Bankruptcy & Litigation Series: #4 Collections - Defendant Bankruptcy

When one of the parties in a collection action goes bankrupt, the result is very different depending on whether it is the defendant or the plaintiff.  As described in this previous post, when the Plaintiff files for bankruptcy, the suit may continue but becomes an asset of the estate.  But what happens to a collection suit when the Defendant files for bankruptcy?

Collection proceedings against a debtor are automatically stayed pursuant to 11 U.S.C. s. 362.  The debtor or debtor's counsel should file a Suggestion of Bankruptcy in the civil suit, but NOT filing a suggestion of bankruptcy does not have any prejudicial effect.

The Plaintiff should file a proof of claim if the case is filed under Chapter 11 or Chapter 13, or in a Chapter 7 where there are assets to distribute. The underlying debt will be included in the debtor's discharge, and should the Plaintiff pursue the case, will be in contempt of either the Order of Discharge or the Order of Automatic Stay, and face civil contempt penalties, including being forced to compensate the debtor for actual damages, attorney's fees and punitive damages.

What if there are multiple defendants?

In cases where there are multiple defendants, the case will be stayed as to the debtor, but the case WILL proceed as to the remaining defendants.  See 11 U.S.C. s. 362

Note that depending on the case, certain damages claimed in a civil or personal injury suit are not dischargable:

1. Money, property or services or an extension of credit obtained by false pretenses or actual fraud; or by a false statement
2. Debts for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
3. domestic support obligations
4. Debts for, what is essentially, bank fraud
5. for any payment of an order of restitution issued under title 18, United States Code
6. Election law penalties
7. Certain condo fees

See complete list at 11 U.S.C. s. 523.

Bankruptcy & Litigation Series: #3 Collections - Plaintiff Bankruptcy

A bankruptcy case can impact other litigation in many ways.  Some cases will be halted automatically by the filing of a bankruptcy due to the automatic stay.  Others might not be stopped, but might not be controlled by the bankruptcy trustee.  And some cases may not be affected at all.  Navigating these interactions can be difficult even for attorneys who are experts in other areas of the law if they don't practice in the bankruptcy court.

What happens to a Collection suit when the Plaintiff files for bankruptcy? 

It is generally a good idea to file a suggestion of bankruptcy to alert the court to the bankruptcy filing.  Most courts will temporary delay the hearing of the case, however 11 U.S.C. s. 362 is not designed for this application.  Ultimately, the suit itself is an asset of the bankruptcy estate.  Like any other asset, it may be exempt depending on the value of the potential claim.  In the event that it is not exempt (and at all times before being abandoned by the trustee), the Trustee steps into the plaintiff's shoes during the administration of the bankruptcy estate.

The Chapter 7 trustee may then offer to settle, or compel the debtor to pursue the suit (although the Trustee will bear the cost of compensating counsel for any post-petition legal fees).  Any proceeds obtained during the suit (less any exempt portions) will be turned over to the trustee as property of the bankruptcy estate and distributed to creditors.

If I move to Massachusetts, do I need to register my guns?

If you are moving to Massachusetts and bringing firearms, you should first obtain the appropriate license and ensure your firearms are legal to possess as previously outlined in this post: I am moving to Massachusetts from another state, do I need a gun license?

Assuming you have obtained the proper license and your firearms are legal to possess under that license, then you are not required to register firearms you brought with you as a new Massachusetts resident under the current statute.  The E-FA-10 registry system allows you to register your firearms if you want to, as described further in this previous post: Do guns in Massachusetts need to be registered?

Be careful not to confuse a relocation situation with the requirement to register firearms purchased from an out-of-state dealer.  If you are a Massachusetts Resident, and the firearms were directly obtained from an out-of-state dealer, then you would have to register them under this system.

Given the intricacies of Massachusetts firearms laws and the unique legal issues facing firearms owners in the Commonwealth, it is advisable to have an attorney who understands and practices in firearms law, criminal law and civil litigation.

Do guns in Massachusetts need to be registered?

In specific circumstances firearms are required to reported to the Massachusetts Firearms Records Bureau, a division of the Executive Office of Public Safety and Security (EOPSS).  This form of “registration” is handled at a state level, and not by the individual town police departments.

That being said, Massachusetts does not have a firearm registration system, per se.  However, the personal sale, transfer or acquisition of firearms by a Massachusetts resident must be recorded with the Massachusetts Firearms Records Bureau.  Therefore, there is a de facto registration requirement, but it does not apply in all cases.  Registration is accomplished by completing a “FA-10” (hard copy) or “E-FA-10” (electronically-submitted) form.  The submission of an FA-10 or E-FA-10 is required when:

1. You personally buy or sell a firearm in a personal transaction (of which you are permitted only four (4) per calendar year);
2. You are a Massachusetts resident and obtained a firearm from an out-of-state dealer;
3.  The loss or theft of a firearm (additional requirements apply);
4.  You acquire a firearm by inheritance.

Additionally, the E-FA-10 system will permit you to “register” firearms in other circumstances, such as:

1. You moved into Massachusetts from out-of-state, and wish to register your firearms;
2. You are in possession of firearms where no previous FA-10 has been submitted.
3. You have surrendered a firearm to the police.

The launch of the E-FA-10 system in Massachusetts this past year was met with significant opposition from the firearms community, as it inaccurately describes the law, and would seem to coerce registration in circumstances where no registration is required.  For example, there is no current statutory requirement that the firearms, brought in from out of state when a new Massachusetts resident moves from another state, must be “registered” or an FA-10 must be submitted.  Be careful not to confuse a relocation situation, though, with the requirement to register firearms purchased from an out-of-state dealer.

Given the intricacies of Massachusetts firearms laws and the unique legal issues facing firearms owners in the Commonwealth, it is advisable to have an attorney who understands and practices in firearms law, criminal law and civil litigation.

I am moving to Massachusetts from another state, do I need a gun license?

If you wish to bring guns with you from another state to Massachusetts, or to purchase and possess firearms in Massachusetts, then you need to obtain a license.  To obtain an LTC (License to Carry) or an FID (Firearms Identification Card) you need to follow the same process as a current resident of Massachusetts, which we outline in this previous post: How do I obtain a gun license in Massachusetts?

Some firearms or accessories that may be legal in other states may not be legal in Massachusetts or may only be legal to possess if you obtain the full LTC/A.  You should confirm that any firearms you bring in are legal to possess in Massachusetts and that you have applied for the correct license to possess that firearm.

It is also important to note that the law exempts the move in and possession of firearms in the home for new residents for sixty (60) days.  Until you receive the proper license, do not transport any firearms and/or ammunition.

While there is this “grace period” for new residents, new license applications are taking more than the 60 days allotted by statute so you should apply right away.  Additionally, it may be necessary to temporarily store your firearms with a properly-licensed individual or FFL until your license is approved to be in full compliance with the law.

How do I obtain a gun license in Massachusetts?

In Massachusetts to legally possess firearms you need to have an LTC (License to Carry) or a FID (Firearms Identification Card).  Since the LTC allows you to possess more types of firearms than the FID and obtaining an LTC/A (Class A) will also grant you the rights and privileges that attach under the lesser FID, we recommend that everyone apply for an LTC/A.  You do not need to apply for both licenses.  (See M.G.L. c. 140 §§ 129B and 131).

You will need to apply to the Chief of Police of the Massachusetts town in which you reside, or, if you own a business, the Town in which you reside or own a business.  The official state application for an LTC/A is a three-page form; however some towns have additional requirements, such as additional letters of recommendation, or request that you sign a memorandums on the lawful use of force.

We suggest that you contact the police department in the town you intend to reside, and request their “packet”, which will have all the forms required.  The fee to apply for an LTC/A is $100.00.  (See M.G.L. c. 140 § 131).

Before you can submit your application, you will need to take a firearms safety course approved by the Massachusetts State Police.  There are a number of certified courses available, and you should not have any difficulty obtaining a safety course certificate.  Most instructors charge between $60.00 and $100.00 for the basic firearms safety course, and the course generally runs four (4) hours.  When signing up for the course, be sure to confirm beforehand that the course is sufficient to obtain your LTC.

Even once you have your LTC/A there are many restrictions on the types of firearms you can own in Massachusetts and on how you must store and otherwise maintain them.  Given the intricacies of Massachusetts firearms laws and the unique legal issues facing firearms owners in the Commonwealth, it is advisable to have an attorney who understands and practices in firearms law, criminal law and civil litigation.

Can I Expunge a Criminal Conviction in Massachusetts?

Unlike some other states, Massachusetts does not have an Expungement statute.  It is not possible to expunge a conviction in Massachusetts.  In fact, the Massachusetts Supreme Judicial Court recently ruled again in Commonwealth v. Moe 463 Mass. 370 (2012) that the Court lacks the authority to order a record expunged, even where the resulting record is the result of fraud on the Court.

It is sometimes possible to reopen a trial and undo a conviction, but this can only be done in very specific circumstances, and the arrest will still appear on your record.  Attorney Trask was successful in one case in reopening a juvenile conviction from almost thirty years earlier and thereafter having the charges dismissed based on the client's clean record since.  While the original conviction is no longer on the record, the charge is not expunged.

It is sometimes possible to seal a record, so that access to the record is prevented from certain requests.  For more information on that possibility read our previous post entitled: Can I Seal My Criminal Record in Massachusetts?