Certain phrases grate. I don't refer to those that slur, or spite, or
to vitriol. I mean the apparently innocuous words and verbal tics that I just don't
care for. They are the sayings that are misapplied, misused, hackneyed.
Below, we relate common examples within different classes of nail-on-chalkboard verbiage. We being with the category of misnomers,
if only because the Bankruptcy Code* is rife with them.
I. Misnomer: A word or phrase with misleading terms.
1) Our inaugural verbal culprit comes courtesy Title 11 Chapter 3, subchapter III,
section 341 on "Meetings of creditors and equity security holders."
Colloquially, we refer to it as the "Meeting of Creditors," or the
"341(a)," "a" being of course, the subsection of the section of the
subchapter of the chapter of the title.
One would presume the
Meeting of Creditors is a meeting of creditors. No. Mostly, the
Meeting of Creditors entails a trustee's interview of a bankruptcy debtor, a rather unremarkable affair. While the invitation's extended to its eponymous event, the everyday bankruptcy creditor shall decline to appear. Creditors rarely show, though if they do, it typically transpires in particular scenarios such as The Case of the Missing Couch or the Circumstance of the Cuckolded Ex. They go something like this:
A: The Case of the Missing Couch
The first of the above-two fact-patterns entails a bankruptcy creditor for a company that financed household collateral such as couches and chaises, futons and footrests, sofas and sleepers, armchairs and ottomans, who may materialize and inquire of the bankruptcy debtor,
"Pray tell me wherein lies the furniture securing your defaulted Mor-furniture-loan from 1997? Though you have no intention of returning it, and I have no intention of repossessing it, I must note for my notes this floral-pattern-covered La-Z-Boy's last resting place."
And the debtor will answer,
"I don't know."
And that will be that.
B: The Circumstance of the Cuckolded Ex
Another type of bankruptcy creditor is the scorned separated-spouse who may appear to just sit, stare daggers, and pass time inquiring of the bankruptcy debtor,
"What ever happened to the floral-patterned tea cozy-- the pink one-- I don't see it on Schedule B [B being the famed bankruptcy schedule dedicated to personal property]?"
The bankruptcy debtor will answer that she thinks it's on the teapot.
And that will be that.
Why don't creditors appear at Ye Olde Bankruptcy Meeting of Creditors? Because generally bankruptcy-creditor affairs may be addressed conveniently from the creditor's-office via correspondence, telephone, or bad vibes.** Besides, trustees grow weary of bankruptcy-creditors fishing for clues at the Meeting, and the latter may be gently encouraged to shut up.
Now, on to the incredibly baffling misnomer of
2) Current Monthly Income
One's Current Monthly Income is not one's current monthly income.
Current
Monthly Income or "CMI" is defined in 11 USC section 101(10A) as the bankruptcy
debtor's average gross income during the six months prior to the month
of filing (the bankruptcy). For example, if you file bankruptcy in July,
your Current Monthly Income is defined as the average gross income for
January through June. Thus, if you lose employment in July, and file bankruptcy
in July, your Current Monthly Income is based on phantom income from an
erstwhile job.
The rationale of the misnomer is that the averaging of
6-months past-income effects a standard test period that measures
earning potential. Jobs come and go, but one's income track record can
be a useful guide in determining long-term debt-repayment-ability. It's a
deterrent against "job loss" on the eve of bankruptcy.
This may lead to confusion where a bankruptcy attorney drafts a petition, which states a Current Monthly Income of $10,000 for a client who has just lost her job. The client shall balk, and say, "But, I make $1,950 in unemployment."
I answer, Yes, but you're assuming "current" means current.
In demonstrating the next species of recalcitrant words, we depart from illustrations in bankruptcy to address subjects of universal scope (or things that bother me personally). First, let's speak of
II. Fictive Kinship. Its definition is: "Use of consanguinal terms in addressing non-consanguinal persons."
In other words, fictive kinship it is the casual employment of otherwise blood-based pronouns in a superficial context. Or: calling a non-brother a brother. Examples in the strict sense are Brother, Bro, My Brother, Sister. In
a broader sense, I include Pal, Buddy, and Dude.
Certain
relationships transcend a lack of common blood and merit expressions
of solidarity. But absent true bonds, they are merely pandering,
presumptuous and stripped of meaning.
III. Common misused phrases
In this category of pernicious phrasing, we'll tackle two flagrant, contemporary instances starting with
1) Ironic. Its definition in the simplest sense is "Something that happens in the opposite way than what's expected."
In addition to revitalizing the appeal of The Chipmunks vocal-styling, Canadian crooner, Alanis Morissette is single-handedly responsible for the the death of irony, the word. Her 1995 ditty Ironic relates a series of unfortunate events that are not ironies. Rather, they are bummers. Perhaps Winona Ryder is to blame. Certainly Ms. Morissette had faithfully watched the prior year's Generation X touchstone film, Reality Bites, in which a flummoxed college graduate, Winona Ryder fails the task of defining the word, and in turn of edifying Alanis.
In present usage, ironic is (well, ironically) confused with the opposite of its meaning. Invariably persons confuse it for events that are actually fitting. Otherwise, it wrongly denotes mere coincidence.
Next we move on to
2) Literally. Definition: "In a manner that's true to fact, exact, or in the strict sense. Not figurative or metaphorical."
Ironically... literally is rampantly used by the public as a means of figurative emphasis. Actor Rob Lowe (who may or may not have once dated Winona Ryder--which would be an act of coincidence, not irony) must take credit for the maiming of literalness. On NBC's sitcom, Parks and Recreation, his beatific fitness-freak-persona, Chris Traeger is regularly-prone to employ this adverb. Unfortunately, its proliferation has led to its popular abuse. As in the case of a peckish person muttering,
"I'm literally dying of hunger."
To which one should answer,
"No, you're not. You just happened to skip a snack."
On to
III. Internet Jargon
Texting and Online abbreviations and initialisms can save precious seconds for tired fingers and thumbs. Yet, often enough they're just filler. The worst offender is LOL or Laugh Out Loud. Its excessive use implies either condescension or a not-very-critical sense of humor. One can audibly laugh only so many times at shared cleverly-captioned-pics of fat cats and ugly dogs. If laughter is the best medicine, then on facebook it's a drug that begs too many junkies. The ubiquity of LOL has turned life into one big big-screen viewing of a middling romcom*** in the company of an undiscriminating audience hellbent to cackle in your ear at each and every cue, because, damnit, they paid $10 to laugh and they're going to laugh.
And finally, about something that
IV. Really Should be Redundant
Perhaps it's spoken unconsciously, but not infrequently persons will preface a revelation with the words Honestly, Frankly, or To Tell You the Truth. I suppose I don't like these turns of phrase for what they imply about everything else the person says. Because honesty isn't the best policy. It's the only one.
San Diego Bankruptcy Attorney, Asaph Abrams
Offering free, no-obligation bankruptcy consultations in San Diego. Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment.
_____________
*The Bankruptcy Code being Title 11 of the United States Code, not to be confused with Chapter 11 (of Title 11), the third most-popular form of bankruptcy.
**Convenience counts. Parking in downtown San
Diego, where the bankruptcy Grand Meeting transpires, can be fraught with peril.
The meter cops will nail one for the slightest infraction, from not pointing wheels-to-curb on a slope, parking 21
minutes in a 20-minute zone, or crashing into a sidewalk coffee-cart.
***Romcom is short for Romantic Comedy, or "films populated by Matthew McConaugheys and Kate Hudsons."
Sunday, March 4, 2012
Wednesday, January 18, 2012
Bankruptcy Court Fee Waiver: Yea or Nay?
In filing a Voluntary Petition under Title 11 Chapter 7 one may appeal to the Court for waiver of its filing and administrative fees. Today's chapter-7 filing fee in the S. District of CA is $306, a predictably periodically-adjusted non-rounded number. In our courts, fee waivers are available under limitation pursuant to the notion of in forma pauperis or conferral of unflattering pauper-status to the applicant.
There are threshold requirements for granting of the bankruptcy fee waiver: income within 150% of the poverty guidelines (Google for updates); lack of savings or assets that would permit payment; and determination that its payment would not be feasible even in 2 installments. However, other considerations should be factored into election whether to seek waiver of fees.
The application for waiver of chapter-7 attorney fees compels one's declaration under penalty of perjury that the fee is presently not affordable. While current peace of mind is important, in the absence of urgency (e.g., garnishment or levy), the notion of "present" suggests "within a reasonable future timeframe."
One must appreciate the implication of a fee waiver. With limited resources, the courts must incur considerable costs to process a bankruptcy filing. Waiver of one's individual fees effects a subsidy that translates to the periodic increase of the standard fee.
In addition, the court fee is allocated in part to the administering case-trustee, who is not otherwise compensated in a no-asset case. A fee-waiver case is not necessarily a simple one; it may beg the trustee's significant commitment of time and costs, and who is happy to work without pay? While it's commendable to freely give and contribute, contributions need to be voluntary and not coerced.
In conclusion, even if threshold criteria are satisfied and a fee-waiver could be granted, the debtor must carefully contemplate whether it should be granted. Fee waivers are valid, yet should be limited to those in true dire-need.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment.Wednesday, January 11, 2012
Something to say about Stan
UCSD’s Biology Professor Emeritus, Stanley E. Mills passed away, I just recently learned. At 89, he’d lived life to the fullest—and I don’t mean that in the usual trite sense. He modeled self-improvement: he quit smoking late in life, and promoted a scholarly regimen for sound nutrition. He showed it’s not to late to expand one's comfort zones: late in life he'd go dancing, lift weights, and learn piano. He persisted to educate both himself and others.
Before college, I came across Dr. Mills through my Pre-Med brother who'd worked in the former's lab. Later, as a distinctly non-science major at UCSD, I'd nonetheless tramp over to the ivy-covered Old Biology Building. There I'd ride the service-style elevator up to Stan's office-- until such time he berated me and I began to take the stairs--slouch on an aged couch, and shoot the breeze with the grand old man.
He was unassuming, magnanimous and hilarious. His utilitarian office was filled with books piled high, papers piled higher, and not much more. For a venerated professor at a top-tier institution, it was pointedly austere. Stan had no need for embellishment. He'd wear a dated Members Only jacket--sleeves rolled up (natch), sported sort-of-scruffy trousers, and drove an ancient American beater. Memorably, he would wryly admonish particular colleagues: those driving certain leather-upholstered-imports.
He had the means to be immodest, but he gave to others. He funded ambitious after-school programs for kids, so they could stay out of trouble and prosper. It was money better spent and he did so without fanfare. Only now do I spill the beans. He'd mock its "y'know" and "like" colloquialisms, but he had faith in the younger generation of students; he did not condescend. His pithy profanities were disarming: with Stan you didn't sense a generation gap.
Ultimately, Dr. Mills directed me into law. I had proposed an alternative career path, which was respectable enough. But he didn't beat around the bush and basically told me to not f--- around: go to law school. He was wiser than me; I accepted his blush-worthy recommendation letter and well, here I am.
Stan's health regimen had a lot to do with combating free radicals and naming culinary heroes and villains. Broccoli sprouts= good. Liver pate= bad. I won't volunteer more, because he was also of the (facetious?) opinion that some things (like the secrets of longevity) are best kept among those close to one's heart. He did prove his point, by the way. It was a tragic accident--not disease that took him from us. But diet aside, he expressed that the main thing was exercise. Or, rather: "not sitting on your ass all day (which I presently attest to, whilst sitting on my ass)."
Stan was one of the founding professors at my alma mater, University of California in San Diego, which opened in 1960 and had immediate impact upon its La Jolla setting. The inception of a diversely-staffed school compelled the locals to abandon racial covenants, being the La Jolla tradition of barring home-sales to "undesirables." Stan would later promote diversity at UCSD through tutoring of minority students.
Dr. Mills also promoted UCSD's mission as the anti-jockocracy. He pushed for deliberate departure from dispensing athletic scholarships or promoting sports at the expense of academics. So, UCSD has never had "real" team sports, and all the hoopla that goes with it. Then again, it maintains its superlative academic ranking.
After graduation, the frequent bull sessions inevitably tapered. Regretfully with time, I saw him less.
A fitting epitaph is something quite simple he said:
If you’re not constantly striving to learn… then you’re just using up air.
http://libraries.ucsd.edu/historyofucsd/newsreleases/1969/19691208.html
http://ucsdnews.ucsd.edu/pressreleases/founding_biologist_at_uc_san_diego_dies_at_89/
Before college, I came across Dr. Mills through my Pre-Med brother who'd worked in the former's lab. Later, as a distinctly non-science major at UCSD, I'd nonetheless tramp over to the ivy-covered Old Biology Building. There I'd ride the service-style elevator up to Stan's office-- until such time he berated me and I began to take the stairs--slouch on an aged couch, and shoot the breeze with the grand old man.
He was unassuming, magnanimous and hilarious. His utilitarian office was filled with books piled high, papers piled higher, and not much more. For a venerated professor at a top-tier institution, it was pointedly austere. Stan had no need for embellishment. He'd wear a dated Members Only jacket--sleeves rolled up (natch), sported sort-of-scruffy trousers, and drove an ancient American beater. Memorably, he would wryly admonish particular colleagues: those driving certain leather-upholstered-imports.
He had the means to be immodest, but he gave to others. He funded ambitious after-school programs for kids, so they could stay out of trouble and prosper. It was money better spent and he did so without fanfare. Only now do I spill the beans. He'd mock its "y'know" and "like" colloquialisms, but he had faith in the younger generation of students; he did not condescend. His pithy profanities were disarming: with Stan you didn't sense a generation gap.
Ultimately, Dr. Mills directed me into law. I had proposed an alternative career path, which was respectable enough. But he didn't beat around the bush and basically told me to not f--- around: go to law school. He was wiser than me; I accepted his blush-worthy recommendation letter and well, here I am.
Stan's health regimen had a lot to do with combating free radicals and naming culinary heroes and villains. Broccoli sprouts= good. Liver pate= bad. I won't volunteer more, because he was also of the (facetious?) opinion that some things (like the secrets of longevity) are best kept among those close to one's heart. He did prove his point, by the way. It was a tragic accident--not disease that took him from us. But diet aside, he expressed that the main thing was exercise. Or, rather: "not sitting on your ass all day (which I presently attest to, whilst sitting on my ass)."
Stan was one of the founding professors at my alma mater, University of California in San Diego, which opened in 1960 and had immediate impact upon its La Jolla setting. The inception of a diversely-staffed school compelled the locals to abandon racial covenants, being the La Jolla tradition of barring home-sales to "undesirables." Stan would later promote diversity at UCSD through tutoring of minority students.
Dr. Mills also promoted UCSD's mission as the anti-jockocracy. He pushed for deliberate departure from dispensing athletic scholarships or promoting sports at the expense of academics. So, UCSD has never had "real" team sports, and all the hoopla that goes with it. Then again, it maintains its superlative academic ranking.
After graduation, the frequent bull sessions inevitably tapered. Regretfully with time, I saw him less.
A fitting epitaph is something quite simple he said:
If you’re not constantly striving to learn… then you’re just using up air.
http://libraries.ucsd.edu/historyofucsd/newsreleases/1969/19691208.html
http://ucsdnews.ucsd.edu/pressreleases/founding_biologist_at_uc_san_diego_dies_at_89/
Sunday, January 1, 2012
Everybody Keep the Faith
Intro:
From a lawyer's perspective, the online Frequently Asked Question ("FAQ") is akin to the objection, "Asked and answered." Legal FAQ's suggest a policy interest of cyberspace economy: counsel will spare web-browsers from duplicative queries with preemptive FAQ's. Yet, ultimately, the ubiquity of FAQ's has not conserved storage space: the World Wide Web features frequently-asked frequently-asked-questions. The Net is pretty FAQ'd up.
Lawyer-websites' FAQ-content is traced to common questions from the field, as well as online queries from various attorney-answered Q&A sites. In such forums, attorneys freely give legal information, and in the process, they achieve Internet Presence. The answers are of varying quality: some are right, and some are wrong. Perhaps they go wrong when an answer reflects an attorney's means to an end (Internet Presence) rather than an end in itself, which is to promote only the most accurate public knowledge.
On that note, a good tip off to self-promotion-centered content is the script beholden to search-engine keywordology. As in, "San Diego Bankruptcy Attorney, [Insert Name] is a Bankruptcy Attorney practicing in San Diego and serving the residents of San Diego in the filing of Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in San Diego. If you are in San Diego, please contact San Diego Bankruptcy Attorney [Insert Name]. Also, how about those San Diego Chargers?"
Now, a legal blog (or blawg, haha) is commonly an overblown version of an Internet-Presence-promoting FAQ. Yet, in its defense, a blog permits a broader-scoped answer than the necessarily-narrow confines of an FAQ or legal-forum Q&A.
A) An Overblown Answer to an FAQ:
A particular frequently asked question (often appearing in legal-forum Q&As) goes something like this:
I just lost my high-paying job. How long do I have to wait to file bankruptcy?
If you come across the above post, then the first thing: ignore the terse response. There's more to it than bare numbers and dates described in succinct Q&A's. It begs some blog room. In attempting to answer the query, we need to talk about faith.
Faith in law is a dichotomy between good and bad. The Bankruptcy Code contemplates a debtor with the cartoon-angel and -devil perched on her respective shoulders. The good-faith debtor obeys the angel and is rewarded with forgiveness (discharge) of debt. The culpable bad-faith debtor is denied discharge. The above query entails a classic instance of good versus bad faith.
It is a matter of faith to embrace a universal motivation to earn income. The bankruptcy debtor is charged with evidencing good faith by not foregoing or postponing new income opportunities, which may be a source for repayment of debt. Forestalling income is counter-intuitive, however in bankruptcy, there may be a bad-faith motive to do just that. Bankruptcy eligibility and outcome is income-centric. If one's income is particularly high, then there be less benefit or opportunity in bankruptcy; with higher income comes greater expectation of debt payment. Therefore, a presently- or temporarily-unemployed-debtor exercises bad faith if she has high-income options, yet postpones employment in order to better qualify for bankruptcy.
Thus, the question itself is misguided.
B) Why Wait Anyway?
The query "How long do I have to wait to file bankruptcy?" is prompted by a particular scheme in bankruptcy, whereby the average of the six-months-income prior to filing are determinative of either 1) chapter 7 eligibility or: 2) degree of payment in chapter 13. A newly-unemployed debtor who previously earned high six-figures may presumptively fail to qualify for chapter 7 on the basis of her income track record. There's logic to it: one's lengthy income history may be more telling of debt-repayment potential than the present moment in time. The person in the above scenario would have a harder time filing bankruptcy the moment they get the pink slip.
At the moment of lost (or reduced) income, the previously high-income-debtor must elect whether to instantly proceed with filing bankruptcy. If there's a certainty of sustained or permanent lost income, they may try to file without delay. Though, the prior six-month-record effects a rebuttable presumption: the debtor must successfully argue the case of permanency of lost earnings. Alternatively, they may refrain from filing (while their determinative six-month-average-period declines) notwithstanding no- or negligible-chance for economic recovery. In the case of a person who truly can't regain employment in the foreseeable future, the delay is unfairly prejudicial. In the case of a newly-unemployed person who does foresee a quick rebound, delay in filing is likewise prejudicial. Yet, not unfairly so.
A sort-of-compelled delay is designed to encourage the debtor to get back on the horse. Until the offer's in hand, there's no guarantee a job prospect--however likely--will ultimately materialize. However, until such time bankruptcy's filed, there should be sustained effort to recover lost income.
The best way to play it is by ear (or ears: yours and your attorney's); if new income materializes during the delay (caused by the prior-six-months test), that does not strictly bar bankruptcy relief (absent serious windfall). High-earning debtors are still privileged to file bankruptcy. Because the measure of what defines high income is not income per se; it's what remains from one's income after deducting particular expenses and liabilities. And such deductions are often commensurately higher for higher-earners. That translates into inability to repay debt and qualification for significant debt relief.
From a lawyer's perspective, the online Frequently Asked Question ("FAQ") is akin to the objection, "Asked and answered." Legal FAQ's suggest a policy interest of cyberspace economy: counsel will spare web-browsers from duplicative queries with preemptive FAQ's. Yet, ultimately, the ubiquity of FAQ's has not conserved storage space: the World Wide Web features frequently-asked frequently-asked-questions. The Net is pretty FAQ'd up.
Lawyer-websites' FAQ-content is traced to common questions from the field, as well as online queries from various attorney-answered Q&A sites. In such forums, attorneys freely give legal information, and in the process, they achieve Internet Presence. The answers are of varying quality: some are right, and some are wrong. Perhaps they go wrong when an answer reflects an attorney's means to an end (Internet Presence) rather than an end in itself, which is to promote only the most accurate public knowledge.
On that note, a good tip off to self-promotion-centered content is the script beholden to search-engine keywordology. As in, "San Diego Bankruptcy Attorney, [Insert Name] is a Bankruptcy Attorney practicing in San Diego and serving the residents of San Diego in the filing of Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in San Diego. If you are in San Diego, please contact San Diego Bankruptcy Attorney [Insert Name]. Also, how about those San Diego Chargers?"
Now, a legal blog (or blawg, haha) is commonly an overblown version of an Internet-Presence-promoting FAQ. Yet, in its defense, a blog permits a broader-scoped answer than the necessarily-narrow confines of an FAQ or legal-forum Q&A.
A) An Overblown Answer to an FAQ:
A particular frequently asked question (often appearing in legal-forum Q&As) goes something like this:
I just lost my high-paying job. How long do I have to wait to file bankruptcy?
If you come across the above post, then the first thing: ignore the terse response. There's more to it than bare numbers and dates described in succinct Q&A's. It begs some blog room. In attempting to answer the query, we need to talk about faith.
Faith in law is a dichotomy between good and bad. The Bankruptcy Code contemplates a debtor with the cartoon-angel and -devil perched on her respective shoulders. The good-faith debtor obeys the angel and is rewarded with forgiveness (discharge) of debt. The culpable bad-faith debtor is denied discharge. The above query entails a classic instance of good versus bad faith.
It is a matter of faith to embrace a universal motivation to earn income. The bankruptcy debtor is charged with evidencing good faith by not foregoing or postponing new income opportunities, which may be a source for repayment of debt. Forestalling income is counter-intuitive, however in bankruptcy, there may be a bad-faith motive to do just that. Bankruptcy eligibility and outcome is income-centric. If one's income is particularly high, then there be less benefit or opportunity in bankruptcy; with higher income comes greater expectation of debt payment. Therefore, a presently- or temporarily-unemployed-debtor exercises bad faith if she has high-income options, yet postpones employment in order to better qualify for bankruptcy.
Thus, the question itself is misguided.
B) Why Wait Anyway?
The query "How long do I have to wait to file bankruptcy?" is prompted by a particular scheme in bankruptcy, whereby the average of the six-months-income prior to filing are determinative of either 1) chapter 7 eligibility or: 2) degree of payment in chapter 13. A newly-unemployed debtor who previously earned high six-figures may presumptively fail to qualify for chapter 7 on the basis of her income track record. There's logic to it: one's lengthy income history may be more telling of debt-repayment potential than the present moment in time. The person in the above scenario would have a harder time filing bankruptcy the moment they get the pink slip.
At the moment of lost (or reduced) income, the previously high-income-debtor must elect whether to instantly proceed with filing bankruptcy. If there's a certainty of sustained or permanent lost income, they may try to file without delay. Though, the prior six-month-record effects a rebuttable presumption: the debtor must successfully argue the case of permanency of lost earnings. Alternatively, they may refrain from filing (while their determinative six-month-average-period declines) notwithstanding no- or negligible-chance for economic recovery. In the case of a person who truly can't regain employment in the foreseeable future, the delay is unfairly prejudicial. In the case of a newly-unemployed person who does foresee a quick rebound, delay in filing is likewise prejudicial. Yet, not unfairly so.
A sort-of-compelled delay is designed to encourage the debtor to get back on the horse. Until the offer's in hand, there's no guarantee a job prospect--however likely--will ultimately materialize. However, until such time bankruptcy's filed, there should be sustained effort to recover lost income.
The best way to play it is by ear (or ears: yours and your attorney's); if new income materializes during the delay (caused by the prior-six-months test), that does not strictly bar bankruptcy relief (absent serious windfall). High-earning debtors are still privileged to file bankruptcy. Because the measure of what defines high income is not income per se; it's what remains from one's income after deducting particular expenses and liabilities. And such deductions are often commensurately higher for higher-earners. That translates into inability to repay debt and qualification for significant debt relief.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment.
The above is general information and opinion. It is not legal advice to be relied upon for action (or inaction). Consult with qualified counsel in your area in regard to bankruptcy matters.
Sunday, December 18, 2011
A Lemon in Bankruptcy or: Why the Young Should (Plan) to Retire
When wanting for inspiration, the blogger inevitably turns to that Emmy-saturated NBC sitcom 30 Rock.* It's the kind of show that TV-people like, because it's about TV people. Now, recall an indelible exchange between the jejune, young(ish), perpetual-singleton, Liz Lemon, and her conservative, capitalist mentor, Jack Donaghy:
Jack: So what are you gonna do with your money? Put it into a 401(k)?
Liz: Yeah, I gotta get one of those.
Jack: What? Where do you invest your money, Lemon?
Liz: I’ve got like twelve grand in checking.
Perhaps it's not the young person's propensity to divert disposable income to retirement accounts. Isn't a higher take-home necessary for a bachelor or bachelorette's trappings: designer duds, fancy shoes, cars that go fast? Yet, ultimately, clothes go out of style (or can't combat the waistline), shoes wear out, and cars break down. And then what are you left with? Invest the same money in retirement and it'll be there when you need it.
In bankruptcy, retirement's relevant for both young and old. This applies in terms of asset protection (a safe harbor), as well as achieving debt relief for less (qualifying for chapter 7 or qualifying for low payments in a chapter 13). Here's how so:
I. Asset protection
When one files chapter 7 bankruptcy, there are rather broad protections for most qualified retirement accounts. Hundreds of thousands may be put aside and be there when you need it. When one files a chapter 13 bankruptcy, qualified retirement money does not affect the threshold payment amount. On the other hand, plain old savings, CDs, annuities, and the like, which are not retirement accounts may be liquidated in chapter 7 (if they exceed certain allowances; some or all of a $23,250 allowance may be allocatable to non-retirement savings**) or set a corresponding threshold for payment in a chapter 13. There may be common sense limitations. If a healthy 25 year-old has a quarter-of-a-million-dollar 401(k), a trustee may question its validity from a "reasonable and necessary" standpoint.
II. Minimizing costs
Bankruptcy's end result is freedom from debt. Or as Mel Gibson put it in Braveheart: "Free-DOM... from debt." [Really, that whole Anglophobic movie was a metaphor about debtors (the Scots) and creditors (the English)]. The question is what does freedom cost?
There are often compelling reasons to elect to file chapter 13 bankruptcy rather than chapter 7. Yet, in many cases, chapter 7 is the cheaper and swifter means of discharging debt. Whereas chapter 13 requires a 36- or 60-month payment plan, chapter 7 rids one of debt sans payment, thus making the latter more economical. Qualifying for chapter 7 is a function of disposable income.
Disposable income is what's left over at month's end. In bankruptcy, disposable income is what's left over at month's end... that is available for debt repayment. If there's lots of it, then one does not qualify for chapter 7. And if one doesn't qualify for 7 and opts for a 13, the higher the disposable income, the higher one's payments are. Now, what's left over at the end of the month is not what's... left over (which most people profess is nothing). It's what's left over on paper after deducting from one's income the expenses that are reasonable and necessary. If you have too much income to begin with, you may be hard pressed to qualify for chapter 7: there are only so many reasonable and necessary things to do with one's money. So, what to do if one's too far in the black?
Putting money in savings, CDs, annuities, and the like is verboten. One can't put aside readily available cash and not repay debt. However, funds may be consistently channeled to retirement-accounts and not be counted as disposable income. This channeling must be historically consistent. Eve of bankruptcy retirement-planning is dubious.
If one ultimately does not qualify for a chapter 7 and elects to file a chapter 13--or opts for 13 in lieu of 7 (13 has its own benefits)--then one may deduct continued retirement contributions from one's monthly payment to creditors.
There are additional subtleties including a distinction between mandatory and voluntary retirement contributions in the context of the chapter 7 means test. But the point for the young reader is that retirement planning is not strictly for the geezers. In overcoming present-day liabilities, retirement contributions help preserve assets and facilitate bankruptcy relief. Those who bear retirement in mind better qualify for chapter 7 or benefit form lower chapter 13 payments.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment or complain about the blog.
___________
*30 Rock! Return from hiatus forthwith--beyond the inevitable ramifications of a structure-wanting and idle Alec Baldwin--even two minutes' worth of your deplorable fill-in Whitney on the tail-end of a DVR'd The Office is an act of terrible affront to the public.
**Applies to some Californians.
Jack: So what are you gonna do with your money? Put it into a 401(k)?
Liz: Yeah, I gotta get one of those.
Jack: What? Where do you invest your money, Lemon?
Liz: I’ve got like twelve grand in checking.
Perhaps it's not the young person's propensity to divert disposable income to retirement accounts. Isn't a higher take-home necessary for a bachelor or bachelorette's trappings: designer duds, fancy shoes, cars that go fast? Yet, ultimately, clothes go out of style (or can't combat the waistline), shoes wear out, and cars break down. And then what are you left with? Invest the same money in retirement and it'll be there when you need it.
In bankruptcy, retirement's relevant for both young and old. This applies in terms of asset protection (a safe harbor), as well as achieving debt relief for less (qualifying for chapter 7 or qualifying for low payments in a chapter 13). Here's how so:
I. Asset protection
When one files chapter 7 bankruptcy, there are rather broad protections for most qualified retirement accounts. Hundreds of thousands may be put aside and be there when you need it. When one files a chapter 13 bankruptcy, qualified retirement money does not affect the threshold payment amount. On the other hand, plain old savings, CDs, annuities, and the like, which are not retirement accounts may be liquidated in chapter 7 (if they exceed certain allowances; some or all of a $23,250 allowance may be allocatable to non-retirement savings**) or set a corresponding threshold for payment in a chapter 13. There may be common sense limitations. If a healthy 25 year-old has a quarter-of-a-million-dollar 401(k), a trustee may question its validity from a "reasonable and necessary" standpoint.
II. Minimizing costs
Bankruptcy's end result is freedom from debt. Or as Mel Gibson put it in Braveheart: "Free-DOM... from debt." [Really, that whole Anglophobic movie was a metaphor about debtors (the Scots) and creditors (the English)]. The question is what does freedom cost?
There are often compelling reasons to elect to file chapter 13 bankruptcy rather than chapter 7. Yet, in many cases, chapter 7 is the cheaper and swifter means of discharging debt. Whereas chapter 13 requires a 36- or 60-month payment plan, chapter 7 rids one of debt sans payment, thus making the latter more economical. Qualifying for chapter 7 is a function of disposable income.
Disposable income is what's left over at month's end. In bankruptcy, disposable income is what's left over at month's end... that is available for debt repayment. If there's lots of it, then one does not qualify for chapter 7. And if one doesn't qualify for 7 and opts for a 13, the higher the disposable income, the higher one's payments are. Now, what's left over at the end of the month is not what's... left over (which most people profess is nothing). It's what's left over on paper after deducting from one's income the expenses that are reasonable and necessary. If you have too much income to begin with, you may be hard pressed to qualify for chapter 7: there are only so many reasonable and necessary things to do with one's money. So, what to do if one's too far in the black?
Putting money in savings, CDs, annuities, and the like is verboten. One can't put aside readily available cash and not repay debt. However, funds may be consistently channeled to retirement-accounts and not be counted as disposable income. This channeling must be historically consistent. Eve of bankruptcy retirement-planning is dubious.
If one ultimately does not qualify for a chapter 7 and elects to file a chapter 13--or opts for 13 in lieu of 7 (13 has its own benefits)--then one may deduct continued retirement contributions from one's monthly payment to creditors.
There are additional subtleties including a distinction between mandatory and voluntary retirement contributions in the context of the chapter 7 means test. But the point for the young reader is that retirement planning is not strictly for the geezers. In overcoming present-day liabilities, retirement contributions help preserve assets and facilitate bankruptcy relief. Those who bear retirement in mind better qualify for chapter 7 or benefit form lower chapter 13 payments.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment or complain about the blog.
___________
*30 Rock! Return from hiatus forthwith--beyond the inevitable ramifications of a structure-wanting and idle Alec Baldwin--even two minutes' worth of your deplorable fill-in Whitney on the tail-end of a DVR'd The Office is an act of terrible affront to the public.
**Applies to some Californians.
Tuesday, December 13, 2011
The Case Against Braveheart
It's the ad hominem fallacy to decry a piece of work on account of one's distastefulness for its maker. For example, it may be fair, but it's not logical to dismiss all films by Mel Gibson on account of his bigotry, sexism and hypocrisy. Fortunately, in the case of Braveheart (ca 1995), there's no cause to abandon logic. Gibson aside, the movie--a romantic epic of a medieval Scot rebel directed by and starring Gibson--itself stinks.
I first heard of Braveheart from my brother. He'd called to spur me to view what he described (in not so many words) as a badass display of machismo. So, I loped down the hill from UCSD to the La Jolla Village cinema (back when they stooped to show mainstream fare), bought a ticket and Jujubes, slumped in a seat, watched it, and yes: it was bloody good fun. I was so fond of it, I purchased the soundtrack CD replete with ennobling motifs and maudlin string orchestra. But I was young and dumb then. In hindsight, it was the erstwhile film critic of the San Diego Reader, Duncan Shepherd, who hit the nail on the head with this contemporaneous and pithy review: http://www.sandiegoreader.com/movies/braveheart/
A couple of years later, I shipped off from UC San Diego to Australia to sort-of study at the University of Sydney, I'm not sure why. Perhaps I was drawn to Sydney Uni's handsome Neo-Gothic structures, a welcome change from UCSD's architectural style of Neo-Whatever-Dude.* Indeed, except for the kangaroos sculpted atop the spires, its towers are quite reminiscent of Cambridge and Oxford.** I mention the Australian chapter, because like me, Mel Gibson was an American expatriate in Oz. Articles tell that his zealot father had emigrated from the States to spare his sons the draft. This did not deter the actor from playing a Vietnam war hero in We Were Soldiers (scripted by the writer of Braveheart).
Among the Aussie student body was a fairly pervasive anti-American sentiment (or maybe they just didn't like me--Ha!), which colored opinion on important matters like Mel Gibson. One classmate and career-student painted him "a big phony," on account of losing his Aussie accent to speak like a Yank. I told her she couldn't blame him, because "you do have pretty silly accents."
Ultimately, coincidentally with increasingly-bad Gibsonian press, having become more jaded, and I daresay wise to instance of filmic cliché, I came to adopt Mr. Shepherd's opinion. The movie was excessively gory (perhaps having become a father effected greater sensitivity to violence), hamfisted, and pandering. There's nothing wrong with the heroic tale of nobility and honor. Yet, it needn't be anachronistic, masochistic, simplistic. Take the flick Rob Roy incidentally released the same year as Braveheart, it told another story of an heroic Scot. [The titular character is famous for inspiring the scotch and vermouth cocktail and killing Englishmen.] Rob Roy, the movie heeds time and place, and physics: 18th-century-teeth were yellow, swinging a sword is hard work, and humans weren't born on Krypton. Its dialogue is rich, its action truly thrilling for being more sparse, surprising and well-earned.
Now is the twilight of Gibson's career. Gone is the lush 80s mullet, the wrinkle-free skin, the A-list status. And that's okay. He had has time in the limelight: Braveheart won the Academy Award for Best Picture of 1995. Rob Roy won nothing, as far as I recall. Which goes to show you that the Academy Awards are a bunch of self-congratulatory hooey.
Anyway, this was apropos of nothing. I've just been meaning to critique Mel Gib-- ahem, Braveheart, for a while now.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment or complain about the blog. a
____________
*The deliberate non-uniformity of architectural style at UCSD is an interesting concept, perhaps suggestive of cultural diversity and tolerance otherwise lacking there. Yet, in execution, many of its buildings are perhaps suggestive of prison barracks.
**This is slightly funnier than it sounds, if only because they really do have kangaroos on the buildings. Nothing wrong with that, except that kangaroos are innately ridiculous (albeit fairly delicious and low in fat... yes, when in Rome...).
I first heard of Braveheart from my brother. He'd called to spur me to view what he described (in not so many words) as a badass display of machismo. So, I loped down the hill from UCSD to the La Jolla Village cinema (back when they stooped to show mainstream fare), bought a ticket and Jujubes, slumped in a seat, watched it, and yes: it was bloody good fun. I was so fond of it, I purchased the soundtrack CD replete with ennobling motifs and maudlin string orchestra. But I was young and dumb then. In hindsight, it was the erstwhile film critic of the San Diego Reader, Duncan Shepherd, who hit the nail on the head with this contemporaneous and pithy review: http://www.sandiegoreader.com/movies/braveheart/
A couple of years later, I shipped off from UC San Diego to Australia to sort-of study at the University of Sydney, I'm not sure why. Perhaps I was drawn to Sydney Uni's handsome Neo-Gothic structures, a welcome change from UCSD's architectural style of Neo-Whatever-Dude.* Indeed, except for the kangaroos sculpted atop the spires, its towers are quite reminiscent of Cambridge and Oxford.** I mention the Australian chapter, because like me, Mel Gibson was an American expatriate in Oz. Articles tell that his zealot father had emigrated from the States to spare his sons the draft. This did not deter the actor from playing a Vietnam war hero in We Were Soldiers (scripted by the writer of Braveheart).
Among the Aussie student body was a fairly pervasive anti-American sentiment (or maybe they just didn't like me--Ha!), which colored opinion on important matters like Mel Gibson. One classmate and career-student painted him "a big phony," on account of losing his Aussie accent to speak like a Yank. I told her she couldn't blame him, because "you do have pretty silly accents."
Ultimately, coincidentally with increasingly-bad Gibsonian press, having become more jaded, and I daresay wise to instance of filmic cliché, I came to adopt Mr. Shepherd's opinion. The movie was excessively gory (perhaps having become a father effected greater sensitivity to violence), hamfisted, and pandering. There's nothing wrong with the heroic tale of nobility and honor. Yet, it needn't be anachronistic, masochistic, simplistic. Take the flick Rob Roy incidentally released the same year as Braveheart, it told another story of an heroic Scot. [The titular character is famous for inspiring the scotch and vermouth cocktail and killing Englishmen.] Rob Roy, the movie heeds time and place, and physics: 18th-century-teeth were yellow, swinging a sword is hard work, and humans weren't born on Krypton. Its dialogue is rich, its action truly thrilling for being more sparse, surprising and well-earned.
Now is the twilight of Gibson's career. Gone is the lush 80s mullet, the wrinkle-free skin, the A-list status. And that's okay. He had has time in the limelight: Braveheart won the Academy Award for Best Picture of 1995. Rob Roy won nothing, as far as I recall. Which goes to show you that the Academy Awards are a bunch of self-congratulatory hooey.
Anyway, this was apropos of nothing. I've just been meaning to critique Mel Gib-- ahem, Braveheart, for a while now.
Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment or complain about the blog. a
____________
*The deliberate non-uniformity of architectural style at UCSD is an interesting concept, perhaps suggestive of cultural diversity and tolerance otherwise lacking there. Yet, in execution, many of its buildings are perhaps suggestive of prison barracks.
**This is slightly funnier than it sounds, if only because they really do have kangaroos on the buildings. Nothing wrong with that, except that kangaroos are innately ridiculous (albeit fairly delicious and low in fat... yes, when in Rome...).
Tuesday, December 6, 2011
Can You A-Ford it (redux)?
[Originally published 5-13-10. Recycling a dated blog on the pretext of incorporating the latest legal developments is the province of the time-taxed, yet conscientious practitioner. Or maybe I want for something new to say....]
It's Saturday. The boy is picking weeds (and not grass, hopefully). That's why it's good to have boys; they don't mind the dirt beneath their nails, which saves you big bucks on gardening. The wife is doing something technical and tedious with the website. That's why it's good to have a wife; she saves you big bucks on IT. And finally, yours truly is sitting with a cat in his lap, fingers clacking on the keyboard (dirt beneath the nails; had to demonstrate proper weeding, getting those suckers out by the roots), and on the desk, 12 ounces of chemicals in an aluminum can, leaving a wake of condensation. Today's topic is Ford.
In that awkward decade, the 80s, Ford Motor Company's ad slogan echoed an apologetic quality,
"Have you driven a Ford... lately?!"
(if not, can you give us another chance?)In modern times, Ford boasts success, insofar as its numbers show the smallest loss among Motown's carmakers. Still, the ads implore,
"Drive One."
(please)and in a companion ad*, the pitchman suggests that a driver swap her current car for a Ford. She responds,
"I was surprised!"
(it wasn’t as bad as I thought it’d be)
The only Ford my family ever owned was a 1970s s#*!-brown Pinto. The Pinto was notorious for combusting upon rear-impact. Ford calculated the cost of recall--to remedy the flaw--as greater than the cost of compensating inevitable burn victims. So, they let them burn. The Pinto's penchant for flaming is aptly illustrated in the seminal and vulgar, episodic-skit film, Kentucky Fried Movie. Rent it at your neighborhood online store. And so that is Strike One, Ford: you're flammable.
Before we strike out, let's sojourn in Bankruptcy Land for a lesson on bankruptcy and cars.
A typical line spoken at initial attorney consultation reads, I want to keep my car out of the bankruptcy. By that, the client means they want to keep their car. The attorney will respond that, you can't keep the car out of the bankruptcy. By that, the attorney means that in the bankruptcy papers, you must list your car as an asset and you must list your car loan as a debt. Even if you "forget" to list your car loan (shame on you!), your debt on the car will, for practical purposes still be discharged (canceled) by virtue of the bankruptcy. [See In re Beezley 994 F.2d 1433 on presumptive discharge of unlisted debts.] But the attorney will stress, you can still keep your car. Whoa! Hold on to your horses (or mustangs or pintos). That doesn't mean you can keep the car gratis. Instead, when you file chapter 7 bankruptcy, there are vehicular options, as follows:***
1) You can surrender the car and you will owe nothing further on it. If your car is worth a grand and you owe 10 large on it, why keep it?
2) You can redeem the car. This means your attorney can move the court to permit a lump sum purchase of the car. The lump sum would be equal to the current market value. Thus, you could buy that $1K car for $1K. The lump sum can be financed through a third party.
3) You can reaffirm the car loan. This means you would re-sign or re-instate the loan and file an agreement to that effect with the bankruptcy court. This puts you back on the hook despite the bankruptcy. If you later default on the loan, the lender can repossess the car, sell it, then sue you for the remaining payoff not recovered by its sale. Reaffirmations are not recommended: they defeat the purpose of the bankruptcy. Though, if you can truly afford to pay off the loan, reaffirmation may be a reasonable calculated risk, and a positive means of bolstering your credit. It is more reasonable to reaffirm if the payoff amount does not substantially exceed the market value, since that translates into a lesser deficiency upon default.
4) You can (maybe) "retain and pay." This is also know as the "ride-through." You'd maintain your installments, pay off the vehicle and when the end credits roll, you'll ride on through, title in hand. Lenders may argue the letter of the Code [see 11 USC §521(a)(6)(A)] that failure to timely reaffirm the loan permits repossession. But most lenders currently tolerate the ride-through in practice. The majority predicts greater profit by accepting payments and risking default, than by incurring repo and re-sale costs on accounts in good standing. Ford Motor Credit Corporation disagrees. They insist upon reaffirmation or else they'll repossess your wheels, even if you're current on payments.**** And that's Strike Three, Ford: you're Out.
So, you may say, what's the problem? Why not just reaffirm if you plan to make payments anyway? The problem (besides risk of default) is we can't always reaffirm, even if we want to. If your expenses exceed your income, then it's presumed that reaffirmation imposes "undue hardship." In paternalistic (yet rational) manner, the court will not permit you to reaffirm a loan, if objectively, you cannot a-Ford it.
So, now what? When in any sort of pickle, I naturally recall Dennis Hopper quizzing Keanu Reeves in Speed. Remember his refrain was, "What do you do? What... do you do?" But, unlike the late Mr. Hopper, we needn't over-act, I mean over-react. Let's go through our choices, in case the lender threatens repo absent reaffirmation:
Choice one: don't reaffirm; let them enforce the letter of the law, yet kill its spirit. Bid the car adieu. Forego payments you can't afford and let go a depreciated piece of metal.
Choice two: compel a ride through. In the event the presumption of undue hardship arises, one may elect to still go through the motions of filing a reaffirmation, for the purpose of entering its predictable denial on the court record. In doing so, one conforms to the duties inherent in reaffirmation [see 11 USC §§ 524(c).] By virtue of such compliance (and implicit good faith), (some) judges have ruled that notwithstanding denial of reaffirmation, the lender must tolerate ride-through. By federal court order, they are barred from repossessing the collateral.
The problem is that choice two is not sanctioned by a consensus ruling. It may not work.
The coercion of reaffirmation is frustrating and it's a hassle for yours truly. But in the end, don't miss sight of the big picture. If you owe on a car more than it's worth, then it's a liability--not an asset. In conjunction with the discharge of considerable, un-repayable debt, abandoning a costly vehicle is a rational choice.
Postscript:
There's a Fourth Strike against Ford. Now, as a kid I always reckoned it was Harrison Ford's name in the blue oval logo. He bested the Nazis with a bullwhip and defeated intergalactic villains while piloting a hamburger-shaped spacecraft. Surely, with such accomplishments, he could have easily crafted cars in his spare time. But no, it was Henry Ford. Ford was a great pioneer. He is credited with inventing the assembly line, thus improving efficiency while rendering work painfully dull and repetitive. But he was also a bad man, a virulent racist. In fact, he had a pen pal named Adolph Hitler. No wonder, it wasn't Ford, but Jeep, maker of jeeps, that equipped Patton to beat Rommel.
Post-postscript
I was visiting with a successful physician at his home. In his garage, he parked an obscenely expensive Porsche, which he faithfully maintained in its showroom condition. While he was feeding his oversized dogs, I drank a beer and flipped through car magazines, reading engine stats and the like. I asked,
"Why not get a Ford GT500 or something? Matches your German brand's performance, 0-60 in a handful of seconds and all that. Fraction of the German's cost. What's wrong with the Ford?" He replied,
"Nothing. But it's a Ford."
I said, "Have you driven a Ford lately?"
Visit us at http://www.bankonitsd.com/ or call 858-344-0500 (open 9 till late, but not as late as Taco Bell). E-mail admin@abramslawsd.com to set an appointment or complain about the blog.
_______________________________
*Generally, we fast-forward through the mind-numbing, spirit-crushing TV commercials (and the Super Bowl ads are no exception: they're the same ads, they just happen to play during the big game, what's up with that particular fascination?), but sometimes I’ll watch ‘em during bathroom breaks or when the toaster-oven chimes and we wait, while the boy retrieves warm chocolate chunk cookies.**I've defined Mr. Kinnear, the actor, as quintessentially likable. Even when he played a bad dude in Auto Focus, he was still likable. It's really annoying.
***We've been through the drill before: this is all basics; a blog isn't an instructional manual. The important thing is to timely advise your attorney as to your intent with your secured properties, so as to satisfy strict deadlines.
****Note: in San Diego, San Diego County Credit Union and Harley Davidson's credit co. also currently assert the repossession "right." You must verify vis-à-vis every lender in your area what their current reaffirmation/ride-through/repo policies are. Reaffirmation may also be compelled if you finance a vehicle on the eve of bankruptcy. This is a particularly time-sensitive area.
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