credit rating agency data for a representative sample of roughly 7 million U.S. consumers. We exploit the staggered rollout of legal sports betting across U.S. states and evaluate two treatment effects: the presence of any legal sports betting in a state and the specific presence of online or mobile access to betting. Our main finding is that overall consumers' financial health is modestly deteriorating as the average credit score in states that legalize sports gambling decreases by roughly 0.3%. The decline in credit score is associated with changes in indicators of excessive debt. We find a substantial increase in average bankruptcy rates, debt sent to collections, use of debt consolidation loans, and auto loan delinquencies. We also find that financial institutions respond to the reduced creditworthiness of consumers by restricting access to credit. These results are substantially stronger for states that allow online sports gambling compared to states that restrict access to in-person betting. Together, these results indicate that the ease of access to sports gambling is harming consumer financial health by increasing their level of debt.  Commentary:  From Casino Floors to Courtrooms Bankruptcy attorneys have long seen gambling debts as a guaranteed bet for financial ruin—often a moral failing and then a line item in the Statement of Financial Affairs to be sheepishly acknowledged and hopefully quickly forgiven. But the world of gambling has changed faster than the Bankruptcy Code’s assumptions. Gone are the days when compulsive gamblers had to drive hours to Atlantic City or Las Vegas. Today, the casino lives on the phone—always open, algorithmically tuned, and cross-promoted during every football game. And as this study shows, once gambling becomes as accessible as checking Instagram, it starts showing up in credit reports—and in bankruptcy filings. Bankruptcy courts have historically taken a dim view of gambling losses, often equating them with “bad faith” or dismissing them as “self-inflicted wounds.” That moral lens made sense when gambling required planning and travel. But today’s “disordered gambling” is less vice than vulnerability—an addiction intensified by tech platforms designed to maximize engagement, just as social-media apps do. Judges and trustees may soon need to rethink the reflexive skepticism toward debtors whose credit cards, payday loans, or even mortgages collapsed under the weight of DraftKings, FanDuel, or BetMGM. Policy Recommendations: From Punishment to Protection Congress and state legislatures could help mitigate the harm in several ways: Bankruptcy Reform for Disordered Gambling – Amend §523(a)(2)(C) to clarify that gambling-related credit card advances are not per se presumptively nondischargeable, especially when incurred in the context of documented gambling disorder.  This is especially true as the credit card lenders that make on-line gambling possible are  hardly  innocent naifs,  but actually actively promoting this behavior. Mandatory Gambling Self-Exclusion in Credit Underwriting – Require financial institutions and credit bureaus to allow consumers to flag gambling transactions or block gaming-related merchant codes, similar to existing “voluntary credit freeze” mechanisms. Tax Revenue Earmarks – Dedicate a fixed percentage of sports-betting tax revenue to fund state treatment programs for gambling addiction and financial counseling. (Currently, many states allocate less than 1% of gaming taxes to addiction services.) CFPB Oversight – Direct the Consumer Financial Protection Bureau to study predatory lending practices tied to gambling losses, including the use of debt consolidation or cash-advance products marketed to problem gamblers. Maybe in 2029? Identifying and Helping Clients: For Attorneys: Consumer bankruptcy lawyers can expect to see more clients whose budgets crumble from gambling losses—but few will volunteer that information. Warning signs include: Unexplained cash withdrawals or “Venmo”-style transfers with sports-related notations.\ Frequent small transactions on debit/credit statements at odd hours. Missing paychecks or “mystery loans” from family or friends. Obsessive secrecy or shame around finances, often cloaked as “bad investing.” Gentle inquiry helps. Ask, “Do you use any betting apps or online gaming platforms?” rather than “Do you gamble?” The former sounds like routine intake; the latter sounds like judgment. For Existing Clients: Offer confidential referrals and normalize treatment as part of financial recovery—just as you would refer for credit counseling or mental-health care. Bankruptcy can be positioned not as failure but as the financial detox necessary to reclaim stability before relationships, housing, or hope are lost. Resources for Clients: Attorneys can provide these evidence-based and anonymous resources: National Council on Problem Gambling (NCPG): www.ncpgambling.org 24-hour helpline (1-800-522-4700) with chat and text support. Gamblers Anonymous: www.gamblersanonymous.org peer-support meetings nationwide and online. NC Problem Gambling Program: morethanagame.nc.gov free treatment and counseling for North Carolina residents. National Suicide Prevention Lifeline: 988 — critical if gambling losses have triggered despair or suicidal thoughts. Final Thoughts As gambling becomes as easy as scrolling a phone, the line between “sports fan” and “debtor” is blurring. This isn’t the old Vegas high-roller—it’s the Uber driver in Greensboro betting $10 parlays during lunch. Bankruptcy courts will increasingly see these debtors not as moral failures but as casualties of a legalized, algorithmic addiction. If the law’s purpose is a “fresh start,” it must evolve to recognize that some losses come not from vice, but from design. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document the_financial_consequences_of_legalized_sports_gambling.pdf (330.54 KB) Category Law Reviews & Studies

Facing the Loss of Your Home? Call Us for Help! If you have received a foreclosure summons, a notice of acceleration, or a foreclosure date from your lender, the Fort Worth bankruptcy attorneys at Allmand Law Firm, PLLC may be able to help. From the date the foreclosure notice is sent, you could have as little as three weeks to save your home. For this reason, you will need to act quickly. Ignoring foreclosure notices won’t make them go away. Similarly, falling further behind on your mortgage payments will only increase the risk of foreclosure. If you want to save your home, you should move quickly to secure the help of a skilled foreclosure defense lawyer. Contact Allmand Law Firm, PLLC today to request your free consultation. How Allmand Law Firm, PLLC Can Assist You Having helped tens of thousands of debtors throughout the Fort Worth area, Allmand Law Firm, PLLC has the skill, experience, and resources to help you fight the loss of your home. Whether you have already received a notice of foreclosure or you have started to fall behind on your mortgage payments, you can turn to us for the help you need. If you are facing foreclosure, our firm may be able to help you: Stop, halt, or prevent foreclosure proceedings End your mortgage on favorable terms Avoid potential tax liability from foreclosure Lessen unsecured debt while keeping your home Minimize the impact on your credit history Fight Foreclosure Through Chapter 13 Bankruptcy There are several different foreclosure defense methods, including short sales, deeds in lieu of foreclosure, and filing for Chapter 13 bankruptcy. Chapter 13 is one of the most popular methods of fighting foreclosure because it allows you to repay your mortgage arrears over three to five years. If you stay current on your mortgage and pay back your arrears by the end of your bankruptcy, you should be able to keep your home. Contact Our Board Certified Bankruptcy Expert If you are facing the loss of your home, Allmand Law Firm, PLLC should be your next call. During a free financial empowerment session, we’ll help you understand your options. How can you benefit from working with our team? We have helped tens of thousands of debtors in Texas We have more than two decades of collective experience Reed Allmand is a board certified bankruptcy specialist Our firm has been featured on CBS News, Fox News & ABC Take control of your finances by enlisting the help of our Fort Worth bankruptcy lawyers. We are not here to judge – we are here to help you toward a better future. The post Stop Foreclosure in Fort Worth, TX appeared first on Allmand Law Firm, PLLC.

Many debtors considering bankruptcy know they need a bankruptcy attorney; but they are afraid of what it will cost and of course how they will pay the fees. If you’re considering filing for bankruptcy and are worrying about how you will pay bankruptcy attorney fees, you’re not alone. To take away the mystery of bankruptcy attorney fees, let’s take a look a number of factors that will determine the cost of your bankruptcy attorney fees: The complexity of your bankruptcy case. The amount of time the bankruptcy attorney will be required to devote to the case. Whether you are filing a Chapter 7 or Chapter 13 bankruptcy. The amount of assets involved in the case. And those are just a few of the determining factor. That’s why there is no one-size fits all for bankruptcy attorney fees. The cost for filing a bankruptcy involving $1 million in assets will not cost the same as filing a bankruptcy for $30,000 in assets. The only way that a bankruptcy attorney can give a debtor an accurate fee quote is to sit down and discuss the bankruptcy case with the debtor. After discussing the bankruptcy case with the debtor, the bankruptcy attorney can discuss what assets can be used to pay the fees and other payment options that may be available. Many debtors view bankruptcy attorney fees as just another bill; but that’s a huge mistake in perception. The fees paid for a bankruptcy attorney is an investment in your financial future. The post I Know I Need A Bankruptcy Attorney–But I’m Afraid Of The Costs appeared first on Allmand Law Firm, PLLC.

Most debtors file for bankruptcy as a last ditch effort to dig themselves out of the hole when their debt troubles are just too much to handle. But often their last stop right before bankruptcy is debt settlement. There are a lot of companies out there that offer debtors the opportunity to settle their debts with creditors for “pennies on the dollar.” Sound too good to be true? Well, many debtors coming to bankruptcy court after going through “debt settlement” have found that at least in their case, it is too good to be true. What a lot of debt settlement companies fail to tell their customers is that debt settlement is risky and not guaranteed. The debt settlement companies require upfront fees; but they can’t guarantee the debtor that the creditor will accept the debt settlement offer. Many debtors go through debt settlement and still end up having to file bankruptcy because their creditors would not accept the debt settlement offer. The other problem with debt settlement is that many debtors, actually most debtors are not good candidates for debt settlement. The best candidates for debt settlement are people who have so much income and/or assets that bankruptcy is not a viable or easy option. These people can afford to pay debt settlement fees and can afford to pay for the taxes owed on the forgiven debt. Yes, debt settlement leaves a tax bill. Any debtor considering debt settlement should speak with a bankruptcy attorney first to find out if bankruptcy would be a better option. The post Debt Settlement Or Bankruptcy? appeared first on Allmand Law Firm, PLLC.

4th Cir.: All American Black Car Service, Inc. v. Gondal — Setoff, Ratification, and the Limits of Lay Testimony in Bankruptcy Litigation Ed Boltz Wed, 10/29/2025 - 17:54 Summary: In this unpublished October 15, 2025, decision, the Fourth Circuit affirmed the rulings of the Bankruptcy Court and the Eastern District of Virginia in a messy dispute arising from the dissolution of a small limousine company, All American Black Car Service, Inc. (“AABCS”). The case reads like a familiar tale of closely-held corporate dissolution gone awry—complete with COVID-era losses, unwritten understandings, and shareholder distrust—transposed into the bankruptcy context. Facts and Procedural History: AABCS had three shareholders: Cheema (51%) and two minority shareholders, Gondal and Sheiryar (each 24.5%), who also worked for the company. When the pandemic gutted revenue and the business ceased paying wages or distributions, the trio agreed to dissolve the corporation, liquidate assets, pay debts, and escrow the remainder for division. Between 2022 and 2023, Gondal and Sheiryar sold ten vehicles for $317,000, paid debts of $88,559.31, and then—contrary to the dissolution agreement—pocketed the remaining $228,000 instead of placing it in escrow. When Cheema revived the corporation in Chapter 11, AABCS filed an adversary proceeding demanding return of the funds and lost profits. At trial, the bankruptcy court (Judge Mayer, E.D. Va.) found Gondal and Sheiryar liable for conversion but granted them a setoff equal to their 49% ownership, reducing judgment to $116,504.76. The court also rejected their defenses of (1) unpaid wages and (2) corporate ratification, and denied AABCS’s request for speculative lost profits. Fourth Circuit’s Holding: The Fourth Circuit (Judges Wilkinson, Thacker, and Heytens) affirmed in full, finding “no reversible error” across four disputed issues: Exclusion of Wage Testimony: Sheiryar attempted to introduce a chart of “market wage rates” from ZipRecruiter and similar websites to justify unpaid compensation exceeding $228,000. The bankruptcy court properly excluded this as impermissible expert testimony, not a lay opinion under Rule 701, because it was based on third-party data—not personal experience. Without that evidence, his claim for unpaid wages failed. Rejection of Ratification Defense: The defendants argued that because the corporation’s 2022 tax return reported the $228,000 as “shareholder distributions,” AABCS had ratified their taking. The court disagreed, noting that the return merely confirmed that sales occurred and that Cheema, a non-lawyer and non-native English speaker, did not understand the legal implications of “ratification.” More importantly, the corporation immediately repudiated the act by suing within weeks. Denial of Lost Profit Damages: AABCS’s appeal on this point was deemed waived for failure to brief it adequately under Rule 28(a)(8)(A). The court noted that two conclusory sentences, without legal or factual citation, do not preserve an issue. Allowance of Setoff: The bankruptcy court’s decision to credit the defendants with their 49% ownership interest was equitable and consistent with Va. Code § 13.1-745(A), which allows distribution of remaining corporate assets after debts are settled. AABCS’s belated argument that Dexter-Portland Cement Co. v. Acme Supply Co., 147 Va. 758 (1926), barred such a setoff was both unpreserved and inapposite. Commentary: Though a relatively small dispute, All American Black Car Service underscores several recurring bankruptcy practice lessons: Lay vs. Expert Testimony: Debtors and insiders often try to shoehorn “market” or “customary” valuations or compensation estimates into lay testimony. The Fourth Circuit continues to enforce Rule 701 strictly—personal experience counts, but quoting internet averages does not. (Practitioners should note similar reasoning in Lord & Taylor, LLC v. White Flint, L.P., 849 F.3d 567 (4th Cir. 2017).) Ratification Requires Intent and Benefit: The decision usefully clarifies that mere bookkeeping or tax reporting—especially in closely held entities—does not establish ratification absent evidence that the corporation intended to approve or benefited from the unauthorized act. Setoff as Equity: Even where insiders misappropriate funds, bankruptcy courts retain equitable discretion to account for ownership interests. This serves as a reminder that bankruptcy courts are courts of equity—but also of accounting, where the math still matters. Appellate Waiver: The Fourth Circuit remains unforgiving toward poorly briefed issues. Two sentences without citations? Waived. While this case originates from Virginia, its reasoning resonates for North Carolina practitioners navigating disputes among small business owners who treat their corporations like joint checking accounts. The equitable setoff here—essentially forgiving nearly half of an admitted conversion—illustrates how bankruptcy courts temper legal rights with pragmatic fairness. For debtor’s counsel, the takeaway is that “what’s fair” may still include a reduction for equity, even when fiduciary misconduct is proven. For creditors or majority owners, it’s another reason to escrow first and trust last. Practice Pointer: For bankruptcy litigators dealing with dissolved entities or partner disputes: Document dissolution and winding-up agreements carefully—preferably with court approval if bankruptcy looms. Distinguish clearly between shareholder distributions, wages, and loan repayments in corporate records to avoid later “setoff” surprises. If asserting unpaid wages or insider compensation, support it with contemporaneous records or testimony grounded in firsthand experience, not online data. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document all_american_black_car_service_inc._v._gondal.pdf (139.12 KB) Category 4th Circuit Court of Appeals

N.C. Ct. App.: Harrington v. Laney — Quiet Title Claim Barred by Statute of Limitations Ed Boltz Mon, 10/27/2025 - 18:49 Summary: In Harrington v. Laney (COA24-1071, filed October 15, 2025), Chief Judge Dillon, joined by Judges Murry and Freeman, reversed a Superior Court verdict that had invalidated a deed executed under a power of attorney, holding instead that the plaintiff’s claims were barred by the statute of limitations. Facts and Background: The dispute centered on a family property in Anson County. In June 2016, the plaintiff’s elderly parents executed a power of attorney (“POA”) naming defendant Curtis Laney and a now-deceased co-agent. Acting under that POA, Laney conveyed the parents’ property to himself, later reconveyed it to the plaintiff’s mother, and then executed a 2018 deed giving himself and his wife a remainder interest. When the mother died in 2019, the Laneys became owners of the property. The plaintiff, Robert Harrington, waited until September 2022 to bring a quiet title action, arguing that the POA was void because his mother lacked capacity and the document had been fraudulently obtained. The jury agreed and voided the deeds, but the Court of Appeals reversed. Holding and Reasoning: The Court agreed with the defendants that the applicable limitations period was three years under N.C. Gen. Stat. § 1-52(1) or (9), since the claim “at its core” challenged the validity of a contract—the 2016 POA. Whether the cause of action accrued in 2016 (when the POA was executed) or in 2019 (when title passed under the challenged deed), Harrington filed too late by 2022. The Court rejected arguments that longer limitation periods under §§ 1-38 (possession under color of title) or 1-47 (validity of deeds) applied, emphasizing that this was not a title-possession or deed-recording issue but a contract dispute over authority. Harrington also sought to invoke the “survivor statute,” § 1-22, to toll the limitations period based on his mother’s incapacity before death and his own alleged incapacity thereafter. The Court noted that any representative of his mother’s estate—not just her heir—could have timely brought a claim within one year after her death, but no one did so by June 2020. The suit filed in 2022 was therefore barred. Because the case was resolved on statute-of-limitations grounds, the Court did not reach the remaining issues regarding jury instructions or laches. Commentary: This decision is a textbook example of how North Carolina appellate courts treat disputes over powers of attorney as contract-based actions for purposes of the statute of limitations. Following O’Neal v. O’Neal, 254 N.C. App. 309 (2017), the Court emphasized there is “little reason to draw distinctions between powers of attorney and contracts.” That framing makes the three-year statute under § 1-52(1) controlling, even when the plaintiff’s complaint is styled as one to “quiet title.” For practitioners, Harrington reinforces two lessons: Timing is everything — Claims attacking a power of attorney or self-dealing conveyances must be filed within three years of execution (or at most within one year after the principal’s death under § 1-22). Waiting to challenge such transactions until after probate or subsequent conveyances will likely be fatal. Quiet title ≠ limitless claim — Even though actions under N.C.G.S. § 41-10 have no specific statute of limitations, the underlying theory controls. Where the “quiet title” claim depends on attacking an earlier contract, courts will apply the contract limitations period. While Harrington is an unpublished opinion, it is a useful reminder that North Carolina limitation periods can sharply constrain later challenges to allegedly fraudulent or self-interested conveyances, even within families. Had this dispute instead arisen in bankruptcy (for example, if Harrington had later filed Chapter 7 or 13 and sought to recover the property for the estate), the trustee would likely face the same three-year state-law bar unless federal avoidance statutes (such as § 548 or § 544(b)) extended the lookback period. Practice Pointer: When reviewing prepetition transfers involving family powers of attorney, counsel should determine when the challenged transaction occurred and whether any surviving representative acted within the § 1-22 one-year window. Otherwise, even the most egregious self-dealing may be time-barred. To read a copy of the transcript, please see: Blog comments Attachment Document harrington_v._laney.pdf (94.77 KB) Category NC Business Court

Bankr. E.D.N.C.: Travis v. Adair Realty – Standing Restored After Dismissal; Foreclosure “Rescue” Claims Proceed Despite Omissions in Chapter 13 Petition Ed Boltz Fri, 10/24/2025 - 15:34 Summary: In Travis v. Adair Realty Group, LLC, Adv. Pro. No. 25-00040-5-PWM (Bankr. E.D.N.C. Oct. 8, 2025), Judge Pamela McAfee denied motions to dismiss filed by both the Chapter 7 trustee for Adair Realty Group (“ARG”) and its principal, Robin Shea Adair. The opinion clarifies two key issues for consumer bankruptcy practitioners: (1) when a debtor retains standing to pursue undisclosed claims after a dismissed Chapter 13 case, and (2) how North Carolina’s “foreclosure rescue” statutes can impose personal liability on individuals behind such schemes. Background: Melissa Travis—formerly known as Melissa Leigh Marek—purchased her Holly Springs home in 2015. After defaulting on her mortgage, she contacted Robin Adair, who promoted himself online as a professional who could “help homeowners avoid foreclosure.” In December 2022, Adair met Travis at a UPS Store, where she signed a quitclaim deed conveying a 50% interest in her home to Adair’s company, Adair Realty Group, LLC, in exchange for promises to reinstate her mortgage ($29,344.62), invest $10,000 in repairs, and split sale proceeds once the home was sold. Adair never made the promised reinstatement payment and allowed the foreclosure to proceed in January 2023. On January 12, 2023, Travis filed a Chapter 13 case (No. 23-00091-5-PWM) to halt the foreclosure. That case was dismissed without discharge on March 11, 2024. Critically, her bankruptcy petition failed to disclose both the December 2022 property transfer and any potential claim against Adair or ARG—neither appearing on Schedule A/B nor in her Statement of Financial Affairs. Despite the bankruptcy filing, Adair recorded the deed post-petition. When the property was later sold for $400,050, the surplus proceeds of $155,429.58 were split, with ARG receiving half. Travis then sued Adair and ARG in Wake County Superior Court under N.C. Gen. Stat. §§ 75-1.1 and 75-121 (the “foreclosure rescue” statutes), seeking to void the deed and recover damages. ARG’s subsequent Chapter 7 filing brought the case into bankruptcy court. Chapter 7 Trustee’s Motion – Standing After Dismissed Chapter 13: The Chapter 7 trustee for ARG argued that Travis lacked standing because her claims were property of her prior Chapter 13 estate and had never been disclosed or abandoned. Judge McAfee rejected that argument, adopting the Second Circuit’s reasoning in Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473 (2d Cir. 2014). Under 11 U.S.C. § 349(b), dismissal “revests the property of the estate in the entity in which such property was vested immediately before the commencement of the case,” including unscheduled assets. Unlike a closed Chapter 7 case, dismissal of a Chapter 13 terminates the estate entirely, restoring the parties to their pre-petition positions and leaving no property in custodia legis. Thus, even though Travis failed to disclose these claims, her right to pursue them reverted to her upon dismissal. Adair’s Motion – Jurisdiction and Personal Liability: Adair argued that the bankruptcy court lacked jurisdiction over claims against him personally and that any recovery would require piercing ARG’s corporate veil. The Court found “related-to” jurisdiction under In re Celotex Corp., 124 F.3d 619 (4th Cir. 1997), because any judgment against Adair would reduce Travis’s claim against the debtor estate. The Court further held that Travis alleged Adair’s direct participation in a “foreclosure rescue transaction,” which under N.C. Gen. Stat. § 75-121(a) makes “any person or entity” personally liable for engaging in or promoting such conduct. No veil-piercing was required. Claims Surviving Dismissal of Chapter 13: Unfair & Deceptive Trade Practices (N.C. Gen. Stat. §§ 75-1.1 and 75-121): Survives. The statute expressly prohibits foreclosure-rescue conduct, whether or not the transaction was “isolated.” Fraud: Survives. The amended complaint met Rule 9(b)’s particularity standard, detailing the misrepresentations, timing, and resulting injury. Unjust Enrichment: Dismissed with leave to amend, as the benefit was alleged to have gone to ARG, not Adair personally. Commentary: Judge McAfee’s decision is significant for consumer practitioners. It reinforces that dismissal of a Chapter 13 case generally fully restores ownership of undisclosed claims to the debtor, preventing trustees from later asserting control. And it underscores that foreclosure-rescue statutes have real teeth, exposing individuals—not just their LL Cs—to personal liability. Professional Responsibility Note – Counsel’s Role in the Omission: While the Court’s opinion did not directly address the performance of Travis’s prior bankruptcy counsel, the undisputed record raises a natural question: Should her former attorney have identified and disclosed these potential claims or the prepetition deed transfer? The December 2022 transfer of a partial ownership interest, coupled with alleged misrepresentations by Adair, occurred weeks before the January 2023 bankruptcy filing. Under Rule 1007(b)(1) and Schedule A/B, such a transfer and any related contingent claims were required to be disclosed. Even if Travis did not fully appreciate the legal significance of the “foreclosure rescue” transaction, counsel arguably had a duty of reasonable inquiry under Fed. R. Bankr. P. 9011(b) to investigate any prepetition transfers or disputes. That said, Judge McAfee’s application of Crawford spared both the debtor and her counsel the harsher consequence of a standing dismissal or judicial-estoppel bar—holding that dismissal of the Chapter 13 case “rewinds the clock.” Still, Travis serves as a quiet reminder that thorough intake and disclosure are the best defenses: even “rescues” gone wrong should be treated as potential litigation assets and properly listed. For debtor’s counsel, however, the case carries a cautionary undertone: the best outcome is still to disclose everything. Had Travis’s prior case resulted in discharge rather than dismissal, the omission could have proven fatal. To read a copy of the transcript, please see: Blog comments Attachment Document travis_v._adair_realty.pdf (186.11 KB) Category Eastern District

If you are behind on mortgage payments and foreclosure proceedings have started, you may be at risk of losing your house surprisingly fast.  How you respond and what you do next is vital. Before answering the notice, talk to a lawyer.  There may be mistakes or problems with the notice that you can challenge, but more importantly, you might have options to help you before you even respond to their notice.  What you do next could be the difference between keeping your house and not. For help, call Young, Marr, Mallis & Associates for a free case review with our NJ mortgage foreclosure defense lawyers at (609) 755-3115. Call a Foreclosure Defense Lawyer Before Responding When you initially get a Notice of Intent to Foreclose (NOI), this tells you that the lender is ready to act against you.  It has a limited time for you to reply before they actually file for foreclosure against you.  That quick time limit might make you want to reply and get things over with, but always call a lawyer first. Having an attorney on your side from the beginning can help set you up for challenges and actions that might take some time to put into motion.  If you wait until after your reply, it can be harder to change course. The Process of Replying to Foreclosure Notices There are actually two different notices you will receive, each of which requires some kind of response or action on your part: Notice of Intent to Foreclose Once you are behind on your mortgage payments, usually by 3 months, the lender will send you an NOI.  This notifies you that they are going to foreclose if things don’t turn around. This notice has to include the reasons they want to foreclose, how much you need to pay to get back on track, some information about your current equity in the property, and your options and resources available. Response At this stage, your main options are to… Let them move forward Pay off the debt Come up with a payment plan to get you back on track Request mediation File for bankruptcy, which might pause foreclosures And more. Talk to a lawyer about your options.  If paying a bit extra to get back on track is an option, you may be able to work things out with the mortgage company and avoid foreclosure. You only get 30 days to act before the lender moves on to filing official proceedings. Foreclosure Complaint When a complaint is filed with the Office of Foreclosure, the foreclosure process has officially started.  At this point, you are the actual defendant in court proceedings and should have a lawyer. You can, again, allow the foreclosure to go through, but your better option is to contest the foreclosure if there are problems with the process or if the lender made mistakes in administering your mortgage. You may also be able to file for bankruptcy, pausing any collection and foreclosure efforts. Answer Your legal filing in response is called an answer.  In this document, your NJ mortgage foreclosure defense lawyer will explain any legal arguments against the foreclosure, such as discrimination, improper notice, or mistakes in identifying the proper borrower. You get 35 days to file an answer, so do not delay in calling a lawyer. What Do I Say to the Mortgage Lender? Do not talk to your mortgage lender on your own if they have started the foreclosure process against you.  Always consult with a lawyer about your options first before trying to handle any of these legal processes. If you are going to handle things on your own, do not make any promises you cannot follow through on, or else you might lose out on later opportunities to correct or cure your back payments if the mortgage company stops trusting you. Can I Stop Foreclosure? If you are able to make up the back payments, payment plans are often accepted.  It is typically harder and more expensive for mortgage companies to go through foreclosure than it is to simply give you a couple of extra months to catch up. In any case, mortgage companies are not afraid to go through with foreclosure when they need to, so you should have a lawyer on your side. FA Qs on Responding to Mortgage Foreclosure What is the Foreclosure Process? After you have received a Notice of Intent to Foreclose, you need to respond and make new arrangements, or else face a formal Foreclosure Complaint.  From there, you get time to give an answer, and the case can proceed to hearings and decisions. There are many options you have in the middle to negotiate, file counterclaims, and seek help from an attorney. Can I Stop Foreclosure? If you respond quickly and have a plan in place, foreclosures can often be stopped after a NOI is sent.  If you are unable to financially handle ongoing payments, bankruptcy might also help protect you or delay foreclosures. Sometimes there is no way to stop the process, but you still have rights that need to be protected, and we may be able to force the mortgage company to follow every step of the process while you work up the financial power to get your mortgage back on track. Do I Need a Lawyer? You may be thinking that a lawyer is too expensive if you are in financial trouble and can’t afford your mortgage.  However, foreclosure defense is incredibly important, and getting a lawyer can mean the difference between the mortgage company taking your house and a well-negotiated plan that lets you keep your home moving forward. How Long Do I Have to Answer a Foreclosure Notice? After a Notice of Intent to Foreclose is filed, the lender needs to wait 30 days for your response before they can file the Foreclosure Complaint.  You have 35 days to provide an answer to a Foreclosure Complaint. What Are My Options in Foreclosure? Foreclosure cases often have a lot of options, and what is best for your case will depend on your situation.  You can let them foreclosure or pay off the debt, but options somewhere in between – such as a renegotiated payment plan – are often the best option. Can Bankruptcy Stop Foreclosure? Filing for bankruptcy gives you an automatic stay, which can halt collection attempts against you.  This can typically halt foreclosure in its tracks and give you breathing room on your debt. However, bankruptcy is not appropriate for everyone.  If you are just behind because of temporary issues and will be able to recover, you may be best setting up a payment plan or renegotiating the terms of your mortgage with the help of a lawyer. Call Our NJ Mortgage Foreclosure Defense Lawyers Today For a free case review, call our Trenton, NJ mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates at (609) 755-3115.

Bankr. W.D.N.C.: In re Joiner – §1111(b) Election Survives Subchapter V Lien Modification Rights Ed Boltz Thu, 10/23/2025 - 17:56 Summary: In In re Joiner, Case No. 25-30396 (Bankr. W.D.N.C. Oct. 2 2025) (Judge Ashley Austin Edwards), the court addressed the intersection between Subchapter V’s debtor-friendly lien modification authority under § 1190(3) and a creditor’s long-standing right under § 1111(b)(2) to elect to have an undersecured claim treated as fully secured. Facts: Joseph and Krista Joiner filed under Subchapter V, personally guaranteeing a $1 million SBA-backed business loan from Pinnacle Bank that was also secured by their Charlotte residence. Pinnacle filed a proof of claim for roughly $1.2 million, asserting a secured portion of $463,768 based on an $805,000 appraisal, after accounting for a senior Truist lien of $341,000. When Pinnacle elected under § 1111(b)(2) to treat its entire claim as secured, the Joiners objected, arguing that § 1190(3) — which allows an individual Subchapter V debtor to modify a lien on a principal residence if the loan proceeds were primarily used for the small business — took precedence and rendered § 1111(b) inapplicable. Pinnacle countered that § 1111(b) applies in all Chapter 11 cases, that § 1181(a) lists the provisions inapplicable to Subchapter V and does not exclude § 1111, and that Congress intended both sections to coexist. Holding: Judge Edwards overruled the debtors’ objection, holding that § 1190(3) does not override a creditor’s right to make a § 1111(b) election. Citing Collier on Bankruptcy and In re VP Williams Trans, LLC, 2020 WL 5806507 (Bankr. S.D.N.Y. Sept. 29 2020), the court emphasized that § 1181(a)’s silence regarding § 1111 indicates Congress meant for the election to remain available in Subchapter V cases. The court also noted that Pinnacle’s loan might not even qualify under § 1190(3), as it appeared secured by more than just the residence. Commentary: This decision marks the first published Western District of North Carolina ruling squarely addressing whether an individual Subchapter V debtor’s new lien-modification power can negate an undersecured creditor’s § 1111(b) rights — and answers “no.” The reasoning mirrors traditional Chapter 11 practice: § 1111(b) protects secured creditors from undervaluation risk by allowing them to receive payments equal to their total claim, while § 1190(3) merely expands which claims a Subchapter V debtor may modify. Judge Edwards viewed the two provisions as co-existing, not conflicting — much as §§ 1123(b)(5) and 1111(b) have co-existed since 1978. Practice Pointer: For Subchapter V debtor’s counsel, this means that even when § 1190(3) allows modification of a lien on a principal residence, an undersecured creditor can still invoke § 1111(b) and require the plan to treat its full claim as secured. That can substantially increase plan payment obligations and alter feasibility calculations. Before proposing a § 1190(3) modification, counsel should: Confirm collateral scope. If the loan is secured by more than the residence, § 1190(3) may not apply at all. Anticipate § 1111(b) elections. Run feasibility models assuming full-claim treatment. Negotiate or value early. Early stipulations or agreed valuations can mitigate post-election surprises. For creditors, Joiner reaffirms that the § 1111(b) election remains a powerful tool—even in the more debtor-friendly confines of Subchapter V. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_joiner.pdf (253.34 KB) Category Western District

W.D.N.C.: Shaf International v. Mohammed – Only the Receiver Can Ride This Motorcycle Ed Boltz Wed, 10/22/2025 - 16:33 Summary: In Shaf International, Inc. v. Mohammed (W.D.N.C. Sept. 22, 2025), Judge Reidinger affirmed the Bankruptcy Court’s grant of summary judgment to the debtor, holding that a single creditor lacks standing to assert fiduciary duty claims against the officer of an insolvent corporation where the injury alleged is common to all creditors. Background: Shaf International sold motorcycle gear to Jafrum International, a company owned and operated by debtor Jaffer Sait Mohammed, who personally guaranteed the corporate debt. When Jafrum collapsed, it sold its inventory to an affiliate of Vance Leathers, a Florida company, for $436,000—satisfying Vance’s $311,000 debt and leaving other creditors, including Shaf, unpaid. Shaf later obtained a $661,239 judgment in New Jersey and then sued Mohammed in an adversary proceeding, alleging “constructive fraud while acting in a fiduciary capacity” and “willful and malicious injury,” asserting that he diverted assets and favored one creditor over others. The Court’s Holding: The District Court agreed with both the Bankruptcy Court and long-settled North Carolina law that fiduciary duties of corporate officers run to the corporation itself, not to individual creditors—unless the injury is “peculiar or personal” to that creditor. Where multiple creditors share the same injury—here, the debtor’s alleged preference for one creditor over the rest—only a receiver, trustee, or derivative action on behalf of all creditors has standing. Shaf’s arguments that its judgment and large claim size made it unique fell flat: the court noted that a judgment creditor is still an unsecured creditor of the same class as others, and “being the largest” does not confer exclusivity. Similarly, Shaf’s claim that the debtor’s post-sale employment with his wife’s company (which later did business with the buyer) was a form of self-dealing failed both factually and legally, as any resulting injury again would have been suffered equally by all creditors. Practice Pointer: This case reaffirms that individual creditors cannot repackage collective injuries into personal claims simply by invoking fiduciary language or alleging bad faith. Where a debtor-officer allegedly strips or favors assets in the wind-down of an insolvent corporation, only a receiver, trustee, or derivative plaintiff acting for all creditors may bring a fiduciary breach or constructive fraud action. For creditor’s counsel, this underscores two key points: Preserve corporate claims early—consider seeking appointment of a receiver or filing an involuntary bankruptcy before assets vanish. Don’t mistake nondischargeability for standing—even if a debt might fit §523(a)(4) or (a)(6), the underlying claim must still be one the creditor can legally bring. And for debtors’ counsel: when closing a business, ensure any payments to insiders or favored creditors are scrupulously documented and defensible—because while individual creditors can’t sue, the trustee (or a vigilant receiver) certainly can. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document shaf_international_v._mohammed.pdf (242.34 KB) Category Western District