Law Review: Sousa, Michael D., Seizing Welfare from the Bankrupt (August 22, 2024). U Denver Legal Studies Research Paper Forthcoming, University of Cincinnati Law Review, Volume 93, No. 2., 2024, Ed Boltz Mon, 08/26/2024 - 20:10 Available at:  https://ssrn.com/abstract=4934050   Abstract: The earned income tax credit (EITC) is currently the largest means-tested antipoverty program in the United States that assists low-income working families surviving along the edges of poverty. A central component of the national welfare system, the EITC has lifted millions of families with children out of poverty and has produced myriad benefits for their everyday lives. But most of the poor and near-poor endure in the low-wage labor market and often lead turbulent financial lives plagued by precarious employment along with deleterious material and psychological constraints in budgeting for daily expenses. For the segment of these families also burdened by unwieldy debts, bankruptcy laws offer a fresh financial start in life, in part by allowing debtors to exempt certain property from the reach of creditors. However, in most jurisdictions EITC refunds are not exemptible in bankruptcy and can be seized by trustees to both enrich themselves and to distribute to creditors, while many middle-class assets are shielded entirely. Adopting a critical theory framework, this Article maintains that capturing EITC refunds from low-income working families who resort to filing bankruptcy is inequitable and perpetuates class inequality. Low-income working families are doubly exploited in our harsh economy, first by the low-wage labor market and second by the bankruptcy system. I argue for the implementation of statutory changes to fully protect EITC refunds in bankruptcy as a matter of fundamental equity. Commentary: Paired with the recent Bellido opinion from the M.D.N.C. bankruptcy court (blog post forthcoming), the examination in this article of the lack of protection for the EITC  is a real indictment of how  bankruptcy courts  universally assert that they are giving   "a  liberal presumption in favor of claimed exemptions"  but nonetheless repeatedly allow Trustees to seize these funds from the poorest of debtors.  The author is also unfortunately correct that, despite various governmental agencies,  from the Department of Justice or the U.S. Trustee Program to more locally the Bankruptcy Administrators (all of whom could direct Trustees,  as they did with COVID relief benefits,  not to administer EITC funds), mouthing concerns for access to justice in bankruptcy, the only real solution will be for Congress  (or state legislatures) to act.  This could be done by  simply excluding  the EITC from the bankruptcy estate like 401k plans,  providing an broad exemption in all states (regardless of having those opted-out) as is done for Social Security, an/or excluding it from the definition of Disposable Monthly Income. With proper attribution,  please share this post.  Blog comments Category Law Reviews & Studies

Startups Are Booming--but So Are Bankruptcies. See the article at Inc. https://www.inc.com/chris-morris/bankruptcies-vc-backed-startups-rising-data.htmlJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!

   Client Review below:" I contacted Jim seeking counsel as one of the 2000 defendants in the Celsius crypto bankruptcy clawback case. After a few short conversations with him, I quickly knew he was the right person for the job. Once the retainer was paid, Jim dropped everything and fully dedicated himself to my case. In just a matter of a few days, Jim had negotiated a very favorable settlement. I highly recommend Jim if you find yourself in a similar situation and are in need of representation" My pleasure to help! Thanksfor the review. Jim

Join the Chapter 13 Academy‘s free webinar Thursday August 15 at 2 pm EDT for the inside scoop on claims process and pitfalls from a pair of experienced Chapter 13 trustees. You can submit questions in advance when you register. Did I say it’s free? The post Navigating Claims in Chapter 13 appeared first on Bankruptcy Mastery.

I’ll be gone for two weeks   I’m leaving for the longest vacation since I became a Virginia lawyer in 1985. If you want to talk to a qualified bankruptcy lawyer right away, I can suggest these two.  Michael Sandler, in Woodbridge.  Or Ashley Morgan, in Herndon. I’d like to talk to you the week of August 26 If you can wait, [email protected] will get in touch with you on Thursday August 22 or Friday August 23 to schedule a Zoom appointment for the following week. For the most complete consultation, please fill in my Be Happy form.  When you send in the Be Happy, Vanessa will give you priority scheduling as soon as I get back. We’re going to Paris and Ruoen. My wife’s novel begins in medieval Paris My wife’s PR business did not survive Covid. So she’s writing a novel. Part of it takes place in Paris and Ruoen, so we are going to visit.  It’s right after the Olympics, so it should be less crowded and maybe more fun. For most people, bankruptcy works Here’s more info on the five ways bankruptcy gives you a new start.   The post I’m out until August 26 appeared first on Robert Weed Bankruptcy Attorney.

I’ll be gone for two weeks   I’m leaving for the longest vacation since I became a Virginia lawyer in 1985. If you want to talk to a qualified bankruptcy lawyer right away, I can suggest these two.  Michael Sandler, in Woodbridge.  Or Ashley Morgan, in Herndon. I’d like to talk to you the week of August 26 If you can wait, [email protected] will get in touch with you on Thursday August 22 or Friday August 23 to schedule a Zoom appointment for the following week. For the most complete consultation, please fill in my Be Happy form.  When you send in the Be Happy, Vanessa will give you priority scheduling as soon as I get back. We’re going to Paris and Ruoen. My wife’s novel begins in medieval Paris My wife’s PR business did not survive Covid. So she’s writing a novel. Part of it takes place in Paris and Ruoen, so we are going to visit.  It’s right after the Olympics, so it should be less crowded and maybe more fun. For most people, bankruptcy works Here’s more info on the five ways bankruptcy gives you a new start.   The post I’m out until August 26 appeared first on Robert Weed Bankruptcy Attorney.

Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court Settlement UpdateJim Shenwick, Esq. is proud to announce that he just settled another Celsius Bankruptcy Claw Back Adversary Proceedings in the SDNY.The client had been sued for over $700,000. Based on a review of Exhibit A to the Complaint, which listed the transactions to be clawed back, we discovered that Exhibit A overstated the transactions in the relevant 90-day period, the cryptocurrency valuation was incorrect, and the client had a "New Value" defense.When all was settled, the client paid back a small percentage of the $700,000 sought.Clients who are being sued for preference clawback's should contact Jim Shenwick, EsqJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!

4th Cir.: David v. King- Former Trustee Has No Authority to Act Following Conversion, Including to Seek Compensation for Professionals Ed Boltz Tue, 07/30/2024 - 17:19 Summary: Byron David filed for Chapter 7 bankruptcy in July 2018, with Donald King appointed as the Chapter 7 Trustee.  While still a Chapter 7 case,  King obtained approval under 11 U.S.C. § 327 to employ his own law firm to represent him as the Trustee.    The case was converted to Chapter 11 in April 2019, with King again appointed as the Chapter 11 Trustee. King did not, however,  apply for court approval to retain his law firm for Chapter 11 work.  The case was converted again, this time  to Chapter 13 in May 2020, ending King’s role as trustee.  After the final conversion, King sought retroactive approval to employ the law firm for work done during the Chapter 11 phase. The Court of Appeals determined that "the trustee" (Emphasis  kinda in the original) in § 327(a) refers to the currently serving, active singular trustee, not a former trustee.  Upon conversion of the bankruptcy case, King’s authority to act as trustee was terminated under § 348(e), meaning he could not apply to retroactively employ professionals.  The court rejected King’s arguments based on equity and previous cases where current trustees were allowed to file after-the-fact applications, emphasizing that those cases did not involve former trustees. Judge Wilkinson, dissenting, argues that bankruptcy courts, recognized as courts of equity, should retain the discretion to grant after-the-fact authorizations for professional services performed under § 327(a). He disagrees with the majority's interpretation that limits such authority to current trustees only.  Commentary: While the impact of this case is likely to be largely just an admonition to  trustees and their attorneys to not make this same $43,668  mistake as the Chapter 7/11 trustee made here,  it does also both indicate that the conversion of a case to another chapter should serve as a "hard stop" for the previous trustee (with even  post-conversion obligations and residual duties almost certainly being administrative  "trustee time" and not legal services)  but also that the possibility of conversion should always restrain trustees from being so overly hungry or adversarial that the debtor seeks escape. And, as this opinion also relies on Lamie v. U.S. Tr., 540 U.S. 526 (2004),  which notoriously departed from long-standing pre-Code bankruptcy practice that allowed the debtor's attorney to be paid from assets of the estate because of scrivener's errors,  perhaps trustees,  which have previously shown little interest in helping the debtor's bar with a legislative correction,  might now see some need for supporting that sort of change from Congress for everyone's benefit.  (Including a fair and reasonable fix for Chapter 13 trustees in cases dismissed before confirmation.)  I would be happy to participate in that  discussion. With proper attribution,  please share this post.  Blog comments Category 4th Circuit Court of Appeals

E.D.N.C.: Walker v. LVNV-Iqbal/Twombley Do Not Apply to Affirmative Defenses Ed Boltz Tue, 07/30/2024 - 17:03 Summary: Walker moved pursuant to Federal Rule of Civil Procedure 12(f) to strike the affirmative defenses raised by LVNV,  arguing that the Iqbal/Twombley pleading standards apply to affirmative defenses.  Finding no controlling case law,  the court rejected this  relying on Liles v. Wyman (E.D.N.C.  2019) as  motions to strike " are generally viewed with disfavor because striking a portion of a pleading is a drastic remedy". Commentary: While technically accurate in stating that there is no controlling authority holding affirmative defenses to the Iqbal/Twombley standard,  the   Lilles  case does cite to Racick v. Dominion L. Assocs., 270 F.R.D. 228, 230 (E.D.N.C. 2010),  describing it as "collecting cases",  when in fact there the district court struck 11 out of 14 affirmative defenses for failing to comply with Iqbal/Twombley  pleading requirements. Based on Walker,  however,  it would seem that the fairly regular grumble by judges that responses to motions or other pleading need specificity might not,  while helpful in the care and feeding of happy black robes,  actually be required. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document walker_v_lvnv.pdf (661.23 KB) Document racick_v_dominion_law.pdf (676.21 KB) Category Eastern District

      Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court   Celsius Network LLC, the crypto company, filed for Chapter 11 bankruptcy. Pursuant to their confirmed Chapter 11 plan, they have commenced 2,000 adversary proceedings in the Southern District of New York, seeking to claw back monies withdrawn by Celsius customers 90 days prior to the bankruptcy filing or from April 14, 2022, through July 13, 2022 (the “Preference Period”).The 2,000 lawsuits are being brought by ASK LP (Debtor’s preference litigation counsel)Jim Shenwick, Esq. has defended over 100 adversary proceedings for various causes of action, including preferences and fraudulent conveyances. He is familiar with cryptocurrency and has a working relationship with ASK LP.Jim Shenwick was recently retained by a client to defend against a Celsius lawsuit seeking to claw back over $200,000 withdrawn from Celsius prior to the bankruptcy filing. We have commenced settlement negotiations and are optimistic about a very favorable settlement for the client.We have also been approached by another former Celsius customer who was sued in a clawback action.Clients who have been sued or have questions about the clawback lawsuits are advised to contact Jim Shenwick as soon as possible to discuss their options or to seek representation in these cases.Jim Shenwick can be reached at 917 -363-3391 or at [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15min