THREE STRIKES AND YOU ARE OUT

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

 One mistake does not a bad faith petition make perhaps but 3 may well take you over the edge:  Rule of Thumb: 1 mistake is a mistake, but 2 mistakes is suspect, and 3 is concealment.  In fact, there is a great letter from Judge Jaroslovsky in the 9th circuit out of California, which was written to the debtor attorneys in his district.  The text of the letter is set forth below. He was trying to reign in some of the rampant petition amendment issues taking place due to the sloppy legal work going on in his district but his words and wisdom have general application.

So let’s stay out of trouble, please tell me EVERYTHING and let me decide.  As you can see below, I will almost always decide in FAVOR of disclosure but there are ways of dealing with such things that you don’t know about and I won’t either unless you “spill the goods” now not after it is too late. For more information see my blog on this topic HERE. An open letter for debtors and their counsel: I have noticed a disturbing trend among debtors and their counsel to treat the schedules and statement of affairs as “working papers” which can be freely amended as circumstances warrant and need not contain the exact, whole truth.  Notwithstanding execution under penalty of perjury, debtors and their counsel seem to think that they are free to argue facts and values not contained in the schedules or even directly contrary to the schedules. Some debtors have felt justified signing a statement that they have only a few, or even a single creditor, in order to file an emergency petition, knowing full well that the statement is false.  Whatever your attitude is toward the schedules, you should know that as far as I am concerned they are the sacred text of any bankruptcy filing.  There is no excuse for them not being 100% accurate and complete.  Disclosure must be made to a fault.  The filing of a false schedule is a federal felony, and I do not hesitate to recommend prosecution of anyone who knowingly files a false schedule. I have no idea where anyone got the idea that amendments can cure false schedules.  The debtor has an obligation to correct schedules he or she knows are false, but amendment in no way cures a false filing.  Any court may properly disregard subsequent sworn statements at odds with previous sworn statements.  I give no weight at all to amendments filed after an issue has been raised. As a practical matter, where false statements or omissions have come to light due to investigation by a creditor or trustee, it is virtually impossible for the debtor to demonstrate good faith in a Chapter 13 or entitlement to discharge in a Chapter 7 case.  I strongly recommend that any of you harboring a cavalier attitude toward the schedules replace it with a good healthy dose of paranoia. (my emph.)   /s/ Judge Alan Jaroslovsky U.S. Bankruptcy Judge Northern District of California, Santa Rosa Division.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


©Christopher C. Carr, Attorney at Law 2013, All Rights Reserved.

FIXING YOUR CREDIT AFTER A BANKRUPTCY DISCHARGE

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

In my prior article on the topic of post discharge activities, I discuss 11 different areas for your attention.  Below, I focus in on just one of these: credit repair.

You have received an Order of Discharge from the Courts. That does not mean that your credit is being properly reported to/by the credit bureaus however.  Fixing any errors is up to you.  Here are the steps:

  1. 60-90 days after you receive the discharge, you should call the number provided on the www.annualcreditreport.com site and order your credit reports.  (Consumers are entitled to a free credit report every year or when a negative decision is made by a creditor relying on a credit report.) You will see an option to download the report or to view it on the internet.  You should request your report be mailed to you by each of the three credit reporting agencies Equifax, Experian, and Transunion.   If you are married and filed a joint bankruptcy, both of the spouses must request their own reports.  There are many websites that will claim to be “free” but will typically start assessing a monthly fee after a trial period…don’t fall for it: www.annualcredi treport.com is the only such site authorized by federal law to provide truly free reports.
  2. You will also want to get additional reports from Telecheck, Early Warning Services, and Chexsystem if you have ever had a problem with a checking account or overdrafts.  These are the agencies that banks and credit unions rely on when the bank or credit union is making a decision about whether you can open an account with them.
  3. So, you are now up to six different reports and if married multiply this by 2.  However the review you will need to do is actually rather straightforward.  Look for a line under each of the creditors that indicates whether a balance is due.  That balance should read ZERO (unless it is a debt that is not dischargeable by law, like court ordered support, taxes, criminal fines or penalties).  There may or may not be a line saying “Chapter 7 Bankruptcy” or “Chapter 13 Bankruptcy”.  These statements refer to the reason why it is no longer a debt.
  4. If any of your creditors is still listing a balance, then the next step is to dispute the report of that creditor.  The Federal Trade Commission offers a sample dispute letter to consumers.  [The sample is here. ] You may alternatively use the form supplied with the credit report (usually found near the end of the report.)  Also send a copy of the letter to the creditor who is reporting inaccurate information.   And please, make and retain in your files two extra copies (one for your file and one for your attorney). Note that if more than one entity is reporting the debt improperly, they each must be notified separately.
  5. When a consumer disputes a credit report, the agency by law must investigate.  The creditor can either verify the accuracy, update or remove the information.   The credit reporting agency has deadlines for their response to the consumer. Generally the wrongly reported debt will now be off your report.
  6. However, if a creditor verifies the report (that is, wrongfully indicates the money is still due and owing), you should seek legal advice promptly. This is likely a violation of the discharge order of the bankruptcy court. There may also be a Fair Credit Reporting Act violation.  Your lawyer may suggest a lawsuit against the original creditor, the debt collector (if applicable) and/or the credit reporting agency. . Only a lawyer experienced in these kinds of cases can properly evaluate the situation and provide advice about your options.
  7. Just to make sure your credit is being reported correctly you may want to order your reports again in a year or whenever you are again eligible for a free report from www.annualcredi treport.com. Repeat the process above as needed.

Summary:

  1. Order your credit reports 60-80 days after your Order of Discharge
  2. Order additional reports for problem with checking account or overdrafts
  3. Carefully review  your credit reports
  4. Dispute any balances that are no longer owed with both the original creditor and the credit reporting agency.
  5. Review  responses promptly
  6. If the response says you still owe the debt, seek legal advice from an experienced attorney.
  7. Repeat in a year

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


I also provide HAMP, HAMP2 and other Mortgage Modification Services.

©Christopher C. Carr, Attorney at Law 2009, 2013, All Rights Reserved

More On Yo Yo Auto Sales (Auto Fraud)

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com

Website: westchesterbankruptcyattorney.org

I  work in autofraud relief for consumers and have posted previously here on YoYo’s.  Recently I answered the following question for AVVO:

Q: I bought a new car and 3 days later they said they made a mistake on the contract and need me to come back.

3 days after the contract has been signed with me giving them $10,500 as down payment with a 780 credit score. They said they made a mistake by stating the price of $31,129.00 . They said that was supposed to have been including $2,000.00 in rebates. On the contract is states $31,129.00 and then subtracting my down payment plus $2,000.00 in rebates. Do I have to give them more money and resign a new contract. It states on the contract that once both parties have signed it is binding. Hayden, Idaho

A: It sounds like you are facing a variant of what is called a yo yo sale, also called a “Spot Delivery”, which simply refers to the dealer putting a consumer into a car “on the spot”, to get the sale and take the buyer off the market, only to “yo-yo” them back at a later date to extract additional funds. This then is a variety of the old bait and switch. Played to perfection, a dealer can pocket thousands of extra dollars in unearned fraudulent gain out of a single unsuspecting buyer.

However, because your credit is virtually spotless the dealer cannot employ the usual tactic of stating that your credit was not approved to lure you back in to sign new papers.  (Your credit was good or the dealer would not have delivered the car to you at the price you agreed to pay.) That is, I believe that the dealer is doing more than simply trying to cheat you out of a rebate that was extended under a legally binding non conditional contract of sale, he is “yo yoing” you back to the dealership to pressure you to rescind the contract and adopt a new one undoubtedly with a much higher rate of interest. The “basis” would be that the contract has to be revised anyway to remove the supposedly erroneous rebate calculation.  This is of course illegal since you already have a binding contract but most buyers don’t know it, assume the dealer is right and go along with everything.

You do not need to stand for any of this because you already have you have signed papers and own the car, subject to making payments only, regardless of whether the vehicle has been financed or the dealer misstated the purchase price.  A finance document showing payments, rebates, deposit, interest rate and other financial items is a binding contract, giving you specific legal rights under the laws of your state. The dealer cannot change any of this legally once you have taken possession.

Yoyo sales are a national problem, involving dealer fraud. The usual fraud is making the consumer think the sale was complete, while at the same time the dealer sets it up so that the dealer can call it off, seize the car, and sell it to another purchaser or insist on dealer enhanced terms in a revised contract. A few states already prohibit conditional auto transactions outright, Idaho not being one of them as far as I can see, but even in the ones that have not taken that step, state contract law still protects the vigilant buyer.  In your case you were never told that the rebate was conditional, subject to being rescinded or the contract rewritten to change the price.  That is, you signed purchase documents and, I assume a registration application; obtained insurance; had a new license plate put on the car and/or had your old plate transferred, so the car belongs to you and the dealer is stuck with the deal they initially made. (The dealer may try the legal argument that the contract was formed based on a mutual mistake but I do not think that will work for reasons that are beyond the scope of this answer.)

Now you state that you have been called back to the dealership to sign certain papers; best not to go at all or if you do, do so in a car other than the one you bought, bring a friend with you if possible and be prepared to resist a browbeating. If the finance manager asks for your papers at any time for any reason, refuse! Keep these documents in a safe place, not in the car.  If you leave the papers they will also get them if they get the car. That leads me to my final point. You likely will need to retain a local lawyer with a good understanding of the laws of Idaho pertaining to auto sales to assist you.  I say this because your best strategy is to have counsel at the ready to take steps to enforce your legal rights against threats of repossession of the automobile or other dubious tactics to try and get the car back if you do not appear.  Best of luck to you and enjoy your new car.

 

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

 

HOME SURRENDER: CAN THE MORTGAGE COMPANY BE FORCED TO TAKE BACK MY HOME IN A BANKRUPTCY (or why dispossession is not nine tenths of the law)

 

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Using bankruptcy to rid oneself of a home that has become unaffordable and/or is now worth far less than it once was is called “surrender” in bankruptcy parlance and is governed by the US Bankruptcy Code.  This procedure is nearly as commonly used as is bankruptcy to stop a foreclosure so that a home can be retained.  We practitioners are using it much more frequently since the housing market is in decline.  Why is that?

Well, the question whether to keep a home when filing bankruptcy is usually answered by comparing the amount of the home’s monthly mortgage payments with the income the debtor is able to devote to housing payments.  Also key in today’s real estate market place is a comparison of the home’s appraised value[1] as compared with the amount still owed by the home owner. Where the home is worth significantly less than the amount owed, the home is said to be “under water”.  If the payments are no longer affordable and/or the property is under water, the debtor will likely choose to surrender the home as part of either a Chapter 7 or Chapter 13 bankruptcy filing.

However, in practice property “surrender” is often more problematic for the homeowner[2] than it would at first blush seem.  Foreclosure means the involuntary transfer of a property in a public sale or what is commonly called in Pennsylvania and many other states a “Sheriff’s Sale” because the County Sherriff will typically sell properties by the hundreds at public auctions held in the Pennsylvania counties following advance notice of the sales published by these officials. The requirements for these notices are very precisely defined in the relevant state statutes. These sales are usually conducted monthly and the sale ENDS the legal ownership and responsibility of the debtor.  Sounds pretty straightforward does is not?  However, in reality, mortgage companies are often slow to foreclose on homes that are surrendered to the lender in bankruptcy, leaving the home vacant, and yet still technically under the ownership of the bankruptcy debtor, for months or even years after the bankruptcy was filed.  It is often said that “Banks are not in the business of owning homes” but like most generalizations this statement is not always true.  The mortgage company may prefer to retain the home in its “inventory” rather than to sell it and take a huge loss that it must report to its shareholders in its public filings, perhaps hoping for a “better day” when the housing market starts to show improvement and it can then sell at at least a breakeven. Not only that but during the hiatus it does not need to legally bear these costs and liabilities.  Rather the mortgage company or its serviather the mortgage company or its servicer can keep the unsuspecting homeowner paying long after he/she has moved on simply by “sitting on” the property virtually indefinitely.

Many homeowners (and even some bankruptcy lawyers, unfortunately) will intuitively believe that their real estate is now legally the property of the bank because it has been “repossessed” (and they have been disposed) even though no actual sale has yet occurred. They may drop or reduce important coverage’s or fail to insure the property at all and find themselves liable in a slip and fall case for example for the full amount of the damages with no insurance coverage at all.

The purpose of any bankruptcy is to provide to the debtor a fresh start but the slow-to-foreclose mortgage company will routinely create fresh liability for the homeowner/ debtor, who will be held liable for post-bankruptcy homeowners association fees, property assessments, other ownership related financial obligations (but not the monthly mortgage payments, the personal obligation for which the debtor was discharged in the bankruptcy), if and as applicable.  The debtor may even be cited and fined repeatedly by the municipality and/or other governmental agencies if the grass is not cut, there becomes an accumulation of junk or hazardous materials on the property (albeit without any participation by the debor), and so forth.

However, a ruling handed down by a Hawaii bankruptcy court this month approved one strikingly clever resolution to the problem.  This Chapter 13 decision, In re Rosa, No. 13-00630 (Bky. Hawaii July 8, 2013), approved over the objections of the trustee a Chapter 13 plan which contained a provision designed to force play the situation by in effect arranging to convey the home back to the first mortgage holder. That is, In the Rosa case, the debtor’s Chapter 13 plan ingeniously stated that title to the real estate “shall vest in City National Bank/OCWEN Loan Service upon confirmation, and the Confirmation Order shall constitute a deed of conveyance of the property when recorded at the Bureau of Conveyances.”    The Chapter 13 trustee objected, arguing that“surrender” under the bankruptcy law did not transfer ownership of the surrendered property until the lender actually foreclosed.

The court disagreed with the trustee and pointed out that here, the debtor had gone beyond merely “surrendering” the property in the Chapter 13 plan.  Rather, the Plan unequivocally stated that confirmation of the Plan by the court would automatically transfer ownership to the lender, and that the order confirming the plan could be recorded like any other deed or conveyance.  While the Plan was drafted by the debtor (or more likely his/her attorney), the lender had been properly served with this plan and it had the opportunity to and had not objected to the Plan in court.  The Plan was therefore confirmed giving effect to this provision.

The result of this strategy for this particular debtor was the complete avoidance of the ills caused by the foot dragging Mortgage Company and its servicer, noted above.  One would think that a majority of the bankruptcy courts and jurisdictions, when presented with this issue, will adopt the new Hawaii precedent as it tends to remedy such evils without placing any undue burden upon or depriving the lender of any of its due process rights, in the eyes of this commenter at least. Perhaps we will even see the Eastern District of Pennsylvania or one of its 3 subdivisions adopting the new rule.

©Christopher C. Carr, Attorney at Law 2012, All Rights ReservedLaw Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.


[1] There are several on line services such as Zillow.com for example that purport to provide property values.

[2] Note that this term used in this context is not inaccurate or imprecise…these persons are still in the eyes of the law owners of the properties they once occupied.

Death & Divorce and Their Disparate Effect on Marital Distribution in Pennsylvania

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

A stark contrast exists in the law of Pennsylvania as between the effects of death and divorce upon marital property distribution.  In the case of divorce, the marital assets, including assets nominally titled in the name of one spouse alone but purchased with marital assets, are subject to equitable distribution (ED) as between the spouses. In the case of and by virtue of death however, the deceased spouse (or more precisely, his or her estate) loses all rights in all property held in the name of husband and wife or otherwise subject to ED unless accruing to the estate under some other law. This is because there ceases to be any counterparty in the divorce action, which as an action in equity can then no longer proceed.  With few exceptions, summarized below, the surviving spouse takes all.

      However, there is a new exception to this death/divorce disparity which was entered into the Pennsylvania statutes in 2005. Recognizing that this had  produced some highly inequitable results, the Pennsylvania General Assembly sought to remedy this when Divorce Code amendments were considered. Section 3323(d.1) was added to the Divorce Code providing that where divorce grounds have been established by the date of death of the spouse, the divorce action may proceed with the executor for the decedent being substituted as a party for the decedent. To establish grounds the following rules are set forth by the statute: a)      If a fault divorce was pending the Court needs to have found that divorce grounds are established, b)     If both parties consented to the divorce, grounds are established, or, c)      Lastly in the no fault case, if an affidavit of two year separation was filed without contest or the court found two years of separation to have elapsed and the marriage was irretrievably broken, grounds are again said to be “proven”. Where grounds are not established as of the date of death, the old rules apply. The divorce ends and each party resorts to those rights created by federal laws like ERISA, the rights of joint owners to the decedent’s interests and the rights to take against the will under the Probate Code. Taper v. Taper, 939 A.2d 969,973 (Pa. S. 2007.) COMMENT:   As our population ages, one can envision this becoming a problem of epidemic proportions. There are obviously many situations which will not fall within the aegis of the 2005 amendment and appear left to chance. One obvious example would be a fault based divorce where no court decree finding grounds for the divorce has been entered as of the date of death. This writer suggests that thePennsylvania legislature will need to take more decisive action, terminating the inequitable operation of the old rules entirely under circumstances where it can be proven that the divorcing spouse knew or should have known of the dire health status of the other spouse as of the date of the divorce petition.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


©Christopher C. Carr, Attorney at Law 2009, 2013, All Rights Reserved

Gamblers & Bankruptcy

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Why do some people already in dire economic shape gamble?  Prudence suggests that they should not do so but gamblers are notoriously imprudent. Well ironically they often do so because they foolishly believe that they can gamble their way out of debt.  Other gamblers think they can win enough money to pay back their gambling debts– debts they may have rung up on their credit cards, money owed to casinos or riverboats, loan debt, and even home equity debt all associated with gambling problems–but quite the opposite happens. You only end up creating more gambling debt to repay. And even if you actually did win enough money to pay off your debt, you would most likely gamble that money away too, thinking if you won once you could win again. GA and other organizations can help to cure the addiction but the debt that persists is a slippery slope tempting the gambler to return to the game of choice and chance.  So oftentimes it is necessary to cure the debt problem to alleviate the addiction. And there is only one way to effectively do so, a Chapter 7 (or 13) bankruptcy, which if successful can wipe the slate clean in one fell swoop.  Thus, Bankruptcy may be the only option for dealing with gambling debt.

If you owe bookies or loan sharks, you may be forced to borrow money from a friend or family member to pay the gambling debt, especially if you’re being threatened with reprisals if you do not pay up . But borrowing money from a loved one, while perhaps better than having your legs broken, may not be such a good idea because all such debts will be discharged in a Chapter 7 bankruptcy leaving them high and dry.

I tell such clients that they should pay some of the money they are gambling away to me instead.  Gambling is risky and the “odds are stacked in favor of the house” but I am a sure thing, or nearly so.  What stands in the way of a fresh start in Bankruptcy for the gambler?

  1. Fraud: Gambling debt, including debt incurred from casinos or charged on credit cards and loans, can be discharged in bankruptcy. It’s important to know that any creditor can object to the bankruptcy filing by claiming you incurred the debt under false pretenses or through fraud. For example, if you took out a credit card cash advance knowing you didn’t have the money to repay the advance when you borrowed it, the creditor can ask the court not to discharge the debt. Creditors owed gambling debts may file “adversary proceedings” to challenge the dischargeability of their debts under Bankruptcy Code section 523(a)(2)(A) provides an exception to discharge for debts obtained by “false pretenses, a false representation, or actual fraud.”  These suits, historically filed by casinos, are rare today. They are expensive, cast the casino and its entire industry in a bad light and with the rise of legalized gambling, are no longer favored by the courts.  The gambler’s creditor has the burden to prove that the gambler actually committed fraud, in other words that you had the intent not to repay the debt when incurred and that is barring some lucky (or more likely stupid) admission, very difficult to do.
  2. Reporting Requirement: All gambling losses within the previous year must be reported on the Statement of Financial Affairs which is part of every bankruptcy filing.  This is required so the bankruptcy trustee and court can determine whether any fraud was involved in the bankruptcy filing.  Bankruptcy trustees have broad powers to avoid transfers which appear fraudulent because they are transfers for which the debtor received “less than reasonably equivalent value,” which is the basic benchmark for determining fraud under the Bankruptcy Code. This requirement may pose obvious difficulty for the gambler who has been dealing with loan sharks who may act aggressively to keep from having their names become a matter of public record.
  3. Luxury Debts: However unlikely it is that the casino will win an adversary action, there is another bar standing in the way of clearing very recent gambling debt. Bankruptcy Code section 523(a)(2)(C) makes a debt non-dischargeable if the debts was for a “luxury good or service” over $1,225 and purchased within 60 days of the filing of the bankruptcy.  That section also precludes discharge of cash advances over $1,225 obtained within 60 days of the filing of the bankruptcy.  In most cases, the exception can be avoided by simply waiting the requisite 60 day period of time
    to file the bankruptcy.  However, this may not be as easy as it sounds for the compulsive gambler. Often the lawyer must demand a turnover of all credit cards, etc. so that the problem is cut off at the source.
  4. Chapter 13: Impossibility of fulfilling the plan because of compulsive gambling:  oftentimes a gambler who is behind in house or car payments because of money diverted to gambling will have no choice but to file a Chapter 13.  This requires a 3-5 year plan wherein the gambler promises to repay some of his debts.  But the plan must be funded by the gambler’s income and little threatens income as effectively as compulsive gambling.  Thus, may trustees and courts (tipped off by the required gambling disclosures…see above) will closely scrutinize such a plan and may demand that the gambler be under the treatment of a psychiatrist and/or regularly attending GA meetings before they will give it the go ahead. A clean recent bank and/or credit card statement(s), not showing large withdrawals, can also be very helpful in showing that the gambler has the self control needed to suceed with a plan in a Chapter 13.

It is clear that the cure of the gambling addiction and its economic fallout go hand in hand.  One cannot easily be repaired without the other. We are experienced in dealing with the problems of and in counseling gamblers and would be happy to discuss the issues facing you or a loved one challenged by this affliction.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified legal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


Now that you Have Your Bankruptcy Discharge: 10 (actually 11) Things to Do to Make the most of it!

 

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

So You Finally Got that Bankruptcy Discharge
Congratulations!
You’re on your way to a fresh start.
Now you’ve got more to do? See why below:
1. Check debts that didn’t get discharged: Child or spousal support, student loans, or taxes for years for which you did not file a return (unless the IRS exceptions are met) are not dischargeable in bankruptcy. The discharge order will not tell you which debts survive and which do not, nor will the Court provide this information so you may continue to require the services of a knowledgeable bankruptcy lawyer to help you to assess this.
2. Verify lien balances: The discharge eliminates your personal liability for dischargeable debts; liens survive. If you plan to keep a house or car encumbered with liens, find out what you owe and resume payments. Otherwise, the creditor can enforce its lien by foreclosure or repossession.
3. Reset Banking Priveleges: Online banking and automatic bill pay may have been disabled while you were in bankruptcy but can be restarted at your request now..
4. Do Some Record Keeping: Save your bankruptcy papers and keep a copy of your discharge paper handy: You’re likely to encounter efforts by buyers of to collect debts that have been discharged in your case, or so called “zombie debt”. You need to be able to show that the debt was discharged in your case. Creditors with notice of the bankruptcy, and likewise those who buy up their worthless accounts and try to collect on them, were discharged (unless they fall within Rule #1 above). The services of a knowledgeable bankruptcy lawyer may be necessary to stop these collectors, or even under some circumstances to sue them for unfair practices and potentially turn the tables by collecting from them, including your legal fees.
6. Join a credit union: Credit unions are owned by their members. They are in the business of extending credit to members (hence the name, “Credit Union’: “Credit” stands for what they do and “Union” for the members they lend to) and the profits from such loans flow to members. Rates are almost always lower and terms better than the commercial banks, savings and loans and private lenders. Start out with a savings or checking account. Sooner or later you will probably need a car loan or even a home loan. Joining now will give you the longevity that adds credibility to a credit union.
7. Maintain insurance coverage: Even though you may have elected to surrender property through the bankruptcy that still stands in your name, make sure that you are insured for liability. Liability insurance covers you for claims of anyone injured on your property. Electing to surrender property doesn’t take you off title until someone else goes on title. Post bankruptcy claims arising from property you’re trying to offload can potentially ruin the fresh start.
8. Get a credit report: Several months after your discharge, check your credit report to make sure all discharged debts reflect a zero balance. The bankruptcy history can properly remain on your credit for up to 10 years, but you are entitled to a showing that you now owe nothing on all discharged accounts (but see Factor #1 above) This is crucial because your debt to income ratio (“DTI”),one of the primary if not THE primary factor lenders look to in extending credit. Getting erroneous entries corrected may be facilitated using the services of a knowledgeable bankruptcy lawyer. You are entitled to a truly free credit report annually from each of the 3 major credit bureaus which you can get by clicking here and credit experts recommend that you check it at least once a year.
9. Budget and Learn to Spend Within Your Means: Studies have shown that people who go bankrupt only do so ONCE in their lives. WHY? Well debt relief is only one side of the coin. On the flip side are the lessons people take from bankruptcy. So, like these now money wise people, take advantage of the fresh start that bankruptcy has provided, and make lifestyle changes so that it does not happen again. Follow Rule # 10 below and stop using trade credit (AKA: Credit Cards). Get a debit card instead and be you own bank, there is no interest that way!
10. Use credit Wisely. Once Lenders see that you have received a discharge, they may well start sending you “preauthorized” credit card applications. However, if you start to load up on credit again, you will soon be right back where you started. So the rule of thumb is to have just one credit card that you keep in a drawer somewhere for emergencies; If you do use it, make it “free credit”, that is: plan to pay it all back in the same month as incurred so that you are not left carrying a balance ant interest. That way you are living within your means. See Rule # 9 above. The only other credit to use generally speaking is for major purchases such as car or home loans.
11. Build up a reserve for emergencies and start saving again. Set up automatic savings Bankruptcy probably brought home to you how little net worth you have and how thin the safety net is. Arrange for automatic savings for both an emergency fund and for retirement.
Since you no longer have trade credit, it will be easier to devote some of your income to savings…follow the rule “Pay yourself first”. Experts recommend a reserve of 6 months salary and at least a 10% savings rate. Contributions toward your IRA or 401K at work count as you can withdraw these funds (with penalty if applicable) in an emergency.
If you follow these rules, you are more likely to take full advantage of your fresh start and not ever be back to see your friendly local bankruptcy lawyer!

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

More on Judgment Liens and their Impact upon PA Homeowners: Lien Revival.

By Christopher C. Carr, Esq. Chester County bankruptcy attorney. 

Tel: 610-380-7969 Email: cccarresq@aol.com

Website: westchesterbankruptcyattorney.org

In my previous post on this topic, I discuss how a judgment lien can come to attach to your home and some ways to avoid such lien attachment.  However, due to unfortunate ambiguities in the wording of the relevant Pennsylvania statutes, there is another common misperception regarding what I will call the “extinguishment” of liens against land titles within the Commonwealth, which I would now like to dispel.

Under our statutes, recently recodified, (Pa. R.C.P. 3023, et seq.),  a lien attaches to all real property in the county of residence of a defendant automatically upon the entry of a judgment against that defendant’s name in the judgment register of the county but that judgment is only a lien against the real property which the judgment debtor owns at the time that the judgment is entered.  The lien lasts for a period of five years (Pa. R.C.P. 3023). It is technically correct that a judgment is not a lien against real property which the judgment debtor acquires after the judgment has been entered of record. Philadelphia Nat’l Bank v. Taylor, 421 Pa. 35, 218 A.2d 246, 247-48 (1946). It is also technically correct that the lien of a money judgment is lost if a proceeding to revive that judgment is not commenced before the expiration of a five-year period from the date the judgment was entered,  Shearer v. Naftzinger, 747 A.2d 859, 861 (Pa. 2000).

Many defendants, noting that five years or more has passed and the judgment against them has not been revived will blithely assume that a.) any real property they own is now free and clear of liens and will be so FOREVER and/or b.) that they can now safely purchase real estate in their own name without threat of a lien EVER attaching to it.  A lender (let’s call it “BB Bank” for Big Bad Bank) will be willing to lend against such property during this hiatus because they are assured of obtaining a first priority mortgage lien since this is a “fresh” transaction, e.g. the property was not owned by the defendant at the time the now lapsed judgment lien was first entered.  These poor unfortunates are wrong on both counts.  The judgment lien has not been extinguished, it has at best lapsed, subject to a potential statutory revival which is always available to the judgment creditor by institution of what is called a “praecipe for a writ of revival.”

For as the Explanatory notes published in the Pennsylvania Bulletin explain, a praecipe for a writ of revival substantially the form provided by Rule 3032 once granted by the court, has a dual function:  it i)  continues any lien which has not been lost at the time it is filed and/or creates a lien in all property then owned by the defendant (called “after acquired property”) .

It is important to recognize that the rules regarding real estate liens were enacted not to create a “safe harbor” for debtors but to permit of an orderly prioritization of liens on real property as between large corporate creditors and other entities.  That is, if you, the judgment creditor, allow your lien to lapse (by allowing the initial 5 year period to go by without filing a praecipe for a writ of revival), later lenders can step ahead of your lapsed priority and if and when you revive, your lien stands in an inferior position as to those filing in the interim, such as BBBank.  But sadly, if you are in the position of a homeowner who has acquired property during the hiatus we have been discussing, once the lien is revived, it WILL capture all property you own at that time, subject to the priority of the BBBank lien ahead of it.  That is, a judgment can by revival be made a lien against after-acquired real property by renewal of the lien after the real property has been acquired. 

How long does this right of revival go on?  Does it have any “statute of limitations”?  Well, in the words of Chief Justice Zappala in the concurring opinion in  Shearer v. Naftzinger, ibid at 861 ,  “There is no outer time limit to executing against real property to satisfy a judgment…”

In the related previous post, I discussed potential methods for avoiding the initial attachment of a lien, and in later (as yet unwritten) posts I intend to delve into how to prevent revived liens from attaching, despite the statutory scheme I have just been describing.  I will also describe the remedies the judgment creditor can use to enforce the collection of their money judgment, if not so defeated.

Note that this right of revival does not apply to personal property which is govened by a separate PA statute.

©Christopher C. Carr, Attorney at Law 2009, 2012. All Rights Reserved

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


I also provide Mortgage Modification Services.

The Telltale Signs of an Email Fraud

Edited by Jenny Greenhough of Rocket Lawyer | August 10, 2012

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Rocket Lawyer Guest contributor Christopher C. Carr , Esq., MBA on how to spot a fraudulent client or transaction in your inbox. Slightly reedited for this blog publication.

                       

 

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Don’t let a fraudster pull the wool over your eyes.

As discussed in my prior post, attorneys need to stay on alert for collection scams. Even for a savvy attorney, it’s easier to become an unwitting target of fraud than you may realize. For example, publicizing a big win in a lawsuit on your website may indeed bring you new clients, but some of them may actually be intent on profiting from a fraud perpetrated against your firm.

These scams can take on many guises. For example, a few weeks ago I got a very sophisticated scam letter. This time it was purportedly the representative of a Japanese law firm wanting local representation for litigation against debtors in the US. I immediately asked for his bona fides and he wrote back pretending to be insulted by my lack of trust. I then wrote back and explained that I had been taken in before and had lost some $2,000 in such a scheme and had thus adopted a policy whereby my firm holds all payments until final payment is issued to my bank by the depository bank on any settlement check (not just provisional payment because the check can still bounce until honored by the depositary institution).

Needless to say, I never heard from my Japanese “colleague” again.

Reading the signs

Let’s look at some if the identifying marks of this trade:

  1. Typos and other language errors: Note the punctuation errors and idiomatic problems in the text above. These are harbingers of this type of fraud and may actually be intentional for the purpose of hiding the true identity of the author from the authorities. However, the message will virtually always contain typos or non-idiomatic English usage, suggesting that the drafter is not even employed by the institution they claim to represent.
  2. No logos/Crude or Incomplete Logos: Another dead giveaway is a suspiciously “plain” appearance. But don’t use this as your only guide. I have recently begun seeing fake PayPal and even some bank items bearing an authentic looking logo.
  3. International debt collection: The message will nearly always solicit your assistance to collect a debt purportedly owed by some American commercial entity or ex-spouse of a foreign national.
  4. Different names: The account you are supposed to credit with the payment will not be in the same name as your client. There may be some excuse like “it’s my mother’s account and she has a different last name than mine.”
  5. Urgency: Anyone who pressures you to pay them however gently or subtlety should be immediately suspect; it means they’re trying to get paid before you receive notice of final payment.
  6. Slow build-up: Sometimes the scammers take a different route: they actually pay a couple of checks for smaller amounts to lull you into a false sense of security. Then they float a big rubber check with a reason like: “We are in a cash flow crunch, would you please pay us early just this once because you are holding up a lot of our money.” If you fall for it, the check bounces and they are never heard from again.
  7. Righteous indignation: When you express doubt about their claims or start asking questions, they respond as if they’re offended. In actuality, they’re trying to make you doubt your own better judgment.
  8. Reality check: As always if it seems to be too good to be true, it probably is!

So how do you test for legitimacy?

If you see any of the telltale signs above or anything else that makes you suspicious, make sure you:

  • Check their IP address. It should be in the same location as they claim.
  • Ask them to wait until you are notified of final payment. Just watch for the “slow build-up trick”.
  • Ask for their ID. Make sure it’s legitimate, and do some in depth Internet research as well to see if the company they claim association with is legit and has a real address where they say it is.

If you use caution, common sense, and follow the tips above, you should be able to spot a scammer without too much trouble. The old adage applies:  IF IT SEEMS TOO GOOD TO BE TRUE, IT MOST LIKELY IS. Otherwise, you and your family or coworkers could find yourself the victim of a home-shattering or firm-busting fraudulent transaction.
About the Author

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


Mr. Carr blogs regularly on debt and bankruptcy topics at https://christophercarrlaw.wordpress.com/.

Related articles

Don’t Let a Scam Put Your Solo or Small Firm Out of Business

Don’t Let a Collection Scam Put Your Solo or Small Firm Out of Business

This Article and a companion piece first appeared on RocketLawyer.com,  Edited by Jenny Greenhough| July 27, 2012

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

 

ROcket Lawyer Guest contributor Christopher C. Carr , Esq., MBA describes a debt collection scheme that nearly took him in and what attorneys can learn from his experience.

Wolf in sheep's clothingSometimes clients aren’t as they appear.

A single fraudulent transaction can easily wipe out the entire bank account of a small firm and expose the firm and members of the firm to lawsuits in the matter of just a few days.  A few years back I was taken in by a fraud scheme, and suffered what was luckily a much smaller loss, so when another scam came in through my email a year ago, I knew how read the signs.

In this most recent case, I would have been defrauded to the tune of $180,000 by a collection scheme that came in through my email. A supposed British subject hired me to collect $600,000 owed her under a very real looking promissory note from her ex-husband, a West Chester, Pennsylvania resident. I even got her to sign a fee agreement. The background of their relationship and source of the debt is beyond the scope of this article; suffice it to say that their ruse was very detailed and convincing.

These two had a relationship alright, but it wasn’t the one they told me about.

When I contacted him by email threatening suit, the correspondent in the fraud (the supposed ex) hemmed and hawed a bit (to make it look realistic) but ultimately agreed to pay a large installment on the debt. A Fed Ex pack duly arrived a few days later containing a check written on a Nova Scotia bank. I called the bank and verified that he was a customer of the bank but they would not tell me his balance for reasons of privacy.  I then deposited the check in my bank and watched my “available balance” soar.  The fee letter required me to remit the proceeds less my fee by wire to an account in the UK.  Had I done so, I and my bank would have been left holding the bag for hundreds of thousands. So I waited.  I ultimately got a notice from my bank that the check had been dishonored upon presentation to the Nova Scotia bank, which took about 10 days from the time of my deposit.

The couple perpetrating the international fraud obviously counted on this “float” period where I had funds in my account that did not really exist. Clearly their check was written on a foreign bank to try and extend this time as long as possible.

I contacted the local police who took a police report but nothing ever came of it. Although I didn’t suffer any loss in this instance, there would have been little or no insurance coverage for such a loss, had it occurred.

The only traceable elements of this scam typically are:

  • The account (and routing information) into which the proceeds are to be paid
  • The IP address of the defrauder (where the computer or other device is located in the world). It cannot be cloaked and can be checked using a free service available via the internet.

This information can be of use in detecting fraudulent activity as to avoid detection and apprehension these people will rarely be where they say they are.  This should be a dead giveaway.

What do you need to do ethically if a client attempts to defraud your or others? My blog on a related topic may provide some answers.

My advice is to fellow attorneys is to stay on alert when it comes to transferring large sums of money.  Never take anything for granted, and you won’t get taken to the cleaners.

About the Author

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


Mr Carr is licensed in Pennsylvania and Ohio and is admitted to the US District & Bankruptcy Courts for the Eastern District of Pennsylvania & the Middle District of Pennsylvania. 

WWW: http://www.westchesterbankruptcyattorney.org/
Bankruptcy Blog: https://christophercarrlaw.wordpress.com/

Attorney Carr may also be reached to schedule an appointment at 610-380-7969 or via email at cccarresq@aol.com.