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

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

SCOTUS: Truck Insurance Service v. Kaiser Gypsum- Definition of Party in Interest in Bankruptcy Ed Boltz Thu, 06/06/2024 - 18:25 Summary: Truck Insurance Exchange, the primary insurer for companies facing asbestos-related lawsuits, objected to the reorganization plan proposed by Kaiser Gypsum Co. and Hanson Permanente Cement, which had filed for Chapter 11 bankruptcy. The plan created an Asbestos Personal Injury Trust under 11 U.S.C. §524(g) to handle all asbestos-related claims. Truck, responsible for defending and indemnifying up to $500,000 per claim, argued that the plan exposed it to fraudulent claims due to inadequate disclosure requirements for insured claims. The District Court confirmed the plan, deeming it "insurance neutral" and finding Truck had limited standing to object as it was not a party in interest. The Fourth Circuit affirmed, holding that Truck was not a  party in interest  because under the Doctrine of Insurance Neutrality the plan did not alter its prepetition obligations.  The Supreme Court reversed the Fourth Circuit, holding that an insurer with financial responsibility for bankruptcy claims is a  party in interest   under §1109(b) and may be heard on any issue in Chapter 11 proceedings. The Supreme Court gave a very broad Definition of a party in interest, including any  entities potentially concerned with or affected by the reorganization proceedings, not limited to those whose pre-petition obligations are altered,  citing the 3rd Circuit in holding that: Where a proposed plan “allows a party to put its hands into other people’s pockets, the ones with the pockets are entitled to be fully heard and to have their legitimate objections addressed.” In re Global Indus. Technologies, Inc., 645 F. 3d 201, 204 (CA3 2011). This included insurers like Truck, who bear significant financial responsibility for claims, and have a direct interest in the reorganization process.   The Court criticized the Doctrine of Insurance Neutrality for conflating the merits of an objection with the threshold inquiry of party in interest status,  holding that being a party in interest grants  allows insurers to voice objections but does not grant them a vote or veto in the proceedings. Commentary: The allowance in 11 U.S.C.  §1109(b) of a party in interest  "may raise and may appear and be heard on any issue" (emphasis added)  in a Chapter 11 case, with the more limited allowance in 11 U.S.C. §1324(a)  that a party in interest "may object to confirmation of the plan" in Chapter 13.  Similarly,  under §1307(c) a Chapter 13 case can be converted or dismissed "on request of a party in interest".    Elsewhere,  however,  pursuant to §1329(a),  only "the debtor, the trustee or holder of an allowed unsecured claim"  can seek a modification of a confirmed plan.  Narrower than the party in interest,  that would exclude secured creditors,  the U.S.  Trustee,  or more hypothetical or attenuated parties,  such as Truck Insurance Service. This might,  however,  mean that homeowner,  car or other insurers for consumers have the right to object to Chapter 13 cases,  requiring that they be notified of the bankruptcy filing and served with the proposed plan. I'm sure GEICO will be ecstatic about the flood of these pleadings. As is usual for bankruptcy matters from the Supreme Court,  this was a unanimous opinion, with the exception of Justice Alito who recused himself, probably because his wife's flags are made out of asbestos in order to keep them from being burned by their unpatriotic neighbors. To read a copy of the transcript, please see: Blog comments Attachment Document truck_insurance_v_kaiser_gypsum.pdf (135.47 KB) Category Law Reviews & Studies

N.C. Ct. of App.: In re White Oak Missionary Baptist Church- No Appointment of Receiver Ed Boltz Tue, 06/04/2024 - 17:52 Summary: An internal conflict within the White Oak Missionary Baptist Church arose over financial affairs and administrative authority, leading to a division among church leaders and membership. In 2018, disputes escalated when church leaders implemented accountability measures that were opposed by other leaders. An audit revealed untraceable spending of a significant donation fund. The church filed a petition for receivership in 2021, claiming substantial debts and mismanagement. The trial court denied the motion for a receiver, citing insufficient evidence of insolvency. The church appealed, arguing that the ongoing internal conflict and evidence of financial mismanagement warranted a receiver's appointment. The North Carolina Court of Appeals reviewed the case, noting that such appeals are typically interlocutory but permissible if substantial rights are affected. The Court of Appeals held that the following criteria were to be evaluated in determining whether to appoint a receiver: Whether the debtor is insolvent; Whether the debtor is not paying its debts, unless those debts are the subject of a bona fide dispute; Whether the debtor is unable to pay its debts as they become due; or  Whether the debtor is in imminent danger of insolvency. N.C. Gen. Stat. § 1-507.24(e).  The Court of Appeals found no abuse of discretion in the trial court's decision, as evidence indicated the church was not in imminent danger of insolvency. The court also addressed the church's objection to an untimely affidavit but concluded there was no prejudice as the church had been given time to respond. The trial court's decision to deny the appointment of a receiver and consider the affidavit was affirmed. Commentary: Another receivership instead of a bankruptcy.   See, for example, my post about Live Oak v. Mafic in March 2023.  The recent article in the ABI Journal,  Why State Court Receiverships Are Becoming the Norm for Smaller Companies,  begins the discussion of why this is happening,  but it would be helpful,  both on this specific topic and for the general health of the NC Bar Association Bankruptcy Section,  if some of the attorneys  making these choices would buck  the restraints  that their Tall Building Law firms seem to have against commenting or even participating in these communities. The absence of any conversation,  even in response to my most obnoxious and flawed posts,  is leading to a serious decline in the section. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_white_oak_missionary_baptist_church.pdf (98.1 KB) Category NC Court of Appeals

Bankruptcy courts handle over one million cases yearly ranging from simple consumer cases to complex multi-billion dollar business cases.  Thousands of parties appear before bankruptcy courts in various capacities raising an infinite array of issues.  The courts are both needed and expected to administer these cases fairly and efficiently.   To do so, bankruptcy courts, which are courts of equity, utilize a variety of tools to manage their dockets, however, one obvious tool remains outside of their reach – the use of special masters.  Efforts are currently underway to change this. Attached is my article exploring this topic and efforts to amend Bankruptcy Rule 9031. 2024.06 - ABI Journal - 9031 Article (with reprint permission) The post It is Time to Enhance Judicial Efficiency by Amending Bankruptcy Rule 9031 appeared first on Sylvia Mayer Law.

Book Reviews Stafford Patterson Mon, 06/03/2024 - 18:36

Book Review: Jacoby, Melissa- Unjust Debts: How Our Bankruptcy System Makes America More Unequal Ed Boltz Mon, 06/03/2024 - 18:31 Available at Amazon:  Unjust Debts: How Our Bankruptcy System Makes America More Unequal But purchasing from your local bookstore is certainly better.  The first person to ask, will get my copy to read and then pass forward. Summary From the inside cover: Bankruptcy is the busiest federal court in America. In theory, bankruptcy in America exists to cancel or restructure debts for people and companies that have way too many—a safety valve designed to provide a mechanism for restarting lives and businesses when things go wrong financially. In this brilliant and paradigm-shifting book, legal scholar Melissa B. Jacoby shows how bankruptcy has also become an escape hatch for powerful individuals, corporations, and governments, contributing in unseen and poorly understood ways to race, gender, and class inequality in America. When cities go bankrupt, for example, police unions enjoy added leverage while police brutality victims are denied a seat at the negotiating table; the system is more forgiving of civil rights abuses than of the parking tickets disproportionately distributed in African American neighborhoods. Across a broad range of crucial issues, Unjust Debts reveals the hidden mechanisms by which bankruptcy impacts everything from sexual harassment to health care, police violence to employment discrimination, and the opioid crisis to gun violence. In the tradition of Matthew Desmond’s groundbreaking Evicted, Unjust Debts is a riveting and original work of accessible scholarship with huge implications for ordinary people and will set the terms of debate for this vital subject. Table of Contents: Bankruptcy for Real People Race Disparities in Bankruptcy for Real People Bankruptcy for Fake People Civil Rights in a Bankrupt City My Money, My Rules From Overindebtedness to Liability Management Beyond the Victory Lap Commentary: From the perspective of the consumer debtor's bar,  the overwhelming  benefits that Chapter 11 debtors receive compared to Chapter 13  debtors.  These include the "front-loaded"  discharge at confirmation,  the absence of a trustee,  third-party releases (contrast the Sacklers and their  modest contributions to the plan with the requirement in Chapter 13 that co-signed debts require payment in full to grant just a stay and not a discharge),  longer periods over which to pay secured and priority debts, binding creditors with misleading voting, the broad deference given to "non-standard"  plan provisions,   etc. (Many of these Chapter11 benefits would be available to consumers through the Chapter 10 envisioned in Sen. Elizabeth Warren's Consumer Bankruptcy Reform Act.) But Chapter 11 is available to individuals as well... The main reason that individuals don't file Chapter 11 cases is the expense, the lack of expertise in the consumer debtor's bar, and that  regular Chapter 11 attorneys don't want to deal with the unwashed masses.  (Otherwise you might see them handle a pro bono SLAP every now and then.) So what if, in addition to excellent public-facing scholarship such as this,   law school  professors also helped teach law students and practicing attorneys how to file simple "pre-packaged"  or "cookie cutter" Chapter 11  cases for everyday  people? Dumb it down, give consumer  form pleadings,  Best Case for Chapter 11 and call it "Chapter 24"  (11+13),  so that can churn these out,  even if we're not $2500/hr  Tall Building Lawyers. Not only would real people start to get the same advantages that fake people (i.e. corporations)  have long taken  advantage of in Chapter 11,  but the courts and Congress might,  under a sudden groaning burden of regular folks sloppily filing disclosure statements and appearing on first day orders,  start to consider rebalancing the bankruptcy system.  (Not to mention the terror-filled response that  the consumer financial services industry would have.) Heck,  for less than $10  consumers could get a Post Office Box in Wilmington, Delaware and take advantage of that court's vaunted bankruptcy expertise. Other reviews and interviews: Publisher's Weekly:  Fake People, Real Obligations: PW Talks with Melissa B. Jacoby Kirkus Reviews:  Unjust Debts- An impassioned plea for confining bankruptcy to its core purpose of resolving just debts justly. Upcoming Events:  Melissa Jacoby on Unjust Debts at Quail Ridge Books June 13, 2024, Raleigh NC Melissa Jacoby on Unjust Debts at Flyleaf Books June 18, 2024, Chapel Hill NC Melissa Jacoby on Unjust Debts at Greenlight Bookstore June 27, 2024, Brooklyn NY Blog comments Category Book Reviews

Law Review Note: Rylee Stanley, The Poor Man's Problem in Bankruptcy, 55 St. Mary's L.J. 1185 (2024). Ed Boltz Wed, 05/29/2024 - 18:39 Available at: The Poor Man's Problem in Bankruptcy Introduction: This Comment describes how bankruptcy courts operate and explores the effects of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) on indigent parties and  also discusses the unique concerns surrounding pro se bankruptcy cases compared to other proceedings and points out the inequities that currently exist between trustees and debtors.  Next, it examines the civil-criminal dichotomy and the heavily debated “Civil Gideon” movement, first highlighting the landmark case of Gideon v. Wainwright, 11 which declared the right to legal counsel is a fundamental right for indigent criminal defendants.  Second,  the comment dives further into Boddie v. Connecticut and Powell v. Alabama,  which explain the importance of the right to access the courts, as well as how the right to counsel is needed in civil and criminal proceedings.  Then the comment sets forth more details about the Civil Gideon movement and discusses its relevance in bankruptcy law,  also explaining four prevalent issues in bankruptcy law that support the need for an appointed right to counsel in bankruptcy. Most importantly, it proposes a solution to provide access to counsel in bankruptcy proceedings and addresses popular concerns with public assistance programs.  Finally, it wraps up the conversation and revisits the many reasons why the Sixth Amendment right to counsel should be extended beyond the criminal courts.   Commentary: This is an idealistic and well-intentioned law review comment, that unfortunately,  by blending the Civil Gideon  movement with bankruptcy  but without any clear experience directly bankruptcy,  misses the target.  There is neither a recognition of  how many indigent people do not actually need bankruptcy, because they are judgment proof,  nor that many debtors are able to file bankruptcy,  depending on the jurisdiction in either Chapter 7 or Chapter 13,  often paying little, if any, costs or attorneys fees in advance.  (As these are unmentioned, so too are the problems with such options,  including the heightened costs of Chapter 13 or the problems with "zero money down" Chapter 7 cases under Lamie or bifurcation schemes.) To read a copy of the transcript, please see: Blog comments Attachment Document the_poor_mans_problem_in_bankruptcy_compressed.pdf (503.07 KB) Category Law Reviews & Studies

4th Cir.: Bland v. Carolina Lease Management Group Statute of Limitations for UDTPA Ed Boltz Wed, 05/29/2024 - 00:32 Summary: Plaintiffs Hank Bland, Kendell Jackson, and Luetta Innis appealed the dismissal of their lawsuit against Carolina Lease Management Group, LLC, CTH Rentals, LLC, and Old Hickory Buildings, LLC. The case involved rent-to-own purchases of storage sheds, and Plaintiffs alleged violations of the North Carolina Retail Installment Sales Act (RISA), the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), and the North Carolina Debt Collection Act (DCA). The district court,  applying a  a three-year statute of limitations from RISA to dismiss all claims, including those under UDTPA and DCA,  dismissed the complaint on statute-of-limitations grounds. On appeal, the Plaintiffs argued that their claims, aside from RISA, were subject to a four-year statute of limitations under UDTPA and DCA.  Relying on North Carolina cases,  including  Shepard v. Ocwen Fed. Bank, FSB, 638 S.E.2d 197, 200 (N.C. 2006), , Skinner v. Preferred Credit, 616 S.E.2d 676, 680–81 (N.C. Ct. App. 2005), and Jennings v. Lindsey, 318 S.E.2d 318, 322 (N.C. Ct. App. 1984), the Fourth Circuit agreed with Plaintiffs, noting that UDTPA claims are governed by a four-year statute of limitations regardless of their basis in RISA violations, and while  affirming  the dismissal of the RISA claim,   but vacated and remanded the dismissal by the district court of the UDTPA and DCA Commentary: This is another in a chain of great decisions that Adrian Lapas (and others) has received   regarding the pernicious rent-a-shed  schemes,  which often seek to claim  to be executory  rather that retail sales contracts,  both to avoid modification in bankruptcy,  but also to skirt recordation and affixation  requirements. It is also worth noting that even if the statute of limitations has run to affirmatively raise claims against a creditor,  those can often be raised defensively as a counterclaim to attempts to collect by that creditor.  That can include as a basis for objecting to a Proof of Claim    Blog comments Attachment Document bland_v._carolina_lease_management_group.pdf (168.3 KB) Document mattox.pdf (231.07 KB) Document hargrove.pdf (389.13 KB) Document bland.pdf (893.55 KB) Category 4th Circuit Court of Appeals

N.C . Ct. of App.: Hurd v. Priority Automotive- Fraudulent Concealment Ed Boltz Wed, 05/29/2024 - 00:30 Summary: Brad W.  Hurd purchased a 2018 Honda Accord from  Priority Automotive of Huntersville, Inc.,  believing it had no accident history based on a Damage Disclosure Statement provided by Priority Automotive.   Mr. Hurd later discovered the vehicle had been involved in an accident prior to purchase and that , Priority Automotive of Huntersville, Inc. had actually filed  an insurance claim for that damage. Despite Mr.  Hurd's request, Priority Automotive of Huntersville, Inc.  did not provide a CarFax accident report , instead giving an Experian AutoCheck report without pre-purchase information and later ejecting Mr.  Hurd from the dealership when he insisted on the CarFax report.  Hurd filed an Amended Complaint alleging unfair and deceptive practices, fraud, and fraudulent concealment. The trial court dismissed the claims, leading to this appeal. The Court of Appeals reviewed the trial court's dismissal de novo, held that to state a claim under N.C. Gen. Stat. § 75-1.1 for unfair and deceptive trade practices, Mr.  Hurd needed to show an unfair or deceptive act in commerce that caused actual injury. The court found Mr.   Hurd sufficiently alleged such acts and damages for the  fraud allegation, as he  needed to show: A false representation or concealment of a material fact; Reasonably calculated to deceive; Made with intent to deceive,  Which does in fact deceive; Resulting in damage to the injured party    As to fraudulent concealment, Mr.Hurd sufficiently alleged the necessary criteria: Concealment of a past or existing material fact,  That is reasonably calculated to deceive,  Made with intent to deceive,  Which does in fact deceive, and Which results in damage to the plaintiff   Lastly, the economic loss rule, which bars recovery for purely economic loss in tort, did not apply as Hurd’s claims were for intentional torts, not negligence. Commentary: Great work by Shane Perry. To read a copy of the transcript, please see: Blog comments Attachment Document hurd.pdf (152.07 KB) Category NC Court of Appeals