Source: http://www.westcoastbk.com/blog/category/bankruptcy-information-and-requirements/
Timestamp: 2019-04-19 00:45:08+00:00

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What Can I Do If A Collection Agency Harasses Me or Tries to Collect a Debt After Filing For Bankruptcy?
One of the not so great parts of filing bankruptcy for Bay Area residents is dealing with unlawful acts of collection agencies and creditors. Yes, everyone understands that a creditor has every right to seek payment for the debts owed to them. The problem is when a creditor tells one of our client’s mother that they are going to through her daughter into jail and arrest her if the mother does not send them money that same day. There are so many problems with this attempt to collect a debt I do not know where to start. If this type of conduct by a creditor happens after a bankruptcy case is filed is most likely a violation of the automatic stay. So, can a bankruptcy filer receive punitive damages, attorneys’ fees and damages for their emotional distress if a creditor is found guilty of willfully violating the automatic stay? According to In re: Snowden No. 13-35291 (9th Cir. 2014) recently published on September 12, 2014.
In this case the bankruptcy petitioner obtained a $575 payday loan. Things unfortunately did not improve financially for Snowden and she filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code. The pay day loan company, Check Into Cash, was very aggressive from the moment they found out Snowden would not be able to pay back the payday loan as agreed. Check Into Cash called Snowden at work even after she told them not to. After Snowden filed for bankruptcy Check Into Cash chose to cash the check Snowden gave them to secure payment of the payday loan. This resulted in Snoweden’s bank account becoming overdrawn and throwing her into further financial turmoil. Snowden eventually filed a motion for sanctions against Check Into Cash for their cashing of the check post-petition and their continued harassing phone calls post-petition in violation of the automatic stay.
Section 362 of the Bankruptcy Code provides for the automatic stay as soon as a bankruptcy case is filed. Section 362(k) deals with damages for the willful violation of the automatic stay. Section 362(k)(1) provides in part: . . . an individual injure by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages. This section permits an award for emotional distress damages if the bankruptcy petitioner (1) suffered significant harm, (2) clearly establishes the significant harm, and (3) demonstrates a causal connection between that significant hard and the violation of the automatic stay. See Dawson, 390 F.3d at 1149. In the Snowden case the creditor took issues with the second prong of the analysis. The creditor argued through their experienced bankruptcy lawyers that Snowden did not prove significant emotional harm, but just fleeting or trivial anxiety or distress. The court disagreed though given that the post-petition cashing of the check and continued phone calls. Even worse was the fact that Check Into Cash did not rectify the situation timely. The Ninth Circuit Court of Appeals found the district court did not error in confirming the emotional distress damages award. The bottom line is this analysis is a case by case analysis. Whether any court will award damages for emotional distress depends upon the severity of the violation, the distress caused and what the creditor did or did not do about it once the creditor was put on notice that a violation had occurred.
Punitive damages are damages to punish a party for their conduct and deter any further violations in the future. Section 362(k) provides for punitive damages in “appropriate circumstances.” Good bankruptcy lawyers will be able to prove some showing of reckless or callous disregard for the law or rights of others. See In re Bloom, 875 F.2d 224, 228 (9th Cir. 1989) In the Snowden case Check Into Cash argues on appeal that the bankruptcy court applied the wrong standard, willful violation rather than the reckless disregard standard. The 9th Circuit Court of Appeals disagreed. The court found that Check Into Cash failed to provide a policy for employee training about how to address debt collection following a bankruptcy filing. This demonstrated reckless and callous disregard for the law making punitive damages appropriate under the facts of the Snowden case.
It is well settled that a debtor can receive attorneys’ fees and costs related to enforcing the automatic stay and remedying the stay violation, but not attorneys’ fees earned when filing an adversary proceeding to be awarded punitive damages and damages for emotional distress. As soon as the violation of the stay is remedied a bankruptcy filer cannot collect from the creditor attorneys’ fees and costs going forward. The 9th Circuit Court of Appeals held that the ‘American Rule’ applies and each party to an adversary proceeding bears their own costs for litigation. There are exceptions. If a court rules a violation of the automatic stay took place and the creditor appeals the ruling, then the debtor has no choice but to incur additional attorneys’ fees and costs to defend the bankruptcy court’s decision and their right to collect damages for the willful violation of the automatic stay. Under these circumstances the bankruptcy filer would be able to recover attorneys’ fees. See In re Schwartz-Tallard, No. 12-60052, 2014 WL 4251571 (9th Cir. Aug. 29, 2014).
This entry was posted in Automatic Stay and Bankruptcy, Bankruptcy Information and Requirements and tagged Damages, Emotional Distress, Punitive, Violation Automatic Stay on September 15, 2014 by Admin.
Can a Non-Filing Spouse of a Spouse that Filed Bankruptcy Buy a Community Property Asset From the Bankruptcy Estate?
The short answer is yes, a non-filing spouse of a spouse that filed bankruptcy can buy a community property asset from the bankruptcy estate. See 11 U.S.C. §363(i) and In re Lewis; BAP No. CC-13-1367. For some this question alone might be confusing. When a couple is married either spouse may file for bankruptcy protection without the other spouse. All of the separate property of the filing spouse and community property of the filing spouse must be listed in the petition. In California, community property consists of: all property, real or personal, wherever situated, acquired by a married person during marriage while domiciled in California is community property. Cal. Fam. Code §760. In the Lewis case the community property at issue is an employment law lawsuit filed, but not resolved, prior to the bankruptcy case being filed. The cause of action is therefore an asset of the filing spouse’s bankruptcy case. See Vick v. DaCorsi, 110 Cal. App. 4th 206, 212 n.35 (2003).
A twist in the Lewis case was that the bankruptcy trustee sold the bankruptcy estate’s interest in the lawsuit to a company named Kallman & Company, LLP for $40,000 pursuant to 11 U.S.C. §363(b). Section 363(b) allows the trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate . . . . . . The Chapter 7 trustee’s bankruptcy lawyer filed, served and correctly provided notice of the motion for approval to sell the cause of action to Kallman & Company, LLP. A hearing was held and the bankruptcy court approved the sale to Kallman & Company, LLP. According to the terms of the sale Kallman did not have to pay the $40,000 until 30 days after the closing date of the sale, and the closing date occurred only when the order approving the sale became final and not appealable. Given the delay in closing the sale the non-filing spouse had time to act and her bankruptcy attorney and her did indeed act.
The non-filing spouse informed the Chapter 7 Trustee and counsel that she intended to exercise her rights pursuant to 11 U.S.C. §363(i). 11 U.S.C. §363(i) provides: before the consummation of a sale of . . . . . . property of the estate that was community property of the debtor and the debtor’s spouse immediately before the commencement of the case, the debtor’s spouse, or a co-owner of such property, as the case may be, may purchase such property at the price at which such sale is to be consummated. So the Chapter 7 trustee then filed a motion under 11 U.S.C. §363(i) under the grounds that the lawsuit claim is community property and the sale to Kallman & Company, LLC was not consummated yet. Kallman & Company, LLC of course opposed the sale to the non-filing spouse. The bankruptcy court granted the motion to sell the lawsuit claim to the non-filing spouse and held that the lawsuit claim was community property and the sale to Kallman & Company, LLC was not consummated. After various legal wrangling the order approving the sale to the non-filing spouse was appealed to the 9th Circuit Bankruptcy Appellate Panel. The 9th Circuit BAP found the act of the non-filing spouse asserting her claim to the lawsuit asset and obtaining an order from the court granting the sale was an intervening event that prevented the consummation of the sale to Kallman & Company, LLC. The 9th Circuit Bankruptcy Appellate Panel went further to say that Kallman & Company, LLC have no one but themselves to blame. Kallman could have consummated the sale immediately by tendering the purchase amount to the Chapter 7 Trustee and Kallman could have asked to have the stay pursuant to Federal Rule of Bankruptcy Procedure 6004(h) to be waived. FRBP 6004(h) provides that an order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. The 9th Cir. BAP further said that Kallman instead provided the non-filing spouse with sufficient time to assert her §363(i) right and to prove that she had the ability to make good on her offer to purchase the lawsuit claim from the bankruptcy estate. What is there to take away from this case? If you are a purchaser of assets under 363 of the Bankruptcy Code and you really want the assets you are purchasing consummate the sale as soon as possible if there is a non-filing spouse.
This entry was posted in Bankruptcy Information and Requirements and tagged Bankruptcy, Non-Filing Spouse, Section 363 on August 23, 2014 by Admin.
How To Avoid or Prevent the Necessity of Filing for Bankruptcy?
One of the most common remarks we here from clients is, “I never thought I would file for bankruptcy protection.” Our response is usually, “No one ever does.” They probably never thought the bad thing that happened to them or, their family, that led to having to file for bankruptcy protection would happen either. Bad things happen every day that are not in our control. So unfortunately for some there is no avoiding the necessity of filing for bankruptcy. For example: being laid off from a job, medical debts, debts resulting from car accidents or a natural disaster. While these circumstances are not traditionally in our control there are plenty of other pieces of the financial puzzle that are within our control.
These four types of debts are primarily the types of debts that can have incredibly high interest rates. If you have never heard of usury laws you are not alone. Each state has or had usury laws to limit the amount of interest a lender could charge a borrower. The laws are designed to protect all of us from unfair or unconscionable interest rates. These laws have been weakened over and over again in the name of greed and corporate profits. For more detailed information please read “How Can Credit Card Companies Charge Such High Interest Rates?” http://www.westcoastbk.com/blog/2012/07/how-can-credit-card-companies-charge-such-high-interest-rates/ So the law now allows for the ridiculous and unconscionable interest rate as high as 29% on some credit cards. If you do not pay off the credit card each month that has a high interest rate the underlying debt will balloon quickly. Spread that problem around four or five different credit cards are you are heading in the direction of a bankruptcy lawyers office unfortunately. So do your best to limit the use of creditor cards and especially the use of your highest interest rate credit cards. Payday loans and cash advances are even worse. The highest interest rate I have ever seen on an actual loan documents was over 1,000%. Somehow this is legal. Standard vehicle loans can have generous interest rates. Title loans are when your vehicle is paid in full, but you take loan and use the vehicle as collateral. The loan company will take your pick slip/title until the loan is paid in full. Title loans are traditionally horrible for the borrower. Again, very high interest rates and title loan companies rarely keep very accurate records regarding payments and accrued interest.
Do not buy too much house. Other than banks handing out questionable loans and fraudulent appraisals artificially increasing the value of homes, the next largest factor as to why so many people lost their homes in my opinion was because they bought too much house. That means they purchased a house that was too large and too expensive given their income and expenses. The cause of this was mostly interest only mortgages and adjustable rate mortgages. So do not buy too much house. If you income is reduced 20% will you still be able to afford your mortgage payment each month? How long can you pay your mortgage if you are laid off? We all hope that these unfortunate events do not happen to us, but they happen to everyone without discrimination.
The thing with taxes is you have to pay them, period. So just let the government have the money upfront so you do not have an issue when it comes time to file your taxes each year. In California the Franchise Tax Board is does aggressively collect unpaid taxes. The FTB will garnish your wages and attached a tax lien to your home if you own real property. If you have changed your deductions on your paycheck to artificially increase your net income each month you are creating a tax debt each paycheck. Will you have the money to pay the taxes at the end of the year? No, you will not because you changed your deductions to increase your net income because you are currently having trouble paying your bills. Do not change your deductions to artificially increase your net income. It is a recipe for disaster. If you take an early distribution from a retirement account pay the penalty/taxes at the time you have the money taken out. Do not defer the penalty/taxes to when you have to file your return. Again, this is a recipe for disaster. Every bankruptcy attorney will tell you that ERISA and other qualified retirement accounts (Tax Deferred) are 100% protectable when filing bankruptcy under almost all circumstances. So another reason to not raid a retirement accounts because you can keep the retirement money and still discharge your debts.
If you are having difficulty paying your bills each month bankruptcy might be the best option to get back on track financially.
This entry was posted in Bankruptcy Information and Requirements, Uncategorized and tagged Avoid Filing, Bankruptcy on August 15, 2014 by Admin.
How to Choose a Reputable Bankruptcy Attorney in the Bay Area?
It is actually very simple to find a reputable bankruptcy attorney in the Bay Area if you take the time. We truly want our prospective clients to speak with other attorneys, preferably before they speak with us. The best thing someone can do for us is speak to other bankruptcy attorneys to find out firsthand how superior our services are from start to finish. If you follow the approach below we are confident you will find the right law firm and person to represent you, even if it is not us. Although, the best thing to do is obtain a referral from a friend, colleague or family member. We know this is a difficult thing to discuss sometimes, but going through this process with an attorney that has already done right by someone you know is priceless.
Take the time to choose a reputable bankruptcy attorney in the Bay Area.
Talk to at least three different bankruptcy attorneys that have an office around where you live or work.
It is important to take the time to meet with at least three different law firms. How you are treated when you call and at the initial consultation will be a sign as to what is to come. If your initial consultation is not with an attorney run away. Some firms use legal assistants or paralegals that are not authorized to practice law, give legal advice or answer your legal questions. This is ethically wrong and you deserve better. After speaking with one or more law firms you will understand what filing bankruptcy requires, what your options are and know what range of attorney fees is appropriate. You should receive a breakdown of the fees. How much are for the attorney, the filing fee, the required courses and credit report. If you receive a quote around $30 per course for the required course run away. The required course for any individual filing bankruptcy should not exceed $12.95 TOTAL! If a law firm is suggesting you have to pay them $100 or more for the required courses run away. They are pocketing processing fees and not telling you. Also stay clear of anyone trying to sell you on post-bankruptcy credit repair. It is a scam, just ask the FTC by going to http://www.consumer.ftc.gov/articles/0225-credit-repair-scams and read for yourself. Only time can heal your credit woes.
Do a Google search of the business name and the word complaints or reviews. Do a Google search of the bankruptcy lawyer name you met with and complaints or reviews. If you look at Yelp you also need to look at the “Filtered Reviews.” There is a link towards the bottom of the Yelp page that is gray. To get the whole story you need to look at the reviews that Yelp for whatever reason chose to filter out. If there is one bad review do not be concerned. If there are a number of bad reviews you know that it is not an isolated incident, but a pattern of poor service that you do not want to pay money for.
How many of your Chapter 7 cases did you have to convert to a case under Chapter 13 because the United States Trustee objected? You may not receive an honest answer to this question. I can tell you as of the writing of this article none of our Chapter 7 cases have had to be converted to Chapter 13 to save the case, but that could change. This questions targets whether the attorney can properly evaluate whether you qualify to file a Chapter 7 case, or should the case be filed as a Chapter 13 to begin with.
Do you enjoy what you do, if so why? If they do not enjoy it do not retain them. Surprisingly enough this question can tell you a lot about who you give your money to. If they are just doing a job and have no passion why do you want them to represent you? You will be surprised at the responses you get. You will know the right response when you receive it.
How long does it take you to respond to my phone calls or questions? This is a good question to ask because communication is important. We return all emails and phones calls within 24 hours. The point is to make the attorney give you some sort of response to rely on. If they do not respond to you timely in the future be sure to let them know what the represented to you before you retained their services.
Will I be able to speak with an attorney after I retain your services? Amazingly this is a good question to ask. Again, you may not receive an honest answer to this question. Read the complaints and reviews and you will read that a common complaint is they were never able to speak with an attorney and had no idea who the attorney was that showed up at the 341 meeting of the creditors to represent them. I see it all the time and it is shameful.
This entry was posted in Bankruptcy Information and Requirements and tagged Bankruptcy Lawyers, Bay Area, Reputable Bankruptcy Attorneys on November 13, 2013 by Admin.

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