Category Archives: Uncategorized

Are the Courts Open?

As Oklahoma is in the process of reopening after the Caronavirus shut down, it is a reasonable question to ask if the Courts are open.  The answer is — well, that depends?  Which courts and what do you mean by open?

The Federal Court system, which includes the Bankruptcy Courts, has had a paperless filing system in place since 2006.  That means that as a practical matter, the Courthouse no longer accepts paper, and filing by computer doesn’t violate social distancing, so filings have gone on as usual — well, sort of.  I am now reviewing and signing documents by remote using videoconferencing and electronic signatures, but actually filing the documents is the same as it was six months ago.

The Federal system has also moved to allow for telephonic hearings, and it has postponed jury trials and large evidentiary hearings.

The State system, however, is not so simple.  The State courthouses have been closed to the public for more than a month.  Filing of pleadings in existing cases and of new cases continues — by mail, email or fax.  In civil matters, the only hearings being conducted are emergency matters.

All of that is in the process of changing, but every County is proceeding according to its own rules and its own schedule.

What my clients want to know is can they still be sued, what happens if they have a pending answer date, when can a house in foreclosure be set for Sheriff’s Sale?

Those answers aren’t easy, but in most cases court clerk’s offices have been accepting new lawsuits for filing.  However, answer dates have been extended by order of the Supreme Court.  Sheriff’s sales have not been happening, but I am seeing them being reset.  Cleveland County has one set in early June, for instance.  So, if you have had a house in foreclosure, it is worth it to keep an eye on your mail, the court’s online docket and your County Sheriff’s Sale list.

Elaine

Safer in Bankruptcy — the Wrap Up

At the conclusion of a bankruptcy an Order is entered called the discharge.  It is the discharge that functionally eliminates the debtor’s personal liability (meaning his legal responsibility for paying) the debt incurred prior to the bankruptcy filing.  In many ways the discharge is the wrap up of the whole bankruptcy process, and it makes everything that happens before it final and permanent.

The downside of the discharge is that it also means the debtor is once again outside the safety of the bankruptcy court and back in the real world — although without all the baggage that caused the bankruptcy filing in the first place.

Clients are thrilled when they get their discharge.  It is OVER!  I am free!  I am frequently a bit wistful, because I know that when something else happens (and life is always happening), the debtor may be less comfortable inside the bankruptcy; but the debtor is far safer.  Inside of a Bankruptcy the Debtor is protected by the Automatic Stay and the Confirmation Order (if in a reorganization chapter).  Those things mean procedural protections and, most importantly, time, to deal with whatever life throws at you.

We have a false feeling of control over our lives.  Really what makes debt and bankruptcy both so scary is the sense of being out of control — but we are used to that.  We aren’t used to bankruptcy so it feels scarier, when in many cases it is far safer.

We are living in the most uncertain times that any of us have lived through, and we are all going to have to learn new survival skills.  I hope that for you bankruptcy won’t be one of them, but if it is, try to be less anxious rather than more.

Elaine

Yes, Virginia, You Can Qualify for Unemployment

I interrupt this week’s trip through the protections of the bankruptcy code to focus a few minutes on the extraordinary unemployment benefits available for residents of the State of Oklahoma during the COVID-19 (Corona virus) pandemic.

Ordinarily, at least in Oklahoma, self-employed people (including independent contractors, sole owner/employees of S-Corps or LLC’s, gig workers, etc.) are not eligible for unemployment benefits.  The reason is, because traditionally in order to be eligible for benefits your employer had to pay into the system (which is a mandate for most employers). Then, when an employee goes to collect from the system, the computer system designed to process that application checks to make sure that the applicant is a covered insured.  If you aren’t a covered insured (i.e., if no employer has been paying into the system on your behalf), then the computer system is designed to reject your application out of hand.

EXCEPT!  Recent legislation out of Congress has changed that.  Yes, I know in Oklahoma employment benefits are processed and paid out of the Oklahoma Employment Security Commission, which is a STATE agency.  It is not under the control of Congress — most of the time.  Congress has always had a hand in the unemployment system, even though it is largely controlled and exclusively administered by the States; and a few weeks ago Congress flexed a little muscle (and a lot of money).

Now, because of the current pandemic, people who have never paid into the system — self-employed, gig workers, sole proprietors, sole owner/employer of an S-Corp or an LLC — are all now eligible to collect from a system they have never paid into.  But WAIT, it gets better!   Congress is ponying up the cash to increase most people’s weekly benefit (and by a lot — like $600 for most), they have extended the number of weeks that benefits are available, and they have eliminated the week off work that you have to wait before you are eligible to collect benefits.  Oh, and they have also dispensed with the weekly requirement that all applicants be actively looking for work (you know, during that whole shelter at home thing).

So, what’s the catch?  Come on, you know there is one.  The catch is that Oklahoma’s unemployment computer system was completely unprepared for this.  First, there is the eligibility for an insurance program of people who have never been insured (i.e., paying into the system).  Then, there is the increased benefit, the changes in timing and eligibility requirements.  Its enough to give an ancient computer system a nervous breakdown.  In all fairness I don’t know that our unemployment system is still built on COBOL (New Jersey has made a lot of news for their COBOL system looking for retirees willing to come back to work on it.)  Ours may be Fortran, but whatever it is — it ain’t new.  Then, the people who are needed to maintain and rewrite it to adapt to these major changes are all — working from home — in their pajamas and slippers.  Add to that record setting unemployment levels and you have a disaster waiting to happen — and it is happening.

So, here is the skinny straight from Oklahoma State Representative Mickey Dollens:

UPDATED 4/14/2020 – OKLAHOMA UNEMPLOYMENT:

The following guidance, tips, recommendations, comments, and answers will help you navigate the unemployment filing process. I’ll do my best to answer your questions in the comments section. If I don’t know the answer then I’ll seek out those who do.

Self-employed workers, independent contractors, free-lancers, and gig economy workers who are not typically eligible for unemployment benefits will be covered under the federal Pandemic Unemployment Assistance (PUA) program which is part of the new CARES Act:

• The Oklahoma Employment Security Commission (OESC) cannot implement these extended unemployment benefits for independent contractors until guidance is handed down from the U.S. Department of Labor on how to administer these benefits.

• Independent contractors must provide alternate forms of financial documentation (pay stubs, invoices, 1099’s, etc.) This is different from what is required for traditional claims.

• If an independent contractor applies for unemployment benefits right now, they will receive an immediate denial message. DO NOT REQUEST AN APPEAL. Any appeal will delay your claims process. Those individuals must wait until OESC has implemented the guidance from the U.S. Department of Labor and updated its system to allow for the processing of PUA claims. OESC is hoping this will be mid-late April.

• Having mentioned the above, both W2 and self-employed can start the process by filing an online claim: https://unemployment.state.ok.us

• Self-employed are not required to file weekly claims while the state waits on the Federal implementation of the PUA program. They will start filing weekly claims at that point.

• W2 claimants ARE REQUIRED to file claims every week as soon as you file. If possible, it’s best to do this each Sunday because this triggers payment. During the emergency all work search requirements are waived. But be sure to respond “yes” when you are asked if you have made your required weekly work searches. Otherwise your benefits will stop.

• It is important to note that once OESC receives the necessary PUA guidance, OESC will backdate all independent contractors claims to March 30, the date the CARES Act went into effect.

• All claimants are eligible for an additional $600/week in Federal unemployment supplemental benefits. The Federal supplemental benefit starts the week of April 4, 2020, and runs through the week ending July 25th, 2020. All claims will be backdated to the date your covid19 related job loss occurred. In some cases, claims may be backdated all the way to Feb. 8, 2020.

• There is no additional process required to receive the Federal unemployment supplemental funds. All approved claimants will receive this automatically.

• Benefits begin as soon as you file. The one week waiting period has been suspended. All claims filed with an effective date of 3/15/20 or later will have the waiting period waived for the duration of the emergency.

Here is some general information:

• Oklahoma provides for 26 weeks of unemployment. The new federal CARES Act adds 13 weeks of additional unemployment for a total of 39 weeks.

• OESC has expanded its call center to better serve claimants. The average call wait time has dropped significantly from last week: 1-800-555-1554

• OESC designed a more user friendly website, https://oesc.ok.gov. However, as of 4/11/20 some of their answers in the FAQ have not been updated to reflect the extended benefits provided in the Federal Cares Act.

Here are some additional tips for those who are self-employed:

• File a claim for PUA as soon as it becomes available. (OESC says mid-April.) If you’ve already filed a claim, that’s fine. OESC will announce when the PUA program is implemented and ready independent contractors likely by mid to late April.

• When filing a claim as self-employed the application will ask for your “employer.” Use your name here. The requirement to put your resume on okjobmatch is waived for the duration of the emergency. At this time the OESC has also waived the work search requirement. List the day you were laid off when it asks for “start date” and keep blank for “end date”

• If the application tells you, “self-employed do not qualify,” or “monetarily ineligible for lack of reported wages“ simply click “continue.” DO NOT FILE AN APPEAL. If you’re self-employed then it is not necessary to file weekly claims until PUA is implemented. You will still receive back pay once the PUA kicks in.

• When you file your claim you will be asked for information about your separating employer. If your separation was due to the business closing or reducing hours due to COVID-19, please mark your reason for separation as a “LACK OF WORK.”

• You will receive an email and or letter saying your application was denied. This means the system hasn’t been updated yet. Save your claim ID number. Do not file a monetary appeal.

Again, OESC will announce when the federal Pandemic Unemployment Assistance program is ready to be administered, which should be mid-late April.

• Benefit amounts will be calculated based on previous income.You will need financial records such as tax returns or pay stubs that document your earnings.

• To check the status of your claim, go to https://unemployment.state.ok.us/w2.aspx You will find information regarding the status of your application, recent activity, monetary entitlement, and determinations of eligibility.

• An unemployment benefit debit card will be issued to you at the time your first eligible week processes. It normally takes between 7-10 days to receive the card. If it takes longer than 7-10 days then they likely ran out and will send you a card as soon as they’re restocked. If you receive a debit card with no balance, that probably just means that your eligibility to receive benefits has not been processed yet.

• If you want to have your benefit deposited directly, visit GoProgram.com or call 1-866-320-8699 and use the automated system to enter your banking information

•If you experience difficulties in filing your claim you may e-mail OESC Helps at oesc.helps@oesc.state.ok.us or call 1-800-555-1554

• If you don’t have internet then you can mail copies of two forms of IDs (one has to be a photo ID) to: OESC P.O. Box 52006 Oklahoma City, OK 73152-2006

Final thoughts:

• Here’s an informative article that goes into more details about the UI provisions in the CARES Act: https://americanactionforum.org/…/enhanced-unemployment-b…/…

•Please be mindful about fraudulent activity at this time. Fraudsters are coming at us through websites, phone calls, and even in person. Be assured you can trust https://govstatus.egov.com/oklahoma-coronavirus-information to connect you directly to government websites for general updates, business help, unemployment help, and all things COVID-19.

One important change in this advice from Rep. Dollens is regarding the advisability of filing an appeal.  Last week House Minority Leader Emily Virgin was advising filing an appeal.  Evidently, the system has been tweaked since then.

Regardless, this is the latest information that I have available regarding these extraordinary employment benefits for these extraordinary times.  What I can tell you is that a client of mine who filed at my urging got his benefits debit card in the mail yesterday.

Good luck, remember, the people at OESC are slammed, their system is crumbling around them; and if you get nowhere — call your State Rep or your State Senator — both of whom have way more time on their hands right now than anyone at OESC.

Elaine

Safer in Bankruptcy — Part 2 — The Automatic Stay

The instant that a bankruptcy is filed an order is entered automatically, and it stays (or temporarily stops) all collection activity against the debtor or property of the debtor.  Instantly.  Automatically.  Boom.  All collection activity must stop.  That means lawsuits, wage garnishments, nasty letters, annoying phone calls (Ok, so I don’t know any court that has managed to stop the car warranty calls, but we’re working on it.).

That order remains in place until either the Court modifies or lifts it, the Debtor’s discharge is entered or the case closes without a discharge.  The automatic stay is designed to give someone who has just filed for bankruptcy literally months of breathing room.

Where the automatic stay is most likely to get cut short is when someone files for bankruptcy and doesn’t continue making payments on a secured loan — most commonly a car payment.  In that case the lender has the right to ask the court to lift the stay and let them repossess the car.  A chapter 7 bankruptcy is not the right place to be if you are not current on a vehicle that you need to keep.  If that is the case, file a chapter 13 bankruptcy.

However, if you find yourself with more debt than you can pay, but you are current on your car loans and mortgage (if you have them), but your phone is ringing off the hook, you are afraid to open your mail, and your payroll office has just received a wage garnishment; the automatic stay is the legal equivalent of a Calgon bubble bath commercial from the 70’s.

Elaine

SBA Loans — Things to Consider

Oklahoma has just had all 77 Counties approved for low-interest SBA loans, and I thought I would post a few things to consider.  First of all, I get the fact that small businesses hit with an expected cessation of business (that means income, that means cash flow, that means money to buy groceries and pay the electric bill) are desperate.  I understand that most small businesses live very much month to month — if not week to week.  I also understand that if a small business doesn’t have money coming in, the owner doesn’t get paid.  Trust me — I GET IT.

I also get that when you are under sudden, intense, terrifying stress is the worst possible time to make difficult, complex decisions.

If you are applying for an SBA loan (or considering it), read everything carefully.  Most SBA loans over a certain amount require collateral, and that usually means a 2nd mortgage on your home.  This is true despite the fact that I have never represented a small business owner with an SBA loan who really understood that.  Oh, they all signed the mortgages.  I print the mortgage papers off from the County website and show them their signatures, but in the heat (and frequently panic) of the moment, they simply did not process the fact that they were putting their homes at risk.

So, read everything carefully.  If you don’t understand something — ask questions until you do, and that doesn’t mean until you can parrot back what someone has told you.  Ask questions until you understand the words on the pages in front  of you.

Then, ask yourself a few things — 1.  What am I being asked to put on the line for this money?  2.  How profitable was the business before this happened?  3.  How much other debt do I have?  4.  Am I borrowing money so that I can make payments on other debt?  5.  How long will this money tide me over, and what is the likelihood that the state of the pandemic, the state of the economy and the state of my business will be in position to not just be back to paying the regular bills, but also in place to pay this new bill (remember, these are loans, not grants)?  6.  How much is the payment on this loan?  7.  When do repayments start?

The hardest thing is to try not to ask what you will do if you don’t get this money.  Before you let yourself head down that road, call someone who understands your business and who understands not paying bills.  Remember, a lot of the financial experts we trust are people who prioritize paying your bills above all else.  In many cases, they don’t understand that sometimes the credit cards need to just not get paid for a while.  They also don’t always understand which kinds of debt you can go longer without paying than others, and who will work with you and who won’t.

I know these are scary times.  I understand being terrified of having no income and still needing to buy groceries and keep the lights on.  I also know that scary times can lead to great things — or worse things.  The problem is telling the difference.

There are some brand new tools in the Bankruptcy system for small businesses.  There are also some old tools that aren’t well understood.  For many small businesses, bankruptcy isn’t the end, it can be a tool for a new beginning.  On the other hand, waiting too long to file really limits your options.  Bankruptcy helps you deal with debt.  It won’t help you make payroll on Friday.  Good luck, stay safe and don’t be afraid to ask questions.  If you are in the Western half of Oklahoma, my phone number is in the right hand column, and whether I am working from home or at the office, I will return your call.

Elaine

That Home Equity Line of Credit — Yea, It Really is a Mortgage

A lot of the things my clients tend to be confused about, I understand.  There is one big exception, and clearly, I am the one who is confused here; because I hear this more often than not.  Clients come in and we talk about the mortgage on their house.  Then, I ask about the 2nd mortgage.  Oh, they don’t have a second mortgage.  No, nope, no way.  Well, what is this debt to Insert Name Bank?  Oh, that is just a Home Equity Line of Credit.  So, it is a second mortgage.  No, no, it isn’t a 2nd mortgage, we don’t have a 2nd mortgage.  It is just a Home Equity Line of Credit.

No.  It is a second mortgage.  (Well, this assumes that there is a first mortgage, but more on that later.)

Here is the scoop.  A mortgage is actually the name for a type of lien on real property.  If you borrow money — all at once, a little bit now and more later, received by cashier’s check or (shudder) by using a special credit card — however, you borrow it; if you borrow money and give the lender a lien on your home (or other real property) to secure payment of that loan — you have just given the lender a MORTGAGE LIEN.

There is no such thing as a Home Equity Lien, and if there were, it would just be a mortgage lien.  Seriously.  Google it.  Now, is that what your friendly banker called it when you were looking for a little cash to catch up some bills or fix up the kitchen?  Why, no.  Calling it a Home Equity Line of Credit just sounds so much better than a 2nd mortgage.  However, look at this carefully.  A Home Equity Line of Credit is a loan that is secured by the equity in your home.  That is a loan, secured by a lien on your home.  How is that anything other than a mortgage?

Now, about that whole first and 2nd thing.  Do you know the difference between a first mortgage and a 2nd mortgage?   The first mortgage was recorded in County records first.  Yep.  That is it.  Now, there can be some different consequences to a 1st and a 2nd mortgage.  There have been times when the tax code gave preferential treatment for first mortgages.  It is more common for first mortgages to include what is called an escrow account for the payment of property taxes and home owner’s insurance.  There are reasons why those things are true, but they have more to do with the fact that a first mortgage is generally incurred to buy the home, it is generally larger than a 2nd mortgage and it generally fits certain standard terms — 15, 20 or 30 years with a fixed monthly payment (unless there is an adjustable interest rate).

Second mortgages can be more flexible.  Frequently, a home equity line of credit has a flexible repayment period.  The principal amount of the loan can change.  It may be repaid in just a few years.

None of these things change the fact that a Home Equity Line of Credit is a loan that is secured by a lien on real estate (your home).  That makes it a mortgage.  If you already owe money on your home, then the home equity line is the 2nd mortgage (because you already had a first mortgage).  If your home was paid for when you applied for the home equity line, then the home equity line of credit will be the first mortgage even though it may not include an escrow account or be for a fixed term or for any of those other common characteristics of a first mortgage.

The whole home equity line of credit thing has been a real marketing coup for local banks, and it all happened when they came up with this cool name – home equity line of credit.  It just sounds so much better than a 2nd mortgage, but a rose by any other name is the same thing as a lien by any other name.  Call it anything you want, it is still a mortgage.

Elaine

Who Comes to the First Meeting of Creditors?

Section 341 of the United States Bankruptcy Code requires that the United States Trustee shall hold a meeting of the creditors within a reasonable time (usually within 20 and 40 days) after a Bankruptcy Petition is filed.  It doesn’t restrict that to cases with assets or ongoing business activities or anything else.  It requires a meeting of creditors (generally referred to as the first meeting, because there can be more in complicated cases) in all cases filed.

It is called the First Meeting of Creditors (or 341 hearing), which confuses many of my clients who then seem to think that their creditors will actually show up.  In most consumer cases it is really a meeting between the Trustee assigned to the case, the debtor and debtor’s counsel.  I doubt anyone actually knows why the same provision for the same meeting is included in the Code for all chapters.  In reality consumer cases, whether they are filed under Chapter 7 or Chapter 13, are very different from business cases — regardless of chapter.

The first thing to say about 341 meetings is that they vary wildly from one part of the Country to another.  Since there is so little statutory direction, they have evolved according to local custom.  The one constant is that very few creditors show up.  Think about it.  Why would a credit card company pay someone to come to your First Meeting of Creditors?  What is he going to ask?  Why don’t you make more money so you could afford to pay this?   They have better things to do.

Now, a local car lender might show up.  First of all, they are already here, second, there are some things they need to know.  Are you going to keep the car?  Oh, and is it insured?  Actually, though, even that has gotten rare.  A call to debtor’s counsel is just more cost effective.  So, for most consumer debtors the only person interested in their case is the Trustee; and he just wants to make sure that the schedules are complete and accurate, make sure he understands what is going on and if there are any non-exempt assets that he gets his hands on them to he can sell them (pay himself a nice chunk) and distribute the rest to your creditors.

Well, that is most consumer cases.  It isn’t all of them.

A First Meeting of Creditors is held under oath, and it is intended for creditors to ask relevant questions if they want to.  So, it is a great chance for someone who thinks that they might have grounds to object to your discharge to ask some basic questions to help them build their case.  So, if someone thinks that the debtor has defrauded them, then that creditor (or his lawyer) might show up to ask some questions about that.

Then, there are the other creditors.  Probably my favorite to watch is the ticked off former spouse.  They are generally just mad, but they frequently know about assets that the debtor kind of, sort of, forgot to list on the Schedules.   Occasionally, a mad ex-spouse makes me regret that I don’t have the buildings’ popcorn concession; but those are rare.

Next, there are the creditors who got the notice of the hearing in the mail and just thought they were supposed to be there for some reason.  That is probably the largest group.

Finally, you have creditors who are just mad.  By golly, they didn’t get paid and they want to tell somebody about it.  I had one of those today, and the Trustee listened politely and then explained that he isn’t the Judge and he doesn’t make decisions about what debts should or shouldn’t be included in the discharge.  Usually, these people just want to feel like they have had their say and someone has listened.

Still, in most cases, the First Meeting of Creditors is the biggest non-event the debtors have ever lost sleep over.

Elaine

Dealing With Debt Collectors

The relatively new Consumer Financial Protection Bureau has put some useful resources on the Bureau’s website to deal with obnoxious debt collectors.  The first thing on this page are links to two new bulletins providing notice to debt collectors of practices the Bureau finds abusive.  These things just make kind of fun reading.

The meat of the page are the so-called “Action Letters”.  These are form letters developed by the CFPB to help consumers implement their rights under existing consumer protection laws (primarily the Fair Debt Collection Practices Act).   These letters serve the following purposes:

  • To dispute a debt and request additional information about the debt;
  • To dispute a debt and demand that the collector prove that the consumer is responsible for the debt and to stop contacting the consumer until they have done so;
  • To restrict the times and methods by which the collector can attempt to contact the consumer;
  • To notify the collector that the consumer has retained an attorney and all contacts should go through counsel; and
  • A cease and desist letter — this is a letter instructing the collector to stop all contact attempts with the consumer.

These letters are very useful tools, but they do have some downsides.  FDCPA disputes almost never produce what you hope they will, and if you really do owe the debt, it will buy you only a brief respite from collection activity.  If, however, you are willing to proceed with active litigation against the collector, this kind of verification letter can be extremely valuable.

The most valuable restriction on time and place of contact is preventing the collector from contacting you at work.  This can be very effective.  It will not, however, stop overly aggressive collectors from calling your employer — just to verify that you really do work there — yea, right.

Attorney retention letters are really better coming from the attorney.  Far too often people will tell a collector that they are represented by a certain attorney (whose name they have plucked from the phone book or a website) when they really aren’t, because they have heard that will stop collection calls.  Believe it or not, the collectors really will verify this; and you will not be winning friends with an attorney you may need to actually represent you down the road if his or her phone starts ringing off the hook with creditors of a supposed client the attorney has never heard of.  Bad plan.

Cease and desist letters basically are a mechanism for requiring that collectors stop all collection contact.  It does not mean they can’t sue you.  Well, if they can’t call you, they can’t harass you by mail and you aren’t represented by counsel; there really isn’t much left for them to do.  Now, not every collector sues upon receipt of a cease and desist letter; and I have clients who have used them very successfully, but only in very specific fact situations.

Finally, at the bottom of this page the CFPB outlines its complaint mechanism for lodging complaints against collectors and creditors.  By all means, have at it.  In fact, I encourage everyone to investigate the resources available from the CFPB and make use of them.  Just be aware of the fact that not everything will do what you expect, and most things do have consequences.  Getting a breather from collection calls is not a solution, it is a tool.

Elaine

Short Answers to Complicated Questions

Frequently when I get a call from someone considering a bankruptcy filing, the first question I’m asked is — complicated.  Here are a few examples.

Are taxes dischargeable in Bankruptcy?

That depends.  Some taxes, like sales taxes and some withholding taxes are never dischargeable.  More commonly I am asked about income taxes, and not surprisingly the rules are complicated.   The most important thing I can tell you in brief is that when you see tax problems developing (and they usually snowball on you), file your returns on time.  Extensions are fine, as long as you file before theyexpire.  If you can’t pay, well, you can’t pay; but file the return.  There are three time frames that must be met before income taxes can become dischargeable, and one of them runs from the time that the tax return was filed.  There is also some troubling case law developing in other parts of the Country limiting dischargeability for late-filed returns.  Of course, if the IRS has filed a substitute for return, that is a whole different ball game.  Yes, I know, this doesn’t make a lot of sense.  It is a short answer to a very complicated question.  Just remember to file your returns timely, and if you wind up way over your head with tax debt, contact a qualified Bankruptcy attorney in your jurisdiction for a consultation.

If I file for Bankruptcy, can I keep my car?

Well, that depends on a lot of things — is it paid for, are you current on it, how much equity do you have in it, have you maintained insurance, can you afford to make the payments?

Think about this one for a minute.  There were over 6300 people who filed for Bankruptcy in the Western half of Oklahoma last year.  If they were all hitchhiking to work, don’t you think you would have noticed? Generally, the impetus for this question is a deep seated sense of shame and a fear that you have been bad and are going to be punished.  I don’t mean to belittle this, it is very real; and most of us have a voice in the back of our heads that says things like this to us, but bankruptcy isn’t about punishment; and most people who file for Bankruptcy keep their cars.   Are there exceptions?   Yes, but that is a whole different blog post.

I’m married, does my spouse have to file with me?

Probably not.  Now, are there reasons why you may want to file jointly?  Yes.  Are there times when you both need to file in order to get a particular result that you want?  Yes.  If your spouse doesn’t file with you, will your filing affect your spouse?  That really depends, and that is one of many reasons why I require that non-filing spouses attend the initial appointment with the filing spouse.

Is the Trustee going to come to my house?

Well, I don’t know.  Are you inviting him for dinner?  Seriously, now, the Chapter 7 panel trustees are highly compensated professionals who get paid a very small amount of money to administer cases.  They make their money administering non-exempt assets.  No one is paying them to go through your sock drawer.  Now, if a Trustee has reason to believe that you are concealing valuable assets, can a Trustee get a search warrant for your home or office?  Well, yes; and in 22-years of practice, I have seen that happen once.  The Debtor went to prison for a number of years for all kinds of fraudulent behavior.  So, don’t hide uncashed royalty checks; and the Trustee will not be paying you a visit.

Elaine

So, What Does a Bankruptcy Lawyer Do All Day?

Yesterday I had one of those days were I was constantly busy only to look up and wonder what on Earth I had done all day.  So, I made a list; and since I am frequently curious about what other people actually DO on a daily basis, I thought I would post the list here.

I started off in Court at 9:00, trip to the bank (and two jelly doughnuts, but we won’t talk about that part), opened mail, downloaded electronic pleadings filed the day before (looked at everything, set aside the motions that will take time to respond to), a bunch of phone calls from — former client about a possible discharge violation, a couple of people looking for a bankruptcy attorney, a couple of creditors wanting to verify that I represent they people they want to harass; reorganize a computer directory, review information provided from a client and prepare for an appointment with that client, series of emails with clients mostly dealing with the status of their cases and the effect of their bankruptcies on pending foreclosures, more email with a client about replacing a car during a Chapter 13, prepare and fax a letter to a collection firm, forward two pieces of mail to clients that were sent to me directly, docket a court hearing and forward tax returns to the Trustee, RSVP to a business lunch, spend just under three hours with a client going over every detail of her case, review motions downloaded that morning and begin mapping out my responses, back up my computer and call it a day.

I got to court a little before 9:00.  I left the office about 6:30.  Oh, and I grabbed a slice of pizza someone else in the office had brought in for lunch. 

All things considered it was a pretty good day.  Now, I just need to find the blocks of time to actually respond to the motions, prepare filings for later in the week, start briefing an appeal, file a discharge violation Adversary. . . .

Oh, well.  It’s only Wednesday!

Elaine