5 Bankruptcy Warning Signs That Could Be Exacerbated by Holiday Spending The holidays mean different things to every family, but one thing they usually have in common is increased spending during holiday months. Many households go all out starting as early as Halloween, continuing through Thanksgiving and their winter holiday, closing out with New Year’s Eve and Day. Experts predicted that this year would break records for holiday shopping, despite nationwide concerns over inflation and the cost of living. In fact, there was a prediction that holiday spending would increase by 10% from $669 to $736 this year. But now that Thanksgiving and Black Friday have passed, we have more insight into holiday shopping trends for 2025. This year, American consumers spent $6.4 billion on Thanksgiving Day, which is up from last year. They also spent $11.8 billion online shopping on Black Friday. However, sales volume was down by 1% and prices were up by 7%, so any increases in consumer spending were spurred by inflation rather than increased enthusiasm for the holidays. One might surmise that families will be getting less quantity for a higher price for the rest of the holiday season this year.  Delivering less to your family this year while feeling more strain on your bank account is an unpleasant feeling. That trend is unlikely to die out this year, especially when things seem so bleak, and any opportunity for joy is welcome. Many families overspend during the holiday season and end up paying the price through credit card interest all year round. Bankruptcy provides a path to clearing debt from credit cards and a variety of other sources. If you are considering a filing in the Phoenix or Tucson area, start your debt relief journey with a free and convenient phone consultation with our firm at 480-470-1504.  1. You’ve Stopped Answering Calls From Unknown Numbers  Perhaps declining calls from unknown numbers has always been part of your lifestyle. But if you have debt with no game plan to get out of it, you probably know that many calls you receive from unknown numbers are from your creditors. You might have already tried negotiating alternative payment arrangements with these creditors, only to fall behind on them with no way to catch up. Creditors have a wide range of tactics they can legally use to make you feel intimidated if you don’t pay your debts. The good news is that you can stop these calls as soon as you make the decision to file for bankruptcy in Arizona—before your petition is filed. After retaining a bankruptcy attorney, you can direct all creditors to call them instead. This can relieve stress off of you during the holiday season and keep family members from learning of financial difficulties.  2. You Have Multiple Maxed Out Credit Cards Spending using credit cards comes with credit building benefits and points accrual that don’t accompany spending with a regular checking account. But it is also easy to overspend with credit cards when you can’t see the money physically leaving your wallet. The best way to use credit cards is by spending only what you can afford and paying off the balance in full at the end of each month. But when this isn’t possible, the credit card user will accrue interest on the amount they can’t pay. Currently, the average credit card interest rate is 25.32% in the United States. If you max out credit cards buying holiday gifts and other items, it could cause your debt to spiral out of control.  3. You Are Being Denied New Lines of Credit If you’ve been denied a credit card application, or even felt apprehension about applying due to poor credit, bankruptcy could be the best way to alleviate the issue. How much bankruptcy impacts a debtor’s credit depends on several different factors. And a debtor can take steps to rebuild credit after bankruptcy. If you need a new credit card to fund your holiday purchases and have been denied, it may be time to consider an Arizona bankruptcy filing.  4. You Can’t Sleep Due to Debt Problems  The holidays can be a tiring time without losing sleep over debt. If your financial difficulties keep you up at night, it can make it harder to get up and go to work the next day. Sleep is crucial to health, but many people struggle with insomnia when they are stressed. You may have holiday visitors who notice your night hours and what keeps you awake. If you discharge debts through bankruptcy, you can rest easy knowing your assets are protected and you have all the power over improving your credit and overall financial situation.  5. You Don’t Foresee Your Financial Situation Changing In The New Year  The start of the holiday season means the end of the year is approaching. The new year can bring changes and inspire resolutions, but not everyone has the power to change their financial situation without outside intervention. Without a new job lined up, or an inheritance or lawsuit settlement in the works, next year only shows signs of being more difficult than this year. But bankruptcy can provide a hard stop to the cycle of debt. Upon filing, a bankruptcy debtor receives an immense legal protection known as the automatic stay. This protection lasts until the debtor’s case is discharged or dismissed. It is the motivation behind many bankruptcy filings, as it can stop lawsuits, evictions, repossessions, and more. In theory, the automatic stay will last 3 to 6 months in a chapter 7 bankruptcy case, and 3 or 5 years in a chapter 13 bankruptcy case. This gives the debtor time and peace of mind to work out debts that won’t be cleared by bankruptcy.  During the holidays, bankruptcy is most relevant for its ability to wipe out credit card debt. In the United States, another of the most common types bankruptcy used to clear is medical debt. Both of these types of unsecured debts can get worse over time, as credit cards have high interest rates, and medical problems can be ongoing and reduce the patient’s ability to work. Secured debts can also be an exacerbating problem. For example, someone who finances their vehicle might have it repossessed after just one missed payment. In addition to losing their method of transportation, they could be left with a repossession deficiency, suffer damage to their credit which makes it difficult to finance a replacement vehicle, etc. The same goes for a home foreclosure, although the process takes much longer and has more legal standards that must be met.  Don’t Ignore The Warning Signs. Prepare For Bankruptcy By Learning More Today. Bankruptcy provides fast and comprehensive relief to debt collection efforts by creditors. A debtor can use an emergency filing to protect their assets with the automatic stay quickly. But the most can be gained from bankruptcy when it is filed knowledgeably and strategically. Every member of our Arizona law office has that skill set that can be employed to ensure you have a seamless bankruptcy filing. Preparing for bankruptcy now can help you avoid the drawbacks of a hasty filing in the future. Learn the ins and outs of filing for bankruptcy in Arizona today with your free consultation by phone. Get scheduled today by calling 480-470-1504. MY AZ LAWYERS Email: [email protected] Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 Glendale Location 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: 602-509-0955 Tucson Location 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: 520-441-1450 Avondale Location 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: 623-469-6603 The post 5 Bankruptcy Warning Signs That Could Be Exacerbated by Holiday Spending appeared first on My AZ Lawyers.

Law Review: Andrea Freeman, The Roots of Credit Inequality, 49 SEATTLE U. L. REV. 25 (2025). Ed Boltz Thu, 12/04/2025 - 18:04 Available at:  https://digitalcommons.law.seattleu.edu/sulr/vol49/iss1/4/ Abstract: Debt oppression began before the United States became a country. Settlers enslaved Africans and Indigenous people, treating them as property that they could buy and sell for their economic and personal benefit. When enslavement became illegal, new economic systems and laws that included sharecropping, Black Codes, and Jim Crow kept Black people in servitude. Laws that prohibited enslaved people from owning property or selling goods to white people evolved into restrictions on Black people’s occupations and market participation, both formal and informal. When Black entrepreneurs overcame these obstacles and built wealth within Black business enclaves, white people enforced their racist norms through violence. Segregated access to credit and different credit terms and conditions in retail, housing, and government loans played a large part in maintaining racial wealth gaps throughout the twentieth century. This system is a vestige of slavery that violates the Thirteenth Amendment. And the laws and policies that uphold a segregated credit system that harms Black, Indigenous, and Latine consumers violate the Fourteenth Amendment’s Equal Protection clause. These constitutional violations require strong remedies that include an amnesty on past debts, rehabilitative reparations, and a reimagining and restructuring of our credit system. This article documents the early roots of the United States’ use of debt as a tool of oppression and is the first in a three-part series. Summary:  Andrea Freeman argues that the United States has deployed debt as a system of racial domination from colonization to Emancipation. The article digs deeply into how credit was weaponized against Indigenous and Black people—not incidentally, but as a core instrument of the American administrative state.  1. Debt as a Colonial Tool Freeman traces how French, Spanish, and later U.S. traders extended “credit” to Indigenous nations in ways designed to induce dependency, provoke conflict, and ultimately justify land seizures. The French incited violence over trivial unpaid accounts; Spanish missionaries used coerced labor in “missions” where Native Californians accrued debts they could never pay; and then President Jefferson institutionalized the practice. Freeman’s discussion of Jefferson’s confidential 1803 letter (the infamous “run them into debt” plan) is particularly damning: the United States would sell goods below cost, encourage Native “leaders” to go into arrears, and then accept land cessions as payment. Within decades, millions of acres shifted from Indigenous control to the U.S. under the guise of settling trading debts. 2. Enslavement and the Criminalization of Black Debt Under slavery, African Americans were treated as involuntary debtors, forced to “repay” their value through uncompensated labor. After the Civil War, this logic persisted: Convict leasing, Sharecropping, Black Codes, and Fabricated “debts” to planters all operated as systems of quasi-bankruptcy without discharge, trapping Black people in perpetual obligation with no exit. 3. Debt in Modern Indigenous Communities Freeman shows that today’s financial deserts on reservations are a lineal descendant of Jefferson’s policy. She recounts modern debt spirals triggered not by wrongdoing but by bureaucratic failures, such as Indigenous patients being sent to non-IHS hospitals and then improperly billed—ending in collections, damaged credit scores, and blocked homeownership. These effects are intensified by: fragmented land titles under the Dawes Act, BIA trust restrictions, and reliance on fringe lenders charging triple-digit AP Rs. 4. Constitutional Argument Freeman’s polemic turn: because racially-stratified debt is a direct vestige of slavery and colonization, she argues it violates both the Thirteenth Amendment (as a badge and incident of slavery) and the Fourteenth Amendment (as intentional systemic discrimination). She calls for bold remedies: debt amnesty, reparative programs, and structural redesign of the credit system. Commentary: Freeman’s article may resonate with many bankruptcy practitioners—not as abstract history, but as an excavation of the very soil from which our modern consumer-credit system sprouted. If Professor Rafael Pardo has spent the past decade showing that bankruptcy is never merely a neutral commercial doctrine, Freeman demonstrates that consumer credit itself was engineered through racial subordination, and that bankruptcy is the belated, imperfect attempt to mop up the damage. Connecting to the Articles by Rafael Pardo: Earlier blogs on Pardo’s work set up the intellectual scaffolding for Freeman’s argument: Rethinking Antebellum Bankruptcy (2024):  Pardo’s careful reconstruction of how early bankruptcy policy grew out of selective legal protections for white commercial interests, not egalitarian relief. On Bankruptcy’s Promethean Gap: Building Enslaving Capacity into the Antebellum Administrative State (2021):   Pardo’s thesis that federal bankruptcy administration was built to exclude enslaved people—law’s “gift of fire” extended only to white debtors, while others remained permanently liable. Bankrupt Slaves (2017):  Pardo’s key insight: enslaved people were simultaneously property and persons, meaning they lived in a legal universe where debt was omnipresent, yet discharge impossible. Freeman’s article can be read as a prequel to all three—tracing the genealogies of debt before the earliest American bankruptcy laws even existed. Why This Matters for Consumer Bankruptcy Today Freeman’s historical narrative is not nostalgia—it is an indictment of ongoing systems we see every day in Chapter 7 and 13 practice: medical debt disproportionately hitting Native and Black families; auto loan markups and “dealer reserves” that feel like modern-day trading posts; credit card penalty-rate spirals targeting “revolvers” (a term whose etymology would look familiar to 19th-century convict-lease financiers); consumer shaming for “financial irresponsibility” that echoes Jefferson’s manufactured debt narratives. In other words: where others have documented bankruptcy law's selective mercy, Freeman and Pardo diagnosed the credit market’s history of discriminatory cruelty. And her constitutional argument—however polemical in tone—is remarkably coherent with modern bankruptcy practice: Chapter 13  dockets are full of “debtors” whose debts arise not from choices but from structural coercion.   To read a copy of the transcript, please see: Blog comments Attachment Document the_roots_of_credit_inequality.pdf (527.86 KB) Category Law Reviews & Studies

It’s time to check out the California homestead numbers for 2026. The 2021 expanded California homestead not only brought the exemption amount closer to the real cost of housing, it provided for annual adjustments for inflation. The original legislation created a $300,000 floor on the exemption and a $600,000 cap for homeowners, based on the median price of a […] The post 2026 Brings Larger California Homestead appeared first on Bankruptcy Mastery.

W.D.N.C.: Asbestos Claimants v. Semian - Interlocutory Appeal Denied Ed Boltz Wed, 12/03/2025 - 17:16 Summary: The Western District of North Carolina (Judge Volk, sitting by designation) issued a consolidated Memorandum Opinion and Order denying attempts by asbestos claimants in Bestwall and Aldrich Pump/Murray Boiler to take an interlocutory appeal challenging the bankruptcy courts’ refusal to dismiss the Texas Two-Step cases for bad faith. The opinion is both unsurprising and important: it reaffirms that Carolin Corp. v. Miller, 886 F.2d 693 (4th Cir. 1989), remains a nearly insurmountable gatekeeping standard for dismissing a Chapter 11 on bad-faith grounds, and that interlocutory appeals under § 1292(b) are not the place to argue “the bankruptcy court applied the test wrong.”  The asbestos claimants sought leave to appeal the bankruptcy courts’ denial of motions to dismiss in both Bestwall and Aldrich Pump, arguing: The debtors are solvent (in fact, ultra-wealthy “Texas Two-Step” creations), The bankruptcy courts misapplied Carolin, and The continued bankruptcy cases deprive asbestos victims of jury trial rights. Judge Volk rejected the § 1292(b) appeal by holding: 1. No “controlling question of law.” The appeal raised no abstract, clean legal question, but only whether the bankruptcy courts misapplied Carolin to the facts. That is classic “you just disagree with the judge” territory. “Appellants reiterate … that the basis for their appeal is the bankruptcy courts’ purported misapplication of Carolin, which is sufficient to doom their request.” 2. No “substantial ground for difference of opinion.” Whatever broader policy concerns exist about solvent debtors using bankruptcy, the bankruptcy courts applied settled Fourth Circuit law, and the district court wasn’t going to create new doctrine by interlocutory review. 3. Immediate appeal would not materially advance the litigation. Even if the Fourth Circuit took the appeal, reversed, or invented a new Carolin standard, the cases would come back down for more proceedings. Nothing would end quickly. Thus, the motion failed at all three § 1292(b) prongs. The court also noted (for Bestwall) that the bankruptcy judge had not even reconsidered Carolin on the merits—the law-of-the-case doctrine resolved the renewed motion. That meant there literally was no bad-faith ruling to appeal. Commentary: 1. Carolin remains the Fort Knox against  bad-faith dismissals. As much as academics, judges, and asbestos claimants may lament the “Texas Two-Step,” the Fourth Circuit’s decision in Carolin—requiring both: Objective futility, and Subjective bad faith —continues to protect even wealthy, fully-funded corporate entities from early dismissal. 2. Nothing irritates a district judge more than being asked to review fact-finding midstream. Judge Volk politely-but-firmly reminds litigants that: § 1292(b) is for pure questions of law, not “you weighed the evidence wrong.” District courts won’t rewrite Fourth Circuit doctrine by interlocutory appeal. Dissatisfaction ≠ jurisdiction. This matters for consumer attorneys: whenever a creditor tries to bring a mid-case appeal (e.g., stay extension, plan confirmation issues, dismissal denials), Semian reinforces that interlocutory review is nearly impossible. 3. The elephant in the room: the Texas Two-Step isn’t going away (in the Fourth Circuit). The Fourth Circuit already held in Bestwall that federal courts have jurisdiction over solvent debtors. The court, again, declined to revisit the big questions: Is the Texas Two-Step a permissible restructuring tactic? Should solvent debtors be allowed into Chapter 11? Does this deny tort claimants their Seventh Amendment rights? Judge Volk was explicit: “The bankruptcy courts simply applied settled precedent.” Translation: If Carolin is to be fixed, it must happen en banc or at the Supreme Court—not via clever interlocutory appeals.  Whether this case is just being set up for that certiorari request remains to be seen III. How Consumer Bankruptcy Lawyers Can Use This Case Believe it or not, Semian provides several tools for everyday practice in Chapter 7 and Chapter 13 cases: 1. When creditors or trustees argue “bad faith,” cite the case to show the Fourth Circuit’s standard is extraordinarily high. Creditors routinely throw around “bad faith” when: A debtor has high income, A debtor files on the eve of foreclosure, A debtor discharges business debts while keeping assets, A debtor files multiple cases. Use Semian to reinforce: Bad faith under Carolin is narrowly confined. Creditors rarely satisfy either prong, let alone both. Bankruptcy courts apply settled law, and district courts won’t intervene midstream. This is particularly effective in: 362(c)(3) “good faith” disputes (to show the bar is high); motions to dismiss under § 707(b)(3) (suggesting subjective bad faith alone is insufficient); Attempts to bring post-petition assets into a converted Chapter 7 estate under § 348 through an assertion of bad faith; post-confirmation modification fights (“debtor acted in bad faith by incurring debt,” etc.). 2.  Strengthen arguments that bankruptcy courts may apply law-of-the-case and decline to relitigate repetitive creditor motions. Judge Beyer’s refusal to reconsider bad-faith allegations in Bestwall was upheld “The focus is on substantially the same facts… and [this] was the law of the case.” For consumer practice: When a mortgage creditor repeats objections to confirmation or subsequently  objects to an amended plan which had not previously been raised. When a trustee brings serial motions to dismiss, When a repeat filer debtor faces rehashed allegations, Semian can be cited for the proposition that Bankruptcy courts may decline to revisit identical issues, even if the movant changes. 3. Reinforce that bankruptcy protection is not limited to insolvent debtors. The opinion reaffirms what consumer lawyers already know: Solvency is not a barrier to Chapter 11, and by analogy, not a barrier to Chapter 13 or Chapter 7. Every time a creditor argues: “The debtor could pay these debts outside bankruptcy!” You can respond with authority: The Fourth Circuit and district courts have repeatedly confirmed that seeking a centralized forum to resolve liabilities—even for solvent or funded debtors—is a legitimate bankruptcy purpose. With proper attribution,  please share this post.    To read a copy of the transcript, please see: Blog comments Attachment Document asbestos_claimants_v._semian.pdf (374.49 KB) Category Western District

 Why is it Too Late for Asset Protection Planning after a Claim or Litigation Arises?Jay Adkisson has written a very informative article about why it is difficult to do Asset Protection Planning after a claim or lawsuit arises. The article was published in Forbes. At Shenwick & Associates we get many telephone calls and emails from clients about Asset Protection Planning and we summarize that article below.   Clients often ask whether they can protect their assets after a lawsuit threat appears on the horizon. Mr.  Adkisson explains in his article, that once a claim exists, meaningful asset protection planning is unavailable. Under the Uniform Voidable Transactions Act (and its predecessor, the Uniform Fraudulent Transfers Act), a “claim” arises the moment the underlying event giving rise to liability occurs—not when a demand letter arrives, not when a complaint is filed, and not when a judgment is entered. Any transfers made after that point are vulnerable to attack as voidable transactions. Many debtors mistakenly believe they are safe if payments are current or no lawsuit has been threatened, but the law provides no such protection. Mr. Adkisson states that post-claim transfers often trigger serious consequences far beyond simply unwinding the transaction. -Creditors can sue the transferee—often a spouse, child, or friend—and obtain a judgment for the value of the transferred asset. -Courts may award attorney’s fees, civil conspiracy damages, or even punitive or trebled damages if the transfer was intended to evade creditors. In bankruptcy, these transfers can result in denial of discharge under § 727, converting what might have been a dischargeable debt into a permanent financial burden.  Asset protection planning must occur before any claim exists. However, if a claim exists or litigation has been commenced clients are still allowed to utilize Federal & State Exemption statutes.Clients or their advisors with questions about Asset Protection Planning should contact Jim Shenwick, Esq. 917 363 3391  [email protected] 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!

Law Review: Janger, Edward J., Consumer Bankruptcy, Household Debt, and the Big Picture -- Pamela Foohey, Bob Lawless and Deborah Thorne, Debt’s Grip (November 24, 2025). Brooklyn Law School, Legal Studies Paper No. 806, American Bankruptcy Law Journal... Ed Boltz Tue, 12/02/2025 - 17:23 Available at: https://ssrn.com/abstract=5798042 Abstract: Debt’s Grip opens with a bracing number:  one in 11 Americans will file for bankruptcy; approximately 34 million people will file at some point in their lifetime. (1)This, of course, is just the visible part of the iceberg.  The percentage of people who experience financial distress either pervasively or at some point in their lives is a multiple of that 1:11 figure.  Foohey, Lawless and Thorne (“FLT”) seek to show who those bankruptcy filers are, how they got there, and what that means for the bankruptcy system.  Along the way, they offer an indictment of the role that debt plays in our economy.  This essay seeks to tell, in abbreviated fashion, the story told by Debt’s Grip, and then offers an appraisal, both of the limits of the methodology, of the policy prescriptions for consumer bankruptcy, and of their suggestions for structural reform.   The takeaway is threefold:  (1) the data they provide generates a thirst for more data from outside the bankruptcy system; (2) the proposal for consumer bankruptcy reform is constructive but falls short of the comprehensive rethink the system may require; and (3) sadly, the need for structural reform is clear, but has never been less in the cards. Summary: Ted Janger offers a generous but clear-eyed reading of Debt’s Grip, the latest product of the Consumer Bankruptcy Project’s (CBP) now-four-decade exploration of who files bankruptcy and why. The book’s authors—Pamela Foohey, Bob Lawless, and Deborah Thorne—appear in the article under the simple abbreviation FLT. Janger abbreviates Foohey, Lawless & Thorne simply as “FLT,” which I cannot help noting that those initials also echo the physics shorthand for “faster-than-light” — an oddly fitting coincidence, given how routinely their empirical work has illuminated the consumer-bankruptcy universe long before Congress manages to catch up. FLT’s central thesis is familiar to anyone practicing in the trenches of consumer bankruptcy: the people who file are honest but unfortunate, clinging to the middle class with fingernails worn to the quick, and filing only when every other option—borrowing, privation, prayer—has been exhausted. Janger walks readers through the key themes: Debt is now the default shock absorber for nearly every American household crisis. “Life in the sweatbox” is not a metaphor; it is an empirical category. Filers are not the poorest—they are the strugglers who tried to save something. Race, gender, and age intensify risk: Black households file at disproportionately high rates. Black debtors are routed into Chapter 13 at double the rate of whites. Single mothers and older Americans struggle the longest. The “can-pay debtor” is a myth, confirmed across decades of CBP data. Debt is functioning as a shadow social safety net, a role it is fundamentally unsuited to play. FLT propose reforms—most mirrored in the Consumer Bankruptcy Reform Act of 2024—including mortgage modification, student-loan discharge, federal exemptions, and a unified consumer chapter. Janger sees the merit but doubts the politics. The article ends with realism shading towards pessimism: the CBP’s data points to structural solutions, but Washington is currently dismantling what little consumer protection infrastructure existed. Commentary: If Debt’s Grip is the MRI of American household financial life, Janger’s review is the radiologist’s report: “multi-system failure, chronic, progressive.” FLT—our “faster-than-light” researchers—continue their decades-long project of showing the world what consumer bankruptcy lawyers see daily: that modern debt relief is not a tool of prosperity, but of triage. The Missing Strugglers: the unseen majority Janger’s most stinging observation—drawn from FLT and work like Dalie Jimenez’s “Missing Strugglers”—is that bankruptcy filers are only the ones who finally fell. The unseen universe of non-filers—those facing garnishments, lawsuits, utility cutoffs, medical collections, and credit-card minimum-payment purgatory—remains largely unmeasured. Bankruptcy’s data tells the story of those who broke. It tells us nothing about the millions still bending. Debt is no longer investment—it is life support As in your earlier commentary, the review reinforces that consumer credit today functions not as a ladder but as a life raft. People do not buy luxuries with credit cards; they buy time, groceries, brakes for the car, emergency dental care, asthma inhalers. Student loans—once the golden ticket to upward mobility—now resemble a regressive tax on ambition. Mortgages, stripped of any modification authority in bankruptcy and even before the absurd suggestion of having a 50-year term, can be more of a trap than asset for the working poor. Reform: applying bandages to an arterial wound FLT (and Janger) correctly support the essential reforms: mortgage modification federal exemptions dischargeability of student loans elimination of the means test unification of consumer chapters But even if enacted, these would treat symptoms of a deeper illness: the privatization of risk and the abandonment of social investment. As your earlier post put it, you cannot cram down the cost of eldercare. You cannot discharge wage stagnation. You cannot lien-strip insulin prices. The long view: the CBP will still be here when Congress wakes up The CBP has been documenting household financial distress for forty years. It will almost certainly be needed for forty more. Reform is unlikely in the short term; political winds are blowing in the wrong direction. But eventually—after enough damage—there will be an appetite for structural solutions. When that time comes, FLT’s faster-than-light research may be the map policy makers finally follow. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document ssrn-5798042.pdf (572.34 KB) Category Law Reviews & Studies

My fellow author at ConsiderChapter13.org Jen Lee called for the bankruptcy bar to do a better job of pitching the manifest strengths of Chapter 13. Ditch the jargon and focus on the facts that are Chapter 13’s strenght. Her advice to use head to head comparisons with alternative approaches to debt for the client is […] The post Putting the spotlight on Chapter 13 appeared first on Bankruptcy Mastery.

The last thing you want is for a personal injury settlement to be taken by greedy creditors rather than going to the very real damages you have incurred and need help covering if you don’t intentionally protect your settlement with exemptions or by filing Chapter 13. The federal exemption for personal injury settlements during bankruptcy is just over $30,000 in 2025. While you may be able to use several exemptions to increase the amount of the personal injury settlement you can exclude, it may not be totally protected if you file Chapter 7, especially if you do so without our attorneys’ help. Call Young, Marr, Mallis & Associates at (215) 701-6519 to get a free case discussion with our Pennsylvania bankruptcy lawyers. How Can You Protect a Personal Injury Settlement During Bankruptcy in Pennsylvania? Your personal injury settlement should go towards the damages you incurred from negligence, not creditors. Protecting a personal injury settlement from bankruptcy is very important, and our lawyers can help with this by ensuring you claim the right exemptions. Using Federal Exemptions There is a specific federal “personal injury exemption” that you can use to exclude up to $31,575 of a personal injury settlement in 2025 if you choose federal exemptions. You may also use the federal wildcard exemption that lets you exclude up to $1,675 of any property, including a personal injury settlement. You may also use up to $15,800 of an unused federal homestead exemption. “Stacking” federal exemptions may let you exclude up to $49,050 of a personal injury settlement from bankruptcy in 2025. Using State Exemptions Pennsylvania doesn’t have a specific exemption for personal injury settlements if you choose state exemptions. Its wildcard exemption only lets debtors exclude up to $300 of any property they want, which might barely scratch the surface of your personal injury settlement. Filing Chapter 13 You may protect a personal injury settlement by filing Chapter 13 bankruptcy rather than Chapter 7, which requires asset liquidation and puts your personal injury settlement and other property at risk. We can see if you qualify for Chapter 13 by assessing your income and running you through a “means test” to determine whether you can settle your debts through a repayment plan that spans three to five years. Can You Use Federal and State Exemptions to Protect a Personal Injury Settlement from Bankruptcy? As mentioned, there are federal and state-specific exemptions for assets during bankruptcy. You have to choose which set of exemptions will help you the most, whether federal or state. You cannot choose both types. You must decide between federal and state exemptions to protect a personal injury settlement and other assets. Federal exemptions are considerably better than Pennsylvania’s regarding personal injury settlements and other property, as the applicable state exemption, the wildcard exemption, only lets you exclude up to $300. What if You Don’t Protect Your Personal Injury Settlement During Bankruptcy? If you don’t intentionally protect your personal injury settlement during bankruptcy, it may be used to settle your outstanding debts with creditors. This could put you at risk of getting into medical debt if you cannot pay upcoming medical bills with your settlement, so don’t underestimate the importance of protecting this sum of money during bankruptcy. If you don’t disclose your recent personal injury settlement or any other assets when you file for bankruptcy, you might face considerable penalties and could lose a large portion of your settlement to the bankruptcy court, as well as creditors. Furthermore, your bankruptcy case might be dismissed, putting you at risk of wage garnishment, vehicle repossession, and even mortgage foreclosure from creditors no longer inhibited by bankruptcy’s automatic stay. FA Qs About Protecting a Personal Injury Settlement from Bankruptcy Can Creditors Take Personal Injury Settlements Before Bankruptcy? If you are in considerable debt and haven’t yet filed for bankruptcy, creditors might file a lawsuit against you to seek repayment and go after your largest assets, like your home, car, and even a recent personal injury settlement. Do You Have to Disclose a Personal Injury Settlement During Bankruptcy? You must disclose a personal injury settlement when you file for bankruptcy, as it’s one of your assets. Exemptions may not cover the entire settlement, and the bankruptcy court may use the rest to help repay creditors. Can Filing for Bankruptcy Protect Your Personal Injury Settlement from Creditors? Filing for bankruptcy may protect your personal injury settlement from creditors if you file Chapter 13 specifically. Chapter 13 doesn’t involve any asset liquidation, and the debtor’s debts are consolidated at a single interest rate and repaid in installments. Should You File Chapter 7 Bankruptcy if You Have a Personal Injury Settlement? Filing Chapter 7 bankruptcy is risky if you recently received a personal injury settlement in Pennsylvania, as you most likely cannot exclude all of it from your case. Do You Need a Lawyer to Protect Your Personal Injury Settlement During Bankruptcy? Without a lawyer, you might cause the wrong liquidation exemptions, fail to meet important bankruptcy deadlines, fail to receive a debt discharge, and face many other issues during your bankruptcy case. How Do You Claim Exemptions to Protect Your Personal Injury Settlement from Bankruptcy? Our Pennsylvania bankruptcy lawyers can use the bankruptcy form Schedule C to identify the exemptions we want to make and for what specific assets. Fail to list any exemptions, and they will not be included in your bankruptcy case. Should You Use Your Personal Injury Settlement to Avoid Bankruptcy? While your personal injury settlement should go towards medical bills and other expenses from an injury, you shouldn’t have to use it to cover previous debts. Filing the right bankruptcy chapter and choosing the right liquidation exemptions can protect the settlement during bankruptcy, so you don’t have to worry about losing it. Reach Out About Your Pennsylvania Bankruptcy Case Now Call Young, Marr, Mallis & Associates for help with your case from our Pennsylvania bankruptcy lawyers at (215) 701-6519.

M.D.N.C.: Custer v. Simmons Bank & DMI: Cause of Action for Loss-Mitigation Fees Survive, Bad Threats Don’t — A Middle District Tune-Up on Servicing Litigation Ed Boltz Fri, 11/21/2025 - 15:08 Summary: In a detailed but pragmatic opinion, Chief Judge Catherine Eagles offers a tidy roadmap for mortgage-servicing litigation in the Middle District — clarifying what sticks at the pleading stage (loss-mitigation fee violations, RESPA damages, UDTPA claims) and what gets tossed to the curb (negligence, joint venture fantasies, and the perennial “they threatened foreclosure!” count that courts treat like the boy who cried wolf). The result: Custer’s strongest claims live another day, and mortgage servicers get a reminder that North Carolina’s Mortgage Debt Collection and Servicing Act (MDCSA) actually has teeth — especially the 30-day fee-disclosure rules in N.C. Gen. Stat. § 45-91.  Personal Jurisdiction: If You Service in NC, You Answer in NC: Simmons Bank tried the predictable “we’re nowhere near North Carolina” argument — but once you service a North Carolina mortgage, communicate with a North Carolina borrower, and collect North Carolina payments, the long-arm statute and Due Process Clause converge in perfect harmony. Judge Eagles had no trouble finding specific jurisdiction, especially where DMI was acting as Simmons’ agent and the alleged misconduct arose out of the servicing relationship itself. Practice Point: Servicers who acquire loans on NC property should stop pretending they’re “not doing business” here. The MDNC is not impressed by that argument.  No Rule 8 “Shotgun Pleading” Here: Simmons also lobbed the increasingly popular “shotgun complaint” argument. Judge Eagles — correctly — found this complaint was not one of those sprawling, defendant-lumping monstrosities that courts love to mock in footnotes. Custer actually separated his allegations and counts with some clarity. Claim-Splitting Defense Rejected: DMI argued that Custer improperly brought two separate cases: Custer I – a narrow class action about illegal pay-by-phone fees. Custer II – an individual action about loss-mitigation misconduct, RESPA violations, and wrongful account handling. Even though both involve the same subservicer and overlapping time periods, the factual nuclei were distinct. Judge Eagles correctly held that North Carolina plaintiffs are not required to put every egg in the same basket just because one of them got mentioned in a demand letter.    This  support the argument that while an Objection to Claim in a Chapter 13 case might appropriate deal with the disallowance of illegal mortgage servicer  fees under   N.C.G.S. § 45-91,  a debtor could raise claims for damages in separate actions or even in other forums than the bankruptcy court. Surviving Claims 1. NCDCA — Loss-Mitigation Fees (Count I) This is the heart of the opinion. Custer alleged that DMI: charged “Loss Mitigation Attorney Fees,” failed to send the required clear and conspicuous explanation within 30 days, and passed through stale fees older than 30 days — all in violation of § 45-91(1)(b) and § 45-91(3). Judge Eagles recognizes that violations of the MDCSA constitute unfair acts under Chapter 75, and emotional distress is a cognizable injury under the NCDCA. This claim stays in. Why This Matters:  The MDCSA may be North Carolina’s most underutilized consumer-protection statute. Servicers routinely treat the 30-day disclosure rule as optional. It isn’t — and Custer shows courts will enforce it. 2. NCDCA — False Representations About the Amount Owed (Count III(b)) Custer alleged that after signing a loan-mod agreement: the servicers sent him incorrect payment amounts, misrepresented the amount owed, and later admitted they had done so. That’s enough to survive dismissal. Even a single incorrect statement, if used to collect a debt, satisfies N.C. Gen. Stat. § 75-54(4). 3. RESPA — Loss-Mitigation Handling (Count II) DMI argued Custer failed to allege “actual damages.” Judge Eagles disagreed. Allegations that: RESPA delays forced him into a worse modification, increased capitalized interest, and brought him closer to foreclosure are more than sufficient. This tracks the increasingly borrower-friendly reading of RESPA damages that’s shown up in recent Fourth Circuit and district-court decisions. 4. UDTPA (Count IV) Servicers argued that the NCDCA provides the exclusive remedy and bars a standalone UDTPA claim. Not necessarily so. Judge Eagles notes that: the MDCSA and SAFE Act impose duties beyond pure “debt collection,” the defendants have not yet admitted they are “debt collectors” under the NCDCA, and a factual record is needed before declaring exclusivity. The UDTPA claims survive, at least for now. Commentary: This is important.   Servicers love arguing that Chapter 75 only applies through the NCDCA. This opinion confirms what practitioners know: mortgage servicing involves more than “debt collection.”   Servicers have independent statutory duties — especially under § 45-93 — and violating those duties can support a UDTPA claim. Dismissed Claims: 1. NCDCA — Communicating With a Represented Consumer (Count III(a)) Custer didn’t identify any specific communication after the attorney-rep notice. Courts don’t accept “they kept calling me” without dates or examples. This was correctly dismissed. 2. NCDCA — Threatening an Illegal Foreclosure (Count III(c)) Simply alleging “they pursued foreclosure” isn’t enough. North Carolina courts have long held that lawful foreclosure threats are not UDTPA violations unless the borrower alleges the foreclosure itself was unlawful. This claim dies — again, correctly. 3. Negligence (Count V) Custer conceded dismissal. 4. Joint Venture (Count VI) The “Simmons + DMI = Joint Venture” theory gets a swift judicial eye-roll. Joint ventures require: shared profits, and mutual control. Servicer and subservicer do not share profits, and DMI does not get to boss Simmons Bank around. Dismissed with prejudice. Takeaways: 1. The MDCSA is no longer the forgotten stepchild of NC consumer law. Judge Eagles treats § 45-91’s fee-disclosure rule as a meaningful, enforceable statute — and one that can trigger treble damages via Chapter 75.  These protections are well known in bankruptcy courts from cases including Saeed, Peach and most recently Rogers.  Mortgage servicers should now be on notice that violations of these restrictions and notice requirements will result in requests  for treble damages. 2. Servicing misconduct during loan modifications is fertile litigation ground. RESPA, MDCSA, NCDCA, UDTPA — all survived in some form. North Carolina homeowners are uniquely well-protected if counsel knows the statutory landscape. 3. Not every misdeed equals a foreclosure-threat claim. Courts require specificity — and borrowers must allege the threat itself was unlawful. 4. Joint venture theories between servicers and subservicers should be permanently retired. We can stop wasting keystrokes on them. Final Commentary: Custer v. Simmons Bank & DMI is a solid example of how North Carolina’s layered statutory scheme protects mortgage borrowers — and how servicers’ casual treatment of fee disclosures, modification timelines, and payment accuracy can open them to real litigation risk. As more cases like Custer develop, expect to see: More MDCSA enforcement, More RESPA damages claims tied to loan-mod failures, and More UDTPA claims survive despite NCDCA “exclusivity” defenses. Debtors in bankruptcy cases seeking treble damages for violation of   N.C.G.S. § 45-91 (whether in bankruptcy court claims objection or subsequent suits in federal district court.) North Carolina continues to be one of the few states where mortgage servicers can’t treat homeowners as an afterthought — and the federal courts are beginning to treat these statutes as more than decorative wall hangings. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document custer_v._simmons_bank.pdf (280.21 KB) Category Middle District

 Chapter 7 Business Bankruptcy Filings in SDNY and EDNY In today’s challenging economic climate, many businesses are struggling due to declining sales, high interest rates, tariffs, supply-chain pressures, or other factors. As a result, an increasing number of business owners in the Southern and Eastern Districts of New York are choosing to close their doors and file for Chapter 7 bankruptcy. Filings commonly rise after the holiday season, following Christmas and Chanukah. Most business filers are Subchapter S corporations or LL Cs. A Chapter 7 bankruptcy for a business is a liquidation proceeding. While many cases are “no-asset” cases, if the company does have assets, the Chapter 7 Trustee will hire a liquidator or auctioneer to sell those assets and generate funds for distribution to creditors. Trustee Document Requests After a business files for Chapter 7, the Trustee will typically request financial documents, including: Bank statements Tax returns Credit card statements Accounting records Contracts and leases Any documents reflecting asset transfers These materials are reviewed by the Trustee, Trustee’s counsel, or the Trustee’s accountant to identify preferential payments, fraudulent conveyances, and other questionable or prohibited transactions. Common Transactions the Trustee Will Scrutinize Below are transactions frequently examined or challenged in a Chapter 7 business case: Preference Payments Transfers made to creditors within 90 days before filing (or within one year if to an insider such as a family member, officer, or business partner) that give one creditor more than others. The Trustee may “claw back” these payments to ensure equal treatment. Fraudulent Conveyances Transfers made to hinder, delay, or defraud creditors—or transfers for less than reasonably equivalent value—typically within two years under the Bankruptcy Code, and longer under New York’s Debtor & Creditor Law. These often involve “sweetheart deals,” including transfers to family members, insiders, or related entities. Personal Expenses Paid by the Business Payments for the owner’s personal insurance, car expenses, meals, vacations, or similar items can be flagged by the Trustee as improper or excessive. Gifts or Large Transfers to Friends or Family Significant transfers to insiders may be reversed if the Trustee determines the business did not receive value in return. Sales of Assets Below Fair Market Value Selling equipment, inventory, or property for less than fair market value, particularly shortly before filing, raises red flags for fraudulent transfer claims. Unusual or Inconsistent Transactions Any activity that departs from ordinary business practices—such as sudden depletion of assets, hidden accounts, cash withdrawals, or unreported income—will be reviewed carefully. Undervalued Transactions Transfers where the business received significantly less than fair market value, sometimes going back up to five years under applicable state law. Transfers Intended to Defeat Creditors Any transfer made to move assets out of reach of creditors (e.g., shifting assets to a family member or affiliate) is subject to reversal. Transactions Where Consideration Is Paid to a Third Party If property goes to one person but payment goes to someone else, the Trustee may challenge the transaction as improper. Transfers to Insiders or Related Entities Deals involving officers, directors, family members, or other businesses under common ownership are examined with particular scrutiny. If you or your advisors have questions about Chapter 7 business bankruptcy filings in SDNY or EDNY, please contact: Jim Shenwick, Esq. ? 917-363-3391 ? [email protected] Schedule a phone call: https://calendly.com/james-shenwick/15min We help individuals and businesses with too much debt.