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One hard and fast rule in Bankruptcy is that debts and claims are “set in stone” as of the petition date, or perhaps post-petition if added to the Chapter 13 plan.  Bankruptcy Courts and Trustees do not normally police potential debts that may come up later.  There are some exceptions to the general rule, and a Texas Bankruptcy Court addressed one of them recently.

In In re Sinclair, Ch. 13 Case No. 11-34564 (Bankr. S.D. Tex. September 7, 2016)(click here for opinion), the Debtors filed their Chapter 13 case in May 2011, proposed a confirmed plan, made all payments and completed their financial management course.  Thus, they were eligible for a discharge.  “But, there is a rub,” said  Judge Jeff Bohm.  There existed a criminal case against Mr. Sinclair arising from an alleged sexual relationship with a minor.  The alleged relationship started after the Chapter 13 petition was filed, and is discussed in a little more detail in the Court’s Order.  It resulted in a felony indictment against the Debtor in July 2014, which was still pending as of September 2016.

Read More from: Georgia Bankruptcy Blog

2 weeks 5 days ago

The Financial Accounting Standards Board's accounting rules for credit risk have good intentions, but a likely amplification of the ups and downs of the credit market was probably not one of them.

Read More from: BankThink

2 weeks 5 days ago

Attorney Ron SykstusIn what can only be described as stunning news, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — since 2011. The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

Employees Opened Unauthorized Accounts

As reported by Money CNN, the scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB.

The way it worked was that employees moved funds from customers’ existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as “widespread” and led to customers being charged for insufficient funds or overdraft fees — because the money was not in their original accounts.

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

2 weeks 5 days ago

Receiving Wide Coverage ...

Incentive to cheat?: Wells Fargo was hit with the largest penalty in the history of the Consumer Financial Protection Bureau to settle charges that thousands of employees created unauthorized bank and credit card accounts for customers in order to collect bonuses for themselves. The company fired 5,300 employees as a result. The bank agreed to pay a $185 million regulatory enforcement action plus another $5 million in customer remediation. Wells' own analysis...

Read More from: BankThink

2 weeks 5 days ago

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9/11 Memorial

By Donald L. Swanson

The American Bankruptcy Institute and St. John’s University School of Law do an annual forty-hour [yes, that’s 40-hour] “Bankruptcy Mediation Training” course.  The next course is coming soon — it’s scheduled for December 11 – 15, 2016.

I took this course two years ago – and loved it!  Here are some reasons why.

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Course Site

First of all, this is not a vacation.  These are long, hard days of study and work and thought, complete with working-lunches, no less!  But being from Omaha, I get up early and walk around lower Manhattan to see the City each morning before showing up – on time – for the course.

Read More from: Mediatbankry

2 weeks 6 days ago

Within five years, a dramatic transformation of the mortgage market will force firms to expand product menus beyond mortgages to develop stronger relationships with their customers.

Read More from: BankThink

2 weeks 6 days ago

A likely sale of CIT Group's aircraft unit (and a whole lot of other stuff) is keeping Ellen Alemany busy, a former Wall Street banker talks about big data as a financial weapon of mass discrimination targeting women and the poor, and First Busey shows how investing in employees pays off. Also, TIAA's Kathie Andrade, Deloitte's Cathy Engelbert and (to spice things up) Victoria Beckham.

Read More from: BankThink

2 weeks 6 days ago

steering your financial course

Chapter 13 bankruptcy is about protecting assets, I read somewhere on the internet.

That sells Chapter 13 short by half in my view.

It’s not just about assets.

Many of my Chapter 13 clients have no meaningful assets to protect.  Assets to protect isn’t what made 13 right for them.

It’s that Chapter 13 kept them in control.

  • Control of creditor interaction.
  • Control of income.
  • Control of assets, too

In the face of a creditor who is entitled to levy, garnish, and harass, Chapter 13 lets the debtor-client stay at the helm of their financial life.

2 weeks 6 days ago

Without incentives to shoot higher, banks usually settle for "Satisfactory" on their Community Reinvestment Act exams, but many find that not getting a better grade has consequences.

Read More from: BankThink

2 weeks 6 days ago

The ability of a secured creditor to credit bid its debt in connection with a sale of a debtor’s assets received a strong boost in a decision last month in the Chapter 11 case of Aeropostale from U.S. Bankruptcy Judge Sean Lane of the Southern District of New York.  Two recent decisions, Fisker Automotive and Free Lance-Star Publishing Co., had surprised many observers by narrowing the rights of secured creditors to credit bid, and resurrected uncertainty about a debtor’s ability to limit those rights (a dispute that had appeared to have been resolved in favor of secured creditors only a few years earlier by the Supreme Court’s decision in RadLax Gateway Hotel).  In particular, Fisker Automotive and Free Lance-Star Publishing Co. suggested that the potential of a credit bid to “chill” bidding by other prospective buyers could suffice to limit a secured creditor’s rights.  Judge Lane’s ruling in Aeropostale significantly walks back those decisions and narrows the grounds on which credit bidding rights can curtailed.  (Kelley Drye & Warren LLP represents parties in the Aeropostale case but took no part in the matters discussed here.)

Read More from: Bankruptcy Law Insights

2 weeks 6 days ago

ScripsAmerica, Inc. (OTCBB: SCRC) has filed a chapter 11 petition before the United States Bankruptcy Court for the District of Delaware (Case No. 16-11991).  The case has been assigned to the Honorable Laurie Selber Silverstein.  The debtor is a provider of pharmaceutical supply chain management services headquartered in Clifton, New Jersey.  According to the debtor, the filing is in response to the cessation of its main business line and ongoing litigation in California.  The petition (including the list of top 20 creditors) and first day declaration are provided.

Contact Norman L. Pernick and  Nicholas J. Brannick for more information.

2 weeks 6 days ago

Receiving Wide Coverage ...

Two heads...: JPMorgan Chase said Mark Leung, head of its Asia Pacific equities business since 2014, and Jason Sippel, global head of prime services, will together run the bank's global equities division. The two replace Tim Throsby, who left to run Barclays' corporate and international division. Wall Street Journal, Financial Times Wall Street Journal ...

Read More from: BankThink

2 weeks 6 days ago

B. Grant McNuttWhen you file your Bankruptcy petition, the Bankruptcy Court will send all your creditors a Notice of Bankruptcy Case (Form 309).  This Notice among other things will tell your creditors specifically which Chapter you have filed, be it a Chapter 7 or Chapter 13 Bankruptcy.  They usually receive this Notice within 7 to 10 days from your filing.  Don’t fret about the seemingly long time frame though, because the moment you file your Bankruptcy case, an automatic stay goes into effect.  The automatic stay stops your creditors immediately in their tracks and prohibits them from initiating or continuing any collection activities against you.  In other words, it stops your creditors in their tracks.

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

2 weeks 6 days ago

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Incongruity = Right of Way Issues (photo by Marilyn Swanson)

By: Donald L Swanson

Each United States district court shall authorize . . . the use of alternative dispute resolution processes in all civil actions, including adversary proceedings in bankruptcy.

28 U.S.C. § 651.

To date, many bankruptcy courts are still without local mediation rules, despite such statutory language.

How can this be?

An Explanation

One explanation is that, many years ago, the Administrative Office of the United States Courts determined that the above quoted language (“all civil actions, including adversary proceedings in bankruptcy”) applies “only to adversary proceedings where the reference has been withdrawn” by the district court.

This explanation is faulty.

Here are some reasons why it’s a faulty explanation.

Read More from: Mediatbankry

3 weeks 45 min ago

NJ Bankruptcy Tax Issues LawyerIt used to be assumed that getting married would help to alleviate debt concerns because doing so would have a positive effect on a person’s tax bill, among other things. However, that may not actually be the case, especially if both spouses have high annual incomes. Beyond that, getting married can potentially reduce a person’s mortgage deductions when filing taxes.

Annual Income and Tax Obligations

Under some circumstances, of course, marriage will do wonders for a person’s yearly tax requirements. For instance, when one spouse earns significantly more money than the other spouse, the couple’s joint tax bill will likely go down after marriage.

3 weeks 14 hours ago

When someone is looking to file chapter 13 bankruptcy, they obviously want to pay back as little as possible. They also want to gain the greatest amount of relief during the process. There are a number of factors that go into determining whether or not the monthly payment is going to be high, low, or+ Read More

The post Paying Back As Little As Possible Under Chapter 13 appeared first on David M. Siegel.

3 weeks 18 hours ago

Despite their slowdown in growth, marketplace lenders are still in good position to gain from the digitization of the financial services industry.

Read More from: BankThink

3 weeks 18 hours ago

Fintech is transforming consumer financial services, but automation and data innovation can also help banks meet their growing regulatory demands.

Read More from: BankThink

3 weeks 21 hours ago

Lawyer Nick GajewskiNow that the new school year has started, parents everywhere are looking at their bank accounts and wondering when school got so expensive.  Between new clothes for the kids, fees for class trips, and the cost of new school supplies, its normal for budgets to be stretched in the Fall. As a result, we often see an increase in the number of people considering filing for bankruptcy relief.

Back to School Costs Add Up

For any bankruptcy filing, the Court requires a current household budget of total income and expenses.  Clients often under-estimate their income and wonder “If I’m making that much money, where is it all going?”  Usually the answer is that the income is going to cover things like back-to-school expenses.  It may only happen once a year, back-to-school shopping can add up to a large part of a family budget.  Luckily, we can include clothing and school supplies and fees as part of your total expenses.  Any parent can tell you that children are expensive, and the Court understands the reality of paying for school.

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

3 weeks 21 hours ago

The financial road isn't always smooth

Sometimes I think my client’s only touch with reality is in the form of  television shows.

And when reality hits them, it’s a trainwreck.

Think  Chapter 13 cases where my client wants to keep all of his assets with secured debts AND pay off back support or, more often, non dishchargeable taxes.

The Problem

Secured debts are things like car loans, home mortgages , and property taxes.

If you don’t pay a secured debt, the creditor has the right to take the asset that is the collateral.

More on secured debts in bankruptcy

In Chapter 13, you get a choice on secured debts:  you can cure any back payments through the Chapter 13 plan or you can surrender the asset.

3 weeks 21 hours ago

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