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Bargain basement bankruptcy lawyers is the common denominator in my newest cases.

It seems the newest specialty for bankruptcy lawyers is fixing mucked-up cases from other  lawyers.

Most of the problems we’re seeing seem fixable, some may resist rescue.

But the clients will end up paying twice: one to the cheapo lawyer, and once to us to clean it up.

Undoubtedly, they’ll pay more than if  they’d paid for competent counsel to do it right the first time.

Bankruptcy mistakes

We have three conversions from Chapter 11 to Chapter 7 involving significant real estate assets.

1 week 1 day ago

Receiving Wide Coverage ...

Mixed bag: Bank of America's second-quarter results are better than analysts predicted, but still spell a big drop from last year. The bank's profit fell to $4.23 billion from $5.13 billion a year earlier, while adjusted revenue slid to $20.6 billion from $21.96 billion, B of A reported on Monday morning. Wall Street Journal, New York Times, Financial Times>, American banker ...

Read More from: BankThink

1 week 1 day ago

Tax return not filed on timeTax returns filed late – can the debt be discharged in bankruptcy?

Confusion reigns among the various courts responsible to interpret and apply the bankruptcy laws.  The question is  whether a debtor can use bankruptcy to discharge a tax debt when a tax return was filed late.  Some court decisions have little to do with the law, but instead focus on the actions of the taxpayer.  even the IRS does not support the conclusion of some courts (filing a tax return even one day late = non-dischargeable).

At this time the Courts of Appeals fall generally into two camps of thought:

1) The First, Fifth and Tenth Circuits have convoluted the Bankruptcy Code, federal statutes and case law in order to determine that a tax debt is not discharged if the tax return is filed even one day late.

1 week 3 days ago
Don't Let This Be You!

Willy Stöwer, 1912

Chapter 7 is the chapter under the Bankruptcy Code that most consumers file. It is seen as simple, fast, and, by some, “just filling out a few forms.”

It isn’t. The picture to the left shows what can happen if you don’t know precisely what you’re doing.

As the Official Instructions to the bankruptcy forms state, “Completing the forms is only a part of the bankruptcy process. You are strongly encouraged to hire a qualified attorney not only to help you complete the forms but also to give you general advice about bankruptcy and to represent you in your bankruptcy case.”

So what’s the worst that can happen if you don’t use a lawyer? Lots.

Read More from: Bankruptcy Law Network

1 week 3 days ago

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Nebraska is the 16th biggest state in the USA, but we rank 43rd in population density.  In fact, Nebraska has more cows than people by a ratio of 3 to 1.

Bankruptcy is a specialized area of laws these days, especially after enactment of the Bankruptcy Reform Act of 2005.  Attorneys in sparsely populated areas of the state generally do not handle bankruptcy cases, so our firm is routinely hired by clients throughout our big state.  (This is actually a wonderful aspect of practicing bankruptcy law since we get to know folks in every square inch of the state and learn about their communities.)

One challenge we face in a state that stretches 430 miles across is getting documents signed and returned in a timely fashion.  This is especially critical in bankruptcy cases since we must provide the court with a precise “snapshot” of a debtor’s financial situation on the day the case is filed.  Bank account balances change daily, average income calculations change monthly, and the list of debts owed changes constantly.

1 week 4 days ago

The acrimonious debate in the bitcoin community turns in part on whether one prioritizes using the digital currency as an investment or as a means of expanding global financial inclusion.

Read More from: BankThink

1 week 4 days ago

On July 6, 2016, the House of Representatives passed the Financial Institution Bankruptcy Act of 2016 (“FIBA”) as part of a larger financial services budget bill.  FIBA proposes to amend the Bankruptcy Code (the “Code”) to address the specific challenges that arise when a financial institution becomes insolvent.  The House Judiciary Committee’s report accompanying the bill concluded that, the bankruptcy process is not optimally designed for the orderly resolution of financial institutions. The Committee noted that the interconnectedness of financial institutions creates a potential for systemic risk to the broader financial markets, and, as was evident during the 2008 financial crisis, taxpayers are often called upon to prevent such risks.  FIBA, which would be located under a new subchapter V within Chapter 11 of the Code, confronts these challenges by seeking to improve the administration of financial institutions’ bankruptcy proceedings.

Legislative Background

Read More from: Hughes Hubbard & Reed

1 week 4 days ago

Recently, a bankruptcy court in the First Circuit, confronted with whether the debtors’ chapter 12 case could be converted to a chapter 11 case – an issue over which there is split in the case law – determined that the Debtors’ chapter 12 case could not be converted to a chapter 11 case. 

Relevant Statutes and Statutory Provisions: 

Chapter 11 of the Bankruptcy Code allows both businesses and individuals a mechanism to reorganize their debt, whereas chapter 13 is a mechanism of reorganization of debt available exclusively to individuals.  Chapter 7 governs the process of a liquidation bankruptcy.

Chapter 12 of the bankruptcy code is a framework for family farmers or family fishermen (as such terms are defined in the Bankruptcy Code) to reorganize their debt.  Chapter 12 of the bankruptcy code was implemented to reduce the complications and costs such debtors would face when attempting to reorganize under chapter 11 of the Bankruptcy Code, as well as to address the issues such debtors would face when reorganizing under chapter 13, which was intended for wage earners who generally have smaller debts than those of family farmers or fisherman.

1 week 4 days ago

Using methods akin to fighting external hacking can also address risks of employees committing legal or ethical lapses.

Read More from: BankThink

1 week 4 days ago

My take on the Second Circuit's opinion – which Levitin has also written about (and I agree with him that the used car analysis is a bit "off") – is over on Dealb%k.  In short, I think that GM mostly has itself to blame for the inability to "discharge" these claims in its chapter 11 case. But the basic point that the federal Bankruptcy Code can override state law successor liability claims remains, despite what some state (and federal) courts have previously held.

Read More from: Credit Slips

1 week 4 days ago

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If an asset isn’t titled to you,  it does not have to be disclosed in a bankruptcy filing.

I hear it and see it in action again and again.

If it isn’t titled to you, it will be “safe” from the bankruptcy trustee and from creditors.

And yet it is wrong.

Wrong, wrong, wrong.

Still, people transfer titles to cars and cash and quitclaim their homes to friends before bankruptcy, thinking that’s smart.

No.  It’s both dumb and dangerous.

Not only does putting your assets in the names of friends and family expose them to a lawsuit to recover the property, in extreme situations it puts your bankruptcy discharge at risk.

1 week 4 days ago

Risk management is not limited to assessing potential successes and failures of everyday business. Strategic risk management is just as important.

Read More from: BankThink

1 week 4 days ago

Attorney Ed WoodsBack in March, I wrote about the immediate steps you should take if you are facing overwhelming debt. Today, let’s look at some immediate steps to take if you are receiving harassing debt collection phone calls. When you are struggling with money problems, the last thing you want to deal with is harassing phone calls by debt collectors. You’re already stressed about not being able to pay the debt (assuming that you do actually owe it) and finding yourself on the end of a nasty debt collection phone call just magnifies the stress. But what can you do about these calls?

Read More from: Bonds & Botes, P.C.

1 week 4 days ago

Hot off the presses: Citigroup and Wells Fargo reported Friday morning that they saw second-quarter profits fall from a year earlier, though both either met or exceeded analyst expectations. Citigroup reported $4 billion in profit on $17.55 billion of revenue. Wall Street Journal, New York Times, American Banker, Financial Times Â...

Read More from: BankThink

1 week 4 days ago

The Second Circuit handed down its much-anticipated decision on the GM successor liability claims. Bottom line is that most, if not all, of the various claims against New GM are not barred by the Sale Order because of lack of procedural Due Process.  That said, there's a lot more in the ruling.  My thoughts below the break: 

Four groups of plaintiffs made various arguments (not all making the same ones) appealing the bankruptcy court's decision to enforce the Sale Order as barring their claims against New GM:

Read More from: Credit Slips

1 week 4 days ago

A former Wall Street trader contends that "bro talk" is keeping women down, and it often comes from bosses; B of A says there is no "bro's club" at the company; Mary Mack is succeeding a retiring Carrie Tolstedt at Wells Fargo; and Barclays' Barbara Byrne tries a new recruiting tactic. Also, with Theresa May as U.K. prime minister, could we soon see mostly women running the western world?

Read More from: BankThink

1 week 5 days ago

Porter Consumer LawCredit Slips blogger Katie Porter has produced a new textbook in consumer law that anyone teaching the subject should consider adopting. Indeed, law professors not teaching consumer law should to take a look at it and consider whether they should add the class to their teaching portfolio. A 2013 poll on Brian Leiter's Law School Reports named consumer law as the number one "area of law which deserves more attention in the legal academy." Next academic year I will be picking up a new course, and the emergence of Porter's new text made the decision easy for me as to which course it will be.

Read More from: Credit Slips

1 week 5 days ago

A decision from the United States Supreme Court penned by Justice Sonia Sotomayor adopted a broad reading of “actual fraud” in section 523(a)(2)(A) of the Bankruptcy Code, which excepts from discharge debts “obtained by . . . false pretenses, a false representation, or actual fraud.”  11 U.S.C. § 523(a)(2)(A).  The decision, Husky International Electronics v. Ritz, resolved a split in the Circuits regarding whether the phrase “actual fraud” required a false representation or whether the phrase could be more broadly construed as encompassing other forms of fraud such as a fraudulent conveyance. 

1 week 5 days ago

Detroit, Michigan, USA - March 30, 2010: The towers of the Detroit Renaissance Center, the world headquarters of the General Motors Corporation.

Last week, the Second Circuit Court of Appeals reversed a bankruptcy court order barring tort claims for product defects against the purchaser of General Motors’ (“Old GM”) assets.  The purchaser (“New GM”) had purchased Old GM’s assets “free and clear” in Old GM’s 2009 bankruptcy case under section 363 of the Bankruptcy Code.  The Second Circuit’s ruling is certainly a victory for the plaintiffs who are seeking damages for personal injuries arising out of product defects and redress for lost economic value for defective vehicles.  However, the court’s ruling also underscores the broad scope of “free and clear” sales under normal circumstances.

Read More from: eSQUIRE Global Crossings

1 week 5 days ago

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