Chapter 13 Bankruptcy – Payroll Control In some jurisdictions, payroll control is mandatory.  This is where the money to pay your Chapter 13 trustee is deducted by court order out of your pay.  Now, payroll control can only work if you have a job.  If you are self-employed, or if you are on unemployment, if+ Read MoreThe post Do I have to go on payroll control for Chapter 13? appeared first on David M. Siegel.

After the PACER  and CM/ECF outage on Friday January 24, I asked the PACER service center if they had any comment.   They were kind enough to respond on January 27.   Here is the latest information: On Friday January 24th, PACER and a number of other federal judiciary web sites, experienced a denial of service attack.  The attack resulted in a loss of service for about four hours Friday afternoon. No judiciary records were compromised during the attack. Because the Electronic Case Filing system was not operational in some courts during this period, attorneys should contact their local courts with regard to any filing deadline issues that may have arisen. According to Wikipedia, a denial of service attack is "an attempt to make a machine or network resource unavailable to its intended users."    Wikipedia further explained that:One common method of attack involves saturating the target machine with external communications requests, so much so that it cannot respond to legitimate traffic, or responds so slowly as to be rendered essentially unavailable. Such attacks usually lead to a server overload. In general terms, DoS attacks are implemented by either forcing the targeted computer(s) to reset, or consuming its resources so that it can no longer provide its intended service or obstructing the communication media between the intended users and the victim so that they can no longer communicate adequately.According to Z Dnet.com, a group calling itself the European Cyber Army has claimed responsibility.   The Z Dnet.com article also suggested that the system could have gone down due to a technical glitch instead.    So at this time, we have two possibilities for what might have happened and one potential culprit but no motive so far.   

The Code Dictates The bankruptcy code is what governs every issue of a bankruptcy filing. Under chapter 7 bankruptcy law, the bankruptcy code dictates as to what must be done with regard to particular, secured property. For example, if you have a financed vehicle in a chapter 7 bankruptcy case, the bankruptcy code mandates that+ Read MoreThe post In My Bankruptcy Case, Why Do I Need To Reaffirm On A Car But Not On My House? appeared first on David M. Siegel.

If you file bankruptcy with an attorney, you’re going to get assistance throughout the process. Your attorney is going to know exactly what needs to be done with your case. This all starts with the very first consultation. The attorney is going to be able to interview you, advise you, and notify you of potential+ Read MoreThe post What Are The Advantages Of Filing Bankruptcy With An Attorney? appeared first on David M. Siegel.

By James B. StewartAnyone who wonders why law school applications are plunging and there’swidespread malaise in many big law firms might consider the case of Gregory M.Owens.The silver-haired, distinguished-looking Mr. Owens would seem theembodiment of a successful Wall Street lawyer. A graduate of Denison Universityand Vanderbilt Law School, Mr. Owens moved to New York City and was named apartner at the then old-line law firm of Dewey, Ballantine, Bushby, Palmer &Wood, and after a merger, at Dewey & LeBoeuf.Today, Mr. Owens, 55, is a partner at an even more eminent global law firm,White & Case. A partnership there or any of the major firms collectively known as“Big Law” was long regarded as the brass ring of the profession, a virtualguarantee of lifelong prosperity and job security.But on New Year’s Eve, Mr. Owens filed for personal bankruptcy.According to his petition, he had $400 in his checking account and $400 insavings. He lives in a rental apartment at 151st Street and Broadway. He ownsclothing he estimated was worth $900 and his only jewelry is a Concord watch,which he described as “broken.”Mr. Owens is an extreme but vivid illustration of the economic factors roilingthe legal profession, although his straits are in some ways unique to his personalsituation.The bulk of his potential liabilities stem from claims related to the collapse ofDewey & LeBoeuf, which filed for bankruptcy protection in 2012. Even strippingthose away, his financial circumstances seem dire. Legal fees from a divorcedepleted his savings and resulted in a settlement under which he pays his formerwife a steep $10,517 a month in alimony and support for their 11-year-old son.But in other ways, Mr. Owens’s situation is all too emblematic of pressuresfacing many partners at big law firms. After Dewey & LeBoeuf collapsed, Mr.Owens seemingly landed on his feet as a partner at White & Case. But he was a fullequity partner at Dewey, Ballantine and Dewey & LeBoeuf. At White & Case, hewas demoted to nonequity or “service” partner — a practice now so widespread ithas a name, “de-equitization.”Nonequity partners like Mr. Owens are not really partners, but employees,since they do not share the risks and rewards of the firm’s practice. Servicepartners typically have no clients they can claim as their own and depend onrainmakers to feed them. In Mr. Owens’s case, his mentor and protector has longbeen Morton A. Pierce, a noted mergers and acquisitions specialist and prodigiousrainmaker whom Mr. Owens followed from the former Reid & Priest to Dewey,Ballantine to Dewey & LeBoeuf and then to White & Case.“It’s sad to hear about this fellow, but he’s not alone in being in jeopardy,”said Thomas S. Clay, an expert on law firm management and a principal at theconsulting firm Altman Weil, which advises many large law firms. “For the past 40years, you could just be a partner in a firm, do good work, coast, keep your noseclean, and you’d have a very nice career. That’s gone.”Mr. Clay noted that there was a looming glut of service partners at majorfirms. At the end of 2012, he said, 84 percent of the largest 200 law firms, asranked by the trade publication American Lawyer, had a class of nonequity orservice partners, 20 percent more than in 2000. And the number of nonequitypartners has swelled because firms have been reluctant to confront the reality that,in many cases, “they’re not economically viable,” Mr. Clay said.Scott A. Westfahl, professor of practice and director of executive education atHarvard Law School, agreed that service partners faced mounting pressures.“Service partners need a deep expertise that’s hard to find anywhere else,” he said.“Even then, when demand changes, and your specialty is no longer hot, you’re introuble. There’s no job security.” He added that even full equity partners werefeeling similar pressures as clients demanded more accountability. “Partners arebeing de-equitized,” he said, as Mr. Owens was. “That’s a trend.”Mr. Owens specializes in financing and debt structuring in mergers andacquisitions, a relatively narrow expertise where demand rises and falls with thevolume of merger and acquisition deals that his mentors generate. Formercolleagues (none of whom would speak for attribution) uniformly described him asa highly competent lawyer in his specialty and, as several put it, “a lovely person”who relishes spending time with his son. But he does not seem to be the kind ofalpha male — or female — who can generate revenue, bring in clients and aregenerally prized by large law firms.At Dewey & LeBoeuf, Mr. Owens’s name was perennially among a group ofpartners who were not making enough revenue to cover their salaries andoverhead, according to two former partners at the firm. But each time, thepowerful Mr. Pierce, then the firm’s vice chairman, protected Mr. Owens, theysaid.“He was very good at what he knew,” a former Dewey & LeBoeuf partner said.“But he wasn’t built to adapt. To make it as a law firm partner today, you have toperiodically reinvent yourself.”As partners were leaving Dewey & LeBoeuf in droves as it neared bankruptcyin 2012, Mr. Pierce went to White & Case. Mr. Owens followed, but this time as asalaried lawyer, not an equity partner, even though he has the title of partner.A spokesman for White & Case said Mr. Owens and Mr. Pierce had nocomment. Neither did the firm.Mr. Owens has been well paid by most standards, but not compared with toppartners at major firms, who make in the millions. (Mr. Pierce was guaranteed $8million a year at Dewey & LeBoeuf.) When Mr. Owens first became a partner atDewey, Ballantine, he made about $250,000, in line with other new partners. AtDewey & LeBoeuf, his income peaked at over $500,000 during the flush yearsbefore the financial crisis. In 2012, he made $351,000, and last year, while atWhite & Case, he made $356,500. He listed his current monthly income as$31,500, or $375,000 a year. And he has just over $1 million in retirementaccounts that are protected from creditors in bankruptcy.How far does $375,000 a year go in New York City? Strip out estimatedincome taxes ($7,500 a month), domestic support ($10,517), insurance ($2,311), amandatory contribution to his retirement plan ($5,900), and routine expenses forrent ($2,460 a month) transportation ($550) and food ($650) and Mr. Owensestimated that he was running a small monthly deficit of $52, according to hisbankruptcy petition. He has gone back to court to get some relief from his divorcesettlement, so far without any success.In his petition, Mr. Owens said he didn’t expect things to get any better in2014.And they could get worse. The most recent deal on White & Case’s website inwhich Mr. Owens played a role was the relatively modest $392 million acquisitionof the women’s clothing retailer Talbots by Sycamore Partners, in which Mr.Owens (working with Mr. Pierce) represented Talbots. That deal was announced inMay 2012. The White & Case spokesman did not provide any examples of morerecent deals.“In almost any other context, $375,000 would be a lot of money,” saidWilliam Henderson, a professor at the Indiana University School of Law and adirector of the Center on the Global Legal Profession. “But anyone who doesn’thave clients is in a precarious position. For the last 40 years, all firms had to dowas answer the phone from clients and lease more office space. That run is over.The forest has been depleted, as we say, and firms are competing for market share.Law firms are in a period of consolidation and, initially, it’s going to take place atthe service partner level. There’s too much capacity.” He added that law firmassociates and summer associates had also suffered significant cuts, which hasculled the ranks of future partners.All this “has had a huge effect on law school enrollment,” ProfessorHenderson said.Mr. Clay, the consultant, said many firms had been slow to confront thereality that successful service partners were probably going to need to work morehours than rainmakers, not fewer, to justify their mid- to high-six-figure salaries.Many of them “seem to have felt they had a sinecure,” Mr. Clay said. “They’re wellpaid, didn’t have to work too hard, they had a nice office, prestige. It’s a nice life.That’s O.K., except it’s not the kind of professional life that will do much for a firm.These nonequity positions were never meant to be a safe place to rest and notwork as hard as everyone else.”And these lawyers may have to give up the pretense that they’re law firmpartners. In his bankruptcy petition, Mr. Owens describes himself as a “contractattorney,” which has the virtue of candor.“From a prestige standpoint, being called a partner is something that’s veryimportant to people,” Mr. Westfahl observed. “Lawyers tend to be verycompetitive, and like all people, titles and status matter. But to the outside world,where people think all partners are equal, it’s deceptive. And inside the firm,everyone knows the real pecking order. When people see that partners are treateddisparately, it causes unnecessary dissonance and personal frustration.”Copyright 2014 The New York Times Company.  All rights reserved.

I’m Northern Virginia bankruptcy lawyer Robert Weed.  I want to talk to you about using Chapter 13 bankruptcy to stop foreclosure in Virginia. Before the housing crisis, Chapter 13 bankruptcy was the best way to stop foreclosure in Virginia.  Today, a lot of the time, getting a loan modification is a better way to stop […]The post Stop foreclosure in Virginia with Chapter 13 Bankruptcy appeared first on Robert Weed.

Most income taxes cannot be discharged in bankruptcy, but some can. To find out whether yours can, your lawyer will need your tax account transcript.  The IRS makes these available now on line.  You can download yours here. Why do you need that?  Your lawyer can use your account transcript to see if your taxes […]The post Before bankruptcy: Getting your tax account transcripts appeared first on Robert Weed.

The Statement of Current Monthly Income is used by judges to determine if your income level raises the question of abuse of the bankruptcy laws. Part of the responsibility of the judge in a bankruptcy case is to ensure that debtors do not abuse the bankruptcy laws and avoid paying debts by filing bankruptcy when they have the means to pay. Prior to 2005, this determination was made at the discretion of judges. After new bankruptcy laws were passed in 2005, judges are no longer able to use their discretion, but instead follow the formulas outlined in the law to determine if there is abuse. The Statement of Current Monthly Income provides this information to the judge.The post The Statement of Current Monthly Income and Your Bankruptcy Plan appeared first on Tucson Bankruptcy Attorney.

On Friday January 24, 2014, attorneys trying to access the federal courts' electronic records and filing systems were unable to get through for almost four hours.   While occasional local outages for maintenance or technical problems are not unknown, there is some reason to believe that the PACER and ECF systems for the entire federal court system were taken down by hackers.   This raises questions of who was behind the hack and why they targeted the federal court system.Here is what I have been able to piece together.   At approximately 2:45 p.m. CST, I attempted to access both the Western District of Texas and Southern District of Texas Bankruptcy PACER sites to look up some filings.   I received a message stating that the website was not available and to check whether I had spelled it right.  After multiple tries, I was not able to get through.At 2:54 p.m. CST, I received an email from the Northern District of Georgia Bankruptcy Court stating:Initial reports are indicating that a Hacker group is impacting PACER access for all U. S. Courts.  Another email will be sent when full access has been restored.At 3:33 p.m. CST, I received an email from the Western District of Texas Bankruptcy Court stating:The Case Management / Electronic Case Files System and the court website for the U. S. Bankruptcy Court of the Western District of Texas is currently UNAVAILABLE due to a network problem at the national level.  The problem is being worked on.  You will be notified when it is once again available.We apologize for the inconvenience.As the afternoon wore on, various other reports came in.   However, other than the initial report from the Northern District of Georgia, none mentioned the specter of hacking.At 6:34 p.m. CST, I received a notification of a filing by another attorney.   Thus, it looks like the system was down from approximately 2:45 p.m. to 6:30 p.m. CST, an outage of nearly four hours.As of this morning, the website for the U.S. Courts did not have any explanation for the outage, although it did feature a story entitled "Working Group Seeks Ways to Pull Plug on Cybercrime."   Back in 2009, Wire.com reported that hackers had engineered a way to go around PACER's pay wall and get documents without payment.  However, I was not able to find any reliable reports of prior hacking attacks on both PACER and ECF.   Having been mildly inconvenienced and perturbed by this possible hacking incident, I am curious at to whether we will learn more about what happened.   Who was behind this?   What was their motive?   Was this done by someone with a grudge against the court system or was it simply a case of teens with too much time on their hands?   From what I can surmise, this was simply a denial of service attack and not an attempt to access and manipulate PACER or ECF data.   However, this should be a warning to the administrative office of the courts that someone could attempt a more audacious attack in the future.   That would be bad.To the person or persons who did this, with apologies to Pink Floyd:We don't need no electronic frustrationWe don't need no nasty trollNo dark sarcasm on the internet Hey hackers, leave CM/ECF alone!

Reasons To File Bankruptcy People hesitate to file bankruptcy for a variety of reasons.  The first is the name bankruptcy has a negative connotation which has been around for centuries.  The truth is bankruptcy was put in place to help people who are struggling financially.  Bankruptcy is not a scarlet letter that someone has to+ Read MoreThe post Why Do People Hesitate To File Bankruptcy? appeared first on David M. Siegel.