Law Office of Asaph Abrams

Bankruptcy Court Fee Waiver: Yea or Nay?

2012-01-18T12:32:00.000-08:00

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.

Something to say about Stan

2012-01-11T16:26:00.000-08:00

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/

Everybody Keep the Faith

2012-01-01T13:10:00.000-08:00

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.

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.

A Lemon in Bankruptcy or: Why the Young Should (Plan) to Retire

2011-12-18T12:21:00.000-08:00

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 $23,500 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.
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*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.

The Case Against Braveheart

2011-12-13T19:35:00.000-08:00

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
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*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...).

Can You A-Ford it (redux)?

2011-12-06T17:42:00.001-08:00

[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.

On to windshield wipers. Wipers are the subject of another film, Flash of Genius, which stars the likable, Greg Kinnear.** Now, regular old windshield wipers have been around since the Model-T. But at the start of the 50s, intermittency was yet to come. Robert Kearns (played by Kinnear) then introduced the marvel of the intermittent windshield wiper. Except, Ford purloined his invention and denied him credit. Strike Two, Ford: you swiper of the wiper.

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.

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*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.

Due Diligence or: Why Do You Need So Much $#*! From Me?

2011-12-04T15:47:00.000-08:00

The Ancient Greeks had odd habits. For example, they played sports in the nude (odd, though not necessarily bad). Democracy and slaveholding were not mutually exclusive (regrettably not historically odd; though necessarily bad). And, they introduced one of the more pernicious human practices: the Socratic Method. Yet, weirdness aside, the Greeks recorded myths and tales that still inform charting of the heavens, psychology, and playwriting. In that last category is the legacy of Greek Tragedy. The tragic theme spans the millennia in Greek drama, from brutal patricide in the 5th-century-BC works of Sophocles to the equally-famous calamity of superfluous nausea-inducing Avatar-bandwagoning 3-D treatment of Clash of the Titans (ca 2010).

As it happens, we turn not to Clash of the Titans (sorry), but to Sophocles to set the tone of our present pontification. For it was Sophocles who's credited with the concept of "don't shoot the messenger" and I discover sometimes I am the messenger. Recall, in Antigone, a ca 442 BC work, the author wrote, No one loves the messenger who brings bad news. Shakespeare put it a bit more elegantly in Henry IV, Part II*:

"Thou shakest thy head and hold'st it fear or sin to speak a truth. ... Yet the first bringer of unwelcome news hath but a losing office, and his tongue sounds ever after as a sullen bell, remember'd tolling a departed friend."

Why don't people talk like that anymore? They should.

So, how am I the messenger? It's about, "Supporting documentation."

In filing a chapter 7 or 13 bankruptcy, the debtor must provide to a case trustee, a distinct set of supporting documentation. These docs must substantiate the facts in one's bankruptcy petition. They also inform what goes into the petition in the first place. In directing the debtor what to provide, the attorney exercises "due diligence." Due diligence is defined as, "the act of nagging a client." [Per 11 USC 101(52)(A).] The trustee, in turn, must exercise due diligence by checking it all (so you want to turn in only what's necessary; if it's redundant, they still have to read the damn stuff, no matter how painfully dull it is.)**

So what are these due-diligence items? Tax returns, tax transcripts, valuations, payoff statements, etc. Nothing too abstract or abstruse. Yet, sometimes (not many times), clients revolt. He who delivers the message to submit tax forms may suffer unexpected vitriol.*** As in, What the (bleep), why am I put out, what am I paying you for?

Yet, we announce at the outset that bankruptcy is a cooperative effort between attorney and client. I sum it up thus: give us the pulp... we'll make the paper.

The paper is that fat stack of stuff we call the bankruptcy petition. And for that paper we need pulp... the returns, the transcripts, the statements, confidential material to which the client retains unique access. Only the client has the pulp-- he need just give it up.

Certain clients may prefer lackadaisical, enabling counsel who don't insist upon what's needed-- or don't know what it is. If one favors expediency over preparation and prudence, one assumes risk for ill results.

The messenger doesn't blame his shooter (too much). It's expected: the clientele is stressed. Just put it in perspective. If one wishes to discharge thousands in debt for a penny on the dollar, then yes, one must uncover pay advices, tax returns, and similar pulp. How hard is that? Its level of taxation does not quite approximate the Spartan stand at Thermopylae or watching Clash of the Titans in 3-D. On the scale of difficulty, procuring bankruptcy-pulp is somewhere in the middle, next to naked track-and-field.

__________
*Insofar as Henry IV was a sequel to the third Henry---who was of such unimportance that he didn't merit a play from the Bard--and a prequel to Henry VI, who was awarded not one, nor two, but a trilogy of plays, the multi-part Henry IV work presaged the contemporary phenomenon of sequel mitosis. This being the milking of a brand name: see such mouthfuls as "The Twilight Saga [IV]: Breaking Dawn Part I" or Harry Potter [VII]: The Deathly Hallows Part II." They say this is somewhat disruptive of the narrative continuity . For example, between episodes, one might forget what a Deathly Hallow is.

**Indeed, the level of boredom may approximate viewing The Twilight Saga [IV]: Breaking Dawn Part I.

***Upon a not-prohibitively-difficult request, a client may promptly begin to pull his hair out and spew obscenities. This is funnier than it sounds because it is true. Such reactions might be uncalled for--I do not know.

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

Banal Bankruptcy Blog Titles

2011-09-24T19:54:00.000-07:00

The 50- to 60-page (or more) document one files with the bankruptcy court is fully titled: Voluntary Petition, Schedules and Statements. This is because it features a section called
"Voluntary Petition," and it also has Schedules and Statements.

Luckily, lawyers are into the whole brevity thing. So we just call the whole shebang a "petition," the way you'd refer to say, the United States House of Representatives of the 112th United States Congress as "The House," or Star Wars Episode IV: A New Hope as "Star Wars."*

Now among the many schedules in the petition is Schedule I, which lists income. The problem we encounter is that the other Schedules (A through H and J) do not follow I's helpful lead; they don't match the first-letters of their respective subject matters. I is for income--that's good enough for me. Yet, Schedule B, for example lists one's personal property. How is that useful? While the practitioner can readily connect any schedule-letter to its subject, the casual participant wants for a mnemonic to better familiarize with the schedules.

Since I don't care to make one, I do the next best thing and employ forced initialisms.
Thus, the subject of Schedule B--personal property is referred to instead as bersonal broperty. The exemptions stated on Schedule C become Cexemptions, with a soft C. Schedule F features unsecured debts, which sound better if they're Funsecured debts. Schedule H features co-debtors, whom we consider Ho-debtors.

As a bonus, our office fancies British pronunciation of "schedule." Hence, we frequently direct a client's attention to her bersonal broperty shed-ule or reference the effect of Funsecured discharge upon Ho-debtors. It causes occasional confusion, but I think it's for the best.
_____
*Hon. Palpatine gives this analogy in explaining definition of "petition" under 11 USC 101(42). See United States v. Lucas, 12 B.R. 94 (1997).

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

Weekday Shopping

2011-08-27T13:41:00.000-07:00

It's common to seek a second medical opinion, though generally each opinion costs money; so it reasonably should stop with the second one. In law, it's common for an attorney to offer in good faith a free consultation to prospective clients: meaning, persons in sincere search for help. While it's important to find the right fit in counsel, it's poor form to exploit the process by seeking third, fourth, fifth opinions without compelling cause. A free consultation is not free to the practitioner; it takes time from other demands or defers appointments with other prospective clients. What that means is being late to dinner, while the kids wait, working the weekend, or losing business. Yet, counsel freely chooses to extend the courtesy; it's an accepted cost of business and it's sound business. There is no expectation that the prospective client must retain the services. There is only expectation of fairness. Explicitly pronouncing that one's "shopping," has "no intention of signing on," is seeking "bids," or "interviewing" likens the professional to a swap-meet vendor, notwithstanding belated lip-service ("thank you for your time") upon parting.

Are the above pronouncements merely defensive, preemptive, and legitimately prompted by what's out there... at the arm's-length law "mills" (or is it "law" mills)? Do they not famously embrace car-lot protocol? I think that is a factor. But know: for a lawyer, pressuring a consult is simply unethical; the decision to retain counsel must be informed and voluntary. I suppose this may explain why the mills delegate consultation-coercion to non-attorneys. Not that non-licensure stops them from giving legal advice also. But here, at my firm, there's no need to put up defenses.

We will help, but only if you can be helped. While the vast majority of persons we see are eligible for significant debt relief, there are exceptions. If we can't help you, we'll let you know. I try to stress the lighter side of things, laughter is a fine remedy, but I'm dead serious about the law. We don't wish to waste anybody's time if the outcome is less than highly predictable. There are no signing-up bonuses here... we leave that crap (a legal term of art, indeed!) to the others.

I meet the public freely and freely discuss options even when apparent that bankruptcy's not their bag. However, it is apparent when a person fishes for flattery and patronizes. While the motivation is understandable, and it's all right to "shop," declaring it undermines efforts and weakens the potential relationship. We don't wish to belabor it (outside this particular piece of self-indulgence, but isn't indulgence the bulk of blogging anyway?), and I hesitated to broach it, but there you go. So, feel free to stop by at our homey office, drink a cup of fresh coffee (is there any other kind or is that the restaurant-menu redundancy of "farm fresh" tomatoes in the salad?), bemoan the fact there wasn't time to read our "fresh" magazines (we keep our subscriptions to indispensable periodicals like Entertainment Weekly current), discuss your situation, and make things better. I have to say, the personally gratifying part of a retainer is the new-client's statement that "[they] feel better already." We're here to help, because the obscenities of interest, penalties, and collections can't be battled alone.

I realize this blog has provided no substantive insight or information on bankruptcy law, but I thank you for your time.

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free (easygoing) consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

Baby, You're Money

2011-08-22T20:27:00.000-07:00

Intro

Back in '96 there was a flick called Swingers starring Vince Vaughn, and concerning some mates who take an impromptu trip to Vegas. I think I caught it at a theater on King George St., which is in Sydney. What's neat about watching movies in Australia is you can buy cocktails at the snack bar and they're more likely to have balconies. Their rating system is different, perhaps more critical of violence than innuendo. But other than that: same old.

Swingers is known for novelty dialogue: men telling men, "Baby" instead of plain-old "bro" or "dude;" and men telling men, "Money" or "You're Money" in lieu of the usual "Cool" or "You're cool." Very inspiring back then, because 21-years-old, I wasn't very money.

Swingers was written by Jon Favreau, who recently directed Cowboys and Aliens. Perhaps that's telling of man's trajectory from money to bizarre. Anyway, money is what occurred to me in the car the other day.

I don't listen to the radio except when driving (though I play a radio ad on occasion, so I encourage you to tune in at all hours). Now, if the telly favors car ads, radio favors depositories. Nothing visual about banks and credit unions; they fit the medium.

Credit unions are open to member-constituencies with shared commonality. In a member's deposits and withdrawals, he may feel the intimacy intrinsic to an exclusive group. For example, San Diego County Credit Union's membership is limited to a tight-knit 8,295, 186* persons in 3 counties.

San Diego County Credit Union (SDCCU) and Navy Federal Credit Union (NFCU) are 2 popular unions in America's Finest City. Whether you bank with them or not, you're familiar with their FM spots, because your radio is always on so you won't miss my ad. SDCCU recently delivered a rather ticklish promo. In it, a speaker conveys the message of the OTHER banks with a one-word refrain: "Money." The word's repeated as a sort-of evil mantra of a money-grubbing industry, against which stands an enlightened credit union. The latter is not in it for the money. They're loving, they're local, they're for the people. This is very dramatic stuff.

In its ad, NFCU is touted by the predictable voice of the avuncular patriot. It's a mixture of the Smuckers ad man, and a film-trailer voiceover. NFCU is there for its brothers in arms and if you don't bank with them, well... you hate your country.

Now, credit unions differ from banks in their definition as not-for-profit organizations. Yet, not-for-profit is distinct from non-profit or charitable. Profit must still be had to sustain the entity; SDCCU's disavowal of capitalism fails the straight-face test. Navy Fed's heavy-handed promotion would suggest philanthropy, not banking and lending.

Credit Unions In Bankruptcy

In bankruptcy and debt-collection, reality belies the unions' warm & fuzzy self-image. From the debtor's standpoint, credit unions are decidedly more aggressive, and less forgiving, than the OTHER banks [who are (gasp) in it for the money]. A prejudicial treatment of debtors occurs
in 2 areas.

1. Cross-collateralization

What a mouthful. Cross collateralization occurs when a member has a security-interest loan (like for a car), as well as unsecured debts (like credit cards) with the same credit union. If the borrower defaults on a credit card, then the credit union (like SDCCU or Navy Fed) may secure that unsecured debt with the same collateral for the secured auto-loan. If you file bankruptcy, then normally you'd get rid of a credit-union credit-card debt. However, if they also financed your vehicle, then you have a problem if the car is worth more than its loan payoff . In that event, if you wanted to keep the car, the credit-card debt or part thereof would get tacked on to the car loan. Your payoff would increase up to the full value of the vehicle. Had you taken a vehicle loan plus a credit card with one of the Big Bad Banks, that wouldn't happen.

2. Reaffirmations

Most California bankruptcy-filers can protect $3525 in motor-vehicle equity and also claim a "wildcard" allowance of $23, 250. ** So liquidation is rare and most people keep their cars. Now, if a car is financed, it still gets "included" in the bankruptcy. This means the debt gets discharged. You can walk away from it if you want. For example, if you owe 20 Large on your $10K Ford, then give it back. Because you filed bankruptcy, you won't owe the 10,000 difference. But if your car isn't underwater, or you'd rather keep it, then generally you just... keep it (and pay it off). This is called retain and pay or the cleverly-titled "ride through." If--at a later point--you can't maintain the payments, then you can still walk, because you had previously discharged the debt in bankruptcy.

Now, instead of retaining and paying, you can alternatively "reaffirm" a car loan. Reaffirmation, means the re-signing of the car loan after filing bankruptcy. This may improve credit, but it also puts you back on the hook for the loan. If you later default, you'll owe the difference between the payoff and the fair market value. Not good. But reaffirmations are voluntary and most lenders do not try to compel reaffirmation by making it a condition of retaining the vehicle. San Diego County Credit Union is an exception.*** In fact, once you file bankruptcy, they will no longer accept payments. Unless you reaffirm the loan, they will later repossess it even if you were always current on the loan. It's an area of fairly hot contention, but the bottom line is: SDCCU is not a debtor's credit union. And who isn't a debtor?

Conclusion

What we've learned today is that credit unions are necessarily in it for the money,**** and therefore they are not money in the Swingers' sense of money.
_______________
*2010 U.S. Census Bureau tally for San Diego, Orange, and Riverside Counties.

**If claiming (or able to claim) C.C.C.P. section 703 exemptions. Figures are current through April 2013.

***Ford Motor Credit Company likewise acts to compel reaffirmations. There are many ramifications to reaffirmations that I don't address here. You need to retain counsel in regard to the disposition of secured property in bankruptcy.

****There's nothing wrong with making money. But like the great jurist, Judge Judy once said, "Don't pee on my shoe and tell me it's raining." And yes, I know the catchphrase "money" went away around the time Vince Vaughn went from suave to everyman, but that's another story.

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

No, Nolo, No!

2011-08-21T10:21:00.000-07:00

Let me confess a not-surprising bias. A practicing attorney will not recommend self-help literature. But, this is not a knee-jerk or strictly self-interested opinion. It's based on observance of poor results for the in propria persona (self-represented). The adage that a fool's his own attorney is corny but true.

Now the public doesn't tend to hold lawyers in the same positive regard as police officers, or... taxidermists, but when you're alone, cornered, distraught: you want counsel. A paperback from the legal aisle at Barnes & Noble won't do.

One could view my Net presence as an enabling of self-help. It isn't. I write online to inform, so that clients may actively participate in the process.* But I don't tell them how to file a case-- for reasons of professional responsibility. What I do is akin to an MD on a WebMD-type-of-site explaining, "You're likely suffering chest pain on account of your conus arteriosus thingamiggy blocking your anterior hypoplastic ventricle auricle next to your pulmonary whatchamacallit." Though extremely technical, such input's perfectly acceptable for online dissemination. It's edifying. Yet, the doctor would refrain from writing that mass-market volume, The Idiots Guide to Removing the Hypoplastic Ventricle Auricle next to your Pulmonary Whatchamacallit. The concept How to File your own Bankruptcy is not much more helpful than that. Law work is (generally) less bloody than medicine, but it's still dangerous. Surgery we leave to those in scrubs; lawyering we leave to those in dress shirts.
_________________

*I also write:
1) to put myself out there. No shame in promotion: actors do it, presidents do it, charities do it;
2) to personalize myself and relate on a human (i.e. non-lawyer) level to existing or potential clients; and
3) to exploit a free medium for self-expression (democracy and proliferation of drivel at work)

For more on bankruptcy, visit us at http://www.bankonitsd.com/ Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

Levying the Bloodsuckers?

2011-08-14T15:01:00.000-07:00

In the Southern Vampire Mysteries aka The Sookie Stackhouse novels, the vampires have come out. It's called the Great Revelation. The undead emerge into the limelight (if not sunlight) upon discovery of a synthetic libation, a substitute for true blood. Its brand-name, True Blood gives title to the HBO series based on the books.

The revelation alleviates the burden of secrecy. Yet, its primary benefit is that there is good money to be had. Revenue (and fresh blood) is drawn courtesy the so-called Fang-Bangers. These are the curious and misguided who frequent the vampire club-scene. In a sleazy venue, they walk the wild-side of trans-species eroticism or some such thing.

Now ,the drawback to the windfall of this vampire tourism is, of course, taxes. Vampires must suddenly get their books in order.

On the one hand, being in the open is good for the honest, yet unfortunate-in-finance undead. They may petition for bankruptcy protection. On the other hand they must file taxes too. The point is you can't have one without the other. More bluntly: you cannot stiff the government then ask it for relief from debt.

***

You're probably asking, why would the vampires pay taxes? How does one enforce payment upon the supernaturally strong, who moreover have the ability to glamor (hypnotize) the auditor? That is a discussion for another day. In the meantime, read up on: In re: Eric the Vampire 542 B.R. 333 (9th Cir. 2010).

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

The Profoundly Poor Etiquette of Double Dipping

2011-08-14T13:03:00.000-07:00

Chips and dip are a soirée staple. For the host, it's simply conceived. Dump chips into bowl, pour dipping goop into second bowl. Put sur la table.

These days scooping-chips come in many trims. It's tough to find the optimal size that's both big enough to grasp, yet not so big that a single dip won't suffice. The latter shortcoming motivates the great breach we call double dipping. It's not as severe as open-mouth chewing (for that offense, we've banned one of our son's friends from all events tableside; it's one of said friend's several grating habits. The ignorant tenor of his speech, for instance, has prompted the Twitter thread: S#!T My Son's Friend Says), but it's up there.

Double dipping is a material concept in bankruptcy (natch). Yet, before broaching dipping, we must mention the other chip-related notion: disposability.

After the party, one considers the disposable or left over chips. Bag them and restore to the pantry? There were so many hands on em.... This is stuff that vexes. In chapters 7 and 13 bankruptcy, disposability vexes too. Disposable income is what should be left over from your paycheck after deducting only reasonable and necessary expenses. In Bankruptcy Land* disposable income translates to money for repayment of debt. If you have zero to nominal disposable income, then chapter 7--discharge of debt sans payment--is permitted.** If you have significant disposable income, then it must be committed (in its entirety) to a chapter 13 payment plan. It follows that whether you're filing 7 or 13, the lower your disposable income is, the greater your net benefit.

In preparing a tax return, Americans invariably claim the maximum allowable deductions, to minimize tax liability. In a matching vein, every bankruptcy debtor is compelled to claim all reasonable and necessary expenses, to minimize disposable income. The Internal Revenue and Bankruptcy Codes enable self-advocacy. It is the imperative of both the tax filer and the debtor to pay as little as possible. The debtor shall claim all expenses they properly can. But they can't claim them twice. That would amount to putting saliva in community salsa.

We refer to the main bankruptcy papers filed with the court as a "petition." It is really short for the "Voluntary Petition, Schedules, and Statements," which usually add up to 50-60 pages of good reading. Among the Schedules are itemizations of average/projected income and expenses. Schedule I is for Income (that's good enough for me). Schedule J is for Expenses, though for kicks,you may employ the mnemonic Jexpenses. Schedule I's total minus Schedule J's total yields disposable income or: what you have available (or not) to repay debt. If the amount's negative or nominal, you're good for a 7.** If the amount's significant, it should go to chapter 13 debt payment. In any event, the debtor wants the figure to be as low as possible.

Schedule I is a function of both income and deductions. It will list your gross wages and itemize all of your payroll deductions, from taxes, to retirement, to healthcare. It may also list your net business income, which would be a function of revenue less business expenses. The net income on Schedule I is then offset by Schedule J expenses. However, there must not be on J any duplication of costs already factored into calculation of net income on I. For example, if Schedule I includes a deduction for housing, Schedule J cannot claim the matching rental cost. If Sch. I reflects a cabbie's profit after deduction of fuel costs, Schedule J cannot list that same transportation expense (again). When counsel spots duplication on I & J, he must smack the hand that re-dips. Can't claim the chip twice.

Inadvertent duplication may be caused by confusion between qualified tax deductions and actual expenses. For example, a home-business owner may deduct on her tax return a portion of her mortgage when she calculates her income. When she prepares her bankruptcy schedules, she may then err by deducting that portion on Schedule I, but then claiming her full mortgage on J.
For business persons, the confusion may be avoided by listing gross income on I, and business expenses on J.

On the flip side of duplication, there is a tendency to project deficient expenses. The bankruptcy schedules are prorated on a monthly basis. Yet certain costs don't recur each month. One must factor into the budget certain one-time costs. Monthly fuel may run $300; yet your transportation expense must account for replacing the tires that wear, or the transmission that busts. When the client puts down the offending chip, they may think to pick up a pretzel.

For more on bankruptcy, visit us at www.BankonitSD.com Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a bankruptcy attorney.
Serving San Diego and Imperial Counties.

______
*A while back, pondering the paradoxical qualities of bankruptcy in conjunction with recent viewing of the superlative feature-film Zombieland, I was inspired to coin the phrase Bankruptcy Land. Suffice to say, it was disconcerting to later discover another blogging practitioner employ the identical idiom. Maybe it was too generic to view in terms of coinage, yet to this day I remain disconcerted.

**There are exceptions, of course, and keep in mind that I discuss here a fraction of the factors involved in preppin a petition.

Haste is in the Devil

2011-08-13T11:09:00.000-07:00

That's how an Israeli camp-guide-cum-storyteller put it to the 17 year-olds on a Negev field trip. My high school class secured accommodations in a Bedouin tent and over some oversized dates and sweet tea, the guide regaled us with a less-than-thrilling tale of a Bedouin wife, who'd waited long for a husband's return. I don't know where the husband went to, but I'm sure it was important. Anyway, years passed, and the wife stayed, loyal. Till the day hubby was sighted suddenly. His woman couldn't contain her patience: she ran. And then fell into a crevice and died. So, the Bedouins figure haste is in the devil. We say haste make waste, because it rhymes. In any event, this principle is common in prepping a bankruptcy, the old BK.

As the Rolling Stones say on a non-hit track from the LP It's Only Rock and Roll: Time Waits for No One. They should know: time brings moss and they're rolling stones. Thus, in BK, there's a client tendency to rush. But rush may effect a petition that's mush. A client may pressure counsel to file today! But the attorney cannot conscionably file with stale or partial data.

Before filing, I task the client with giving info--lots of it, and I do so under penalty of client disgruntlement. I cannot gratify impatience by filing a half-assed petition. I nag because I care. Due diligence is done so the client will be non-disgruntled (gruntled?) after filing. That's what matters.

Beyond the admirable principle of avoiding half-assedness, the debtor's attorney is bound by federal law not to leave a t uncrossed, nor an i undotted. She has an affirmative duty under 11 United States Code § 707(b)(4)(D) to inquire into the debtor's financial affairs. A bankruptcy petition is a client's declaration under penalty of perjury, which counsel must compare against objective documentation and public record.

Thus, preppin a BK is a cooperative routine. Wheels should squeak rather than say nothing at all, but they must also roll with the process. It ain't becoming to file like you fry a patty at Mickey-D's. Proper BK is Inn-n-Out Burger: takes a wee bit longer, but it tastes Good.

***

I never waited on a deserter spouse in the desert, but I did learn my lesson on haste 20 years ago. I got disgruntled with my orthodontist and pressured him to remove my bottom-teeth braces. I had the confidence of youth and must have made a very compelling (or annoying) argument. So he removed em; yet, they hadn't finished their job. So while my smile's still pretty good, it's not perfect.

On Bankruptcy Eligibility (and Stuff).

2011-08-10T20:00:00.000-07:00

You know when The Who sing Who are You? or The Rolling Stones sing Dylan's Like a Rolling Stone? It's very clever... in a Lady-Gaga-sings, ‘Ga-ga-ooh-la-la!’ kind-of-way.

These curious cases of self-reference are certainly a springboard to discuss:

I. Who can file bankruptcy; and

II. Why a debtor should not gather moss; and

III. Why Ga-ga is a good go-to-lyric

Okay, let’s go.

I. Who can file? The Bankruptcy Code, a voluminous volume of intricate detail, which you don't want to read lays it out as follows.*

A. Who may file chapter 7?**

First of all, a person may file a chapter 7 "only if such person is not a railroad." I assume that if you're reading this, you're not a railroad. This is a good start.***

There is more in the Code on insurance companies, banks, foreign entities, and other things, which you don’t care about. I think.

The relevant answers below are culled from Title 11, §109 and §727. “§” (from the Latin signum sectionis or the Old English squigglius shorthandus), meaning “section.”

1. You must reside, have a domicile, a place of business, or property in the USA. I have just lost my foreign readership.

You guffaw, yet Google Analytics insists I have readers in countries where I know no one and no one knows me. I attribute this to misleading key words and accident. The term domicile is roughly a redundancy of residence.

2. You can’t file**** a chapter 7 if you filed a prior chapter 7 within the last 8 years AND got a discharge from that prior chapter 7. I.e. finished it successfully and wiped out your debts. If your prior case got dismissed or closed without a discharge, then there’s no 8-year bar, but there are other limitations, especially if you had prior filings within one year of filing again.

This 8-year wait period runs from filing date to filing date.

Example:

a. Batman goes through one-too-many Bat-mobiles, Bat-bikes, and bats (which are not indigenous to Gotham City, and must be imported to populate the Bat-cave) and files chapter 7 January 1, 2000.

b. He got his discharge and completed his case in April 2000.

· April isn’t relevant; we only care that he did get a discharge.

c. Batman can file after January 1, 2008.

3. You can’t file a chapter 7 if you filed a chapter 13 within the last 6 years AND got a discharge from that prior chapter 13. I.e. finished it successfully and wiped out your debts. There are exceptions if your prior chapter 13 paid off 100% of the allowed unsecured claims, or 70% of those claims, if the payment was coupled with “good faith” and “best effort.”

If your prior case got dismissed or closed without a discharge, then there’s no 6-year bar, but there are other limitations, especially if you had prior filings within one year of filing again.

Example:

a. Under pretext of saving the world, James drives a borrowed Aston Martin through a storefront window, seriously maiming a family of mannequins.

b. He gets sued for damages he can’t pay and files chapter 13 on January 1, 2000.

c. He gets a discharge in January 2005.

· That’s not relevant; we only care that he did get a discharge.

d. James can file a chapter 7 after January 1, 2006.

B. Who may file chapter 13?

1. The same residency requirements (listed above for chapter 7) likewise apply to chapter 13.

As with chapter 7, there are certain wait periods pursuant to prior bankruptcy discharges. See 11 USC §1328(f).

a. There is a 2-year wait period (from filing date to filing date) to file a second chapter 13 after a prior chapter 13 that ended successfully in a discharge. Weird, because it’s rare that a chapter 13 discharge would be granted within 2 years. There are limitations due to repeat filings pursuant to dismissals (especially if there were dismissals within one year of your new filing).

b. There is a 4-year wait period (from filing date to filing date) to file a chapter 13 after a chapter 7 in order to get a discharge in that new chapter 13. What that means is that if you don’t wait the 4 years after a 7, you can still file the 13, but you won’t get a discharge; in other words, you’ll only get credit for what you pay into the plan and there will be no forgiveness (discharge) of the unpaid balance (that forgiveness is the general outcome in chapter 13, whereby pennies are paid on the dollar). But the discharge may not be important if, for example, you file chapter 13 in order to pay dollar-for-dollar on student loans, which are not dischargeable in bankruptcy (with rare exception).

2. To file a chapter 13, you must have regular income. Indeed, chapter 13 is the Metamucil on the pantry shelf of Title 11.

3. The Code then decrees that chapter 13 is: only for an individual with regular income who has (non-contingent, liquidated) unsecured debts under $360,475 and (non-contingent, unliquidated) secured debts under $1,081,400.

What does this mean? First, notice the term, “individual” as distinct from person. While railroads can be persons, individuals can only be humans. Where lies Thomas the Tank Engine, I do not know. The point, Dear Reader is that business entities cannot file chapter 13. Individual business-men and -women may file, but corporations, partnerships, et al. cannot.

Second, note the debt limits (with regard to non-contingent, liquidated debts). If your unsecured debt is $360,475 or higher, then you cannot do a chapter 13. AND/OR if your secured debt is $1,081,400 or higher, then you cannot do a chapter 13. Now, stop! Check the date of this entry. Are those figures current? They are... until April 2013, when they'll update. I like to stress: when you traverse the Big Bad Web, numbers are subject to change. The Net is a carton of milk that inevitably sours. Many sites are not updated (like the milk left before your 2-week trip), or are just plain wrong (like brand new soy milk).

So what's unsecured, and what's secured? Secured debt is guaranteed by collateral, such as your home or car; a mortgagee or car lender may presumably foreclose or repo upon default. Credit cards and many loans are presumably unsecured... though don't presume. Because Weirdness Happens. Installed-flooring may be counted as collateral. A Petco pooch purchased on credit may be claimed as security.

Yet, even if a security interest is properly perfected, it may be illusory; lenders aren't prone to strip floors or collar dogs. Which... really is a shame. If the urchins scuffed the floors, one might shift removal costs prior to placing new carpet. If one suffers an incorrigible barker and territory marker, one might happily permit its removal. Know, I don't dislike dogs; I sort of tolerate (some) of em. My reticence is not for want of affection, but from devotion to cats: I don't believe one may love one's cats, yet not share their antipathy toward dogs. That's like loving vampires, but having an affinity toward werewolves.

Some clients would cry foul at canine discrimination. But when inventorying personal property (part of the prepetition "homework," one performs), it is THEIR dog-values that range from $0 to $100. Now, in California, if your "normal household" good (including a pet) is $550 or less, then a blanket exemption (protection) applies. For values in excess of $550, one must tap a limited "wildcard" fund, usually allocated to savings and automobiles.***** Personally, I would still price my cat at $1000, at the cost of some wildcard, just to not hurt his feelings.

It is not uncommon that the above debt limits are exceeded, especially for debtors with depreciated real property. After the real estate crisis, once-secured mortgages have become under- or wholly-unsecured. A second mortgage would have originally counted toward the higher (and less-likely-surpassed) secured-debt limit. With values down, a first-mortgage alone may exceed a home's worth. The second mortgage would then be entirely unsecured. In conjunction with credit cards, student loans, and other debt, the $360,475 threshold can frequently preclude chapter 13 eligibility. A decisive factor may be characterization of partially secured mortgages. According to the most recent S. District of CA case-on-point, the unsecured portion of a partially-secured mortgage counts toward the secured-debt limit. This facilitates eligibility. See In Re Munoz Case no. 09-07087-JM13 published 1-12-10 or read Newz from Munoz at: In re Munoz

An esoteric summary:

As Dora the Explorer and Map would put it:

1) First, you need to have regular income;

2) Then, you need to be a human person;

3) And Then your debt can't be too high;

That's how we get to chapter 13!

And along the way, you will encounter the objections of your chapter 13 trustee. So remember to say (all together now): Trustee, No Objecting! Trustee, No Objecting! Trustee, NO OBJECTING!

Thanks for helping!

For those without young children tuned to Nickelodeon, you may cease scalp-scratching and move on to part

II. Why a debtor should not gather moss;

First of all moss has no intrinsic value. It's really not useful at all. This touches upon the principle of Dawdle Not. Too many petitioners squander opportunity through undue delay. There's necessary commitment of time to prepare a bankruptcy petition on the part of both client and attorney. It is incumbent upon the petitioner to provide raw data to her counsel. A do-it-tomorrow approach may translate to shooting oneself in the foot. Income changes, assets change, and a once-promising case becomes a can of worms. The flip side is Haste, just as-- or more dangerous than its Dawdle counterpart. So keep rolling.

III. Why Ga-ga is a good go-to-lyric

It's easy to remember.

For more on bankruptcy, visit us at www.BankonitSD.com

Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation.
______________

*But really, the Code is brussels sprouts; consume it if only `cause you should. We refer here strictly to chapter 7 and chapter 13 bankruptcy. There are other chapters, such as 11 USC Chapter 12: Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income. Fortunately, 11 USC section 109(f) helpfully explains that Chapter 12: Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income applies only to "...a family farmer or family fisherman with regular annual income...."

**In this piece, I use the phrase "Who may file?" as synonymous with the statutory language, "Who may be a debtor?" See 11 USC §109.

***Those are real quotation marks. But okay, okay: "person" is a term of art under the Code that refers both to humans as well as to corporations, partnerships, and railroads. 11 USC §101(41)

****See 11 USC §727(a)(8). The Bankruptcy Code articulates this notion in terms of ineligibility for a discharge in chapter 7, rather than plainly stating you can’t file. The distinction is immaterial, since ineligibility for discharge renders a chapter 7 moot.

*****This article applies to CA law. The California Code of Civil Procedure §§703 and 704 provide for mutually-exclusive exemption schemes. The above example applies to a debtor who opted (or was able to opt) for the exemptions under section 703, which has a wildcard provision not available under section 704.

Same Sex, Same Joint

2011-07-20T20:43:00.000-07:00

A simple syllogism.
Premise 1: in federal bankruptcy-law "spouses" may file a joint petition. So says 11 USC section §302(a).
Premise 2:"spouses" are defined under non-bankruptcy federal-law as persons of opposite sex. Conclusion: opposite-sex spouses may file a joint petition.
Inference: same-sex persons cannot file a joint petition.
Yet, federal bankruptcy law incorporates certain state laws. Some states sanction same-sex marriage. Can state law carry the day, or: for the same-sex, may there be same-joint treatment?

Listen, creepy-crawly-Google-Spiders* mining cyberspace for keywords. Listen up. I ask you, Can a Same-Sex Married-Couple file a joint petition in bankruptcy?

Traditionally, the answer was no. Till right around now.

Now, the Golden State's federal courts divide into different districts. In bankruptcy, one must generally file a petition in the district where one resided for the majority of the 180 days precedent to filing.** District courts are not fast-food restaurants, where you'll get pretty much the same questionable-quasi-beef patty, whether you dine beneath Angeleno or San Diegan golden-arches. So, when the Central District of California Bankruptcy Court (encompassing Riverside, L.A. and other burgs) says yay, the Southern District of California (including San Diego and Imperial Counties) says what it may. In other words, notwithstanding what follows, what happens in San Diego remains to be seen.

In the Central District comes the Memorandum of Decision of In re Balas & Morales entered June 13, 2011 by Judge Thomas Donovan.*** 19 other judges signed the decision. Therein, the court addresses the United States Trustee's motion to dismiss the joint filing of Balas and Morales because Balas and Morales are messieurs Balas and Morales. In reading the decision, one obtains a sense early-on where the court leans. In reciting the factual background, the court names the abbreviated forms of the opposing parties: the 2 aforementioned debtors are named "Debtors," and the United States Trustee is "sometimes referred to simply as 'trustee.'"

The court ultimately denied the trustee's motion and concluded that "[Mr. Balas and Mr. Morales satisfied] every legal requirement to pursue their joint petition as filed pursuant to § 302(a)."

Pursuant to its fleeting legalization in 2008, there were 18,000 gay couples married in California. Other states have permitted gay marriage, so including those who've flocked to the west, the present number would be higher. But in the Union's most populated state, these are relatively minuscule figures. Still, with the swelled numbers of bankruptcy filings, I expect that anon a married gay couple shall test the San Diego waters with a joint filing. Their case will determine whether the Southern District shall follow suit with Central. I would like to file that first case,**** but an interesting quandary comes up. A married gay couple may have strong conviction and wish to file jointly in order to effect new law in the Southern District. Yet, it may not be in their personal best interest to do so.

First, instead of a typical speedy resolution, they may suffer protracted litigation. The Southern District may not quickly follow suit with Central. Or the local U.S. Trustee may take a more vigorous stance. Legal wrangling is like those licorice spaces in Candy Land, which forfeit a turn. Eventually you'll get to Candy Castle, but your shoes will be sticky. The gingerbread man on the board of Bankruptcy Land may want to sidestep its mines.

In addition, gay spouses who file jointly may less readily qualify for chapter 7, or they may incur higher payments in a chapter 13. This is how:
In bankruptcy, a married debtor may elect to file separately, without their spouse. However, the non-filing spouse's full income is presumptively imputed to the filing spouse in testing chapter 7 eligibility or setting chapter 13 payments.

However, if bankruptcy does not recognize gay marriage as marriage, then it would be a double standard to presumptively count a non-filing gay-spouse's income. Yet, that selective approach is voiced in our district. Still, under the current status quo, one can reasonably contend that a gay spouse's income is outside the equation. That's an important measure of flexibility and creative argument that would be undone were one to follow In Re Balas.

So, when the married gay couple asks me, "We're the same sex, can we do the same joint [filing]?", I'll say,

"I can do separate or joint, boss. You want practical or principle?"

________
*Spiders, aka bots or crawlers are the programs that mine cyberspace and index all the nonsense out there: dating sites, gossip sites, bankruptcy blogs.

**More fully, a debtor may satisfy the 180d "venue" rule by virtue of residence, domicile, prinicipal assets, or principal place of business (and some other things). A rationale of venue is convenience--but whose? If you're new to a district, you may have to postpone filing till you've been here 91 days. This restriction rationally deters venue-shopping. Yet, for a debtor, it may effect forum non conveniens (Latin for "A sucky outcome"), if she's being actively garnished.

***The Latin phrase "In re" meaning "In the matter of" is traditional legalese. While their rhetoric may be long, legal professionals are fond of succinct and esoteric shorthand. It makes us feel special. The historical legal knack for abbreviation is a curious case, which some say foreshadowed the Twitter Age.

****Whether messieurs or mesdames will knock on my door, I don't know. It's a numbers game. I serve hundreds of clients , but the bankruptcy mills "serve" thousands. "Bankruptcy Mill" is defined in Black's Law Dictionary as:

ˈbæŋkrʌptsɪ, -rəptsɪ -mɪl/ n: "An impersonal firm with exorbitant advertising and aggressive salesmanship that attracts unsuspecting masses and operates under a dba till such point such dba earns bad press upon which a new dba is acquired with exorbitant advertising and aggressive salesmanship that attracts unsuspecting masses. The business model's persistent appeal is particularly perplexing."

Or something like that (and it's possible I purloined the Collins English Dictionary pronunciation key). See, I bought a hardbound volume of Blacks Law Dictionary back in law school when the confidence of youth compelled wanton purchases. It's a useless tome in the Internet age and the contemporary trend toward Plain English legal writing. Nonetheless, public suspicion of pervasive and insidious legalese persists, a ready excuse for ignoring abstruse imperatives of the like of, "stop using your credit cards" or "don't transfer your vehicle title to your cat."

AA

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Debtor-Man and The Rogues Gallery

2011-06-29T20:57:00.000-07:00

Superheroes named after animals. It vexes me, man. I'm terribly vexed about it. Example:

I. Batman

Bruce Wayne, alias Batman chose the bat moniker to instill fear in the hearts of villains, because bats are spooky. Yet, his bat-mask's bat-ears bear resemblance to ears of the common housecat. And while indubitably diabolical, housecats remain ostensible members of the genus, Cute-and-Furries. A dubious choice, Mr. Wayne.

II. Spider-Man

Teenage Peter Parker, alias Spider-Man selected spiders. Spiders are terrible, horrible, no good, very-bad creatures. Inspired choice to scare crooks, right? Thing is, Spiderman is Your Friendly Neighborhood Spiderman: unlike why-IS-he-so-serious- Batman, Spidey's a people's superhero; he's very nice and he wears bright-and-happy reds and blues.

The first, and more-so, the second of the Spiderman movies with Tobey Maguire were superlative, for what they were. And while its sequel possessed more oomph, the Important Notion is in the first installment.

To earn dough-to-buy-a-car-to-win-a-girl, Pater Parker attends an open-challenge wrestling match. He wins, yet the promoter denies Peter proper pay, and says to his earn-dough-to-buy-car-to-win-girl trouble, "How is that my problem?"

Without further ado, same-promoter is robbed at gun point. Tables turned, the promoter looks to Parker’s spider-skill-set for salvation. Parker says to promoter's pleas, "How is that my problem?” Karma, man. In a flash, (lest one miss cause and effect), the unleashed robber carjacks and kills Parker's saintly uncle, Uncle Something-or-other, I don't recall. Parker learns that With Great Power Comes Great Responsibility (hereinafter referred to as "WGPCGR").

III. The Red Herring

TV’s The Simpsons adeptly highlights the hackneyed WGPCGR. In episode number 11, 007, Common-Man-protagonist Homer revels in a power-grab; stickler-neighbor Ned reproves:

"WGPCGR."

Homer responds:

"Who said that?! I'll kill them With My Power!"

Fortunately, the Important Notion we seek is not WGPCGR; it’s,

"How Is That My Problem?" (Hereinafter referred to as "HITMP.")

IV. HITMP

It's telling that HITMP is the defining characteristic of the legal system. Law is adversarial, ergo one side's problem cannot be the other side's problem. That’s how it has to be; otherwise we're all compelled to get along, a notion which is not conducive to my employment.*
Bankruptcy, the big BK is no exception to legal antagonism. In stepping to the plate, there’s no call to spit tobacco, scratch where you shouldn't, and kick up dirt. But you must carry your bat and know who you’re up against on the BK Diamond. Read on: it’s certainly confusing, man, but it’s slightly less boring than baseball.

V. Debtor-Man and The Rogues Gallery

Batman fights a multiplicity of baddies: The Joker, The Riddler, The Penguin, the inappropriate attentions of Robin The Boy Wonder... Spiderman combats The Green Goblin, Dr. Octopus, Sandman, and pimples.** The bankruptcy debtor or petitioner--aka Debtor-Man--has his own foils, every bit as dangerous.

VI. Creditor-Man

He: You've been pre-approved!
You: Like, holy smokes, I didn't even try. You Must Like Me, You Must Really Like Me!
He: And what's more, we're offering introductory 0% APR and you may select between a baby-seal- and a bald-eagle-background on your card.
You: You had me at pre-approved.
He: Just sign here.
You (pointing): here?
He: yes, right beneath where it says card-issuer may change terms, interest, and otherwise do what it may with impunity.
You: Right on, man.
You (lying in bed 3 days later stroking your new card): Wait, what's APR?

He is the Creditor, man. Or rather, he is Creditor-Man and he has a big C on his chest. Unlike, say The Joker with his acid-spewing flowers, Creditor-Man's weapon-of-choice is Teaser Rates. And he'll take a jot of blood to get his pound of flesh.

Okay, that's very melodramatic and self-righteous and silly, and you know, creditors are people too. Sort of. But the point is, when things start to snowball, you can call your friendly-neighborhood creditor, say you're out of work, can't pay the minimum dues, need a break, and you can know that Creditor-Man will say,

HITMP?

Is that wrong? Well, it's capitalism and it's not personal and that's the world we choose to live in.

VII. Then What?

Once you default on your credit card agreement, Creditor-Man will refer your file to Collector-Man. Collector-Man is employed by virtue of your default, yet does not refrain from self-righteous accusation, because it's what he's paid to do. Of course, he could get paid to do something else. Debts must be collected, yet an end does not justify all means. Creditor-Man may call you, and call you, and call you, and then call again. He may call your employer. He will do so because it inflicts pain, it will mortify, and it will get him paid. Sure, it's better than a bookie breaking arms, but it's still pathetic.

VIII. Military-Collector-Man

A colleague of Collector-Man is Military-Collector-Man or MCM. If you are a service-member who cannot pay her military credit cards, MCM will not call you at work; MCM will call your commanding officer. This is why a soldier should be wise not to apply for in-house credit. Civilian employees likewise suffer prejudice should they borrow from their employer. Nordstrom workers are fired if they default on their Nordie-issued credit cards. (Note: Nordstrom CANNOT fire Debtor-Man if he files bankruptcy, a process in which Federal Law preempts Nordstrom Law.) Creditors do not protect "their own." However, Nordstrom is useful to me because its downtown second-floor is a shortcut between mall parking and the San Diego bankruptcy court (Yes, San Diego has a downtown). Then again, I always get dirty looks every time I stop and play their piano. Maybe I shouldn't bring my tip jar.

IX. Creditor-Attorney-Man

When Collector-Man can't collect, he engages Creditor-Attorney-Man ("CAM"). CAM's job is to sue you, get a judgment, and garnish your wages. This is the inevitable culmination of the collection process. You may not ever see CAM, yet you will get to meet Process-Server-Man who will deliver your summons, and Sheriff-Man, who will garnish your wages.

A regular garnishment is limited to 25% of one's paycheck. While debtors may have already suffered abuse, mortification and possibly termination, many do not take corrective measures until their money's already been taken. Yet, it's not too late to file bankruptcy, void a judgment and stop a garnishment.

When you file chapter 7 or chapter 13 bankruptcy, a case trustee is appointed. Trustee-Man's role is particular to the bankruptcy chapter.

X. (Chapter 7) Trustee-Man

Trustee-Man's role in chapter 7 is two-fold. 1) Determine if you have enough stuff to merit liquidation (don't fret, it's rare) and 2) Refer your matter to the United States Trustee (more on UST-Man later) if there's something fishy--a fact, which once contributed to a glut of referrals of commercial-fishermen debtors and prompted the inception of 11 US Code Chapter 12: Adjustment of Debts of a Fisherman.

You, Debtor-Man (DM) will come across Trustee-Man (TM) at your Meeting of Creditors (don't fret, creditors rarely appear at the Meeting of Creditors, natch), which is for the honest and prepared, a zippy and routine affair. Its setting is not a courtroom, but an average-everyday-office building. There's no judge to render final decision, and on occasion it might be downright cordial. Yet, DM must testify under penalty of perjury, and he better know who is who, and what's it all about.

TM does not represent Creditor-Man, Collector-Man, or Creditor-Attorney-Man. Yet, TM's interests align with those parties insofar as TM is obliged on rare occasion--like it or not-- to liquidate Debtor-Man's assets. This occurs if Debtor-Man has too many luxuries or wishes to have his cake and eat it. Liquidation necessarily benefits TM; the Bankruptcy Code provides for TM compensation from liquidation proceeds. Nothing wrong with that--but Debtor-Man must know the Meeting of Creditors was not conceived to be a friendly get-together. In fact they don't even allow food in the waiting room.***

XI. Chapter 7 Trustee-Man-Attorney-Man

By the numbers, most Chapter 7 Trustee-Mans are attorneys (they don't need to be attorneys), yet if a disputatious dispute shall arise with Debtor-Man, TM shall employ Trustee-Man-Attorney-Man. In other words, the attorney TM employs his own (big-gun) attorney to litigate; this attorney-within-attorney scheme is commonly referred to (by me) as the Bankruptcy Russian-Nesting-Doll. Again, it's cool so long as Debtor-Man understands what he's up against.

XII. Chapter 13-Trustee-Man

Chapter 13--in a wee nutshell--involves repayment of debt (often pennies on the dollar) through a payment plan, which we call... the Chapter 13 Payment Plan.
Trustee-Man's role in chapter 13 is to disburse Debtor-Man's Plan payments among DM's creditors. In Chapter 13 Land, Chapter 13-TM, Chapter 13-TM-Attorney-Man (yes, that Russian nesting doll thing, again), and... (welcome back!) Creditor-Attorney-Man, all seek to increase DM's plan payments or dismiss DM's case. Alone, DM seeks to maintain lower payments and preserve his case.

XIII. Creditor-Attorney-Man (ii)

He showed up in the context of pre-petition (before filing bankruptcy) lawsuits and got a shout-out in our last Roman numeral. In the context of bankruptcy, Creditor-Attorney-Man may also object to the discharge of debt. This means that if CAM suspects you didn't do right by Amex, Discover, and Capital One, he will sue after you filed bankruptcy. The purpose is to obtain a ruling that a particular debt shall survive your bankruptcy. How so-- is bankruptcy not a forgiving, second-chance kind-of-thing? Well, it IS, but there are limits. It is a privilege for an honest, yet out-of-luck debtor. If CAM reveals you charged $2000 for plane tix on the eve of filing, he'll flag you; if you flew to attend a parent's deathbed, you may still be deemed guilty till proven otherwise.

XIV. United-States-Trustee-Man

A member of the Department of Justice, UST-Man investigates fraud, abuse, and other unpleasantries. In chapter 7, he may seek dismissal for "presumed abuse." This happens if on paper it appears you have enough dough to repay (some) debt in chapter 13. Yet, repayment ability is not black and white. The presumption of abuse may merit rebuttal.

UST-Man and UST-Man-Attorney-Man (Russian nesting is rampant) may also object to discharge and deny you the privilege of debt relief. This might happen if you bought those bankruptcy-eve plane tix. UST-Man will also prosecute if you conceal assets or lie under oath. Don't do those things. A $500,000 (non-dischargeable) fine and/or up to 5 years in prison apply. To illustrate the severity, that is tantamount to the penalty for copying your DVD of Justin Bieber: Never Say Never. How do you skip those FBI warnings anyway? It takes for-EVER to queue up a DVD.

XV. Judge-Man

Now, you know, the whole "man" business is generic. In the Southern District the majority of the bench is female, which is pretty cool. It was in the not-too-distant-past that law schools excluded women altogether. But that's another story. Now, Trustee-Man, US Trustee-Man, Creditor-Attorney-Man may all have beefs with Debtor-Man. However, there is due process: it's Judge-Man's call in the end. Judge-Man is neutral; he will listen to Debtor-Man. However, Judge-Man must also lend his ears to the multiplicity of voices that oppose lonely Debtor-Man: TM, TM-AM, UST-M, UST-M-AM, CAM (that's okay, I don't remember what I said those stand for either; the quantity's what matters).

The point: any one of the above Men may say of Debtor-Man's troubles...

HITMP?

XVI. Debtor-Attorney-Man

With the sheer number of elements in potential opposition, Debtor-Man is alone, and perhaps scared. People tell me sometimes, "I haven't done this before...." I tell em, that's okay. I have.

We're in this together, man.

I didn't know where this blog would take me. (I thought I'd quit at the housecat part, because I just like ragging on Batman. Why is he SO flippin serious?)
It takes me in the end back to Spider-Man. In the first movie--the one with the Important Notions--Peter Parker learns that safety of the citizenry IS his problem. He asks rhetorically,

Who am I?

I shan’t answer for Parker, lest I further spoil the profundity of Spider-Man. But I can answer for myself that debtors’ problems are my problem; I’m

a Debtor Attorney, man.****

____________________
*The adversarial system, of course, is our deliberate scheme for achieving either justice, fairness, compromise, or non-ruffling of feathers. Truth shall be manifest if each camp may hold the conch and speak freely and shrilly. It's the lesser of dispute-resolution evils, the alternative being the inquisitorial or beat-it-out-of-em system.

**I profess a layman's knowledge of these things, and was compelled to "Wiki-search" the rogues gallery. (Shrug), I suppose maybe I knew some of em.

***Our office ensures the Meeting of Creditors is a routinely no-sweat-affair, by virtue of indefatigable pressing of Debtor-Man to produce documentation. The required docs make Trustee-Man happy(er), and really aren't that hard to procure, so please do it already.

****If that whole "man" affectation/verbal-tic is overdone, it's partially the superhero-thing, and partially George Carlin voicing a hippie Volkswagen. My three-year-old boy's downstairs now watching the animated flick Cars (which is about animated cars) for the umpteenth time. George Carlin's there talking-up his special organic fuel, man.
George Carlin passed away since Cars came, and so did Paul Newman, a fellow cast-member. Cars 2 premiers this summer sans George and Paul. Owen Wilson--who plays the protagonist, Lightning McQueen—will be there, but barely. Post-Cars, Wilson survived a much-publicized suicide attempt. In moving on, perhaps Owen realized that lending voice to a Cars-car beloved by 3 year-olds everywhere is something special, and with that kind of power-- oh, never mind.

Call 858-344-0500 Or email admin@abramslawsd.com to request a free consultation with a Debtor Attorney, man.
Visit our Website for more information: www.BankonitSD.com

On-est-lay?

2011-06-02T21:04:00.000-07:00

Our title today is that Austin-Powersesque emphatic-cockney-expression-of-incredulity. Honestly?

A lawyer needs thick skin. Empirical data does not provide for any greater number of scoundrels among the bar than is found in the general populace. Yet the public hostility toward the profession shall withstand any measure of flagellation the state bar shall exact. In a pinch, people want a lawyer. Badly. Yet, they don't like em, and a lawyer can't tell himself otherwise. A cause of animosity is that law is unpredictable, it is adversarial, and results cannot be guaranteed. Yet, the hardworking attorney must still be remunerated. Likewise, the waiter must still be paid even if the food's lousy, and the doctor must still be paid, even if you die. The problem is that the disgruntled diner and the dead patient don't like having to pay, even if it was the fault of the cook, and cancer.

What's fantastic about bankruptcy is that when done right, the results are highly predictable. The client gets what the client wants. I like those odds, and with attention to detail I ensure there's no random element of luck: we get swell results. Yet, it's not just results that satisfy a client. It's the way the client's treated on the way to those results. With every client I believe I undo the damaging lawyer rep.

Still, the animosity lingers. I provide a half-hour free consultation to potential clients. Yet, I don't look at the clock. I get into necessary detail and nuance, and give the potential client complete information concerning the potential hazards we must avoid. Therefore, it's odd that at the end of this discussion, a potential client should assess me, and ask apropos of nothing, "Are you honest?"

I don't take it personally. The point here is that there's absolutely nothing personal about it.

Still... for a fleeting moment, I consider the diplomas and certificates on the wall that represent a hundred-thousand-dollar education, years of training, and an oath before the Supreme Court. I consider the many pages of client feedback on display that represent years of hard effort. I consider whether patients ever ask that of doctors, even though doctors rarely explain shit-all, and sometimes they kill people, to boot. I consider saying (out loud), "Don't you suppose that's patronizing, offensive and highly inappropriate? Yes, I'm fucking honest."

For a fleeting moment, I consider such petty self-indulgence (and sacrificing of physicians to a false cheap-shot just to stress a point).

Then again, knowing the lawyer jokes... knowing the Shakespearian incitement to kill em all... I chose to be a lawyer. So be it.

What Dreams May Come (To a Bankruptcy Lawyer)

2011-05-16T18:40:00.001-07:00

The other morning, my wife informed me I'd been talking bankruptcy in my sleep. In fact, I was giving a lucid and comprehensive client consultation. The Good News is, I can do this in my sleep. The Bad News is I'm doing this in my sleep.

From waking to slumber, bankruptcy is a moveable feast.

I am blessedly free of somnambulistic tendencies. This is a good thing, because a bankruptcy case can be filed electronically from one's laptop 24/7 and one's laptop is a skip and a hop from one's bed. While the basic admonitions that accompany consultation may be rattled off in fitful repose, it is generally not advised to docket a matter while sleepwalking.

In all semi-seriousness, law work is referred to as law practice, because the law evolves and breathes (or at least sighs in exasperation). And it should not be performed while sleeping, eyes wide shut. Still, the knowledge that one practices Sleep-Bankruptcy ("SB") is conducive to a sense of accountability. If a client's recollection fails, the attorney must be able to report with confidence that, Yes, I-certainly-did-mention-that-important-piece-of-advice, which the client did not heed. The SB Practitioner will make this report without equivocation. If the foundations of bankruptcy are sufficiently ingrained that they haunt your sleep, then you know what you would have said, and you know that important-piece-of-advice was given.

Of course, this is very silly, and my wife likely flattered me with suggestions of lucidity and comprehensiveness. I remain committed to the tedious, tireless documentation of essential client communications lest there be sufferance of selective recollection.

On the subject of SB, there's concern for confidentiality. As it were, my own particular SB was of a generic nature: names were not named. In any event, the only witness to my SB is Robin, and as legal assistant, office manager, and wife, she is sworn to preserve client confidentiality. I suppose there's the cat at the foot of the bed, but so far as I know, she's not talking.

Yet, consider the promiscuous prosecutor, the lecherous lawyer, the rakish and philandering attorney or--your average, everyday bachelor(ette): who can count the number of ears that bear witness to the mutterings of their SB?

To limit the dissemination of confidences through SB, it is important that the client retain a happily-married attorney. You know this is the case in my case when you look at my wife and think "how can he NOT be happily married?" Be wary of the overly charming, too-good-looking counsel with a ringless ring-finger.

Fine! Bachelors must earn a living too. But that is all right--there are countless other reasons to select our office for representation. If you need help with your debt, call us: we can help.

Postscript

Commencing with this entry, I am compelled to deliver a new series of articles on the subject of Professional Responsibility. While the California Ethical Rules address myriad concerns, certain topics--Confidentialy in SB not the least of them--are disconcertingly absent.

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Student Loans and Epithelial-mesenchymal Transition: sort-of-maybe related in a free-association kind of way

2011-05-16T17:43:00.000-07:00

I. Sociology. Socrates. Teeth.

My major in college was sociology, which is different from, say rocket science, in that it gets no respect. However, it's also similar to rocket science in that most people don't know what the heck it is, including sociology majors. However, sociology prepared me well for law school: law students, likewise get no respect. It has to do with asking questions. The Socratic Method (named after rapper, Method Man) employs the act of questioning as a means of seeking truth, of provoking thought, and of humbling the first year law student. It is standard procedure for lowering cocky first-years down a peg or three. The Socratic method is defined in Black's Law Dictionary as: 1) hanging a law student out to dry because she didn't do her homework; 2) hanging a law student out to dry because he's weak minded; or 3) hanging a law student out to dry because he didn't do his homework and is weak minded. Drilling an ignorant student to glean information that's not there is an interesting sideshow, yet ultimately, it's like a dentist drilling a perfectly healthy tooth. Good for torture, like in that movie Marathon Man, but not good for one's dental health or legal knowledge.

II. More Socrates. The Paper Chase. Student Loans.

A large audience shall attend to observe the Socraticization (no, that's not a "word") of a single student. I say a large audience because law school classes are necessarily inundated: there are 2.6 attorneys per capita in San Diego County, and they all have to come from somewhere. In addition to graduating practicing attorneys, law school educates a fair number not destined for the legal profession. Law school's first-year class must accommodate a bottom 10% to be automatically expelled at year’s end. It also matriculates juris doctorates who will not become lawyers. A non-abundance of legal positions may be a shocker to the new grad. School statisticians lure fresh-faced applicants by boasting enviable rates of employment once school's done. They do not underline that "employment" denotes any type or form of work. A graduate folding Gap-khakis is "employed" with equal statistical weight as a classmate inducted to a Big-Firm in a Tall-Building (that is a practice with fat-pocketed clients). Both types of grads bear the onus of six-figured student-loan debt.

As this is nominally a bankruptcy blog, it merits discussion that student loan debt is a type of debt excepted from bankruptcy discharge. Though, discharge may be permitted for hardship--“hardship,” being defined in 11 USC §523(a)(8) as “just kidding” or: The state of being 1) dead; or 2) disabled to the extent that sometimes you wish you were. The egalitarian lobby-group, the Deceased for the Equal Treatment of Hardship (“DETH”) is currently attempting to expand the hardship exception on behalf of the living.

Now, back to that audience observing a classmate--who might be a mate, or might be a competitor, but most likely a competitor--suffer a barrage of questions for questions' sake. Both professor and student know the latter has no answers.

III. Yet More Socrates. Steel and Glass. Drop Outs.

Most observers of the Method occupy one of three types of emotional response: 1) schadenfreude; 2) gladitsnotmeism (break that one down); or 3) indifference. These types shall successfully become Big-Firm-in-a-Tall-Building automatons; associates hunched in windowless confines within steel and glass--towers that scrape an unseen sky: these are Tall-Building Lawyers in exclusive service to the corporate entity. The exceptions to these observers---students with sympathy--are prone to drop out of law school. Or stay the course, graduate, and represent the community or a consumer clientele.

IV. Canadian. Cashews. Baleful Response to the Exchange of Nuts.

A fourth emotional response to observance of law-school haplessness--besides schadenfreude, gladitsnotmeism (did you break that one down?), and indifference--was eating cashews. I was seated by a Canadian exchange student who would share with me cashews from an uneconomical-single-serving-size bag of cashews. She shared not because she volunteered to, but because I can't turn a good cashew down, even if it's not being offered to me, and I have to ask for it. So, while law professors grilled, I ate nuts. Of note (but not really), the Canadian exchange-student's German-exchange-student boyfriend didn't take kindly to this cashew sharing. I ascertained this from a third-party report that he'd been staring at me across the quad with murder in his eyes. I hadn't noticed, due to indifference.

The point is that law students must learn respect is something they'll have to earn. And there's no better preparation for that than a degree in sociology.

V. Sociology: a Brief History

The day I met my then-future sister-in-law, she prompted me to report my college pedigree. I promptly answered "sociology," and she promptly spat out her beer. I tugged at my collar, except that I didn't have a collar--I wore a tee-shirt-- so I guess I mimed it, muttered something about "no respect," and changed the subject. Fortunately, her sister--my future-wife pretended to be more hospitable.

Selecting this major stemmed from fascination with the writings of Durkheim, Foucault, Comte, and Weber and had nothing to do with the high female-to-male ratio in sociology classes. I did not take interest in any sociologist (or Canadian for that matter--I just wanted her cashews); I was destined to only love and marry a molecular pathologist. My wife, Robin would contend that molecular pathology is at least arguably, slightly more complex than sociology. I differ. She then tends to compare the relative merits of our college writings, to what end I don't know. I had in my salad days composed sociology papers of great depth, which is apparent in such titles as, "The Impact of Leash Laws Upon the Mores of the Modern Canine," (ca. 1995) and "Leaf Blowers: an Empirical Study of the Intersection of Humans and Leaves," also from 1995--it was a prolific year. Contemporaneously, Robin published the study, "Erythropoietin Promotes MCF-7 Breast Cancer Cell Migration by an ERK/Mitogen-activated Protein Kinase-dependent Pathway and Is Primarily Responsible for the Increase in Migration Observed in Hypoxia." Now you tell me, whose writings--mine or Robin's--do you believe further advanced man's pursuit of knowledge? In fact, Robin's breast-cancer research failed to obtain permanent access to the great repository that is Wikipedia; its editors summarily removed her contributions therein, something about urokinase-type plasminogen and epithelial-mesenchymal transition. Robin says the rejection pertains to her suggestion of pernicious side effects in multi-billion-dollar pharmaceutical-treatments. I think they had trouble pronouncing the words.

It is futile within these blogatory* confines to impart upon the reader the integral role of sociology in humanistic study. That is not a cop out**; the discipline is too... big for the space herein. You'll just have to take my word for it: sociology is deep, man. Still, the spitting-out-of-beer-at-its-mention remains a commonplace response to confession of this college major. Yet, the humility that accompanied me as an undergrad made the law-school transition a smooth one.

_________
*No, that's not a word, but it should be, as in: " blo·ga·tory [blä-gŭ-tō-rē] adj. 1. something of a bloggish nature
**Yes it is. Like I said, most people don't know what the heck sociology is. I am no exception, though from having studied it I may at least posit that, "It's about society and stuff. "

Maher About Bankruptcy Next Week

2011-03-27T09:10:00.000-07:00

I. The New Rules

Real Time with Bill Maher (pronounced "mahr") is a provocative HBO talk show starring actor/comedian/pundit/whatever-he-is, Bill Maher. It's on HBO and we don't subscribe to HBO, yet I know of Maher from the infrequent professional conference-trip sans spouse, where pampered accommodations are uncalled for. On such occasion, the motel marquees boasting "HBO" and "ESPN" are big selling points. A bankruptcy conference consists of several days attending lectures, networking, and amassing great quantities of vendor-booth swag. It is all very tiring and when you're ready to retire from such a day, comfort's found at your modest lodging in a vending machine, a bucket of ice, and premium cable.

Say you retire to your room, it's 9:30 p.m. and your motel TV guide shows the The Rock movie starts only at 10 (The Rock being the sobriquet of actor and erstwhile wrestler, Dwayne Johnson. I believe The Rock presently prefers to be addressed as Dwayne Johnson. Yet, I risk offense and call him The Rock, so I may write things like, "The The Rock movie" then humble Grammar Check by rejecting its objection to the repeated word "the." Grammar Check thinks it's so smart.) So from 9:30 to 10, you pass the time with Real Time. Real Time features a live studio audience, live guest panelists, and via-satellite panelists, who are also alive. The gabfest's guests are a satisfying mixture of politicians and actors, the latter there to show they still know something about something, when untethered from a script. The subject matter is predictably polarizing. Yet, whether one watches to validate opinion, seethe in indignation, or wait on the The Rock movie, all may agree upon one particular observation: that Maher is prone to populating his panel and audience with yes-persons. In the event of a token objection, Maher will invariably interject and quiet the protest by talking right over it. This muffling capability is in keeping with the Merriam-Webster Dictionary (College edition) definition of "talk show host:" "One of a group of outspoken individuals with no particular commonality save for an innate ability to discreetly command the volume dial on guests' microphones."

Anyway, a signature segment of Real Time with Bill Maher is the editorial “The New Rules,” which presents mock suggestions for abandoning bad practices and improving humankind. Inspired by that vaguely related concept of A Series of New Resolutions, I will propose below "The New E-mail Signatures." (Naturally, the polemical Maher had nothing really to do with this blog.) E-mail signatures routinely include trite sign-offs (who says "best regards" anyway? Who came up with that one?), device defaults, labored privacy-warnings, and other predicable plagiarizations. These tired e-mail closures and footnotes beg revision; we must list The New E-mail Signatures. But why a list? Because

II. Nothing Beats a List

Sure, it is certainly for want of substance that writers compile lists of Things. For example, periodicals fancy their Greatest Lists lists. You know, The 10 Greatest [insert name of genre or decade] Movies, The 10 Greatest TV Characters, The 10 Greatest Villains, The 2 Acceptable 80s Songs. Still… nothing beats a list.

Many years ago, I pseudonymously wrote for The Koala, the vulgar, sophomoric quarterly published at UC San Diego in competition with its official weekly, The Guardian.
At late-night bull sessions, over greasy Round Table and tepid Bud Light, we crafted our signature off-color Top Ten lists for the Koala's Top Ten Lists page. I'm a bit out of practice, but this is what I have so far:

III. The New Email Signatures (without further ado... sorry about all that prior ado):

1) Thank you and best regards,
[Insert your name]
In the event wishing regards seems incongruous with an otherwise hostile email, please just note it's a default sign-off. I still don't like you.

2) Sent from my clunky desktop.

3) The content of this e-mail and its attachments is mundane and you’re not privileged for the pleasure of having read it. We are indifferent as to its distribution to non-original and un-intended recipients. If you received this email in error, please feel free to delete it. Or not. Just don’t call to bother us about it.

4) The content of this e-mail is not intended for you. It is confidential and privileged. It's been sent solely to test your good faith compliance with our systemic privacy notices. Therefore, please delete this message, then immediately call us to confirm you did so.

5) If smart-phone reading this email while idling at a light, please honk if you like cookies.

6) Please excuse my lack of salutations, greetings, and regards. I'm busier than you are.

7) Please consider the environment before printing this email. I realize you probably never considered printing this email (who prints emails?), yet now you know: me and Mother Earth are tight.

8) Please excuse my spelling mistakes, my thumbs are too big for my Blackberry. Why are my thumbs so big?

9) This email is a confidential and may contain privileged attorney-client communication and/or attorney work product. Its forwarding or distribution to anyone other than the intended and original recipient is prohibited and subject to penalties pursuant to 18 United States Code §2511 et seq., such penalties to include fines of no less than $500 for each violation, imprisonment of not more than 5 years, tarring and feathering, tarring without feathering, and/or feathering without tarring (in all circumstances, tar may be substituted by an adhesive of like quality).

10) [Insert profound quotation from a prominent person, which expresses your own greatness by association]

Postscript (because postscript sounds better than plain-old "P.S.")

While its reliance upon advanced thumb dexterity may slightly curtail conversion, ultimately, the majority of adults will follow the evolution of young people toward the higher communicative level of "texting." Texting--defined by the Webster Dictionary (Tween Edition) as "sending an email to a telephone number"--does not enable use of a signature, thus avoiding the imperative to select one. That choice presents the dilemma whether to conform or be a smart aleck. Don't be a smart aleck in your emails. That is what blogs are for.

The Law Office of Asaph Abrams
Eliminating San Diego debt. One San Diegan at a time.
Call for a free consultation: 858-344-0500
Email for a free consultation: admin@abramslawsd.com
Visit us online (easy, 'cause you're already online): www.BankonitSD.com

Sexy Beast or: Fraudulent Transfers in Bankruptcy and why they're Fraudulent

2011-02-16T11:59:00.001-08:00

I. On Titles
Why must I resort to inexplicable titles (or blogs for that matter)? Thing is, today's title's perfectly explicable. Sometimes seemingly incongruous subjects do mesh or: I just like the conceit of using the conjunction "or" in a title. See Stanley Kubrick's "Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb;" also, J.R.R. Tolkien's, "The Hobbit or: There and Back Again." The latter title may not be an example of the finest writing (really, it's just a spoiler, isn't it?), but then neither is this... whatever this is you're reading. Still, hopefully, the title of this blog will make (some) sense in the end.

II. On Definitions
Sets of statutes start with painful litanies of key-word definitions, lest there be later misunderstanding of basic concepts. Since there invariably is later misunderstanding, there is the consequent need for the legal profession. This actually touches upon the premise of an anticipated work by Harvard Law School's own, Professor Plum.* While it's pending publication, the book will likely adhere to its present working title, The Advent of the Legal Profession or: Where do Lawyers Come From? The job of Lawyer came about--says Plum--from the composition of ambiguous statutes by lawyers, which necessitated the need for lawyers to interpret those statutes. There might be something wrong with that logic, but I don't want to think about it anymore.

III. On Bankruptcy Definitions or: Bankruptcy 101
United States Code Title 11, section (§) 101 defines about 90 indispensable terms that frequently populate the Bankruptcy Code. For instance, therein one learns that "commercial fishing operation" refers to "the catching or harvesting of fish, shrimp, lobsters, urchins, seaweed, shellfish, or other aquatic species or products of such species...." [See 11 USC §(7A)(A).] Such detail permits a professional to identify her role in the scheme of all things bankruptcy. It dispels the confusion of earlier Code drafts, such as whether Chapter 12 debt relief extends to strictly-urchin-based businesses. The catch-all "other aquatic species" is also helpful in precluding prior discriminatory treatment of the harvesting of mermaids, prehistoric sea creatures, or those aliens in James Cameron's The Abyss. Section 101 also defines the term "claim" as a "right to payment" [§101(5)(A)], "creditor:" as an "entity that has a claim against a debtor" [§101(10)(A)], and "bankruptcy blog" as "a shameless excuse for self-promotion under a pretext of promoting public knowledge and access to legal information" [§101(55A)].

IV. One's own Section
Certain concepts can't be confined to the spaces of section 101; they need more room to breathe, and they need sections unto themselves to incorporate sets and sub-sets of elements and conjunctions. The notion of "fraudulent transfer" needs its own section and it has it; it's numbered 11 USC §548. Therein fraudulent transfer is defined in the context of a trustee's ability to avoid it ("avoid" meaning void or undo, but with the "a" added for confusion).

Section 548 provides for a 2-year look-back period for transfers that can be undone. "Avoidable" transfers come in two basic forms (we'll gloss over certain details, because I have to do the dishes). The first is deliberate fraud in the sense of hiding assets. Section 548 incorporates the bankruptcy catch phrase "to hinder, delay, or defraud." You can't do those things to a creditor by transferring an asset with a culpable mind. There is also constructive or implicit fraudulent transfer, which applies even to an innocent mind. That occurs if you you give something away for less than its reasonable worth. Such transfer is fraudulent under certain conditions; for example, if it occurs when your liabilities exceed your total assets (i.e. you're insolvent) or when the transfer itself effects insolvency.

V. Ka-chow!
The 2-year rule is reflected in a portion of the bankruptcy petition (petition being shorthand for the 50-60 pages we initially bless the docket with) titled Statement of Financial Affairs (or "SOFA" in brief: an unfortunate acronym in that it suggests couches and potatoes; due to the suggestion of sloth, debtors are often faulted for perfunctory completion of the SOFA). The SOFA asks many things, including whether you've transferred assets within 2 years prior to filing.

Say that you read that question, then recall making a fraud-qualifying transfer of a big, big asset nigh 2 years ago. So you wait it out. Once the 2 years have passed, you file your bankruptcy; you enter "None" in response to the above SOFA query and then grin a big grin. Until you get to your meeting of creditors a month after filing; there you're asked whether you'd transferred assets within 4 years. Yes, you heard right: the 2-year look-back period is really a 4-year look-back period.

This is because bankruptcy adopts both federal and state law, and CA has a 4-year look-back period for a constructive (implicit) type of fraud. See CA Code of Civil Procedure (which also addresses uncivil procedures) section 3439.09. So your more-than 2 year-old transfer can now be undone. On such occasion, a trustee uncovering this truth would necessarily say, Ka-chow! This is the well-known catch phrase of cocky race car, Lightning McQueen, star of that movie my son loves, the one about cars that's called, Cars. "Ka-chow!" is the new "Gotcha!"**

VI. Transfers to cats
Not often, but now and then, a client prepping to file bankruptcy will ask, "Should I transfer my car title to my cat?" Now, that's just an example; usually, it's a brother, or a mother, or a brother from another mother, but I suppose for our purposes, it could be a cat, because it's slightly more funny. Though not really. Now, how exactly does one answer that question straight and to the point and with oomph, but without reference to a rambling blog nobody reads?

VII. Mia Michaels: a Digression
Before choosing the correct snappy answer to a fraudulent proposal, let me explain about Mia Michaels. Now, when the kids are fed, bathed, brushed, and PJ'd, and a long day's work is done, my wife and I may be prone to commit obscene acts of indiscriminate TV watching. One show of indiscriminate appeal was So You Think You Can Dance or SYTYCD (a hard-to-say, truly terrible acronym along the lines of BAPCPA***). SYTYCD is a dance equivalent of singing contest, American Idol or AI: in countrywide auditions, a panel of judges winnows out thousands of wannabes to select a handful of future dance stars. Of note, when contestants pass the first audition round, they're each tasked with improvising a memorable Happy Dance--a signature feature of SYTYCD. Now, after the judges determine two-dozen finalists, they must then leave it to AMERICA to vote for its favorites. From episode to episode, the stakes are HIGHER THAN EVER.

ON SYTYCD, Mia Michaels is a featured choreographer; in behind-the-scenes practices, she's a taskmaster, relentless, demanding of the young contestants: one tires just to watch; watching, I'd be humbled and lose strength to lift chip to mouth, let alone lower chip to dip-bowl and scoop. I'd just kind of sink into the couch, and confess: I don't think I can dance. Anyway, Michaels would sometimes join the judges' panel and decide auditioners' fates.

On one occasion, a muscle-bound, yet graceful terpsichorean pulled a wildly impressive routine. Normally-grim Michaels was misty eyed; half-crying, half-smiling, grasping for words, she said, "...you're... just... stupid." You know, stupid in an amazing, fabulous, fantastic kind of way.

Since then, if something stupid enough is encountered, such that it merits Robin or I say, "that's stupid..." then we compulsively add, "and not in a Mia Michaels kind of way."

VIII. Saying No, Like You Mean It
Back to finding an expedient and emphatic answer to misguided fraudulent planning or: giving your car to your cat.
When sheer adamance is called for, is it really enough to say simply, no, non (French), nyet (Russian), lo (Hebrew), neich (German), NEH-gah- tiv (German-accented cyborg-killing-machine from the future)? I don't think so. You have to EXPLAIN it, say it like you mean it. Here we suggest dramatic delivery, incessant repetition, and convincing the other side by way of attrition. How is it done? 2 examples from pop culture come to mind.

IX. Inside the Actors Studio
Example 1 is an indelible exchange between Michael Scott and Toby Flenderson. This occurs in a pre-credits sequence from NBC's hit sitcom, The Office. Michael Scott (played by Golden Globe winner, Steve Carell) is the very lonely manager of a paper company. Thirsty for social acceptance, he overcompensates with a tireless drive to make the workplace a fun, familial environment, where rules of decorum don't apply. Through this process, he's seen as a delusional, needy, awkward, tactless, sexist, clueless, hyper, inappropriate imbecile. He is stupid, and not in a Mia Michaels Way. Still, this caricature endears himself; perhaps we are all lonely at one time and so we relate to poor Michael Scott.

Naturally the boisterous Michael's fated bête noire is the one office presence responsible for rules and regulations: Toby Flenderson, of human resources. Killjoy, Toby's phlegmatic, soft-spoken (yet innocuous and most reasonable) persona inspires in Michael an irrational, white-hot hatred. When Toby finally leaves the office to pursue greener pastures, Michael does a Happy Dance.

Many or several episodes down the road, the prodigal Toby returns. Employees announce this to Michael who's initially convinced it's an office prank, only to turn and find himself face to face with Toby, mere inches away.
Michael is speechless, appalled. When he finds his voice, he screams and his scream is the sound of dismay, and denial, and anguish, and horror, and all things that are terrible. The scream reads (verbatim from the teleplay, or at least the nerds who transcribe it online), ”NOO GOD! NO. GOD. PLEASE. NO. NO!!! NO!!! NOOOOOO!!!"

That’s one way to say no, like you mean it.
Example 2 is a nifty bit of scene chewing by versatile, Academy Award winner, Sir Ben Kingsley.
In the movie, Sexy Beast, ca. 2000, Kingsley is Don Logan, a criminal bent on pulling a former partner out of retirement for one last job, an ambitious heist in London-town. Said partner, by the name of Garry 'Gal' Dove resists Logan's overture. He declines, he won't do it, he's happy basking poolside in a Spanish sun with his beautiful wife. Bliss. To this defiance, Logan answers (verbatim from the script or at least the nerds who transcribe it on imdb), "No. No no no no no no no no no! No! No no no no no no no no no no no no no! No!" Kingsley's acting is what film critics would characterize as a "bravura" or "powerhouse" performance, or the audience at home might call, "cool."
And that's another way to say no, like you mean it.

Now, with this perspective, how do I ultimately elect to answer the question, "Should I transfer my car title to my cat?"
I say simply, "No" and I give pause so it may sink in. And then I move on.
After positing the above theory of Emphasis by Excessive Repetition ("EER"), I've realized that succinctness works too. Plus, all those histrionics might be a bit off-putting. See, there's TV and movies, where we aspire to win Golden Globes and Oscars, and there's real life, where we aspire to be normal.

I had also attempted a variation on the whole brevity thing.
Client: "Should I transfer my car title to my cat?"
AA: "No. That's stupid. And not in a Mia Michaels kind of way."

However, I abandoned that tack upon observing the client was first offended, and then confused. I've come to realize not everyone speaks my marital language.

_______________________________________
*Plum confides the idea for the volume came suddenly, while he was peeling a plum, with a knife in the kitchen.
**Incidentally, Cars movie lore states that "Ka-chow" was simply ad-libbed by thespian, Owen Wilson, one of the Wilson brothers (see our blog on HOAs for further discussion of the Wilson brothers; I've been told it's important to carry over important themes in order to establish a unique blog voice--for better or worse), who voiced Lightning McQueen.
***BAPCPA is the Bankruptcy Abuse Prevention and Consumer Protection Act (or some kind of mouthful like that), a major reformation of the Bankruptcy Code in October 2005 that attorneys like to gripe about. I just don't like the way it sounds. Has no ring to it.

Disclaimer: this is not a treatise on fraudulent transfers. Don't try this at home.

Visit us online at http://www.bankonitsd.com/. The Law Office of Asaph Abrams is exclusively a bankruptcy law practice. To give peace of mind, we provide responsive and personable care for our clients. For a free, half-hour attorney consultation, call 858-344-0500 or e-mail admin@abramslawsd.com. Please ask for Jodi or Mellanie to set an appointment.

Bankruptcy Baby

2011-02-09T09:41:00.000-08:00

I. Bankruptcy Vows

In filing bankruptcy, a married debtor may file singly sans spouse, or jointly, with her spouse. Yet, what is a married debtor? California's defined marriage as both opposite- and same-sex unions. Yet, the federal Defense of Marriage Act (DOMA) established marriage as strictly an opposite-sex union. Since bankruptcy is federal law, DOMA bars joint filings by same-sex spouses.

Yet, it's been a concurrent trustee argument that a non-filing, same-sex spouse's entire income is presumptively considered the filing spouse's community income. Community income is the marital principle whereby one spouse's income is the other spouse's income. Bankruptcy's income-centric; counting a non-filing spouse's income can preclude chapter 7 eligibility or inflate one's chapter 13 payments.

Now, a trustee position is not law; it's a position. The same-sex married debtor may argue to the arbiter--the Court, that if she is not married for bankruptcy-filing purposes, she should not be considered married when tallying income. Case law supports that debtor's position: See In re Shari- Anne Roll (which is similar to a rainbow roll, no, nevermind, I'm thinking sushi). The court there denied the United States Trustee's (UST's) intention to compel inclusion of Shari's precluded-from-filing spouse, Renee's income. The court denying a UST motion is a function of balance of powers between the Judiciary and the Department of Justice; it's internecine government warfare in bankruptcy court. Anne Roll is a Wisconsin case, FWIW.

II. Smack

That's marriage. Now on to babies. As you recall from Statistics class (I got an A in that, but then that was the most advanced college "math" I had), "average" or "mean" requires that you add items and divide by the number of items. Median is whatever number falls smack in the middle of your spectrum. Median state gross income is a benchmark factor in bankruptcy. Where you place--above it or below it--can indirectly and respectively affect chapter 7 eligibility, the length of a chapter 13 plan, and/or the monthly chapter 13 payment.

Median income is relative to "household size." The more peeps in the household, the higher the applicable median income, and the more likely you'll fall below it. Fall below the median and your net bankruptcy benefit is likely to increase.

III. Heads

The problem: what is "household size?" As with marriage, definitions differ. The U.S. Census definition of "household" correlates to "heads on beds;" luckily, that only sounds horribly gruesome. With the heads-on-beds approach, one counts the human heads (which weigh 7 lbs each according to that little kid in Jerry Maguire) in a dwelling, and you have "household size." This implies that roommates count as household members (but try that gambit at your own risk). Trustees might argue the "household" strictly equates to nuclear family and tax dependents. The debate hasn't entirely come to a head. Haha.
Oh, wait. Babies, we were gonna talk babies.

IV. Bankruptcy Baby

Before there are babies--which are new heads on beds--there are buns in ovens. And that is our subject: is the proverbial bun part of the household size? Trustees argue, nay, and an Oregon district court case, In re Fleishman, (2007) 372 B.R. 64 supports that proposition; there, an Oregonian judge concluded the unborn baby was not a household member.
Fleishman dealt with the effect of household size in a chapter 13. We'll get back to household size in chapter 7s later, if I remember to do so.

In chapter 13, whether debtors are above or below median-income is what determines the length of their chapter 13 repayment plan or their "Applicable Commitment Period (ACP)." In chapter 13s, below-median debtors are eligible for a shorter, 3-year payment plan; above-median debtors need to complete a 5-year plan. The gestating Fleishman baby would have put her parents in a 3-year plan, since the addition of a household member would raise the applicable median income above the Fleishmans' gross. But Mama's baby bump--by virtue of being a bump and not a baby--bumped them into a 5-year plan.

Interestingly (well, relatively so, I mean, this is a Bankruptcy Blog for Heaven's sake), in determining the ACP, the court suggested that in chapter 13, the household size could be amended after filing the bankruptcy. The reason given is the ACP is statutorily deemed effective upon "Confirmation" (i.e. approval and cementing) of the Chapter 13 Plan. Confirmation can occur many months after filing the chapter 13. Thus, according to the Oregon court, a baby birth mid-bankruptcy could facilitate an amendment that would save mum and dad lotsa money. Household size is not set in stone the moment you file a chapter 13.

Side note: the Fleishman court dealt only with the effect of household size (as it affects median income) upon the ACP. It did not address how household size also affects "Disposable Monthly Income," which is a threshold figure for the amount of monthly repayment to unsecured creditors in chapter 13. That figure is a function of household size, because it's based upon total household income less standard expense allowances, which increase by number of household members. The Fleishmans' judge opined at page 66 that he would "leave [the issue of disposable income] to another day, although the case [was] clearly pregnant with it." Haha.

V. Oregon State of Mind

But keep in mind,what happens in Oregon stays in Oregon. Its courts do not carry legal authority in sunny San Diego. Someday, we may have to take up the cause of the unborn San Diegan.

VI. Lucky 7?

Given the aforementioned opportunity to amend household size, the baby-bump exclusion is less prejudicial in chapter 13. It is more damaging in the context of household size and median income in chapter 7s. In a 7, there's no post-filing confirmation event that would permit post-filing addition of post-filing baby. In a 7, household size is set in stone the moment you file. And a larger household size (which affects applicable median income) can decide if chapter 7 is a go or no.

[Intermission. Change reels, visit the loo, grab a drink, this blog is way too long.]

Better now.
We had mentioned state gross-median-income as it relates to chapter 13 plan length and payment amounts. In chapter 7, median income simply affects eligibility. Below median-income debtors presumptively (more readily) qualify for a 7. Again, median income corresponds to household size; with more household members (like the baby-to-be), the higher the median income threshold and the more likely you'll fall below it.

VII. Illustrative Baby

In California (ingrained pronunciation: Cal-i-FOHRN-iah. Danke schon, Arnie!), the median income for a household of 1 is $47,234/year (that's currently; it changes frequently). If pregnant Debbie Does Chapter 7 and earns $50K, she may less readily qualify. Count her belly and increase the household to 2 (for which the median income is $61,954) and she's easy, that is, more-likely-than-not good to go for a 7. [Again, these are median income figures in CA. If you're from out of state, then 1) envy our weather and 2) look up your own median income figures.] But such math is contested; Debbie will have to fight if she wants to be good to go.

In chapter 7, household size still factors in if you're above median. An above-median debtor can still qualify for chapter 7 if certain standard expenses sufficiently offset his income. Those standard expense allowances relate directly to household size; hence the larger the household, the more expenses one claims and more readily qualifies for chapter 7.

VIII. Not Strictly for the Birds

From the standpoint of income and expenses, which is at the heart of things in bankruptcy, it would be equitable to count the fetus as a household member: child-related expenditures [prenatal vitamins, checkups, Honda Odyssey) can be higher before the bouncing boy or girl is born. Homo sapien nesting begs for more than sticks and twigs.

It also may feel arbitrary that household size should be counted differently if a permanent addition to the household will be imminently introduced. Why did the Oregon court disagree with these dollars and sense? Because the court anticipated the ramifications of prematurely counting the baby-to-be.

The court correctly predicted the inevitable danger of compulsive procreation; hasty impregnations on the eve of chapter 7. These would be blatant attempts to hinder, delay, and defraud creditors. Such form of manipulation is explicitly proscribed in the United States Code sections 707(a)(1), and 727(a)(2). It would not be conscionable to the courts that prior to filing, a debtor would get busy in a manner not pertaining to careful review of a bankruptcy petition. And with the trials of ovulation, conception, and tell-tale morning sickness, yours truly would suffer a rash of constantly flush clients who cannot answer the simple query: what is your household size? A slippery slope indeed, or--as Bill Murray put it aptly in Ghostbusters: "Human sacrifice, dogs living with cats, mass hysteria."

Similarly, after filings of chapter 13s, debtors would conspire to conceive pre Plan-Confirmation. All in further effort to enable bad faith amendment to bankruptcy papers. These maneuvers would constitute impermissible instances of getting-jiggy-with-it, in the stead of diligent commitment of disposable income.

IX. How many goofy undergrad classes did you take?

I don't very-well remember undergraduate philosophy class. It's filed in the brain's forgotten filing system. Yet, I suddenly recall the topic of logical fallacies and the fallacy of the slippery slope. But, I will leave logical fallacies to another day, although this blog is pregnant with it.

Conclusion

Thus, in federal bankruptcy court, marriage is conservatively defined, babies are not. It does not make sense, don't try to sort it out. Still, the concept troubles, this uncertainty indubitably on a par with instances of human sacrifice, dogs living with cats, mass hysteria. Or at least a bad case of dogs living with cats.

AA, San Diego, 2011
For a 1/2 hour free consultation call 858-344-0500 or email admin@abramslawsd.com
Also visit: http://www.bankonitsd.com/

Disclaimer: the above is general information that's applicable in CA only; it is not legal advice that should be relied upon.

Bankruptcy and Archaeology: a Classic Coupling

2011-02-06T10:42:00.000-08:00

Somewhere in the Middle East, 1938
Recall the swashbuckling archaeologist, Indiana Jones--wait, first consider the preposterousness of the name, "Indiana Jones," it being a supposed variation on the title character of Steve McQueen's ca. '66 western, Nevada Smith; the moniker is also traced to a namesake dog owned by Indiana Jones creator, George Lucas. Apparently--Wikipedia tells me--Lucas's shaggy dog, Indiana, also inspired the Chewbacca character in Star Wars, the latter being a 7-foot-tall dog that flies spaceships. Anyway, recall Indiana "Indy" Jones in one of his loony adventures visiting the last resting place of the Holy Grail? It wound up in the bowels of Petra among a hundred red-herring cups. An immortal knight of the Round Table held vigil there; he tasked Indy and accompanying villains with the task of choosing the correct grail. Initially, Indy's foil, a German raider of the lost Grail, poorly chose a gilded, jeweled goblet. The ill selection was punished by death; he summarily succumbed to a bad case of special effects. Yet, Indy judiciously selected a carpenter’s modest wooden receptacle. The knight then deadpanned to Indy, "You chose... wisely." And so, Indiana lived on to enjoy geriatric sequeldom.

San Diego, California, 2009
A potential client enquires of me , "Why are your fees lower? My friend paid much more to [a bankruptcy mill]." I respond that paying a premium to finance bus ads is a client's (a client who, btw fails to Google for bad press, and Googling is Good for the Soul ) prerogative. I told him, "You're free to pay me more if it'd make you feel better." For some reason, he didn't feel free to pay me more. Yet, he ultimately selected good counsel. I then deadpanned to the client, "You chose... wisely;" when he stared at me blankly, I filed it away in my mind to someday explain my inane reference. And so, said client lived on to enjoy a successful bankruptcy.

Scranton, Ohio, 2011
TV's The Office advertised an online extra, a "Webisode" featuring Oscar, the accountant’s Accounting Blog. I considered the mocking of Oscar comical, until such point my wife reminded me, "Dear, you write a Bankruptcy Blog...."

Visit us at http://www.bankonitsd.com/ for more information on bankruptcy and the hit NBC series, "The Office." Or call 858-344-0500 to set an appointment for a free 1/2 hour consultation. For appointments via e-mail write Jodi at admin@abramslawsd.com

Homeowners Associations (HOAs): Your Partner in Life or Thar She Blows

2011-01-20T09:25:00.000-08:00

Second subject line: "Homeowners Association or HOA fees and Bankruptcy." And with that, the Google site-crawling spiders being satisfied, I am now Free to Move About the Web sans servitude to keywordology. Notwithstanding Verizon's cultural contribution of the "Free to Move About" tagline and that indelible bespectacled geek (his bespectacledness doesn't make him a geek; otherwise I'd be a geek and that's not possible. It's not possible, is it?) and his computer-multiplied minions, I have discharged (canceled in bankruptcy) a fair share of Verizon debt on my clients' behalves. If phone bills didn't top a grand, I wouldn't have to go there.

I. AT&T and the Wilson Brothers

I've also discharged a lot of AT&T bills, but don't tell them, because they're my cellular provider and according to Forbes magazine (a copy of which I read in a waiting room), AT&T is VERY VERY powerful. They cannot do a thing to my clients ('cause if they do--why, I'll...), but their powerful power permits them to place me on infinite hold should I ever call for help. Such calls are generally motivated by the perplexities of the Cell Phone Invoice, a species of written form second to none but the Internal Revenue Code for its superlative degree of vexatiousness.

AT&T really needs to work on its image. First, they don't have a bespectacled-geek spokesman; they should get one. (Verizon-bespectacled-geek is occupied, but I hear Jared, from the Subway ads is available; he'll do in a pinch.) Second, while they have a happy orange color scheme (and orange had been the "new black" at one point or another), their most famous spokesperson was Luke Wilson; true, he's a Wilson brother, and that stands for something, but he's not even a first-rate Wilson brother, like the other Wilson brother, Owen Wilson, being the one with the disheveled blond mop, an endearing broken nose, and that gee-whiz, aw-shucks charm. Third, AT&T's name does not inspire modernity. They are the American Telegraph and Telephone Company, and telegraphs are only sometimes used. I propose, American Telepathy and Telephone. Telecommunications progress at such rapid rate (for example, telegraph usage has dropped 10% since 2001) that telepathy is right around the corner: the inevitable marriage of technology and parapsychology, so often discussed.

II. HOAs and the Bankruptcy Code

Where was I before you distracted me? Right: homeowners associations. Now, HOAs are special; as such, debts to HOAs occupy a special class of debt, and merit a special section in Title 11, the United States Bankruptcy Code. In 7 lines of text, 11 USC section 523(a)(16) states: HOA dues before bankruptcy are dischargeable; HOA fees after bankruptcy are not. Not every form of creditor gets such honorable mention: there are only so many hundreds of pages in the Bankruptcy Code to go around. For example, there is no particular rule about the Victoria's Secret Angel card, the Target Red Card, or my Vons Club card. Yet. When the Code's revised again, what sections may come and what sub-sections will be shuffled off?

Why do HOAs receive special treatment not awarded other creditors? Why ever not? Nobody argues the proposition that HOAs are the paragon of the American Institution. What organically follows is brief commentary on HOAs' integral role in our culture.

III. HOAs: Sights and Sounds and Smells

HOAs are primarily known for hiring leaf blowers to leaf-blow. Leaf blowing serves the important function of blowing leaves from Point A to Point B. Townhome residents are regularly privileged come early morning with the sight and sound of leaf blowing men carrying those awesomely cool backpacks, like the ones from the movie, Ghostbusters. Blowers, rest assured, are "green;" in fact, they're 100% recycled from surplus flame throwers and vacuum cleaner hoses. Beyond teaching leaves a lesson in manners, blowers masterly muffle neighborhood noise, such as talking. Blowers' heavy emissions helpfully block offensive smells such as cookies baking, and your baby's shampooed hair. In addition, HOA leaf blowing props up the principle of predictability: it is highly predictable in the unpredictability of its scheduling; it may happen Monday, Tuesday, and/or Wednesday. Repeat visits permit blowers to adapt to changing conditions; leaves may be shifted from Point A to Point B and back to Point A, because sometimes on second thought, Point B isn't as good as Point A.

Leaf blowing is widely considered the premier factor in preserving real property's value. In this recession, notwithstanding diligent leaf blowing, condominiums and townhomes have halved in value, it's true. Yet, imagine the unimaginable decline had the properties suffered for want of leaf blowing: they'd have quartered in value.

IV. HOAs: How Do They Due It?

HOAs' inexplicable ability to exponentially increase dues is a most curious thing. In a nation beset by recession, HOAs are envied for successfully defying the usual market constraints, such as common sense and all economic theory. However, no other institution has better merited increased funding. Incredibly, the contributions of HOAs extend beyond the promotion of leaf blowing on a global scale. They are famous for an expedient mechanism of conflict resolution and improvements.

V. Fixin

Neighbors are not always good neighbors and the common areas of a complex may need fixin. Got complaints? (By the by, try going through life without saying "got." Ever. Given it is satisfactorily substituted by "have," "received," or "brought," it serves no purpose save to invite grammatical abuse.) The excellent means of answering your grievances is something the HOAs got down to a science.

VI. Lounge Act

Suppose you wish to have a rusty lounge chair at the community pool replaced. Call the HOA: they have thousands of your dollars at their disposal and the means of redressing the wrongs of rust (technically you call the property management company, but we'll just refer to them as the HOA, 'cause that's simpler, which is a good reason). Instantly, the complaint is processed. You need only submit a written description and request for consideration of addition to the agenda of a future HOA meeting. HOAs' homeowners' meetings are set quarterly on weekday evenings (usually in the lil' clubhouse by the pool with the rusty lounge chair) to discuss latest developments in leaf blower technology, to discuss your thousands of dollars at the HOA's disposal, and to take "minutes."

VII. Barking Up The Wrong Tree

HOA meeting agendas are set months in advance to ensure there's no digression, flexibility, adaptability, or exchange of ideas, which might lengthen the proceedings by several minutes. Stray from the agenda, causing delay and you miss out on evening pleasures, like your Glee viewing-party, or your no-more-than-2-dog nighttime walking. Why 2? I simply cite the 2-dog limit under HOA bylaw 9004.3(b) as amended by General Order 162-A in Spring 2009; to wit: "No household shall have more than 2 full-size canines. If any one canine fits into a purse, one may have a total of 3." Since "canine" was never strictly defined consistent with the presumed intent, as canus lupus familiaris, HOAs' adherence to the rule of law has been expressed in odd fashion. Dentists operating in the vicinity of HOA communities have had increased demand for elective tooth extraction, while veterinarians routinely perform animal liposuction; when asked for lipo target dimensions, a dog owner will generally measure with her hands about the length of her purse.

Now... where was I? Right, you've submitted your request for lounge-chair replacement. The agenda for the HOA meeting for the first quarter of 2011 has been filled. However, there is vacancy in the agenda for the second quarter of 2011 meeting (approximately six months from the present). You prepare your written request, calendar your attendance at that meeting in six months and patiently await an answer. While the ultimate resolution awaits, you may rest assured that your request will not be rejected until such time that it's been reviewed by the HOA Board, the Pool Committee, and the Pool Lounge-Chair Sub-Committee. In the meantime, you discover that a second amendment to bylaw 9003.4(b), being General Order 162-B is on the agenda for the third quarter meeting of 2011. In preparation, the HOA's Sub-Sub-Committee for Dogs and Cats has ordered hard copies of both the Oxford Dictionary and Roget's Thesaurus. Their intention is to establish an interim definition of "canine" pending subsequent General Order 162-C.

VIII. Commendations

You may think the HOA is an entity (albeit an excellent entity) without a soul. Not true. In dealing with the HOA, one finds a human touch. Back when I lived in an HOA-run establishment, I used to call the HOA's property management. A lot. A guy named, Dave, whom we'll refer to as "Dave" would routinely take my calls. Mainly, I commended Dave for the excellent leaf blowing in our 'hood. Sometimes, there were straggler leaves at the end of a day, yet with Dave's steady reassurance, you knew someone would be on top of it by the morrow. In all honesty, my calls to Dave were not all flattery (albeit well-deserved flattery). Occasionally I had to complain about the neighbor firing up his chopper at 3 a.m. Or the neighbor's pit bull, Fred, taking it upon himself to regulate the 2-dog quota by eating other dogs. The mailman endorsed the latter complaint because Fred tried to eat him too.

Dave was always on the ball inviting me to write letters that would be instantly processed by a sub-committee in charge of referrals to other committees. When he picked up the line, Dave invariably answered with an "oh, you again" tone, even when I had called him for the very first time. You might think that was indifferent at best, but that wasn't the case. Dave was just too cool for school. In fact, for a while, I imitated his style at work, thinking people might interpret nonchalance as an expression of high standing. In the end, it didn't work for me personally and I had to revert to being naturally nice. But I found Dave's 'tude to be instructive in the art of how to win friends and influence people by making them feel small. Last I heard, Dave was promoted to the position of assistant to the regional manager of leaf blowers. We wish him well.

For some reason, 7 lines of text from the Bankruptcy Code turned into all the above nonsense. But next week we'll discuss "double dipping" in bankruptcy: the application of chip-and-dip etiquette to Schedules I, J and the Statement of Current Monthly Income.

AA, San Diego

Sex, Toys, and Bankruptcy (but, not necessarily in that order)

2010-12-25T20:04:00.000-08:00

Part I. Bankruptcy and Toys

1997, New South Wales, Australia.

After a train ride to the boondocks, I was tramping with some Aussie law student (discussing the comparative trans-hemispheric aspects of the Anglo common law tradition, naturally) through the swamps to give a first go at water-skiing. My attempt summarily failed; after watching my mates have better luck at the skis, we retired to a run down cottage to watch Mad Max, Mel Gibson's first foray into blood lust. It was the "real" Mad Max, of course, unstripped of its "Strine," the incoherent vernacular of Down Under. Your Blockbuster version may feature the Stateside edition, redubbed to innocuous "American" The point of this nonsense is that I lack in talent for sports that beg investment in adult "toys:" jet skis, ATV's, boats, paragliders, horses, hunting weapons, and jet packs (the latter, perhaps nonessential, but after dispatching a SPECTRE operative, they're good for a getaway). The dearth of pleasure craft has saved me money over the years.

Now, in bankruptcy, there is the rare case of sacrificial adult toys.

Upon first meeting a client, we assess assets of interest. The vast, vast majority of chapter 7 bankruptcies don't involve liquidation. Yet, you can't keep limitless luxuries (have your cake) and eliminate all debt (eat it too). There's the occasional client who inventories expensive sports inventory. In addition to normal household goods, attire, retirement accounts, and more, you can exempt (keep) up to $23,250 worth of just plain extras. Like Seadoos, which they tell me are a brand of jet skis. But if your stuff exceeds the above value, you may have to let something go. To illustrate: Scarlett's Seadoo would sell at $5K. She's exhausted her available exemptions for vital assets and savings. When she files chapter 7, we turn over the Seadoo to be sold at auction, the proceeds to benefit creditors. It's a $5K loss. Yet, Scarlett just happened to have $50,000 in debt, which she's just eliminated for 10 cents on the dollar.

Are there alternatives to liquidation? Must Scarlett's Seadoo be gone to the wind? She needn't lose it. She could buy it "back" from the trustee or bankruptcy "estate." Or, if she elects to file a chapter 13 bankruptcy (a payment plan), she need only ensure that her payments match at least what unsecured creditors would've received from the chapter 7 liquidation. The logic is sound; it's stated in the Bankruptcy Code at 11 USC §1325(a)(4). ["§," BTW means "section;" it's not on your keyboard, and begs more time for inputting. Its insertion conveys a writer's commitment. And BTW, BTW means By The Way. The shorthand begs less time for inputting. Its insertion conveys a writer's indifference. Hence, inputting into a sentence both "§" and "BTW" is a wash: I'm committed to this blog, yet ultimately I could take it or leave it. And with that last sentiment, you must certainly identify. Oh, and USC means United States Code, and not University of Southern California. The former has about 160,000 pages (source: none. I made it up erring on the low side); the latter has 160,000 in dollars you'll pay for a bachelor's degree, which is understandable: their 2009 endowment ultimately fell a bit short of $3 billion (source: U.S. News)].

What 11 USC §1325(a)(4) implies is that creditors cannot be worse off because you elected to file chapter 13 instead of chapter 7. Example: I had prospective clients with Seadoos and the accompanying dilemma: opt for chapter 7 and lose the jet skis or file chapter 13 and pay for them over time. I told them the alternatives and the implications. Now, a lawyer will refuse to do what is not feasible or advisable. But when reasonable alternatives exist, it is not a lawyer's job to make your life decisions. And don't get around that by asking me what I would do. I wouldn't know the psychological impact of Seadoo surrender. Initially I thought Seadoo must refer to an underwater Scooby Doo adventure. Thus, deprived of a directive, the "prospectives" went home to think about it prior to signing on. Then they came back and left me with 3 lbs. of paperwork I hadn't requested and begged again that I decide the Seadoo's fate. I wouldn't, so they went home to think about it some more, prior to signing on. Then they disappeared. I don't know where they went. Have you seen them?

The experience robbed undue time and resources. Thus, despite my non-subscription to adult-toys, they ultimately cost me money anyway.

Part II. Sex and Toys

2010, San Diego, California.

That's all about liquidation of adult toys. But as a young dad (wait, let me pull that gray strand out. Inteloper! ), I observe mainly kids and their toys. For want of blogatory direction, I revisit the trite study of nature vs. nurture in the context of sex and toys. Do boys prefer guns, and girls dolls of their own choosing, or do they merely accept that which we give them? My older son (knocking on 11's door) is all rambunctious roughness, from the invariably dirt-ingrained nails, to mud-caked pants cuffs, and sneakers with a 1-week half-life. He's a scrapper. The younger lad, all of 2 1/2 packs guns (with Nerf rounds) and boxes opponent Miis on the Wii. He lugs 20 lb. cat food, pours it, then commands the defiant cats to commence chewing on his schedule and not theirs (the cats might otherwise be attending to important tasks, like regurgitating hairballs and licking their coats. Though, not necessarily in that order). The boy's main train, Thomas the Tank Engine belongs to a mainly all-boys club of tough steam and diesel locomotives. At the same time, the lil' one has a strong affinity for the color purple, and his doggy, cleverly named, Doggy (a sort of raggedy generic hound, like Copper, from The Fox and the Hound) is under his arm, morning, day and night. He doesn't care if a girlfriend (he has girlfriends) has a pink electric Mustang convertible: he'll drive it anyway. So, really: at the toddler age of unisex soccer, do the sexes differ at all when it comes to taste in toys? Before we answer, we must suffer another recollection.

Not too long ago, in this very galaxy, my mother came to visit and delivered a shoebox to my kids. In it were not shoes, but a pile of my vintage Star Wars men (meaning the original cheap ones with inflexible joints and generic faces). My old, well-worn toys have apparently been preserved for posterity in my parents' home. They aren't particularly good toys. Yet, in slow succession, they are exhumed from their resting places, and carefully doled out to the new generation. When the figures came out of my box, my wife immediately questioned why I had played with dolls as a kid. With a condescending eye roll, I explained, they're action figures, honey. She returned my eye roll and raised me a pitying head shake. I took a closer look at the little men. All the fighting implements, the light sabers, the laser blasters, Chewbacca's crossbow, had long since disappeared into yesteryear's sofa cracks and shag carpet roots. Action figures stripped of action, disarmed from weapons of war for their Star-Wars wars, they're just... dolls. All that's left to do is appreciate the galactic fashion. The casual Jedi robes (the sci-fi equivalent of pajamas and a smoking jacket), the villains' fascist garb (lest you miss the Third Reich parallel), Han Solo's cowboy vest and boots (like Gary Cooper in High Noon), and Chewbacca's hairy chic. I asked my mom why she brought my boys dolls to play with?

Thus, I must conclude that divisions blur between boys' and girls' toys. And for whichever sex--boy or girl--the toy is destined, a grandparent--unlike a chapter 7 trustee, will never liquidate their child's toy. Well, not unless it were in its original packaging. That kind of thing is compelling to an affluent geek.

AA, San Diego, CA

Chocolate Education

2010-12-21T12:36:00.000-08:00

Yesteryear's chocolate was a simple proposition: sickly-sweet candy bars in the checkout aisle beside your bubble gum and Tic Tacs. Milk chocolate, caramel, nougat, and peanuts were the building blocks of childhood fancies: your Snickers, your Baby Ruth, your Kit Kat. Yet, today, those items are strictly for the birds. Contemporary consumers have seen the advent of boutique chocolatiers, purveyors of artisan bonbons stuffed with ginger ganache, panko bread crumbs, and (natch) chipotle chile. Citing cacao percentiles, confectioners charge premiums for purism. But is one compelled to subscribe to chocolate chic? Or may one find comfort in kids' standbys? In this new milieu, I was all at sixes and sevens, not knowing which chocolate to eat. Naturally, I turned to bankruptcy for the answer.

About 5 years-ago, Congress drafted a bankruptcy reform act. Its title: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Skeptical eyes prone to veto would summarily glaze upon a glimpse of this mouthful; the Act had been shrewdly coined. In everyday usage, it is slightly abbreviated to BAPCPA and affectionately referred to by debtors attorneys as BARF, which apparently stands for the colloquialism... barf. While some etymologists trace the acronym to the Latin, Bankruptus Ad Res Fides, most contend the vomitus reference is implicitly censorious. Perhaps, we'll never know for sure.

Under the new law, it became incumbent upon bankruptcy filers to complete Online or telephonic Debtor Education. The first of two parts to "Debt Ed" is a pre-filing "Course" in Credit Counseling or "CCC." Of course, the word, "course" is generally defined as a series of lessons. Yet, the CCC is a single, 1-2 hour session. The titular misnomer, which suggests a daunting task (rather than a brief commitment) fits the simple rationale of Debt Ed: to discourage would-be bankruptcy filers... from becoming bankruptcy filers. The CCC requires that you list your income, expenses, and debts, with the purported purpose of precluding bankruptcy by drafting a debt repayment plan. In 99.99% of cases, repayment's unfeasible and one's CCC counselor does not draft a plan. In 0.01% of cases, repayment's unfeasible, and one's CCC counselor does draft a plan, for academic purposes.

(The second of two parts to Debt Ed is a post-filing course (well, class) in Personal Financial Management. We'll talk about that another time; it's relevant, but it might disrupt the flow.)

Courts will concede the CCC is a hollow exercise. Debt repayment is not a viable option for persons who have necessarily turned to bankruptcy. Yet, bankruptcy moves in mysterious ways; Debt Ed has still proven to be quite beneficial, as you shall see.

Now, fees vary significantly among the many Debt Ed companies. We took care to find an economical, yet high quality provider (we strive to partner with those of a like mind) to whom we'd refer our clients. I like our Debt Ed provider. They are responsive and care for our clients. I had the privilege of meeting their reps at a bankruptcy conference. For reference, bankruptcy conferences are like any other colloquium: you get a name tag, bag swag at the vendor booths, and tax-deduct your Starbucks tab. Bankruptcy conferences are also similar to the local, Comic-Con, San Diego's pop culture convention. Comic-Con patrons dress like favorite comic book heroes; at a bankruptcy conference, guests likewise depart from everyday attire: they wear jeans.

At bankruptcy conferences' vendor or sponsor halls, many Debt Ed companies gather to distribute pens. I think they also compete for lawyers' referrals, but mainly they bring a lot of pens. After passing myriad providers' tables, and rejecting their services, I end up with a lot of pens.

Promotional writing implements are like those "brand name" watches you buy on the street. They look pretty, but they don't last. But that's okay, because you get a lot of them. They feature comfort-grips, bold colors, and sometimes they have bulbs that flash when you tap a surface; others have those window-ads that rotate when you click to retract the point, and that's pretty addictive.

But a wide assortment of pens isn't the only gift of Debtor Education. Once yearly, our Debt Ed provider ships a token of winter-season chocolates. This year: a serendipitous 4 lb. box of See's. See, See's was the happy middle ground we'd been seeking, halfway between elitist Godiva and grass-roots Reese's. The sweet spot betwixt truffles and Twix. Thus, it was Debtor Education that cured my chocolate quandary.

Debt Ed did not effect its legislative purpose; the CCC has not particulary availed my clients. Yet, it has unequivocally benefited me. It has satisfied my sweet tooth and given me something to write with.

Postscript

In the fallout of the American chocolate renaissance, Halloween-pail stalwarts (your tired, your poor, your Hershey's and your Mars) assumed dark-chocolate airs with bittersweet twists on kiddy classics. In fact, intergalactic efforts were made to convert the skeptics. When a Star Wars movie was released, Darth Vader implored children to Join the Dark Side... of M&Ms. Well, you can comply with the Dark Lord for kicks. All I can say is his wares are not too good for Halloween.

AA, San Diego
____________

Note: for the primary source on Debt Ed, please be sure to visit the United States Code at Title 11, sections 109(h), 111, 521(b), and Federal Rule of Bankruptcy Procedure 1007(b)(7). Or not.

Radio GaGa

2010-12-01T12:05:00.000-08:00

In pop music, beyond the banal ballads and bubble gum of break-ups and crushes, we sometimes find the serious artist whose words give pause.
One such artist, Lady GaGa tells narratives, which resonate when the music's over. If The Doors and Dylan, The Beatles and The Byrds captured 1960s zeitgeist, Gaga is the spokeswoman of the 21st Century. Commentaries on selected songs follow:

Just Dance
"Just Dance," from the award-winning The Fame album (her magnum opus) captures the depths of a young person's insecurity. Vying for the affection of discerning suitors, a self-conscious GaGa confides, "I can't believe my eyes/So many women without a flaw."

Not since Springsteen, has an artist lent a stronger voice to the working class. Like those who work graveyard, GaGa does not clock out till dawn's break: "I'm gonna hit it and flex and do it until tomorrow." "Twirlin up them hips," she delivers a simple, yet profound message: stay the course, persist, overcome. Just dance.
"Just Dance" then meditates on the crippling effect of the mobile-phone, in a powerful preamble to the superlative tune, "Telephone. " Saying, "I've had a little bit too much... I can't see straight anymore," GaGa alludes to minds intoxicated by cellular dependence. The bemused protagonist cries, "where are my keys, I lost my phone." The phrasing encapsulates a decidedly contemporary struggle: where once we needed only safeguard our keys, now we must keep track of our phones, too. The allegorical discotheque fittingly underlines the message: keeping your phone is doubly challenging in pocketless club attire.

Telephone
In "Telephone," once again, GaGa leaves her head on the dance floor. With guest-vocalist, Beyonce, the chanteuse visits a club where cell-phone calls lay siege. The "cell"--a once technological-marvel is a prison cell. "Telephone" takes overdue issue with this pernicious accoutrement. In the transcendent bridge, R&B beauty, Beyonce does not acquiesce to demands to answer "faster;" such roads spell "disaster" (when you're trying to get your groove on). GaGa concludes, "Call all you want, but there's no one home, And you're not gonna reach my telephone." Empowering.

Paparazzi
"I'm your biggest fan, I'll follow you until you love me." Like invasive creditors, the titular celebrity photographers invade the lives of our citizenry, albeit that of the rich and famous kind. But isn't that the greatest offense to target our superiors? The term originates from the eponymous shutterbug, Paparrazo in Fellini's bohemian ode, La Dolce Vita. Ever since, paparrazi have turned sweet to bitter; yet GaGa turns the term on its head. Stalking was heretofore plain-creepy in pop: The Police swore that with, "Every Breath you Take... I'll be Watching You" and Sting's Lolita- muse prompted the admonition: "Don't Stand So Close to Me." But when your paparazzo is GaGa, wooing is welcome.

GaGa's songlist unfolds myriad other riches. I belatedly comprehend my high school English teacher. After wrapping Melville's Billy Budd, he concluded we'd forego the author's masterwork, Moby Dick. A single semester simply wouldn't suffice. In such manner, one regards GaGa's tour de force, "Poker Face." Blogatory confines cannot do it justice.

Next week: 23 year-old lyricist,Ke$ha on bouncing: "Now the dudes are lining up, 'cause they hear we got swagger, But we kick 'em to the curb unless they look like Mick Jagger...." Has Ke$ha seen Mick Jagger? Ah, certainly she has; seemingly superficial lyrics belie far greater meaning.

With apologies to Bret Easton Ellis.

(It's all Happening) At the Zoo

2010-11-30T13:56:00.000-08:00

The sign on the monkey cages at our San Diego Zoo admonishes patrons not to: "annoy, torment, pester, plague...vex, bequiet, goad, beset... or ruffle the animals [multitudinous further verbs omitted]. Hey, if you put enough monkeys in a room full of typewriters, they'll yield Shakespeare for you, eventually. Hand them a thesaurus and they'll put up a sign.

Once, a Marine on leave patronized said zoo. Seeing the simian sign, he wondered why the monkeys merited special treatment. That week in boot camp, he'd been annoyed, tormented, pestered, plagued, vexed, bequieted, goaded, beset and certainly there was a lot of ruffling.

The sign won't adorn Camp Pendleton walls. Yet, the occasional civilian picks up a memento copy in the zoo's tchotchkes shop. It's overpriced, but supports not-for-profit zoology and permits a (sort of) clever addition to one's office. Insert your occupation (lawyer) on a sticker over "animals," and you instantly convey that even a (lawyer) has feelings. Prick us: we do bleed. I daresay, lawyers are people too. Okay, maybe that's an overstatement.

Like that ca. '67 track from The Stones' "Between the Buttons," a good lawyer must remain, "Cool, Calm, and Collected." Good counsel will empathize, but not internalize. For the litigant or petitioner, legal proceedings are inherently stressful. This prompts the cliche, "Only a fool's his own counsel;" unchecked sentiment will sabotage one's case. Now, with high emotion coincides the occasional venting upon counsel; the public is colored by a critical preconception of lawyers. Yours truly provides the utmost care to his clients, yet, sometimes we bite the hand that feeds. If blame is misplaced, I correct the misconception. Yet, I don't begrudge it; the client who seeks counsel is the vulnerable client. It's not the best of times. Thus, I remain cool, calm, and collected. (Cool in the redundant-to-calm-and-collected sense; not in the Fonzie sense.) That we hear and listen to clients means they get to share their happiness and sorrows.

Such grievance is petty, yet I implore that I not be annoyed, tormented, pestered, plagued and certainly not ruffled by my clients. Those acts, Dear Reader, we shall cede to the telemarketer.

All's Wells that Ends Well, if it eventually ends well

2010-11-10T12:20:00.000-08:00

Wells Fargo and Union Bank: 2 popular institutions that freeze bankruptcy filers' funds. Meaning, monies on deposit at the moment of filing are placed in trust for disposal by your chapter 7 trustee. Pray tell, why? Such funds constitute part of the bankruptcy estate or property of the debtor, which is subject to liquidation by the trustee. Your stuff may be sold for repayment of (some) of your debt. Yet, in practice, liquidation rarely transpires (if your attorney's on the up and up). The debtor is entitled to keep the shirt on her back (in fact, up to $23,250 of cash may be exempted or shielded from liquidation). Greater funds may be nonexempt and lost. However, a debtor seldom possesses nonexempt funds, either within or without of the bank: a debtor by our definition has little to spare.
Thus, the freeze is a meaningless exercise, most often. The trustee almost invariably instructs the bank to release the funds to the account owner; generally, the funds are modest. They are necessary for necessities. The rub, though is that such release may not come for a month or more.
There is a rationale to the Wells and Union policies. Sections 541 and 542 of Title 11 (the Bankruptcy Code) confer upon entities in possession of debtors' assets an obligation to preserve the so-called bankruptcy estate (the debtor's property). Yet the statute explicitly excepts such "preservation" of assets that are of inconsequential value to the estate. That exception has been glossed over. While a higher threshold figure triggers the freeze by Wells Fargo, Union Bank freezes de minimis (great phrase, huh) or negligible amounts in apparent violation of the statute (e.g. withholding 2 bits on deposit, just because). And Wells Fargo takes an all or nothing approach. If you have $3K on deposit, they will freeze all the $3K; you could not access a dime; if nothing's stashed beneath the mattress, and you like to, say... eat, then prepare to situate at the corner light, with your tired, weary and huddled. And a makeshift beggar's sign.
In any event, statutes are black and white. We need the courts to sort out the inherent grayness of life. Section 542 was interpreted in the banks' favor in a few cases, to wit, In re Calvin from a Texas Bankruptcy Court and In re Jimenez from a New Mexican District Court (Old West states take to Wells's stagecoach silhouette). Those courts concluded that freezing was, uh... cool. No pun intended, yet I now picture the punning Arnold Schwarzenegger as Dr. Fries-cum-Mr. Freeze. You know, the rogue-gallery fiend with a freezing gun, star of the corny-campy feature, Batman and Robin. Picturing it, I struggle not to gouge my mind's eye. Gray-matter's numbed by the likes of, "My name is Mr. Freeze, learn it well, for it's the Chilling sound of your doom./You're not sending me to the Cooler!/ I'm afraid my condition has left me Cold to your pleas of mercy./Cool party!" And the indelible, "Ice to meet you!" All voiced in Ah-nuld's wonderfully terrible speech. Thank you to the pitiable folks who assiduously populate the "quotable" quotes section of the Internet Movie Database.

Then came the 9th Circuit (which includes California) Bankruptcy Appellate Panel (BAP) decision of In re Mwangi, which ruled against Wells. Splendid, yet the BAP decision is not binding upon our lower-level courts where we conduct our daily disputes. The matter would have to be decided in the 9th Circuit Court of Appeals before we can rest easier and not fine-tooth-comb our clients' accounts prior to filing.

AA, San Diego, CA

Schwarzenegger and Pet Sounds

2010-11-05T10:54:00.000-07:00

The gubernatorial seat vacates. I suppose it's time to retire my Ah-nuld.
You know, my Arnold voice. Perhaps it's due. I occasionally call my wife, Maria. When at loss of words, I utter Schwarzeneggerian one-liners. I adopt his emphatic "Fahn-TAS-tic!" I've considered--God help me--buying a Hummer.

However. My father-in-law's German Shepherd, Sherman does sound eerily similar to Arnold. You know, his voice that I voice, 'cause the animals--God bless 'em--can't speak for themselves. Somebody has to do it. My phlegmatic cat, for example is the vocal love child of Coffee Lady and Alf (the titular muppet from the inane 80s sitcom).

While Arnold (and his voice) retire to the Hollywood hills, Sherman is still in good health and the voice must live. He'll continue to beg for "Hahm-buh-GERS" to be mixed with his kibble. His owner obliges--I don't know why. See, Sherman is about the size of that shark in Jaws and has a disposition to match. I suggested recruiting him to law enforcement, but the cops were scared of him. Plus, he'd always eat their hamburgers.

Arnold: God only knows what I'd be without you.

Shiny and New

2010-11-05T09:58:00.000-07:00

Not a baby's visage. But credit cards, the pernicious plastic plague.

Recall when the 3-D logos first adorned them? You tilt 'em and the Visa eagle or MasterCard- rings give you that micro-Avatar thrill--without the glasses. Then came the jubilation of personalization: customize your card with your pet's mug, your cherub's rosy cheeks, your favorite car--all gleaming chrome and heavy-metal grille, corny vistas, juvenile seal pups, fair-weather-team's mascot... or a "skin" of homemade art that you fancy is art. Whip the card out of the wallet you had bought with said card--like a joey that begat mama kangaroo--from your designer-labeled back pocket and the world's your oyster and it's full of pearls. How could such a cheery piece of plastic bring harm? It's even relatively cleaner than a greenback.

You'd reckon that the understated 2-D standard-issue cards of yesteryear were less tempting, no? No. As I relate below, the temptation of credit is nothing new under the sun, as wise Solomon would say. As I'm feeling Biblical, today, I'll quote and annotate the oft-quoted reverential reference to debt in Deuteronomy 15:1-2:

At the end of every 7 years, thou shalt make a release [aka chapter 7, 9, 11, 12, 13 bankruptcy]

And this is the manner of the release [procedure under Title 11 of the United States Code]: Every creditor that lendeth ought unto his neighbor shall release it; he shall not exact it of his neighbor, or of his brother [as such act would violate the automatic stay of 11 USC 362(a) and the effect of discharge per section 524].

Of course, there's the less-oft-quoted verse 3 of chapter 15:

Of a foreigner, thou mayest exact it again: but that which is thine with thy brother thine hand shall release. [Oh well.]

Yet, we needn't look back 3000 years to discover the temptation of debt. Here's a pre-customized-3-D-credit card tale circa 1972: Stephen and Tabitha King were in debt then. Stephen King hadn't yet sold Carrie, his news-article structured tale of a telekinetic girl. Credit cards were his bane. He came home one day after teaching English to aspiring writers (like himself). Tabitha sat at the kitchen table. Credit cards laid on it and in her hands were dirt-encrusted garden shears. Now, in your typical King novel, such a sharp implement would do less subtle work. But Tabitha employed it to slice her cards. Then she directed Stephen to follow suit. A happy wife means a happy life, so Stephen obliged: his cards were sliced. Cutting a card is a simple, yet symbolically powerful act. It breaks shackles.

How does debt occur? Divorce, job loss, illness. Life has its rainy days. Let's say you're buying on credit, 'cause times are good: your employer pays well, you're happily married, and you're healthy as a horse (well, a healthy horse). You'll reap the benefits of purchasing on credit. Life can only get better: your income will double and treble and the credit will be paid off when the time comes. The creditors collect finance charges and everybody's happy. But the economy's cyclical. Depression follows the Gatsby-ian days when the good times roll. Don't count on paying off the debt if you can't pay it off now. Call your credit card a convenience card and pay it off in full.

One final illustration why plastic is bad, paper is good (as with your preferred methods of both payment and bagging at the supermarket): if you're making minimum payments on a credit card debt of $10,000 at a common 29% interest rate with minimum payments of 3%, you will end up paying $50,198 over the course of half a century.

Ashes to Ashes

2010-10-26T11:47:00.001-07:00

It was widely discussed that the oft-criticized Pacific Law Center or Kerry Steigerwalt's Law Center had shuttered its doors. Defunct Center attorneys reported excessive case loads and observers wondered what would become of the clients? Laid-off attorneys and staff scramble to find new positions. Yet, amidst ashes, the idea of the bankruptcy mill persists. Pervasive ads for big firms still win the public notwithstanding deficient attention to clients and higher fees (to pay for the ads). What is deficient attention? It boils down to collection of attorney fees for non-attorney services. The United States Trustee (Bankruptcy's FBI, if you will) is suing law firms to disgorge (take back) attorney fees paid to firms that delegate attorney representation to clerks. When you respond to ads for free bankruptcy consults, and find the consult is with a clerk, then stop--look around: should you pay more for such representation? Or seek out the small firm, with the personable and attentive presence of an attorney?

Between the Cracks

2010-10-22T17:09:00.000-07:00

Dr. Martin Seligman is a pioneer of Positive Psychology, a therapeutic approach that focuses on mental wellness, rather than mental illness; he's the shrink with the glass half-filled, if you will. In his 2002 book, Authentic Happiness, he cites studies on lawyers that show lawyering is one of the more miserable pursuits in life. Luckily, the frustrated attorneys were mainly the large-firm associates, non-autonomous drones sequestered in windowless rooms tied to puppet-strings of partners. That's not me, so I tossed the book aside and picked up some Turow. Or maybe it was Grisham, I can't recall. But it occurs to me there might be another reason why lawyers have come to replace dentists (those souls once limited to 2 tools: pliers and whiskey) as the unhappiest of the work-force campers: uncertainty.

Sure, uncertainty applies in any field: for physicians, new cures come to light, for engineers, new techniques are gleaned, for designers, orange becomes the new black. The point is that every worker struggles with progress: the lifelong learning curve. In law, however, change can throw you for a loop. You were rowing forward, 2 oars in hand. A conflicting opinion, like a wave washes one oar away; you end up circling, going nowhere, bemused.

A while back, I wrote about In Re Munoz, a local case here in San Diego that addressed the issue of debt limits. In Bankruptcy Land (after I first used that term, I found it in a colleague's blog--I don't know who got there first, but we can share) you'll inevitably come across the prime numbers 7 and 13. Their respective connotations in the real world (lucky 7, unlucky 13) frequently hold true in The Land. Chapter 7 (which eliminates debt with zero payment) is often superior to chapter 13 (which requires the debtor to make monthly payments on the debt--albeit pennies on the dollar, and the unpaid pennies of debt are canceled). But chapter 13 may be lucky after all. If you have a second mortgage (which is a lien or secured debt that is junior to your primary mortgage or "senior" lien) it may have "become" unsecured due to depreciation; meaning the balance on the primary mortgage is now higher than the home's value & there's no equity to secure Junior.

If that is the case, chapter 13 presents a nifty procedure whereby we "strip" (lest you think of salon waxing strips or what happens in seedy bars--and if you think the latter, shame on you--herein strip means remove) the second mortgage. We change its character from secured debt, which maintains a lien on your property that limits your (future) equity to unsecured debt that will be eliminated upon completion of the chapter 13. Thus, the junior lien will be disposed of pursuant to payment of pennies on the dollar. Sounds good, right? But not everyone can do a chapter 13.

Chapter 13 has debt limits. You simply can't do a chapter 13 if your secured debt (e.g. mortgages/car loans) exceeds $1,081,400 and/or your unsecured debt exceeds $360,475. You may find lower amounts cited elsewhere, but these are the correct amounts; the next inflation adjustment will happen April 2013. Those are fairly high amounts; you'd assume your unsecured debt, e.g. credit card and medical liabilities is far from the threshold. And most people don't have mortgages in excess of $1M, even if you add up all the junior liens and equity lines. But there's disagreement in defining secured and unsecured debt. What of the portion of your mortgages that have become unsecured pursuant to depreciation?

If you owe more on your first mortgage than your home is worth, then any junior liens will be counted as unsecured debt that may disqualify you from chapter 13. And if you're also ineligible for chapter 7 (e.g. if your income is too high), then you're out of luck: you fall between (I was tempted to use the old English version of between: betwixt. I like that word better, because it reminds me of the candy bar) the cracks of 7 and 13. Chapter 11 is an alternative, yet it's a costly one without a promising success record in the industry.

But what of the unsecured portion of the first mortgage? If you count that portion toward the unsecured debt limit, that might by itself push you between the cracks. If you count it as secured, then you might better qualify for a chapter 13, since the secured debt limit is over $1M. The local Bankruptcy Court has considered how we should count.

In In re Groh from May 2009, the Honorable Judge Bowie (the Chief Judge) ruled that the unsecured portion of the first mortgage is counted as unsecured debt. So, Larry Groh and his wife, Shulamit Hanover's chapter 13 was rejected. In In Re Munoz from January 2010, the Honorable Judge Meyers concluded that the unsecured part of the first mortgage should be counted as secured debt. This determination averted dismissal of Oscar and Diana Munoz's chapter 13.

So, it's settled, right? Pick up the fallen oar, steer straight? It's never quite settled. Munoz had not overruled Groh; it had "diverged" from the latter. Recently a chapter 13 trustee challenged Munoz. After all, there are 5 judges in the Southern District of California Bankruptcy Court; their opinions may differ. In the end, the latest challenge did not disturb the Munoz law. Yet, there can always be appeals to a higher court.

Life happens in the presence of uncertainty. But we don't circle. We pick up that fallen oar, open our peepers and row. Change and surprise may be in store. But we venture forth.

SCOTUS v. LOTUS

2010-10-14T13:01:00.000-07:00

October 15, 2010. I'll depart now from SCOTUS (Supreme Court Of The United States); while its choices settle central tenets of bankruptcy law (eventually), it's a D.C. fixture and this is Cali-forn-ia (to be pronounced gubernatorially while we can). In California and in line of sight is LOTUS. The non-ubiquitous Lotus is a luxury British car-make of the sporty and shiny kind; one such Lotus routinely parks in my office building's lot. In bright, fluorescent orange (what Dodge calls "Hemi Orange"), it's not missable from outer space. While parking's not reserved, the Lotus favors a particular spot. At the lot's north end, two perpendicular parking rows meet. At their intersection, at 45 degrees lies a segregated space, a place--on its face-- of vehicular honor. Therein lies the Lotus bordered by parallel curbs, which protect its resident's flanks from neighbors' opening doors.

Yet, while its doors are secured, its tail is exposed to cars pulling in and pulling out from the next-door spots, the latter's noses edging by at 45 degrees. The Lotus's bumper is placed at risk!

I have never met its driver, yet I respect the time-honored tradition of revering a stranger's set of wheels for its price tag. I would sacrifice to ensure such things grace our roads in flawless state. So, cogitating in the after-hours, I resolved to claim the informally-reserved spot for my more-modest vehicle, to whom the occasional bumper-bender offers less offense.

Yet, what I failed to realize is that the Lotus is earlier to rise than I. So I seek another spot. And spinning my wheels, I contemplate the merits of arboreal shade over sun, at the price of debris of a tree and avian deposits.

For bankruptcy advice and representation, call us at 858-344-0500 or email admin@abramslawsd.com Operators are standing by. Well, they're sitting, but sometimes they stand to stretch. Visit us online at http://www.bankonitsd.com/ or drop by the office to check out the Lotus and have a cup of coffee.

Lanning Gear and the Phantom Menace

2010-09-15T10:48:00.000-07:00

Part I. What's in a Number and What's in a Name: Statutory v. Case Law

Except for some lingering presence in contracts and pleadings, lawyers rarely employ a Latin lexicon. You can get through life quite well without ever having to utter, "per se." And if you do use it, you're probably not using it correctly. Yet if lawyer-speak is discouraged, attorneys still speak in numbers.

Our legislators draft and enact our laws in the form of statutes codfiied or arranged by variable titles, paragraphs, numbers, letters, fonts, and that funny squiggly § symbol for the word "section." Consequetly, we express legal concepts in symbolic or numerical shorthand. You could explain that a a debtor can't file chapter 13 because her unsecured debt is too high. Or simply state there's a §109(e) exclusion. You could say the debtor earns too much money to qualify for chapter 7, or simply refer to his §707(b) bar. Such number-talk is our jargon.

The term "statutory law" simply refers to all those statutues compiled in code books.

Statutory law is of course, just a starting point. Its crafters can't anticipate every contingency and predictable ambiguities must be resolved by opposing lawyers and presiding judges. The conclusions of that judicial treatment constitutes our case law or "common law," an English-derived legacy of rule-making throught the courts.

While statutues are methodically formatted in symbols, common law principles are oddly captured in litigants' names. Landmark rulings forever tie conclusions to an individual. Pursuant to Brown v. Board of Education, Linda Brown will always embody defeat of the "separate but equal" fallacy. Pursuant to Miranda v. Arizona, Ernesto Miranda's name remains shorthand for reading of criminal rights.

Like all practice areas, bankruptcy law is formed through marriage of the stautory and common law traditions. The above labored preamble leads to a new tradition: a weekly sampling of bankruptcy common (case) law.

We shift to first gear to discuss the case of Hamilton v. Lanning, affectionately known simply as, Lanning, because saying two names takes too long, and besides, Lanning was the "good guy [gal]."

* * *

Part II: Disposable Income, Budgeting, and Chapter 13 bankruptcy in the Abstract

If you've come this far [sound of crickets], you know that I can hardly get straight to the point. Before addressing Lanning, we must address the notion of 'disposable income" and its relevance to chapter 13 bankruptcy (that's the one where you make monthly payments). Disposable income is also technically known as: "what's left over at month's end." Disposable income is the result of your income minus your "reasonable and necessary expenses." Disposable income is the amount by which your budget's in the red (a negative/shortfall) or in the black (a positive/excess). And disposable income is what you must commit to monthly payments in a chapter 13 bankruptcy.

What is chapter 13? In a nutshell, it's a payment plan: you commit your disposable income to a maximum of 60 monthly payments. Since disposable income may be limited, you'll often pay only a fraction of your total debt. The balance is forgiven.

If you're in the red, you can't do a chapter 13. If you're sufficiently in the black, you could do a chapter 13 payment plan and the more you're in the black, the more you'll be paying. Calculating disposable income, i.e. how much you're in the red or the black is a matter of balancing one's budget. Now, balancing a budget used to be easy. When you were 10. Mostly.

* * *

Part III: Disposable Income, Balancing your Budget, and Chapter 13 In Real Life (sort of)

When you were 10, you'd feed the dog, water the plants, empty the trash, mow the lawn, and you'd get a fiver on Sunday. Daily, between Monday and Friday, you'd stop at 7-11 on the way home from school, Abe Lincoln tucked in your front jeans pocket. Through the week, $5 got you a grape Slurpee, 2 packs of baseball cards, a Baby Ruth, Nerds, and then some. If change remained, there was always something on the shelf to match its value. 'Cause you happened to be 10 back when change got you something. So, after making those reasonable and necessary expenses, you wouldn't be in the black.

And you wouldn't be in the red either, 'cause Mom cooked dinner, and you had plenty of hand-me-down clothes (you were 70s chic, except it was the 80s), and 7-11 didn't extend credit. But I said boyhood budget-balancing had been mostly easy, right?

It wasn't easy that time front-yard batting practice put your wayward baseball through a $1000 pane of imported stained glass. When you were 10, you could be in the red. And with a $1000 tab, you could be 10 years-old and bankrupt. To repay such a debt, you'd have to committ to debt-repayment all of your $5/wk allowance for 200 weeks. But then, how were you gonna snack and trade cards? So, you approached your dad seeking debt forgiveness. You didn't have disposable income to commit to a chapter 13 since your full allowance went toward the above-listed necessities. You considered chapter 7, another form of bankruptcy. This is the type of bankruptcy that requires $0 payment on the dollar. Yet, you learned that under chapter 7, you risked liquidation of your Cal Ripken, Jr. rookie card.* While it would've been exempted under California Code of Civil Procedure section 703.140(b)(5), it's not protected under Dad's Code of Civil Procedure.

So you rejected chapter 7, but remember, you didn't have disposable income, which is necessary to sustain a chapter 13 payment plan. After much hand-wringing, you conceded you could forego the reasonable necessity of $1/week for Big League Chew (that's that bubblegum masquerading as chewing tobacco, replacing cavities for mouth cancer), yet still sustain acceptable snacking standards. Tightening your belt would yield disposable income: $1 a week toward chapter 13 glass-repayment. Recall that chapter 13 is a proposition of partial repayment of debt. You'd pay $1 a week for 60 weeks, and the $940 remainder would be discharged. You proposed your chapter 13 payment plan to Trustee Dad. Dad smiled wryly and said, "Son, you have a problem here." You asked him to pray tell. Dad said one word. "Grandma."

* * *

Part IV. The Applicable Period for Determining Disposable Income (which affects your chapter 13 payment amounts):

Ah, Grandma. See, you had forgotten about a little bit of supplemental income you'd had going. Six months prior, Grandma had sent you a $10 bill for your birthday. And then she started sending you $10 bills every week, 'cause she'd forget it was already your birthday.** Every week for three months, you'd toss aside that TVGuide and grocery fliers, rip open the envelope addressed in Grandma's spidery scrawl, pry open that Snoopy or Garfield card, and a greenback slipped out. On its face, the face of your friend, Alexander Hamilton.

But just about the time of the glass-smashing, you had suddently fallen out of favor with Grandma (always, always send a Thank You card). Those Hamiltons she'd been mailing dried up. And under statutory law, that made your chapter 13 unfeasible.***

* * *

Part V. Disposable Income Surrealism

See, the Bankruptcy Code looks backward toward past income in determining your chapter 13 repayment ability. The backward-analysis is a feature of the so-called the Means Test. In consumer bankruptcy, the determination of your disposable income is influenced by your past-demonstrated earning capability. You must commit to monthly chapter 13 payments, an average of the monthly disposable income you had over the 6 months prior to filing.**** This applies even if your income has since gone down, as of the time of bankruptcy filing, resulting in less disposable income going forward. The result is absurd: your chapter 13 payments are a function of higher income you no longer have. This absurdity happened to you.*****

In your real life (sort of) your budget had decreased from $15 [Abe Lincoln ($5) + Grandma's Hamilton ($10)] and was sustained at $5 (just allowance) on the eve of bankruptcy. Your minimum chapter 13 payments would not be a function of your actual post-Grandma-fallout one-Lincoln income. The Means Test's look-back approach determined that your chapter 13 payments must incorporate old Abe AND the ghost of Hamilton. Through his arrival and departure, Hamilton would have you produce a phantom $10 each week. What a menace!

* * *

Part VI: I just like Roman numerals

Which brings us after much long-windedness to Hamilton v. Lanning. Prior to filing her chapter 13 bankruptcy, Stephanie Kay Lanning received a one time buy-out from a former employer. That single income-spike skewed her prior 6-months average. Her prior 6 months income did not reflect her actual earnings going forward. Yet, in determining Lanning's monthly chapter 13 payments, the Trustee, Mr. Jan Hamilton--in applying the letter of the law,the statutory law--expected that Lanning apply "yesterday's" budget to today. The Supreme Court, with the exception of Justice Scalia, embraced in this case law the spirit of the law: granting Americans a second chance, a second lease on life. The Court opined that determination of Lanning's chapter 13 payments should not reflect that one-time spike in income. She should have a viable payment plan based upon actual projected income. Pending this result, Lanning had remained in bankruptcy-neutral for 3 1/2 years as the slow wheels of justice went round and round. Now she can shift into gear and get a fresh start.

* * *

Part VII: Conclusion

And in short (I know, I know, it's nothing but short), Dad should let you repay your debt, while still enjoying the occasional grape Slurpee.

_____________

*Chapter 7 is defined as liquidation bankruptcy (meaning assets can be lost). But if the bankruptcy's performed correctly under California (not Dad's) law, liquidation is rare and chapter 7 relief is readily available at a tremendous net benefit.

**Apologies to J.D. Salinger, RIP

***This application of present bankruptcy law to past-tense "facts" begs your suspension of disbelief.

****At least that amount

*****Yet, absurd can be rational. The 6-month look-back approach is about resilience. If the last 6 months showed high income, then a recent setback should not ignore one's implied high-earning potential, and then consider only present income. Setbacks should be temporary. If, upon a drop in income, we instantly ignore past earnings, then where is the incentive to pull oneself up by the bootstraps and into the saddle [at this juncture my mind plays Aerosmith's "Back in the Saddle," Steven Tyler's high-pitched ode to financial recovery. Of course the lyrics betray dirtier agendas, but that's just because rock is dirty. It's intrinsically filthy. Always is.].

Yet, such an approach contemplates a robust economy. This stautory conceit was published in 2005, before the crash. In this recession, that saddle eludes you, and it eluded you back when you were 10 too. See, after the fall out, you had quickly made up with Grandma; she promptly resumed her mailings. But then all you got in the Snoopy or Garfield cards were Snoopy or Garfield. You shook and shook that card, but no Hamilton fluttered out. Times were tough on everyone. Times are tough on everyone. Even grandmas.

For free in-depth analysis of your situation and for immediate response, call us to set an appointment at: 858-344-0500. E-mail us at: admin@abramslawsd.com for a slightly-less immediate response. Or check us out at www.bankonitSD.com and bank on us.

Profiling

2010-09-14T11:38:00.001-07:00

In the little monthly newsletter the San Diego County Bar Association (SDCBA) mails its lawyer-members, there's a Q&A column called SDCBA Member Profile. It is a column that highlights a member's profile. The featured attorney is a random or not-random choice plucked from the pool of 2.7 million attorneys in San Diego. It is an opportunity for a counselor to share a bit about herself or himself. It helps humanize the profession and make relatable a profession that has its own chapter in joke books.

I'm still awaiting my invitation to appear.

In the meantime, I thought I'd draft my answers, so I'll be ready if called upon. Below, find my responses to the standard Q&A queries:

Question: Proudest Career Moment:
Answer: how much space do we have?

Q: Current Area of Residence?
A: San Diego County. Choosing the right bar association was a no-brainer.
[Editor's Note: this is an opportunity for the profiled subject to better connect to the public with frequent honorable mention to Carmel Valley, La Jolla and Rancho Bernardo]

Q:Family:
A: 2 cats, 2 boys, one wife (not necessarily in that order).
[Ed: The inclusion of this question is a splendid opportunity to highlight who is single ("and looking")

Q:Birthplace:
A: Who cares?

Q: If I weren't an attorney, I'd be...
A: A TV attorney.

Q: The best thing about being an attorney is:
A: Blog indulgence (or "blogdulgence" if you seek succinctness)

Q: My last vacation was...
[Ed: this is an opportunity (as with the area of residence) to advertise your worldliness and resources]
A: San Diego Zoo (Why should it be a vacation only if you're not from San Diego?)

Q:Favorite Web site:
Mine. http://www.bankonitsd.com/
[Ed: the most frequent answers are... Google and its search-engine ilk. It's a practical answer, I suppose]

Q: Hobbies:
A: The suggestion that I can afford to abandon client service at any time is preposterous!
[Ed: more typical answers range from innocuous family outings to hard-core sports like golfing]

Q: Favorite Movie
A: La Dolce Vita, it's vintage Fellini... no, strike that. Die Hard.
[Ed: in past answers, you'll find mention of respectable documentaries or lawyer movies with Gregory Peck and Boo Radley]

Q: Favorite Book:
A: I don't know, but currently my boy and I are reading, Baby Mickey Finds a Friend. It's all about how Baby Mickey Mouse finds a friend.
[Ed: herein lies the respondent's compulsion to display literary proficiency; a privilege not to be squandered on trivial beach reads. Citing non-fiction is highly recommended]

Q: Favorite Music Artists:
A: Lady GaGa
[Ed: she's catchy. I could quote critics' darlings-where my tastes genuinely lie-but that's personal. In the archives of Q&A answers, there will be scarce mention of rap, heavy metal, & hallucinogen- or heroin-inspired artists; Wolfgang Amadeus Mozart is a good selection: Divertimento in B-flat is a favorite (the unplugged version)]

Q: Favorite Food:
A: Walk up and smell the... yes, hummos, in its multifarious incarnations (jalapeno, chipotle, pine nuts, cilantro, kalamata olives, roasted red peppers, garlic and other friends), with Snickers Bars a close second. They go together, actually. Try it.
[Ed: stock answers are either whole ethnic categories or epicurean fare: truffles, force-fed ducks, and creatures you first meet alive-and-well in the lobby, before cracking them open to eat tableside]

Q: What efforts are you making to make your practice "greener?"
A: I plan to email the SDCBA a request that this newsletter be exclusively published electronically.

Q: How have changes in technology affected the way you practice law and do business?
A: In the Pony Express days, mail service deadlines were tolled for Indian attacks and horse thieves were summarily hung. With the introduction of the Internet and e-mail, communications are faster, Indian attacks are fewer, and it takes more time to hang a horse thief.

Q: How have you benefited from your SDCBA membership?
[Ed: this is a question from the SDCBA. They reserve the right to edit your response, exercise disciplinary measures and banish you]
A: Seriously?

Q:What technology/products do you find effective in your practice?
A: iPhone and Drive-thru Starbuckses (the latter, a technological marriage of cup-holders and uber-fast espresso making) enable me to map, calendar, research, e-mail, facebook, voice-memo and tweet, while slurping coffee en route to court. Necessity is the mother of invention and these technologies have taught me to drive with my feet, which is no small feat as I drive a stick shift.*

Disclaimer:

The profile questions are authentic; "editor" notes are hypocritical drivel; answers are baloney; tongue is placed firmly in cheek.
__________________
*I don't.

If you're interested in bankruptcy-related attorney representation from an attorney who lives and vacations in San Diego visit us online at http://www.bankonitsd.com/

Or call 858-344-000

Or email: admin@abramslawsd.com

Or write us a letter on nice stationery, postage prepaid.

Radio GaGa

2010-09-13T19:30:00.001-07:00

Bankruptcy Bromides

2010-08-18T09:45:00.000-07:00

How does one, er, how do you* file for bankruptcy?*

Let me be clear:
You do so with a little help from your friends. Well, your attorney and his staff.

Make no mistake:
Your attorney and his staff will do it right by you. Guide you along the way. I see now the Court e-mails spitting out notices of discharge, one after another. Discharge signifies successful completion of a bankruptcy case. These notices tell my clients they can now better provide for their families. They've made a bold financial move and it's paid off.

Change isn't easy:
If you're still current on payments, the situation begs for a paradigm shift (whatever that means). You've been making minimum payments forever, yet not putting a dent in your principal debt. Once you elect to file, you should usually** stop the hardship-causing payments on dischargeable debts. Punishing yourself with further sacrifice defeats the purpose of bankruptcy. It's hard to deliberately cease payments when you've always been current.*** It can be a radical change. But it doesn't make sense to throw good money after bad. Not anymore.

It won't happen overnight:
Filing for bankruptcy is more Subway than McDonald's. You have to help your sandwich artist (or attorney) put your meal together. Your bankruptcy petition isn't sitting beneath a heat lamp.
Your sandwich artist will work quickly, but he needs your help. He needs your facts, so he can apply the law.

There will be setbacks and false starts:
Sometimes things change. Your income might increase. Or decrease. This may change our initial assessment. But we only file when it is in your best interest to do so. Sometimes, this means postponing filing. It's the nature of the beast and we abide by its rules to ensure successful results.

___________________________
*Why would one think "one" in lieu of the generic "you" would favor one's Google keyword-standing?

**When you can't make payments without undue sacrifice, then stopping them makes sense as long as you did not incur recent dischargeable debt (debt you can get rid of in bankruptcy). If you incurred new debt recently and haven't paid back an equivalent amount, this implies bad faith,
even if you clearly decided to file bankruptcy after you incurred the new debt. Every case is unique. One should only act upon specific advice by their retained counsel (rather than a blog).

***Maintaining currency by paying minimum dues while not decreasing your balance is not an achievement. It is counterproductive, when you have the healthy alternative of debt-busting bankruptcy.

Asaph Abrams
Attorney at law, licensed in California state and federal courts

Call us at 858-344-0500. Ask for Jodi to set a free consultation. Or e-mail admin@abramslawsd.com to set a good time to come in.
We are a Federally-designated debt relief agency. We help people file for chapter 7 or chapter 13 bankruptcy protection. We can help you.

Visit us online at www.bankonitsd.com

Fleeting Phrases

2010-08-10T12:08:00.001-07:00

Toddlers find calling cards in unique sets of catch-phrases and garbled gobbledygook. These things of childhood last through three stages. At first, they're endearing. Second, they wear thin. Third: they are memories. Blink and they're gone, the funny little corruptions of speech they'll never have again.

S.J., my young lad of two had taken to the idiom, "Ah yeah," a soft-spoken exclamation of pleasant surprise and affirmative response. The choice words to accept culinary choices, wardrobe suggestions, or outing options.

And then, poof! it was gone. A positive response is now a low-pitched, almost solemn, succinct, "Yes," accompanied by a simple nod of the head.

What is in a name? To S.J., nothing much. Aunt Jenny was Jenny, but Aunt Sharon was Jenny Two; I was Dan, while the cat was, Dad.

Then Sharon became Sharon and my own rightful title was restored.

Cats we have at home, hence the average canine on the street is of great interest. Dogs were initially ba-bahs; then gah-zees, before they became doggies. Our secret little lexicon fades away.

Still, it's not gone just yet. Nana's dog, Henry remains Hemi (like the engine), muffins are muzzies, donuts are nuts, and lest you figure we eat nothing but junk, milk is myeelk, and vitamins are mins (brevity is the soul of wit). And sometimes, it appears, he consciously considers, then rejects our corrections. Maybe we have it wrong and he has it right? I dare you to say that muzzies in not a superior-sounding moniker for those scrumptious baked goods, which the uninformed still label, muffins.

In the end, we've learned not to hurry progress; we enjoy the special tongue of toddlerhood.

* * *

It has come to my recent attention that Sharon has now become Ino (her fiance's name).

All right, enough of this nonsense. I've finished my sandwich (I can't drive and text, but I can type and eat) and it's time to go. I have to read Schwab v. Reilly and wonder if that anti-debtor Supreme Court ruling would have panned out differently in the new Kagan era. The consequences of black-robe appointment teaches that timing and luck is not irrelevant in law. Afterwards, I'll indulge in some discovery requests, chapter-13 planning and more thinking on In re Wiegand.

For personable, responsive and low-priced bankruptcy representation, please call us at 858-344-0500. Request Mellanie or Jodi to set an appointment.

Visit us online at:

www.bankonitsd.com

All we want are the FAQs, ma'am

2010-07-16T15:08:00.000-07:00

Bankruptcy FAQs abound (read rapidly for effect): can I keep my car? Can I keep my other car? Can I keep my home? Can I keep my other home? Will it stop foreclosure? Will it stop a lawsuit? Will it stop eviction? How will it affect my credit? How will it affect my spouse? Can I file without my spouse? Can I file a second time? How 'bout a third? My IRA? My 401(k)? Etcetera, etcetera (I like to spell out that word, I like the way it looks).

You may wonder, where to find the answers? You can check us out at www.bankonitsd.com. We've taken the time therein to answer many FAQs in detail and in depth. There are answers there on your computer screen. But... they're not strictly YOUR answers. It's not advised to act upon a universal response. It's like those one-size-fit-all caps. They fit some, but not all. Some people just have oddly-shaped noggins... or bankruptcy fact-patterns.

So you've decided to speak with an attorney to find your answers. You peruse the ads and realize there must be 2.6 attorneys per capita in this county of ours. You wish to seek legal counsel, but whom do you call? There are two extremes to watch for.

There's a San Diego phenomenon called the bankruptcy mill. One such mass-client mill is shutting down. The bigger-is-better, ad-blitz model collapsed. And the mill sobriquet fits, like so many factories yielding to cheap imports. Bankruptcy mills offer the minimal attorney contact, anonymity, high prices, and impersonal touch some seek (I kid you not, some clients confess they prefer to be assembly-line material). However, if you seek there an attorney's counsel, you might instead find a sales-pitch. Free consultations are offered by clerks (not attorneys), ready to sign you up now, ask questions later. Prepare to pay upfront if you'd like to see an attorney. And prepare to pay a lot. Big advertising and multiple locations cost big bucks. Saving a gallon of gas, 'cause a clerk's parked at a next-door satellite office isn't worth another 300 gallons you'll pay in attorney fees.

There's another San Diego phenomenon, I call the "how-can-your-fees-be-so-low lawyer."

Now, our prices are among the lowest in the industry. We make bankruptcy affordable without compromising compassionate and responsive service. If you find lower prices, they likely do not entail the considerable scope of attorney representation we offer. If prices you see are too good to be true, you may find that the price advertised was for minimal a la carte service and it'll cost a lot more to get a full entree. Besides hidden fees, excessively low pricing may imply virtual representation by an office-less attorney, a Website-less attorney, a one-man operation that lacks the support staff necessary for a thriving practice. In addition, beware of bankruptcy moonlighters, operations that dabble in a "trendy" area of law. Call it bankruptcy chic.

Bankruptcy law is a mercurial beast. This creature must be mastered and tamed. We are exclusively a bankruptcy law office. I live it day in, day out (except on weekends). It's not just a side job.

What you seek is balance. Dedicated, individual advice from an attorney, comprehensive representation, and a strong support staff to administer your case. I reckon we fit that mold.

I'm your advocate. When you come in for a free consultation with me, I sit with you personally and offer my professional opinion. You will know me. I supervise every stage of your case and appear at your side at the mandatory meeting with the trustee. I am available for legal consultation throughout your case. Pertinent and complex questions are routed to me immediately so I may timely assess the facts. I am faithfully supported by a seasoned, indispensable staff to handle the considerable administrative and fact-gathering duties that are integral to preparing a successful case for you.

It's a cliché complaint: the non-phone-call-returning lawyer. That notion is unheard of in my office. It's verboten and never acceptable.

If you're seeking attorney representation, but would like an attorney's answers before you pay, then give us a call. We offer free, no-obligation consultation with an attorney whose every word is his reputation.

__________________

*You'll find our office in the garden suites of Carmel Mountain Professional Park, located conveniently off the I-15 freeway near the CA-56. We request in-office consultations to meet you in person, but accommodate busy work schedules: we work extensively and patiently by phone, e-mail and mail. We accommodate appointments outside your work schedule.

Call: 858-344-0500 or e-mail admin@abramslawsd.com to set an appointment. You may also visit us online at www.bankonitSD.com

Bankruptcy-sPacific

2010-07-07T13:16:00.000-07:00

Kerry Steigerwalt’s Pacific Law Center (“KSPLC”), formerly known as Pacific Law Center (“PLC”) will now simply be formerly known. It is officially winding down, gearing to shutter. Pacific Law Center has had several fields of practice, including bankruptcy, upon which I’ll focus now. I have a bankruptcy-specific mindset.

The young Center has sustained negative reviews and scandal. The KS was added to PLC (which was less of a mouthful) in 2008. That year, criminal attorney, Kerry Steigerwalt acquired an ownership interest in Pacific Law Center. Though in our context, I note Mr. Steigerwalt is not a bankruptcy attorney. A reason cited for ending the business is its low-money-down and installment plan options. However, I believe problems stem more from the aggregate fee than in the method of payment. Pacific Law Center's been known for expensive bankruptcy fees. In conjunction with minimal attorney contact for high attorney fees, I've wondered why many San Diego debtors sought the Center's bankruptcy services.

Yet, Pacific Law Center has had ubiquitous and pervasive promotions. And they have been on TV. Television: our most revered medium. Or, as Homer Simpson eloquently defended the impact of a television-broadcast, “…but… it’s on TV... TV!”

I’m an attorney who is involved in every aspect of clients’ cases, from initial interview to court appearances. My fees are low and attorney-contact with clients is high. It’s my name there on the shingle and I personally stand behind every action I make and every action of my well-trained staff. We do not compromise our commitment.

Call for a free attorney consultation to explore bankruptcy options: 858-344-0500. Bankruptcy is not a dirty word: it could be the cheapest and best solution to your hardship and the means of better providing to you and your family.

Visit us at: http://www.bankonitsd.com/ or call 858-344-0500. You may also e-mail for an appointment request: admin@abramslawsd.com We're standing by, though not on weekends, 'cause my wife won't let me. But we answer right away, Mon-Fri 9-5 and accept after-hours appointments.

Source: National Broadcast Company:

http://www.nbcsandiego.com/news/local-beat/Owner-Pulls-Plug-on-Pacific-Law-Firm-97506829.html

and Clients' statements.

Additional sources:

American Bar Association:

http://www.abajournal.com/news/article/pacific_law_center_to_close_my_dream_became_a_nightmare_controlling_lawyer_

San Diego Union Tribune:

www.signonsandiego.com/.../pacific-law-center-winding-down-not-adding-clients/

Bankruptcy vows

2010-06-25T16:58:00.001-07:00

I explicitly admonish my bankruptcy clients to apprise me of any potential change to marital status. Hence, if a singleton client suddenly takes a groom unannounced, I get the grumps; and it's not for lack of a wedding invitation.

One common concern with a debtor prepping for both bankruptcy and marriage is that the new spouse becomes liable for the debtor's debt. Not true. Premarital debt is separate debt. But, taking vows does affect the eligibility and outcome of the engaged (or elope-prone) bankruptcy debtor.

Bankruptcy is income-centric. We look to past, present, and future income. The less income you have, the more likely you are eligible for chapter 7 bankruptcy: a 3-month-long process that eliminates debt for $0.00 on the dollar. A single debtor needn't count a fiance's income (except for contributions he makes to her expenses). Yet, a married debtor's bankruptcy eligibility is based upon community income, meaning both spouses' income, even if one spouse isn't filing. A married debtor must count her husband's income as her own. Hence, you might conclude: if the spouse-to-be will increase the debtor's income, why not simply file before marrying?

Because significantly, the bankruptcy debtor's projected income is factored in as well. One must report reasonably-expected changes-to-come in the year post-filing. Hence, imminent or pending nuptials affect the eligibility equation assuming the debtor's spouse-to-be has income.

In conclusion, marital status is material. If you're about to tie the knot while preparing to file bankruptcy,

then you better stop,

look around,

lest your chapter 7 break down.

www.bankonitsd.com

858-344-0500

Speak Softly, but Don't Forget your Stick

2010-06-16T11:04:00.001-07:00

In these United States, the abuses inherent in consumer-debt collections contribute significantly to the number of American bankruptcies. The Fair Debt Collection Practices Act (FDCPA) explicitly links collection abuse to increased bankruptcy filings. The FDCPA was designed to counter creditors' transgressions by subjecting its violators to fines. Yet its penalties are negligble and therefore abuse persists: lies, threats, intimidation and harassment. Only bankruptcy-- not the FDCPA--puts a true stop to collection and definitively eliminates debts.

The FDCPA would empower consumers to request that creditors cease contact. Consumers can speak softly to creditors the statutory words that should halt aggression. Yet, when requests are not heeded, you can't just keep asking. You need to act. You need to explain to those who intimidate. Bankruptcy is an explanation.

Postscript
If you word-search above, you'll find reference to the phrase "consumer debt," i.e. debt related to the welfare of one's self and dependents, rather than business-related expenses. The FDCPA "protects" consumers. Yet, if your debt is from business, you are not likewise protected, even on paper. The distinction throws business debtors (among them self-reliant workers and entrepeneurs) to the dogs.

Post-postscript
Police are legally entitled to lie to suspects in order to elicit confession. You've watched the procedurals. A bad guy's brought in. The men and women in blue have nada: no confessions from conspirators, no solid evidence. So, Good Cop cracks open a Coke can, lays it gingerly in front of the perp, nods sympathetically. Bad Cop growls, we've got your DNA all over it; and your buddy in the other cell-- he told us everything. While lying isn't nice, we make an exception for law enforcement. In the interest of public safety, the end justifies the means. But, is there a public interest in permitting (by way of poor enforcement) debt collectors to lie?

He helps you to understand

2010-06-11T05:53:00.000-07:00

Doctor Robert wasn't his name, but to protect the indifferent, that's what I'll call him. But, I'll start with his son. Growing up, there was a kid I walked to school with. What was he to me? In elementary schools today, peers are all "friends." Educators promote tolerance by suggesting a presumptive bond among kids. Fine, but liberal use diminishes a word. And as for myself, I never overused the word, "friend" and I still don't. So, the kid was a kid I knew. His dad, Doctor Robert, was head of cardiology at a major hospital. Doctors (physicians) make very good money. But this was back when doctors made very, very good money.

Walking over to Dr. Robert's house to see Dr. Robert's son, I'd notice Dr. Robert's car. Now, in bankruptcy petitions we accurately describe clients' personal property. To ensure correct valuation, cars must be graded. We use Kelley Blue Book's terms of art: Fair, Good, & Excellent. Bankruptcy petitioners' vehicles are rarely in Excellent condition, even if the clients would like to think they are. They're generally Good or Fair, though often enough they're Poor, which is off the Kelley chart altogether. Now, Doc Robert's car was what you'd call Poor. A beater. Or what Israelis sardonically call a tarante (tah-RAHN-teh-- and don't forget to roll your r). I wondered why he'd possess such a tarante? I asked my mother, what was the meaning of this? She said the good doctor didn't wish to inspire envy. I wasn't wholly satisfied with her answer.

Years later, while visiting my parents' homestead, I cruised by the doctor's house. The doctor was still there, but the original tarante was gone. Parked in its stead was an Audi. Now, Audi is Volkswagen's luxury brand, but remember: people change less often than they stay the same. See, this wasn't a brand new, shiny, high-performance Audi. It was an old, stodgy (and green-- a bad color depreciates a car more than anything... at least in my Blue Book), dusty Audi station wagon. The doctor would have only grown richer since my youth, yet his car remained humble and below his means. While the eye of envy is green, that eye does not envy a green car.

My mother's answer makes more sense to me now. As a callow youth, I would look down upon the doctor. I don't anymore.

It's nice to drive a nice car. But I see a lot of people driven into insolvency by lust for cars. It's tough not to. Every. Single. TV or radio break features promotions for new and expensive automobiles But with a depressed economy, what debtors could afford to finance yesterday isn't what they can afford today. So, think twice before financing and driving off with that fancy car. Even if you can afford it today, future misfortune can send you driving off again. To bankruptcy.

Fortunately, we've learned that bankruptcy is not a dirty word. There's a way out, if the money's gone and you can't afford your car payments. What was that bumper-sticker phrase Forrest Gump unknowingly coined? I can't say (I mean, I literally can't say), but when Mr. Gump's whimsical tale airs on our violent (but swear-free) airwaves, it reads, It Happens.

It Happens. Economic misfortune, that is. And when It Happens to the honest debtor, there's a way out. If times have hardened and you can't afford your fancy car, you can take a cue from Dr. Robert. Switch to a dusty, stodgy Audi. You'll still owe the finance company more than you can repay, but we're here to help.

Contact us for bankruptcy representation by an experienced licensed attorney. Prices you can afford. Installment plans available.

Web: http://www.bankonitsd.com/

Email for a free appointment request: admin@abramslawsd.com

Call: 858-344-0500 for immediate response.

Bogie and the Nerf gun

2010-05-21T17:46:00.000-07:00

Some harassing-creditors refuse to honor debtors' counsel's pre-petition (before filing of the bankruptcy) cease and desist demands, which quote federal and state fair debt collection laws. The pretext is devotion to protecting customers' privacy.

They advise that no information on the customer shall be divulged absent a notarized Power of Attorney (POA) given by the debtor-customer to her counsel. And by the way, we're gonna keep on contacting the customer, so nyeah-nyeah-nyeah-nyeah-nyeah.

To paraphrase Alfonso Bedoya's opinion on badges delivered to Bogie in The Treasure of the Sierra Madre, I say, "POA? We ain't got no POA. We don't need no POA! I don't have to show you any stinkin' POA! "

And so we respond, if not in so many words. The legal squabbling that ensues is a subject for another day. Today, I simply illustrate the anemic quality of the fair debt collection acts. Consumers' demands of creditors to stop! are routinely defied; the collection acts are like that Nerf-gun my boy has. With a satisfying pop! it launches foam bullets with velcro heads. They stick to your shirt. It's a blast. Really. But the Nerf rounds don't do much damage... 'cause they're Nerf rounds.

Bankruptcy is a mortar. It has creditors walk the line. If you stop short of the big B, creditors will just peel off your velcro grievances with that __________(insert onomatopoeic word for velcro-removal; I can't think of one) sound.

Tired of creditor harassment? Call us. We can help. 858-344-0500

www.bankonitsd.com

The Things that Go Bump in the Night

2010-05-09T20:19:00.000-07:00

I settle in my reading spot. In my hands, a hardbound in a cellophaned dust jacket, library initials stamped on its fore edge. It's a short-story collection and it's by Stephen King and it's my yield from my wife's last book-borrowing run. I vaguely recall morning dialog, Robin asking me to choose my poison from the fiction stacks. She was heading out to Reading Time for the wee one. I shrugged, distracted, multitasking with a shaver and a toothbrush (it never quite works). Dunno, pick something I'd like.

I approve of her pursuit. Library books are free. Free is an excellent price

Later, I picked through volumes she had brought. After weeding out female detectives and female sleuths, I found the book by King. So here I am.

Haven't read much from the "Master of Macabre" since I was a wee lad. I recollect a time reading one of his titles, a bestseller about zombie house pets. I had a house pet at the time*, so I could relate to the material, but I related even more when my house pet died before I finished the book. No, it wasn't ironic. Stop abusing and misusing that poor word! But it was coincidence and after it happened, I was a little less eager for his next paperback to publish.

So here I am.

King's anthologies of novellas or short stories routinely commence with conversational Introductions by Uncle Stevie**. Therein, the avuncular King confides in his Constant Reader*** the context and inspiration from whence sprung the stories you're geared to read. They're homey and conspiratorial preambles, just you and he, on the porch with a couple of cold ones.

And the intros are peppered with a writer's personal vignettes, such as the following.

In the mid-1970s, King wrote a book about a telekinetic high school pariah****, which they made into a movie, that then sold the book, and soon he was earning gazillions of dollars writing about the things that go bump in the night. But in the early 70's, King and Mrs. King were living hand-to-mouth. One day in 1972 (King confides), he came home from work to find Tabitha (Mrs. King) seated at the kitchen table on which table lay a pair of garden shears. And a credit card split into 2. Mr. King was instructed to relinquish his own credit card, which he did, because he was a good husband. Said card was summarily snipped apart. And though (he confides elsewhere) he later battled with worse demons than credit (gazillions of dollars don't always solve our problems), on this occasion, King faced the credit devil and won.

_____________

*Mine was a dog and it was a dog because I didn't know any better at the time. It's the sorest of subjects with my cats of present day. I don't know why I ever told them about it.

**What he calls himself

***What he calls his readers (or at least the faithful ones, who don't skip the Introductions)

****Carrie

The Law Office of Asaph Abrams. Visit us at: http://www.bankonitsd.com/ Call us at: 858-344-0500

A consumer bankruptcy law firm. We are also a federally-designated debt-relief agency.

Big Bob's Lemon Tree

2010-04-28T21:51:00.000-07:00

There’s a man up our street, we call him Big Bob, ‘cause he’s big and we don’t know his last name. But really everybody calls him Big Bob: that’s how we were introduced. Now, Bob’s garage is crammed full of tools, and that’s a good thing. You can count on Bob to have the part you’re missing. The other week, there was trouble; trouble with a combination lock. Either it was stuck or its permutation of letters had spontaneously reset. Helpless to open it, the sports bin it shielded was off limits. The sports bin being the repository of all form of balls, rackets, gloves, flotsam and jetsam. Robin dispatched the boy to Bob’s house and the lad summarily returned. With a can of WD-40. Perhaps the lock was rusted shut? The child was sent back with the can unused. Even a lawyer’s home will store some of that resourceful lubricant and try it in a pinch first, before searching for salvation. Okay, it wasn’t tried first. But as it were, when our own WD-40 was produced and sprayed, it failed its task.

Our eldest then returned with the big man, who carried a saw. It took some serious application, but Bob defeated the lock. Now, we abide by the rule of reciprocity. Fortunately, Big Bob’s garden needs tending. The boy is well-suited to weed-picking and Robin happily and readily lent his services. Though, the youth questioned why all the trouble if he could not then access his ball and bat?

And when the boy returned at dusk, dirt packed beneath his nails, he carried a hefty bag of lemons from Big Bob’s tree. Not a sweet dividend, yet still good recompense.

The above dramas unfold during the day whilst yours truly pores through bankruptcy petitions, bankruptcy cases and bankruptcy codes, counseling clients, delegating what he doesn’t want to do himself. I'm regaled with the tale later, though, and I think it’s good there are guys like Big Bob.

All's Well that Withdraws Wells

2010-04-25T20:08:00.000-07:00

Desert backdrop. Stagecoach silhouette. Driver at the reins, comrade beside him, shotgun in hand, risking the elements, highwaymen, and their scalps to escort your hard-earned funds to the next safe vault. The name's spelled in that font used for movie-Western titles, colored in yellow on red, no less. [Yellow and red: the classic fast-food (and Denny's)-logo color scheme, the Pavlovian bells of restaurant signage.] Combine the images and nothing's more wholesome: it's John Wayne eating a Big Mac and securing your deposits. It's Wells Fargo and its corporate symbol is pure genius.

But that was then, this is now. Riding shotgun used to mean you carried one; today, calling it's just a goofy way to get front-passenger dibs. Let's deal with now.

In Bankruptcy Land, Wells Fargo causes trouble and here's why. Once the chapter 7 petition is filed with the court, the petitioner's property becomes property of "the estate." The estate is your stuff: your known, unknown, contingent, present, future and sometimes even past property and interests. When you file your petition, nobody physically snatches your property, but your property is technically relinquished to the estate, which is owned by a trustee assigned to your case. The trustee becomes the custodian of your property and must determine if your property is finally yours to keep after the bankruptcy. If he or she reckons you have excess assets, then the trustee has the right to sell the property with unreasonably high value, and distribute the proceeds to your creditors. But no fear! The process is not arbitrary. We know what's safe and what's not; we work to ensure you escape potential loss. Usually within a month after we file your chapter 7, the trustee will have made a decision. She'll typically have assessed your property, found we've applied the necessary law to protect it, and she'll abandon her custodianship: the property is then officially yours, once again. It's really no sweat.

Now, until that determination is made, your property must be kept safe: otherwise, creditors might be denied the yields of liquidation. Thus, the trustee requires that throughout your case, you insure your home, car and business. She also expects that your property not vanish. Fair enough. But what happens with property you own that is held by someone else... say your deposits with Wells Fargo?

Cash you have in the bank is part of the estate and the estate is supposed to be preserved for the trustee. Still, after your bankruptcy petition is filed, you must continue to use your bank account. You will withdraw, deposit and conduct your regular transactions in good faith. Yet, if you had, say $50K deposited the date of your filing, then the trustee would expect to claim a good chunk of it. That kind of sum can't just vanish.

Wells Fargo fears liability for the vanishing 50K. Therefore, its policy is to be a custodian for the custodian (trustee). If your balance on the date of filing is around $3K+, Wells will freeze it. All of it. Not even a fiver left to buy lunch. Wells will release the funds only upon the trustee's approval, which could take a month or more. This will happen even if the $3K would be clearly exempt and would clearly be released later by the trustee. If all your money's in Well's, well....

If all your money's in Well's frozen like peas, then you might consider yourself... a stagecoach driver. 'Cept, you're the driver sprawled on the desert floor, six horses and shotgun rider stuck with arrows like so many pincushions. Left for dead with no horse, you'd be starving. Like the bankruptcy debtor who can't pull bills from the ATM and can't buy a loaf of bread.

Though, I guess you could eat the slain horses.

If the freeze policy must stick, then it must also be modified: some funds should remain. If there is 50K in the bank, then freeze 40; not 50.

Is the freezing proper? Wells Fargo cites its case law authority: In Re Calvin and In Re Jimenez; we cite other precedent. In In re Mwangi and Mwicharo (I'm not the one to voice grievances when it's time to pronounce), the Court understated, "Upon reflection, several elements of Wells Fargo’s policy are puzzling... " Will the Supreme Court bother with this trifle? Dunno. But till then, the question remains: who asked Wells to "assist" the trustees anyway? I don't believe the majority of trustees did. Other banks don't follow suit and no one is prosecuting them.

Wells Fargo shoots itself in the foot: it loses liquid assets. Our clients are instructed to empty their Wells accounts before we file: this is the only means to preclude arbitrary freeze. Some of the clients simply close their Wells accounts for good. Consider that children routinely bank with their parents' institutions. Thus, future customer bases are dumped. Wells may be losing lotsa, lotsa money. Nope, it doesn't makes sense. But then, banks have been known to make mistakes... one reason why bankruptcy's on so many tables right now.

What is next? Will your home valuables be placed in similar limbo, commandeered and stored in trustee storage till the estate is abandoned? Probably not; it's easy to freeze bank accounts, but go freeze your rare stamps.... Still... slipperier slopes have happened.

Is Wells the only one? Union Bank has an even stricter policy than Wells. There's no apparent threshold amount that triggers their freeze. As with Wells, this policy will cause losses for Union. Not good: they lack even a compelling logo to fall back on and they're tremendously unpopular in the South.

What have we learned today? Empty your Wells and Union accounts before we file your bankruptcy (don't count on a $3K threshold). Since other banks could potentially adopt the policy, it's simply better to have cash-on-hand reserves no matter who your bank is. Additionally, if you bank with a company you owe money to (e.g., holding a checking account with Chase, while you're past due on a Chase credit card), then seek a different bank.

This isn't legal advice and it's strictly opinion that doesn't address your specifics and details

Visit us at http://www.bankonitsd.com/ for more information OR call 858-344-0500.

Call me, call me anytime

2010-04-16T20:28:00.000-07:00

Lots of things come in threes. Stooges. Little birds on my doorstep. Sheets to the wind. And the stages of collections. Stage one: your creditor calls you to demand payment. Stage two: your creditor sells your debt to a collector. The debt collector will call you, call you anytime until your phone is not your phone. Stage three: a creditor's attorney will summon you to court and it's judgment day. Bankruptcy stops the collection at whatever stage it stands.

Now, it takes time to file for bankruptcy. There's no Drive Thru, no combo #7 or combo #13 on a menu and it's not done at the push of a button. So, what is your part, Dear Client? The granting of bankruptcy relief requires the petitioner to provide detailed documentation and information. While the attorney directs the client as to what's required and provides the legal know-how, analysis and application, only the client can access her own financial and personal records. Some documents you may possess readily; others might evade you. There may be some hunting and gathering in store. Some homework, that's all. You're seeking a powerful remedy through bankruptcy and it takes devotion to the task. But until the homework's done and corrected, so we can file your petition, the creditors may continue to harass you, threaten and lie (with all kinds of nonsense like tellin' you you're going to prison. Fa!). Yet, once I represent you, they can call me, call me anytime. Thus, we can help during the preparation process, even before that petition has been filed with the court.

We provide a letter to creditors that spells out in no uncertain terms that further contact with you is a definite no-no. Further contact with you is subject to prosecution. Further contact is definitely uncool. So, when referred to me, creditors may call us to verify your representation. This is strictly unnecessary when my letter already spells that out. Originally, when called, we'd be patient and all, but this was generally rewarded with the same sort of ugly condescension and rudeness our clients would suffer. I don't take to rudeness. So, we've honed down to a science a supremely succinct stock response to creditors who call to verify what's already been said. I won't give you the script, but if it takes my staff a second over 10 seconds to say, then that's a second too much. The conversation must be ended before it's a conversation, because the creditor will want to know more than the creditor is entitled to know. We preserve our clients' confidentiality and what happens in my office stays in my office.

The Law Office of Asaph Abrams is a federally-designated debt relief agency. I am an attorney at law who helps people in debt with no way out. They're in quicksand; I lend them a rope. Okay, they buy the rope, but it's pretty good bang for the small amount of bucks.

www.bankonitsd.com

Bankruptcy relief you can afford. (But you still have to do your homework.)

Fatal Error: Dawdle Not!

2010-04-09T16:29:00.000-07:00

Put off till tomorrow what isn’t due today. That is the student’s motto that accompanies nights of dorm room revelry, late-night debauchery. All splendid till the sleepless night-before exam cramming and sweating. But it works out in the end, even if it takes a toll. But in real life, procrastination is fatal. For the lawyer, there are no kind professorial extensions. Only a swinging gavel, an executioner’s axe if you’re late. If you’re late, you’re history. So I’m never late. But alas, it pains me to say that sometimes a client delays.

In chapter 7 bankruptcy, attorney fee payments are required in advance. A debt to an attorney would be discharged once the bankruptcy is filed; the attorney would have to close shop; he'd be unable to help anybody anymore. Many clients don’t have the ability to pay even our modest fee in a lump sum. No worries: we provide easy, convenient payment plans. We are not a debt collector, no siree! However, we deliberately adhere to the installment plan’s schedule so that we can timely file the bankruptcy petitions. This inures to the client's benefit. Yet, sometimes the client delays in payment, because it's tempting to put things off till the conceptual tomorrow. But this is perilous. Filing for bankruptcy is preventive medicine, it is the rotation that keeps the tires turning, the jog that keeps the heart pumping. As old Dick quoted in his eponymous Poor Richard’s Almanac: a stitch in time saves nine. (The almanac was Benjamin Franklin’s pseudonymous compendium of maxims and good stuff. Okay: no more “onymous” words, I promise.) Often, there may be greater costs if the bankruptcy filing is pushed out. Example?

Take Horatio. Here’s what transpired when he opened his door:

Horatio? Horatio Alger?
Yes.
You’ve been served! [papers are shoved in Horatio's face]

Now, he may be plucky, but Horatio is still shocked. And that’s a typical service of process. It’s also what I call stage 3 in the three stages of debt collection. Stage 1: creditor harassment. Stage 2: collection agency harassment. Stage 3: lawsuit. Before they know it, even clients who have signed on with us well in advance get garnished and find judgment liens encumbering their real property. Delay is a dangerous path and ultimately it causes undue expenses and stress.

But payment's just one part of the preparation. There is homework! And you thought school was out forever! As a standard industry requirement, we must ask our clients to provide a healthy dose of information and documentation. While we provide the legal know-how, only the client possesses access to her own financial affairs and records. It requires prompt diligence and attention to give the attorney what he needs to help you. Help me, so I can help you. Pretty please.

Best,

Asaph

Bankruptcy Agent Man

2010-04-03T14:25:00.001-07:00

Now this is an interesting bit of business. The Federal Bankruptcy Code defines debtors' attorneys' practices as "debt relief agencies." Thus, bankruptcy attorneys must publicly disclose the obvious: that their business is debt relief. You'll find such a disclosure on my Web site, if you care to visit. This turn of phrase establishes that bankruptcy is necessary, not gratuitous: it is relief, not reward. It's a break, not a guilt trip.

But "debt relief agency" certainly sounds goofy. I'm no agent, man. And the slippery slope of Congressional coinages gives reason to pause.

* * *

I went into a dream during the crash between morning coffee and early-afternoon coffee. For some reason, Yul Brynner stands behind a congressional podium and declares:

So let it be said, so let it be written, the House shall decree that offices of

1) Divorce attorneys disclose they are "fidelity relief agencies;"

2) Angeleno lawyers-to-the-stars disclose they are "tabloid relief agencies;"

3) Criminal law attorneys disclose they are "prison relief agencies;"

4) Unlawful-detainer attorneys disclose they are "tenant relief agencies;"

5) Attorneys who incorporate companies disclose they are "liability relief agencies;"

6) Immigration attorneys disclose they are "deportation relief agencies;"

etcetera, etcetera.

We could go on, but it's getting tiresome, the horse is dead, and it wasn't that clever to begin with.

Postscript:

So, I finished my draft, then moseyed down to the park with Robin avec les enfants. I mentioned this premise, but she asserted the language "debt relief agency" has a good ring; a positive impression. Oh well. It's been written, so let it be said: I'm sending it to cyberspace.

Click "Publish."

Post-postscript:

Don't worry, I don't really go into those kinds of dreams. Unless I run out of coffee.

Newz from Munoz

2010-04-01T12:38:00.000-07:00

I suppose all of life is mutable; can't claim law's special in that respect. Medicine advances, technology transforms, art adapts to tastes (or tastes adapt to art): everything changes. Some changes are good (the 2005 Ford Mustang), some changes are poor (the 2010 Ford Mustang: a new bulbous derriere?) and some changes are wanting, as in an end to vehicle spoilers: take ye car wings and get the flock out.

Law is fluid and in Bankruptcy Land there's no ground for complacency. Know that a change is always gonna come. Here's one change, but first you'll suffer some preamble.

By now we've learned the basic difference between chapter 7... and chapter 13. (Can't stop my compulsive Jack Bauer clock-reading pause). In the former, you discharge debt sans payment. In the latter, you commit (an often small) monthly payment, usually pennies on the dollar of your debt. Today we talk thirteen, chapter 13. For your consideration, the curious case of Benjamin Barrette. Ben's pappy had built a local barrette factory: he made the finest domestic clasps to pin down ladies' hair... and yarmulkes. But such a domestic product could not survive the modern global economy. Benjamin failed to sustain the barrette business and fell heavily into personal debt. So he swung by my office back in December 09. We shook hands, confirmed the weather conditions and I waited to listen. For a good while we just ended up discussing how life could be pretty backward sometimes. Ultimately, talk turned to bankruptcy: Ben needed debt relief. He'd come to the right place. We considered chapter 7 bankruptcy, but despite business woes, Benjamin's income remained pretty high. He could not qualify for chapter 7 debt relief. We turned to chapter 13: a 60-month payment plan that would be fair and manageable: he would pay what he could and 5 years later, he'd be forgiven the balance of his unpaid debt. But we hit a stumbling block.

A person cannot do a chapter 13 if his debt exceeds certain thresholds. As of April 1, 2010, one is not eligible for chapter 13 relief if one's unsecured debt is equal or greater than $360,475; and the limit on secured debt is $1,081,400.

You'd think it wouldn't be a frequent issue: those are pretty high limits. But in this downturn, it is not uncommon that persons' unsecured debt equals or exceeds $360+. However, the definition of unsecured debt is determinative.

Mortgages are taken out as secured debts guaranteed by the lender's lien on the debtor's real property. However, the security interest is compromised by the property's depreciation. In our case, Benjamin's home is worth $300K and the mortgage is $661K. The mortgage debt is essentially bifurcated: $300,000 of the $661K mortgage is secured, and $361 has become unsecured. If that unsecured portion is counted toward the unsecured debt limit, that would preclude Benjamin's chapter 13 bankruptcy.

Thus, it appeared we had fallen between the cracks of chapter 7... and chapter 13. Which reminds, me Jack is on tonight and even President Obama is watching. But....

In mid-January 2010, I picked up the horn and buzzed Benjamin. A significant decision had been rendered in In re Munoz, a S. District of CA case. The Court ruled that in the case of a partially-secured mortgage, all of that mortgage would count as secured debt. Thus, Benjamin would owe $661K in secured debt, well within the chapter 13 threshold. We went ahead and filed the chapter 13.

Note: suppose Benjamin's $300K home had a first mortgage of $350K and a second mortgage of $361K. The entire $350K primary mortgage would count as a secured debt. However, the entire junior lien would count as unsecured debt and would yank Ben out of chapter 13.

We know by now from my many past disclaimers that this too is not legal advice. Moreover, it's district-specific. It should not be relied or acted upon, since exceptions may apply.

Bankruptcy Blackout

2010-03-29T11:58:00.000-07:00

Blackouts are nifty for kids, 'cause of quaint candlelight and that spooky effect of illuminating one's face with one's flashlight. But it's near-Spring and we're in a safe haven between winter-storm outages and air conditioner strain. Lights are on.

I have blackouts on the mind 'cause I'm in a holding pattern of scheduling and head-scratching. I have 30 or more cases ready to file and I can't press Go. Why is that? When I file a bankruptcy case, I get notice of a scheduled mandatory meeting of creditors that takes place about a month later. Both attorney and client must appear at this meeting that's an interview with the assigned case trustee. But what if you have a planned day of absence about a month after the time you're to file? A sole-practitioner lawyer who knows his clients and who's there personally for them, needs to be able to black out a day or two for conflicts: I don't want anybody taking my place if I'm not available for an appearance. Unfortunately, the Bankruptcy Court calendar system does not permit the blacking out of certain dates. It's a function of precluding trustee shopping: meetings of creditors are set randomly by computer, but as calendars begin to fill, we're able to check which trustees occupy which dates. If black-outing is freely available, attorneys might routinely rule out dates when their less-favorite trustees are on calendar. It's very much a game of rolling the dice, then hopping one's shoe or thimble from square to square. The bankruptcy counsel planning a date to drive downtown to the meeting is a game token looking for Free Parking (or an open downtown meter) to lay hold of that community pot of dough: the crisp multi-colored bills, the Monopoly board reward of a favorite trustee. So to avoid suspected trustee shopping, there are no opportunities for scheduled absences. You have to wait until the conflicting date's calendar is filled. And so I wait.

At least, I believe that shopping preclusion is the rationale that would prohibit blackouts. After all, the solution seems handy: a quick tinkering with the machine and attorneys forced to black out could be pushed out beyond the currently-visible calendar. They'd be scheduled for a time frame in which all seven chapter 7 trustees hold meetings and they could land in any spot.

Now, shopping is my least-favorite occupation. And fussing over trustee selection is no exclusion from this retail aversion. It doesn't matter a whit to us. The trustees have different styles and different requirements. But that's all right. I like some variation in my job. And I think of the Boy Scouts. Well, my brothers had done it, but I never joined the Boy Scouts, myself. Never earned those patches for mile swims and CPR and stitching. Never parked my butt fireside with peers and a scout leader, a flashlight held under my chin shining up my face. Still, I subscribe to one Scout tenet: always be prepared.

So no matter where we fall in the case trustee lotto: we prepare for the meeting. How? Paperwork.

This is where our clients will appreciate our strict instructions for providing supporting documentation. Those documents are routed directly to the trustee. And the trustee wants her documents well before the meeting takes place. So going the extra mile (no need to swim it, we'll guide you by phone or e-mail) with those papers pays off when your meeting concludes in the blink of an eye. 'Cause it's been done right by you.

* * *

I'm still scratching my head, 'cause one matter remains unresolved. See, the Boy Scouts, they don't sell cookies. And that's unfortunate. I don't think there's anything unmanly about associating with cookies.

Tales of Two Cats

2010-03-25T11:28:00.000-07:00

Breathing it, drinking it, bankruptcy is all-day air and fuel for the practitioner. At our Twitter site, we gravitate toward the so-called off-topic remarks. Can't properly cover median income, chapter 7, and second-mortgage lien-stripping with a 140-character cap. But Twitter's a perfect outlet for occupying one's digits at the red signals with mundane observations of interest to few.

Professional blogs are not necessarily the sole province of shop-talk. It's good for the mind to ramble and steer from the designated topic of insolvency and debt relief. Let me speak of Roger Ebert, film critic, now viciously disfigured and rendered mute by that bitch, cancer. Now, Rog and I have had our arguments: I pointed out that a bare-torsoed Paul Newman picture on his site featured the wrong caption: it referenced the title character of the prison-flic, Cool Hand Luke, insead of Ari Ben-Canaan, the protagonist of the film, Exodus. Rog semi-conceded the point. However, his editor promptly resolved the issue by cropping the photo so you could no longer see the Star of David on Newman's chest (Luke wasn't Jewish; Ari was), and leaving the caption as is. That all transpired when Newman, a great philanthropist, passed away. Where was I?

Right: so Ebert is a Pulitzer Prize winner. Now that's not the comparison: my greatest blogatory aspiration is that my wife might read my drivel when the most indulgent of moods strike. The comparison, rather is that Roger likes to go off topic. He blogs like a madman and it's not all movies. Politics, religion, family: everything goes. He has lost the power of speech, but not the power of language. Thus, this rambling preamble leads to today's topic that's off topic: cats.

On our first date, I asked my wife about her house pet status. She related that there were felines. Two felines. "You have TWO cats?" Now, I wasn't fearful of strange cat-lady issues. Strange cat ladies aren't foxy. Instead, I was thrilled, 'cause I like cute and furries. I mean I'm not obsessed about 'em, I just think they add nicely to the background, roaming from one sun spot to another, sleeping like sleep's going out of style: an enviable life.

If dogs are a hunter's companion, then perhaps cats are a bankruptcy attorney's province. For some reason, I see colleagues of mine with this same type of animal ownership. I've had dogs before: golden retrievers who respectively died violently or succumbed to that awful hip dysplasia that attacks this cute and dim breed. That made me sad and I'm over dogs. I'm paranoically private about my people, so the point of this piece (while chewing a PB&J during my self-alloted 30m lunch break) is to compensatorily relay a bit about my animals, my cats.

Cats aren't perfect. In fact, they're probably from outer space, here visiting, observing and reporting to the mother ship when the Planet Earth might be most vulnerable to hostile takeover. But until then, we sort of tolerate them and they sort of tolerate us.

I call them The Guys, though one is male and the other, female. Onyx, our male, is a Bombay cat, predictably named for his color. He's soft and plush, and our toddler likes to pin him down with coercive snuggles. He's just a stuffed bear that softly purrs with accompanying dollops of drool.

At some point, my wife had left him to his own feeding devices with an automatic kibble dispenser. He demonstrated poor self-regulation and gained generous proportions. I've since improved the situation. He's no jacked-up pickup, but he's no low-rider either and he's been commended by his loved ones for much-improved clearance to floor. Onyx has emotional problems: he occasionally drags blankies and whimpers. It may have to do with his mutilation. At a tender age, Onyx padded outside to find a healthy pack of raccoons helping themselves to his outdoor food bowl. Onyx figured, share and share alike and nudged himself in. Now, raccoons are routinely considered members of the cute-and-furry animal group, but it's not an accurate observation. They are a vicious thing, chock full of chutzpah. If I once felt bad about the raccoon tail hanging off my boyhood Indian headdress, then no more.

Apparently, they couldn't all be friends, as one of the black-eyed interlopers promptly bit off Onyx's tail.

Onyx had once sported a luscious piece of tail. Now it's a nub and so it goes. If it's any consolation, a local yokel obtained the sheriff's O.K., took his rifle from the closet, and happily blew off the racoons' heads.

The second cat is Snickers. Snickers are the kings of candy bars. While Three Musketeers have their nougat, Mars, its added caramel, and Baby Ruths toss in peanuts, the Snickers bar possesses all the above candy bar elements. The chocolatory earth, wind and fire. Snickers, the cat is a pound-purchase who was nary a pound: a barely survived preemie. She's scrawny, but she has a tail: the perfect tool to waive and slap and taunt her tailless brother. Snickers' claim to beauty is a function of textile shortage. Her divine seamstress apparently exhausted her patterns: our furry girl shows a tortoise-shell back and a calico belly, an odd 2-for-1 design. Naturally, she doesn't possess the normal arrangment of body parts. She is a Hemingway cat: you'd count six fingers on each Snickers forepaw.

There's more to be said, but it can't be that interesting insofar as my proofing of the above has put me into slumber. As I finish my ode to my aging Bombay and Hemingway, I simply think I will miss them when they're gone. I'll remember the good times; forget the blanket-dragging, the tail-teasing, the furballs, and the litter. Well, maybe not the litter.

Nice to trek out of Bankruptcy Land. But we'll be back to business before ya know it.

Copyright 2010 Law Office of Asaph Abrams www.bankonitsd.com
Free bankruptcy consultations: call 858-344-0500. Personal attention by your attorney, prices you can actually afford.

Sookie's CMI Part III

2010-03-21T13:31:00.000-07:00

Recap: CMI is unrelated to the slightly-different acronym on the backs of the windbreakers of those guys on TV. You know, the all-in-one lab-geeks-slash-witness interrogators-slash-quick-on-the-draw-in-a-shootout, Crime Scene Investigators. They certainly do it all, the intrepid Sin City scientists-with-guns, every Thursday night on the eye network, CBS. Which stands for Columbia Broadcasting System, though usually people assume the C is for Central.

Where was I? Right, CMI. Current Monthly Income. But that tells you little, because here in Bankruptcy Land, things are not what they seem and words are not what they mean. Current Monthly Income is the Congressional coinage for a particular look-back period. When we assess your eligibility to file for chapter 7 bankruptcy, we look at your past gross income, specifically the six months prior to the month in which you file your petition. And the average monthly gross for those past six months is called Current Monthly Income. Makes sense, doesn't it? No, you're right, it doesn't. Not only that, but a lot of people confuse it with crime shows on the telly. But there is method in the madness.

Eligibility to file for chapter 7 bankruptcy is income-centric. If you're rolling in it, then you can pay back your debts. If your income is low, then maybe you need a clean slate so you can build a future, not wallow in the quicksand that is debt. Fair enough. The confusion arises when the debtor loses her job. Example? Sure.

Asaph Abrams asks his potential client ("PC" in lawyer-speak or "Apple" if they boot faster), Sookie, what her income is. She replies, it's only $1000. This is her consideration from a monthly moonlighting gig. Sookie asserts that she knows she qualifies for lucky number seven. But she's not exactly right. Yours truly learns that Sookie just got terminated from a very well-paying waitressing position. A patron's paw went wayward and Sookie slapped him good. The lascivious barfly wound up in hospital (Brits omit "the" in that phrase. I'm not an anglophile, but I'm all for economy). It wasn't Sookie's hand that caused the damage, it was the hot chili bowl she dropped in the slapping process. Injuring the customer isn't good business, so Sookie's employer let her go. And here she is.

I ask Sookie what her average income was before she got fired. She says, $6,000 from her waitressing and her moonlighting, combined. Now, that's well above the single-person median here in Cali. If you're above the median, you don't proceed to attempt your chapter 7 just yet. You move on to step 2, which entails expense-analysis. Sookie's home was foreclosed upon a while back and she's been renting a single room for cheap. She drives a beater she bought for cash. She has no special medical needs at present. In short, Sookie's budget for the prior six-months would have enabled allocation of funds to repayment of her debt. When the debtor has significant disposable income, they're expected to direct it to a chapter 13 repayment plan rather than discharge it gratis in a chapter 7. But that's then and this is now. There is no money for a chapter 13 for Sookie. Nevertheless, bankruptcy law holds Sookie to her past income in calculating eligibility. Is there method in that madness? Yes. How so?

It would not be equitable if a six-figure earner could wipe out all debt the moment she's laid off. You could argue that the past is past and bankruptcy should address the present. But, the rationale of looking back is that prior income is an indication of one's earning potential. Before granting the presumptive privilege of a fresher chapter 7 (as opposed to a mere fresh chapter 13) start, the debtor is given time to restore that proven ability to earn. If the past was not considered at all, debtors could abuse the system by "losing" employment on Friday, filing bankruptcy on Monday, then "regain" employment once a discharge is granted. The six-month period in which one's average income can decrease is arguable a necessary trial period. Pursuant to an above-median job loss, are you really a below-median earner or is this a fleeting setback?

Problem is, workers are not rebounding easily in these hard times. Consequently, the period of decreasing past average-income is a state of limbo. It is expected that one diligently seek employment for the purpose of repaying one's debts. But the CMI formula triggers a dilemma. When handed a rifle, you need choose: replace it in its scabbard, or blow your foot off. A footless life is difficult to traverse. In reality, this dilemma is not likely. In hard times, it is difficult to regain employment before the average past income would fall below median. If Sookie doesn't get a replacement job in 3 months, then at that time, her average gross income will have fallen below the median. She'll presumptively qualify for a chapter 7. Note, that presumptive eligibility is not conclusive eligibility. There are always exceptions.

Whoa, stop! What if you don't have the "luxury" of waiting to file? What if debt's hand is snatching your earnings by way of garnishment: a quarter for every dollar you earn? In that case, you can still file, notwithstanding the inconsistency between present income and your Current Monthly Income (CMI), which is the average for your past six months. But, you'd have to rebut the presumption that the CMI income should determine eligibility. You'd argue that present circumstances should dictate your treatment. Rebuttal implies an uphill battle. But sometimes we must rebut.

So that's the eligibility question. Or at least one facet. Myriad considerations get mulled over before you file for bankruptcy. In these blogatory spacial confines, I won't attempt to touch more than a pinprick on the tip of the bankruptcy iceberg.

Now, what happens afterwards, once the petition is sent on its way? What about going to court?

The debtor rarely goes to court in bankruptcy and that's a good thing. But you must attend a Meeting of Creditors... which is a meeting where creditors do not appear. Mostly. Thus, I give you another bankruptcy misnomer. Because here in Bankruptcy Land, things are not what they seem and words are not what they mean. And of the Meeting of Creditors, we'll talk next week.

The above is not legal advice. It doesn't address specifics and nuances and it shouldn't be relied upon. Median income and other figures and benchmarks change frequently. It is strongly recommended that you seek local legal counsel in contemplation of bankruptcy. For more information, visit us at http://www.bankonitsd.com/

Cake Idiom

2010-03-19T12:56:00.001-07:00

Cakes feature often in popular metaphors and similies and they're also delicious.
Chattels sell like hot cakes and clueless monarchs suggest the hungry substitute 'em for bread. In Bankruptcy Land, the phrase of choice is to have one's cake and eat it too. It's a confusing proverbial corruption: it reads like a redundancy given that having something is synonymous with eating it. Syntax is everything. Back in the sixteenth century, which was a good century for English, it read more clearly, wolde you bothe eate your cake, and have your cake? That lovely phrase translates more clearly to convey that after you've eaten your cake, you can't expect it to remain yet uneaten on your plate. In Bankruptcy Land, this comes to play in the assessment of assets.

Chapter 7 bankruptcy is called liquidation. The debtor's property is liquidated for the purpose of repayment of debt. The Bankruptcy Code does not lack for words, yet apparently space ran out in this instance. A single apt modifier was cut: possible. Chapter 7 bankruptcy is possible liquidation.

California has a bunch of nifty statutes that exempt (exclude) a finite amount of property from liquidation in chapter 7 bankruptcy. Thus, you can eliminate debt without losing the shirt off your back. But within reason: you won't find them in MY wardrobe, but there are some awful expensive shirts out there.

Occasionally, I have to quote the cake proverb to a client. When you stroll through my door, you'll be handed a clipboard with a brief questionnaire clipped to it. In one column, said questionnaire will ask that you list your secured properties. In a corresponding column, you'll list the balance on the loans for those assets: this would be the payoff on a mortgage or the payoff on a car.

It's happened that the payoff line for a very, very expensive home or car was left blank. I assumed it was oversight, but sure enough, the asset was a paid-off property. That's bad news. Say, for example, you have a $600,000 house owned free and clear. In your case, bankruptcy would not benefit you if your debt is limited to $50K. The house would be sold, the debt would be paid and then some. The trustee liquidating the property would collect a surcharge after she paid your creditors from the sale proceeds. In practice, this revelation results in an awful brief consultation. But the not-to-be-client has learned something and it cost them nothing. It cost me something (time and expense), but from the circumstance, I did get to mutter, wolde you bothe (which is fun to say) AND I got a blog out of it. Also, it got me thinking about cakes and cakes are delicious.

Note: this is a vague illustration and it applies to California law only. Filing for bankruptcy without seeking legal counsel can be pretty, pretty bad.

Sookie's CMI Part II

2010-03-11T19:36:00.000-08:00

Sookie waits tables in a little town. She's the kind of waitress that knows what you're gonna order before you order. She makes about $4000 a month, give or take. Now, some moonlighting opportunities knock. See, Sookie's a superior judge of character. An area sheriff named, Eric frequently taps her, for reading criminal minds in interrogation. Eric recompenses to the tune of $1000 a gig and Sook averages a gig a month. For the last half year, S's gross income has averaged $5K.

Now, the Census bureau shows that for singletons like our Sookie, the median gross income is just under $4000 (this changes frequently, so don't count on it). That means half the state earns less than she does. Half the state earns more.

Sookie's a woman who is prone to injury. She's a bit of a scrapper, believe it or not, 'cause sometimes the unsavory sort frequents her pub. With no medical insurance and regular rumbles, her hospital bills have piled high. It's a mountain of debt and she calls the Law Office of Asaph Abrams to request a free bankruptcy consultation.

Thing is, in order to presumptively qualify to file for a chapter 7 bankruptcy, her income must be below the median in California. It ain't. (That's affected bad grammar, btw.) So her prospective attorney produces his trusted (generic Staples) calculator and starts crunching the numbers. He takes S's gross income, deducts her necessary taxes, social security and other dues, and subtracts local standard IRS allowances for what she "should" be spending to live.

He then deducts her actual prospective healthcare expenses and some other fact-based figures. Finally, he figures in her mortgage, property tax and home insurance (why the wood and drywall is insured and Sookie isn't, I don't fathom). After taking all those "allowable" deductions from her gross income, her prospective advocate yields the number $100: that's what's supposedly left at month's end for Sookie to pay back her debt. That figure is considered to be negligible. It doesn't justify setting up a chapter 13 payment plan for ol' Sookie, which would have her pay back $6000 over 5 years. Instead, assuming Sookie's actual budget shows no significant balance, she can still do a chapter 7. A chapter 7 typically runs 3 months and when it's done, you've wiped the slate clean of most debt. All it costs is a reasonable attorney fee and a reasonable court filing fee. How much is it? Well, give us a holler and ask. If you're serious, we can get down to business, with one Benjamin down and an excellent end-result in mind.

* * *

Sookie pipes up. "What about my house? What about my car? What about my cat?" Ah. Sookie has anticipated the next series of questions. Chapter 7 may involve liquidation. We need to be sure S's home won't go, her car will stay, and her cat (assuming she states an intention to keep it) will not be lost. And that will be a discussion for another day. Ciao.

Note: median income is a fluid figure. You must NOT rely on fictitious blogs to assess your own eligibility to file for bankruptcy. These are illustrative concepts and food for thought; these blogs (like blogs everywhere) are NOT legal advice.

There's no time to blah-blah-blah-blah Blog!

2010-03-10T07:52:00.001-08:00

As I type as rapidly as my fingers will take me, I recall someone once said to those who bemoan the finite bounds of the waking hours: remember Da Vinci, Franklin, Einstein... they had the same 24 hours you do. So don't complain you have no time to blog!

Laws are imperfect. Statutes are charged with the impossible task of addressing every contingency and every one. They can't do it. A lot of lawyers are out there (they say we have 2.3 attorneys per capita in the U.S.) trying to figure out just what those laws mean. Bankruptcy laws are no exception. When the Bankruptcy Code was overhauled in the fourth quarter of 05, there was a rather precipitous drop in bankruptcy filings, a kind of statistical pin-drop silence. The downturn in filings was brief. Today the number of filings are higher than ever. Seeing the big boys of industry bailed out, the public understands there is no need for it to suffer. The foreclosures abound, the creditors' summons get served and when there's no money in your coat, there has to be a Plan B. B is for Bankruptcy. And it's good enough for me. Big B can put an end to the hostility and grief dispensed by the creditors.

* * *

And don't complain you have no time to Twitter: Ashton Kutcher has but 24 hours too.

Scranton S.D.

2010-03-02T16:31:00.001-08:00

Near our office, there's a little road called Scranton. Thus, my thoughts easily and freely associate with that other office, the titular office from TV's The Office, the office from Scranton, a little city in Pennsylvania.

Take protagonist Michael Scott, the earnest, yet cretinous manager of said office. Notwithstanding his flaws (his many, many flaws), when it comes to sales, he rises to the occasion. Michael sells paper. He charges more than the big guys (i.e., Staples), but he wins over business by offering the personal attention the outsized corporations fail to provide.

We strive to do the same: we provide the personal attention that a great, big corporation can't give. For an attorney who is a corporate employee, one who can come and go, the outcome of your case does not carry the same consequences it does for a sole proprietor. Every single action I take, and every action my staff takes reflects upon my personal reputation. My name's on the symbolic shingle and I don't compromise that name. That is why the personal attention will always be there. Of course, there's a difference between Michael and me. Michael charges more than the big guys. I charge much less than they do.

For a free consultation, contact us at admin@abramslawsd.com or call 858-344-0500.
There's no need to suffer creditor harassment anymore. We will help.

Show me the way to the next credit card

2010-02-19T12:39:00.000-08:00

There's but one clerk at the check-out and you're second in line. To the First-In-Line-Shopper is addressed the dreaded phrase: would you like to apply for a [store name] card today and save 10% off your purchase?
Second in line and you could be in for a wait.
So what would you hope First-In-Line would say?
Not now, not ever (well, that's what Paul Newman answered to Jessica Tandy's repeat-offerings of tea in "Nobody's Fool"). Or alternatively, they could say: Never! (an emphatic Homeric response). I incline toward these wonderful idioms when accosted by the greeter-photographers at the Zoo and Wild Animal Park, but my wife suggests I don't be a smart-ass, so I keep mum.

The vast majority of chapter 7 bankruptcies do not entail lawsuits by creditors. Yet, some debtors do face adversarial motions that must be overcome with diligent defense. One element creditors need to establish is that extension of credit (and assumption of risk of nonpayment) was predicated upon the debtor's representation of solvency or ability to pay. However, one's belief in ability to pay is linked to the interest rate. The tantalizing teaser rate can lull a buyer into once-affordable charges that cannot be repaid later, after interest is hiked. Assessing increased interest rates makes the creditor a contributing party to the exponential incurrence of debt.

Credit is extended indiscriminatorily. First-In-Line, with her new blouse on the counter, folded neatly in white wrapping paper, tenderly placed in the store bag with the handles; she says, show me the way to the next credit card. You're second in line, asking, why? But, she says, oh, don't ask why, oh, don't ask why .

Board game

2010-02-14T13:31:00.000-08:00

The dictionary defines insolvency as the inability "to satisfy creditors or discharge liabilities, either because liabilities exceed assets or because of inability to pay debts as they mature." Insolvency can effect de facto bankruptcy. Filing a bankruptcy petition may simply be acknowledging a done deal.

Monopoly. That board game where you roll the dice, clomp around in your thimble or shoe, pass Go, collect $200, then buy big. What's the best strategy? Buy everything. Thing is, Monopoly's real estate market hasn't had a drop in over 70 years. In life (not Life, that other board game), things have turned out differently. You may buy everything, but so may your co-players and their rolls might be luckier. Then the rich get richer at your expense. You can wheel and deal, mortgage your properties, beg and plead. But when your debt exceeds your worth, you are bankrupt. Game over.

Thankfully, life doesn't work quite that way anymore. We still invest big sometimes. And lose big. But if we get in over our heads, it is no longer the end of the road. Federal law provides that we may petition the Bankruptcy Court and be forgiven our debts. Then climb back into your wheelbarrow or race car, hop the squares, collect $200. Chance might even let you win a beauty contest.

So, what's the cost of that freedom to walk your Scottie dog, shuffle your iron or sail your battleship? It can be very little. It is rare that people lose any property in bankruptcy. And attorney fees can be low. If you live in San Diego or Imperial Counties, we would be happy to help you. Call 858-344-0500 and let us know what's going on.

Postscript. Not all debts are eliminated in bankruptcy. Due to public policy, certain debts are here to stay. For example: domestic support obligations, student loans, taxes (with certain exceptions) and debts to society (such as fines for drunk driving).

Generally, by the time someone is contemplating declaring bankruptcy, they already meet the dictionary definition of insolvency or bankruptcy. That doesn't necessarily mean they need to declare bankruptcy. Their debt may be relatively small, and they may only be experiencing a temporary set-back. But, if they cannot possibly pay the debt in the foreseeable future, then bankruptcy may be a viable or even necessary option.

Robin

www.BankonitSD.com

Valentine's day is not a reason to go into further debt

2010-02-12T13:49:00.001-08:00

My grandfather used to say that one should only go into debt to buy your home. By which he meant the purchase of the home, not the upgrading thereof. Of course cars were also less expensive back then. Still, he advocated purchasing only used cars. Very used cars if that's all we could afford. In subsequent generations we've altered his credo to include cars. So, one should only go into debt for your home and car. Understandably, life happens and we can't all stick to this regimen.

Valentine's day however is simply not on the list of things to go into debt over. Now, if your sweetie really loves jewelry and you have the disposable income to buy it, more power to you if that makes you happy. The economy most assuredly thanks you.

But if not, if you're struggling as it is and you can only acquire that shiny bauble by straining the limits of your MasterCard, it just does not make sense. Further, if you are with someone who expects presents beyond your pay grade it may be time for a heart-to-heart. It will be hard to build a future together if you mortgage out that future trying to win her heart in the first place.

But romance is not dead without spending money! Indeed, gifts are usually the easiest and yet least meaningful way to show someone you care. Why not instead: cook a candle light dinner, take your special someone to do something you know s/he loves, revisit the site of an important date, pack a picnic lunch on the beach, make your own card or simply opt for a blank card that allows you to write in your own words. Oh, and roses may be more traditional but their price is also highly inflated for the holiday. Try instead a pretty bouquet from Trader Joe's. I can't be the only woman who finds restrained spending attractive!

Just my two cents for those who are wondering how to get by without debt. It's not an easy thing. But it has some huge rewards.

Robin