By MARY WILLIAMS WALSH Retired police and firefighters from Central Falls, R.I., have agreed to sharp pension cuts, a step thought to be unprecedented in municipal bankruptcy and one that could prompt similar attempts by other distressed governments. If approved by the bankruptcy court, the agreement could be groundbreaking, said Matthew J. McGowan, the lawyer representing the retirees. “This is the first time there’s been an agreement of the police and firefighters of any city or town to take the cut,” he said, referring to those already retired, who are typically spared when union contracts change. “I’ve told these guys they’re like the canary in the coal mine. I know that there are other places watching this.” As cities, towns and counties struggle with fiscal pain, there has been speculation that they could shed their pension obligations in bankruptcy. Some have said it might, in fact, be easier for local governments to drop those obligations than it is for companies, which use a different chapter of the bankruptcy code. Large steel companies, airlines and auto suppliers like Delphi have terminated pension plans in bankruptcy. “But it’s a fight that municipalities haven’t been willing to fight,” said David Skeel, a law professor at the University of Pennsylvania who writes frequently on bankruptcy. Municipalities have been reluctant because public pensions are protected by statutes and constitutional provisions meant to make them nearly airtight. And even if the rules could be broken in bankruptcy, that would present a different problem. Local officials who want to cut pensions do not, as a rule, want to shortchange their bondholders for fear of not being able to borrow in the future — yet bankruptcy law requires that both types of creditors be treated equitably. Rhode Island sought to sidestep the issue with a law that gave bondholders more protections than retirees. Central Falls’s retirees used that issue to gain some bargaining power, extracting a commitment from the state to seek extra money for the next five years. The extra money is not a sure thing, though, and would not cover all the cuts to the retirees over those years. The last American city to work its way through Chapter 9 bankruptcy was Vallejo, Calif., which finished the process this year. It had to navigate similar stumbling blocks. Initially, it planned to cut its workers’ and retirees’ pensions, but it changed course when California’s giant state pension system, which administered Vallejo’s plan, threatened a costly and debilitating court battle. Vallejo instead cut pay, health care and other benefits, as well as city services and payments to its bondholders, and left the pensions intact. Even though the bondholders faced a loss, all parties eventually agreed they had been treated equitably, and the state passed a law making it easier for Vallejo to continue borrowing. The episode strengthened the perception that public retirement plans were unalterable, even in bankruptcy. “Central Falls is undermining that,” said Mr. Skeel, who wrote about Vallejo’s bankruptcy for a coming issue of The University of Chicago Law Review. Central Falls had little choice. For years, its government failed to contribute enough to its police and firefighters’ pension fund, and the fund effectively ran out of money this fall. The city, which had also promised the retirees comprehensive health benefits, could not cover the pension and health payments out of its general revenue. The police and firefighters have known for months that drastic cuts were looming. Last month, the unions representing active workers negotiated new contracts, which called for workers to complete at least 25 years to receive pensions, instead of 20. Workers will also have to meet much more rigorous standards to qualify for disability pensions. Until now, 60 percent of Central Falls police officers and firefighters have retired on full disability pensions, drawing the inflation-protected and tax-free payments even when they embarked on new careers. One of them, at 43, has become a prominent personal-injury lawyer and can be seen in television ads shooting baskets and pretending to fall down a manhole. That retiree, Robert Levine, a former police officer, said his disability was the result of an on-duty car crash where he was not at fault, and that his pension had been granted lawfully after his condition was certified by three different doctors. The retirees, who are not represented by the unions, voted in favor of their pension reductions last week. The cuts would be up to 55 percent of each retiree’s benefits, which now vary widely, from about $4,000 to $46,000 a year, depending on final salary, years of service and other factors. A few retirees would give up more than $25,000 a year. Central Falls’s police and firefighters do not participate in Social Security. The new agreement also reduces the annual cost-of-living adjustments and requires retirees to start contributing toward the cost of their health benefits. But it does not take disability pensions away from retirees — something that could become a sticking point. In the negotiations, the state’s revenue director promised to seek money from the state — enough to pay most retirees a supplement of several thousand dollars a year for five years. Having recently enacted a big and painful package of pension cuts for state workers and teachers, Rhode Island legislators say they are in no mood to help a city’s retirees who stripped their own pension fund, often collecting disability pensions when they were well enough to work. The retirees’ lawyer, Mr. McGowan, won support for the state money by threatening to challenge a state law enacted just before Central Falls declared bankruptcy last summer. The law protects holders of general-obligation bonds issued by Rhode Island and its municipalities by giving them priority in bankruptcy. Without the law, investors could find themselves subject to the same losses as the retirees. The state law was intended to prevent a contagion effect, in which Central Falls’s bankruptcy would frighten investors away from other cities’ bonds, driving up borrowing costs across the state. The idea of shielding municipal bondholders during bankruptcy is controversial, however. “It’s not clear to me that you ought to be protecting bondholders,” said Mr. Skeel. “It seems unfair to me that you’re singling out one type of creditor to bear the burden, and another type not to.” Mr. McGowan, the retirees’ lawyer, said he had threatened to sue Central Falls’s bondholders on the argument that the state law had given them a “voidable fraudulent transfer”— an abusive deal that could be undone by a bankruptcy court. He said the state did not want such a challenge, so it agreed to push for pension supplements. Theodore Orson, who represents Central Falls’s state-appointed receiver in the bankruptcy, said negotiations would have been impossible without the law. He said he thought Chapter 9 should be amended to give cities the ability to shield their bondholders if they could show a compelling need to do so. But that would take an act of Congress, and federal lawmakers, at odds over their own debt and deficit, show no interest in taking on the cities’ fiscal woes. “One thing I think we’ve demonstrated in Rhode Island is, we really have a functional state government,” Mr. Orson said. “We are pulling together and making what we believe to be difficult decisions that you don’t see Congress making right now.”Copyright 2011 The New York Times Company.  All rights reserved.

A wage garnishment is one of the most devastating forms of collecting a debt. General creditors, such as credit cards and medical bills, can often take up to 25% of the debtor’s net pay. Debts owed to taxing authorities, such as the IRS, more may be taken. With many people living paycheck to paycheck, a wage garnishment can ruin a family budget. Fortunately, the bankruptcy code provides an equally powerful countermeasure. Once a bankruptcy petition is filed, the powerful “automatic stay” goes into effect. The automatic stay is an order of the bankruptcy court for creditors to cease collection efforts on a debt. Since wage garnishments are collection efforts, wage garnishments must cease. When the Stay Applies. The stay takes effect when a Voluntary Petition is filed. When filed, a notice is sent to all creditors, informing them of the stay. The notice is usually sent out within a day or two of filing. Rather than waiting, a copy of the Notice can usually be obtained from the Clerk of the Bankruptcy Court where the case was filed. For St. Louis and St. Charles residents, the Bankruptcy Court is located downtown St. Louis. It can then be hand delivered, faxed or electronically delivered to the creditor. Since an employee’s wages are being garnished, a copy should go to the employer’s HR department. If the debtor’s wages are presently being garnished, it is best to notify the creditor and the employer as soon as possible to stop the garnishment. The stay remains in effect until the court orders otherwise. Most debts are discharged, so the wage garnishment will cease permanently. If the debt is not dischargeable, such as recent tax obligations, the creditor can reinstitute a wage garnishment. However, the debtor is at least provided breathing space to arrange a payment plan with that creditor. If the nondischargeable debt is a tax obligation, the debtor may consider filing a Chapter 13 bankruptcy. In those cases, the debtor may pay back the tax obligation, without incurring further interest, through a repayment plan. Those in Missouri may consider consulting a St. Louis bankruptcy attorney for guidance. When the Stay Does Not Apply. The stay does not apply to domestic support obligations, i.e. child support and alimony payments. If a wage withholding order is in effect for either of these obligations, the bankruptcy court will not stay the order, and the support will continue to be deducted from the debtor’s wages. Under the newer Bankruptcy Abuse Prevention Act, if a debtor had a previous bankruptcy dismissed within a year of commencing the present case, the stay will not be automatic. Thus, a garnishment could continue. However, the debtor may file a motion with to extend the stay. Under the new law, a new petition filed within a year of dismissal of the earlier case is presumed to have been done in bad faith. This is only a presumption and the debtor may demonstrate facts to the court showing that the second filing is done in good faith. A wage garnishment can be devastating, but there may be methods of stopping it. In Missouri, contacting a St. Charles bankruptcy attorney should be consulted as soon as possible.

Print PageJudge Richard Posner of the Seventh Circuit recently offered the following advice to appellate attorneys:When there is apparently dispositive precedent, an appellant may urge its overruling or distinguishing or reserve a challenge to it for a petition for certiorari but may not simply ignore it. We don’t know the thinking that led the appellants’ counsel in these two cases to do that. But we do know that the two sets of cases out of which the appeals arise, involving the blood-products and Bridgestone/Firestone tire litigations, generated many transfers under the doctrine of forum non conveniens, three of which we affirmed in the two ignored precedents. There are likely to be additional such appeals; maybe appellants think that if they ignore our precedents their appeals will not be assigned to the same panel as decided the cases that established the precedents. Whatever the reason, such advocacy is unacceptable.The ostrich is a noble animal, but not a proper model for an appellate advocate. (Not that ostriches really bury their heads in the sand when threatened; don’t be fooled by the picture below.) The “ostrich-like tactic of pretending that potentially dispositive authority against a litigant’s contention does not exist is as unprofessional as it is pointless.”Gonzales-Servin v. Ford Motor Company, No. 11-1665 (7th Cir. 11/23/11), pp. 4-5. You can find the opinion here. To illustrate his point, he included the two photographs set forth below.It is good to know that in these times of budget shortfalls that federal judges still have access to Photo Shop. This was indeed a case where two pictures were worth a thousand words.

Many Missouri residents wonder what the Chapter 7 bankruptcy test are and how they are used to determine eligibility for Chapter 7 bankruptcy relief. It turns out that the means tests used to determine Chapter 7 bankruptcy eligibility are a series of number-based tests that use information about a debtor's income and expenses to determine eligibility for Chapter 7 bankruptcy relief. Here is a quick overview of how these means tests are used to determine eligibility for Chapter 7 bankruptcy relief. --The first test determines if a debtor earns less than the median Missouri household income for a given year. This is an important calculation because debtors who earn less than Missouri's state's household's average income are automatically eligible to file for Chapter 7 bankruptcy. --If the debtor fails this first test, debtor's attorney must then determine the debtor's disposable income. Bankruptcy courts determine debtor's disposable income because they use this information to determine if a debtor can afford to pay at least some of his debts. As a result, debtors who fail the first means test must provide information about how much they spend for different items such as childcare, charitable contributions and secured payments on car and house. Bankruptcy courts use this information to determine a debtor's disposable income by subtracting the sum of these expenditures from the debtor's monthly income. If the remaining income is greater than what is allowed by the U.S. bankruptcy code for your household, you will not be allowed to file for Chapter 7 bankruptcy in most cases. Instead, you could be required to file for Chapter 13 bankruptcy reorganization that will require you to pay at least some of your debts back to your creditors. The factors used to determine your household's income vary in Missouri because each city and county uses income guidelines that vary by population. Therefore, if you need help understanding how the means tests are used to determine Chapter 7 bankruptcy process, please contact a St. Louis bankruptcy attorney or a St. Charles bankruptcy attorney for a free consultation. Asking a St. Louis bankruptcy attorney or a St. Charles bankruptcy attorney for information about these means tests can help you determine if filing for Chapter 7 bankruptcy relief is worthwhile. This is the case because they can help you use the results of the means tests to help you develop the best way to handle your overwhelming debts. To ask for your free consultation, please call us today for an appointment. We'd be happy to help you see how hiring a St. Louis bankruptcy attorney or a St. Charles bankruptcy attorney can help you use the U.S Bankruptcy Code's means tests to your advantage.

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.