February 2011

28 Feb How Should I List My Bankruptcy Exemptions in Light of the Supreme Court Case of Schwab v. Reilly?

The recent Supreme Court decision of Schwab v. Reilly dealt with a rather technical question of just what are debtors protecting when they claim an exemption in their bankruptcy? The Court said that a debtor must indicate that they are claiming an exemption for the full value of the item not just a portion of it. In Schwab, the debtor listed office equipment with a value of $10,718.00 and exempted the equipment for $10,718.00, which was not the total amount that could have been exempted. The trustee in the case claimed that the value of the equipment was much higher and that the debtor was only entitled to an exemption up to the amount claimed, which was $10,718.00. Therefore, he argued that the equipment could be liquidated and only $10,718.00 would have to be given to the debtor with the balance going to the debtor’s creditors on a pro rata basis. The Court sided with the trustee. Often bankruptcy exemptions have a ceiling as to how much can be claimed exempt. For example, in New York a debtor can now exempt a vehicle up to $4000.00. Here, Schwab does not really pose a problem, as a debtor can simply claim the full exemption of $4000.00, even if the vehicle is only worth $1000.00. In that case, if the trustee claims the value of the vehicle is really $3000.00, it would still be 100% exempt. But, there are exemptions that do not have a ceiling, and this is where Schwab has more of an impact. For instance, in New York, most retirement accounts are exempt and there is no limit as to the amount that can be claimed exempt.
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28 Feb How Can Bankruptcy Help Me?

As a Consumer Bankruptcy Attorney, I meet quite a few people who are investigating what bankruptcy can do for them. Often the question will arise: How Can Bankruptcy Help Me? I think it is a great question, and it is one that I try to answer for each and every individual that walks through my door. If you think of a consumer bankruptcy filing like a game of chess, you will see different strategies begin to unfold as your assets are revealed. As a consumer bankruptcy attorney, I am there to provide you with the insight and analysis of each and every option available to you as the game unfolds. Let's face it, not everyone who walks through my door is going to file for bankruptcy, nor do they need to, nor should they. As a matter of fact, I tell many people that they should not file for bankruptcy protection because it would be a very bad move for them. But, I try to help them all.
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27 Feb NACBA Goes to Washington

The National Association of Consumer Bankruptcy Attorneys (NACBA) meet in Washington, D.C., in April. The deadline for discounted "early bird" registration is Friday, March 4, 2011. The 19th annual NACBA convention on April 15-17, 2011, is being combined with the annual members-only Capitol Hill meeting on...

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27 Feb Can I Get Out of a Bad Oil and Gas Lease If I File Bankruptcy?

Many landowners, particularly struggling farmers in Upstate New York, are trying to get out of gas leases they signed several years ago and replace them with new gas leases. It could make a difference of over $1,000,000 to the landowner. Filing bankruptcy could be the tool they need. For several years gas companies have known about the Marcellus Shale. This is a deposit of up to 500 trillion cubic feet of natural gas lies at a depth of 7000 to 10,000 feet under significant parts of New York, Pennsylvania, Ohio and West Virginia. Until recently the technology to retrieve this massive gas deposit in an economically feasible way was not possible. In the last few years, however, two technologies, hydrofracking (fracking) and horizontal drilling have been developed. You may have heard of fracking because it is the subject of an Oscar nominated documentary film at tonight’s Oscar presentation.
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25 Feb Where Does Bankruptcy Law Come From? Part 1: The Code

Bankruptcy law in the United States is an amalgam of rules that comes from various sources sometimes with an exquisite harmony -- like a fine orchestra -- and sometimes with great disharmony -- like an engine with a blown bearing. The variety of sources for the law makes it particularly complex to practice as a lawyer and difficult to comprehend for the layman. In a series of notes, we hope to lay out the basic idea -- where does the law come from? Bankruptcy is specifically designated in the Constitution as a subject of federal legislation, not state law. This is why there is no specific bankruptcy for New York or Iowa, St. Louis or Cleveland. There is one federal law enacted by the U.S. Congress. This law is known as the Bankruptcy Code (under Title 11 of the U.S. Code). The Code is divided into Chapters, which serve different purposes. For example the first three Chapters (1, 3, and 5) provide definitions, tools, powers, rights, and responsibilities for the various actors in the bankruptcy process -- which generally apply in most of the other Chapters. The later Chapters (7, 9, 11, 12, 13, and 15) are the choices available to individuals or businesses under which they can seek relief (and through which creditors can attempt to obtain repayment in an orderly fashion). The Bankruptcy Code itself is very short, a few hundred pages. Indeed until 2005, it was one of the shortest of the federal laws meant for general public use and, even after the unfortunate BAPCPA amendments, it still only fills a relatively short book. This is because, even after 2005, much of the Code is written in broad, generalized terms, designed by Congress to provide broad rights and responsibilities, benefits and sanctions, to the players.
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