Reprinted from Free Credit Score – CreditSesame.com
Friday, October 15, 2010
Thursday, October 14, 2010
New Median Income Figures Released for all Bankruptcy Cases Filed after November 1, 2010
The United States Trustee Program has released new Census Bureau data which is used for means testing calculations regarding Chapter 7 and Chapter 13 bankruptcy petitions. Due to the updated figures, the various standards for the expenses in the "means test" form will change for all bankruptcy cases filed on or after November 1, 2010.
In Massachusetts, the new Median Family Income figures are as follows:
Family Size of 1: $54,161
Family Size of 2: $67,142
Family Size of 3: $82,385
Family Size of 4: $100,462
In addition, add $7,500 for each individual in excess of 4.
For a list of the updated median family income figures for other states, a complete list is provided here.
In addition, the Kelsey & Trask, P.C. bankruptcy website has been updated to reflect the new figures, including updates to the Kelsey & Trask P.C. Means Test Calculator, and also our Mobile Means Test Calculator, optimized for use on smartphones. We will also be making the same updates to our Means Test Calculator iPhone App in the near future, so be sure to update your App.
In Massachusetts, the new Median Family Income figures are as follows:
Family Size of 1: $54,161
Family Size of 2: $67,142
Family Size of 3: $82,385
Family Size of 4: $100,462
In addition, add $7,500 for each individual in excess of 4.
For a list of the updated median family income figures for other states, a complete list is provided here.
In addition, the Kelsey & Trask, P.C. bankruptcy website has been updated to reflect the new figures, including updates to the Kelsey & Trask P.C. Means Test Calculator, and also our Mobile Means Test Calculator, optimized for use on smartphones. We will also be making the same updates to our Means Test Calculator iPhone App in the near future, so be sure to update your App.
Tuesday, October 12, 2010
Small Claims Redefined - Up to $7,000
As part of AN ACT RELATIVE TO ECONOMIC DEVELOPMENT REORGANIZATION on August 5, 2010, the Massachusetts legislature raised the amount in dispute that may be heard in small claims court from $2,000 to $7,000. SECTION 156 of said Act states:
There is no doubt that this will increase the number of small claims cases, with the hope that it will also decrease the caseload on the district court process. This change may also increase the overall number of claims, however, by making it easier for potential creditors to seek judicial relief from debtors.
Small claims court is operated slightly differently from ordinary district court. The process is streamlined so that disputes are heard quicker than in the district courts. Instead of a judge and jury hearing the case, a court magistrate will preside and make a judgment.
Small claims court was designed to create a user-friendly environment for resolving disputes over an amount of money that was too small to justify hiring an attorney or having lengthy discovery and trials. Because of the expanded jurisdiction of small claims court to hear controversies over larger sums of money, there is more an incentive to hire representation since there is more at stake. The process can still be cheaper than district court, though, because of the simpler and quicker procedure.
For more information and frequently asked questions regarding small claims court procedure in Massachusetts, visit the Massachusetts Small Claims website or our new Small Claims page.
If you are owed money that you have not been successful in collecting on your own, or if you have had a small claims suit filed against you (called a "Statement of Claim and Notice of Trial") and wish to speak with an attorney regarding representation, contact Attorney Matthew Trask or call 508.655.5980 to schedule a One-Hour Initial Consultation.
Section 21 of chapter 218 of the General Laws, as so appearing, is hereby amended by striking out, lines 6 and 35, the following words, "two thousand dollars" and inserting in place thereof, in each instance, the following figure:- $7,000.
There is no doubt that this will increase the number of small claims cases, with the hope that it will also decrease the caseload on the district court process. This change may also increase the overall number of claims, however, by making it easier for potential creditors to seek judicial relief from debtors.
Small claims court is operated slightly differently from ordinary district court. The process is streamlined so that disputes are heard quicker than in the district courts. Instead of a judge and jury hearing the case, a court magistrate will preside and make a judgment.
Small claims court was designed to create a user-friendly environment for resolving disputes over an amount of money that was too small to justify hiring an attorney or having lengthy discovery and trials. Because of the expanded jurisdiction of small claims court to hear controversies over larger sums of money, there is more an incentive to hire representation since there is more at stake. The process can still be cheaper than district court, though, because of the simpler and quicker procedure.
For more information and frequently asked questions regarding small claims court procedure in Massachusetts, visit the Massachusetts Small Claims website or our new Small Claims page.
If you are owed money that you have not been successful in collecting on your own, or if you have had a small claims suit filed against you (called a "Statement of Claim and Notice of Trial") and wish to speak with an attorney regarding representation, contact Attorney Matthew Trask or call 508.655.5980 to schedule a One-Hour Initial Consultation.
Thursday, September 30, 2010
New Ban on Texting While Driving Goes Into Effect in Massachusetts Today
We don't typically handle many moving violations at Kelsey & Trask, but a new law in Massachusetts goes into effect today, banning text messaging while driving. As a public service announcement to our readers, the text of the statute that applies to drivers over the age of 18 (M.G.L. 90 § c. 12A) is reproduced below:
Section 12A. (a) No operator of a vehicle or vessel used in public transportation, including a train, passenger bus, school bus or other vehicle used to transport pupils, passenger ferry boat, water shuttle or other equipment used in public transportation owned by, or operated under the authority of the Massachusetts Bay Transportation Authority, the Woods Hole, Martha's Vineyard and Nantucket Steamship Authority, Massachusetts Port Authority, or the Massachusetts Department of Transportation, shall use a mobile telephone, hands-free mobile telephone or other mobile electronic device while operating such vehicle or vessel; provided, however that this section shall not apply to the operator of a vehicle or vessel used in public transportation using a mobile telephone, hands-free mobile telephone or mobile electronic device in the performance of the operator's official duties; provided, however, that in order for the use of any such device to be made "in the performance of the operator's official duties,'' such use must have been made in conformance with applicable written guidelines issued by a public entity listed in this paragraph relative to circumstances when operators are permitted to use said devices in the performance of their official duties or pursuant to directives from federal authorities having regulatory jurisdiction over such public entity's operations.
Whoever violates this section shall be punished by a fine of $500. A violation of this section shall not be a moving violation for purposes of the safe driver insurance plan under section 113B of chapter 175.
(b) It shall be an affirmative defense for an operator under this section to produce evidence that the use of a mobile telephone that is the basis of the alleged violation was in the case of an emergency. For the purpose of this paragraph, an emergency shall mean that the operator needed to communicate with another to report any of the following: (1) that the vehicle or vessel was disabled; (2) that medical attention or assistance was required on the vehicle or vessel; (3) that police intervention, fire department or other emergency services was necessary for the personal safety of a passenger or to otherwise ensure the safety of the passengers; or (4) that a disabled vehicle or an accident was present on a roadway.
The statute that applies specifically to drivers under the age of 18 (M.G.L. c. 90 § 8M) is as follows:
Section 8M. No person under 18 years of age shall use a mobile telephone, hands-free mobile telephone or mobile electronic device while operating a motor vehicle on any public way. For the purposes of this section, a junior operator shall not be considered to be operating a motor vehicle if the vehicle is stationary and not located in a part of the public way intended for travel.
A junior operator who violates the preceding paragraph shall be punished by a fine of $100 and shall have his license or permit suspended for 60 days for a first offense and shall not be eligible for license reinstatement until he also completes a program selected by the registrar that encourages attitudinal changes in young drivers; for a second offense by a fine of $250 and shall have his license or permit suspended for 180 days; and for a third or subsequent offense by a fine of $500 and shall have his license or permit suspended for 1 year.
It shall be an affirmative defense for a junior operator to produce evidence that the use of a mobile telephone, hands-free mobile telephone or mobile electronic device that is the basis of the alleged violation was for emergency purposes. For the purpose of this section, an emergency shall mean that the junior operator used the hands-free mobile telephone or mobile electronic device to communicate with another to report any of the following: (i) that the motor vehicle was disabled; (ii) that medical attention or assistance was required; (iii) that police intervention, fire department or other emergency service was necessary for the personal safety of the operator or a passenger; or (iv) that a disabled vehicle or an accident was present in the public way.
A penalty under this subsection shall not be a surchargeable offense under section 113B of chapter 175.
Section 12A. (a) No operator of a vehicle or vessel used in public transportation, including a train, passenger bus, school bus or other vehicle used to transport pupils, passenger ferry boat, water shuttle or other equipment used in public transportation owned by, or operated under the authority of the Massachusetts Bay Transportation Authority, the Woods Hole, Martha's Vineyard and Nantucket Steamship Authority, Massachusetts Port Authority, or the Massachusetts Department of Transportation, shall use a mobile telephone, hands-free mobile telephone or other mobile electronic device while operating such vehicle or vessel; provided, however that this section shall not apply to the operator of a vehicle or vessel used in public transportation using a mobile telephone, hands-free mobile telephone or mobile electronic device in the performance of the operator's official duties; provided, however, that in order for the use of any such device to be made "in the performance of the operator's official duties,'' such use must have been made in conformance with applicable written guidelines issued by a public entity listed in this paragraph relative to circumstances when operators are permitted to use said devices in the performance of their official duties or pursuant to directives from federal authorities having regulatory jurisdiction over such public entity's operations.
Whoever violates this section shall be punished by a fine of $500. A violation of this section shall not be a moving violation for purposes of the safe driver insurance plan under section 113B of chapter 175.
(b) It shall be an affirmative defense for an operator under this section to produce evidence that the use of a mobile telephone that is the basis of the alleged violation was in the case of an emergency. For the purpose of this paragraph, an emergency shall mean that the operator needed to communicate with another to report any of the following: (1) that the vehicle or vessel was disabled; (2) that medical attention or assistance was required on the vehicle or vessel; (3) that police intervention, fire department or other emergency services was necessary for the personal safety of a passenger or to otherwise ensure the safety of the passengers; or (4) that a disabled vehicle or an accident was present on a roadway.
The statute that applies specifically to drivers under the age of 18 (M.G.L. c. 90 § 8M) is as follows:
Section 8M. No person under 18 years of age shall use a mobile telephone, hands-free mobile telephone or mobile electronic device while operating a motor vehicle on any public way. For the purposes of this section, a junior operator shall not be considered to be operating a motor vehicle if the vehicle is stationary and not located in a part of the public way intended for travel.
A junior operator who violates the preceding paragraph shall be punished by a fine of $100 and shall have his license or permit suspended for 60 days for a first offense and shall not be eligible for license reinstatement until he also completes a program selected by the registrar that encourages attitudinal changes in young drivers; for a second offense by a fine of $250 and shall have his license or permit suspended for 180 days; and for a third or subsequent offense by a fine of $500 and shall have his license or permit suspended for 1 year.
It shall be an affirmative defense for a junior operator to produce evidence that the use of a mobile telephone, hands-free mobile telephone or mobile electronic device that is the basis of the alleged violation was for emergency purposes. For the purpose of this section, an emergency shall mean that the junior operator used the hands-free mobile telephone or mobile electronic device to communicate with another to report any of the following: (i) that the motor vehicle was disabled; (ii) that medical attention or assistance was required; (iii) that police intervention, fire department or other emergency service was necessary for the personal safety of the operator or a passenger; or (iv) that a disabled vehicle or an accident was present in the public way.
A penalty under this subsection shall not be a surchargeable offense under section 113B of chapter 175.
Monday, September 27, 2010
Inconvenient Convenience Accounts: What happens to a Joint Bank Account in Bankruptcy?
What is the effect of having your name on a joint bank account if you later file for bankruptcy?
Sometimes it just makes sense to give a trusted friend or family member access to our bank accounts. Commonly referred to as "convenience accounts," this often happens when parents wish to give their adult children the authority to take care of their affairs as they age by putting their child's name on their bank accounts. If that child later files for bankruptcy, a bankruptcy trustee might view the account as being the child's property, meaning that all or a portion of it may be at risk of being seized in bankruptcy proceedings.
In determining whether a convenience account is an asset which may be seized in a bankruptcy proceeding, courts will look at whether the original account holder intended to make a gift of access to the account or rather for their own convenience (so that an additional person could merely write checks to pay for the original account holder's bills), and the extent to which the additional person exercised ownership of the account (in other words, did he or she use the funds from the account for personal expenses, or was his or her use consistent with the original account holder's intent?). The law presumes that adding another person onto a bank account is a gift, which means that it can be difficult to convince a court that the additional person was added to the account for convenience, and the account should not be considered an asset to be seized in a bankruptcy proceeding.
The easiest way to avoid this risk is to execute a Durable Power of Attorney. This still allows for another person to write checks from your bank account should the need arise, and doesn't risk a bankruptcy trustee seizing your personal savings if your child files for bankruptcy.
If you need help weighing your options, contact Attorney Matthew Trask or call 508.655.5980 to schedule a one-hour consultation.
Sometimes it just makes sense to give a trusted friend or family member access to our bank accounts. Commonly referred to as "convenience accounts," this often happens when parents wish to give their adult children the authority to take care of their affairs as they age by putting their child's name on their bank accounts. If that child later files for bankruptcy, a bankruptcy trustee might view the account as being the child's property, meaning that all or a portion of it may be at risk of being seized in bankruptcy proceedings.
In determining whether a convenience account is an asset which may be seized in a bankruptcy proceeding, courts will look at whether the original account holder intended to make a gift of access to the account or rather for their own convenience (so that an additional person could merely write checks to pay for the original account holder's bills), and the extent to which the additional person exercised ownership of the account (in other words, did he or she use the funds from the account for personal expenses, or was his or her use consistent with the original account holder's intent?). The law presumes that adding another person onto a bank account is a gift, which means that it can be difficult to convince a court that the additional person was added to the account for convenience, and the account should not be considered an asset to be seized in a bankruptcy proceeding.
The easiest way to avoid this risk is to execute a Durable Power of Attorney. This still allows for another person to write checks from your bank account should the need arise, and doesn't risk a bankruptcy trustee seizing your personal savings if your child files for bankruptcy.
If you need help weighing your options, contact Attorney Matthew Trask or call 508.655.5980 to schedule a one-hour consultation.
UPDATE! Reaffirmation of Mortgage Debt
Last week, we addressed whether or not a debtor should consider reaffirming mortgage debt to ensure that their right to remain in their home, in the event the debtor does not reaffirm debt secured by real property. One open question is whether a the failure to reaffirm a debt creates a risk that the lender may foreclose on an otherwise current mortgage gives the lender the right to immediately foreclose on the mortgage. Many mortgages contain a term whereby the act of filing bankruptcy constitutes a default, even if payments are current, and the bank can recover its security interest securing the loan.
Prior to the 2005 Bankruptcy Abuse Protection Act (“BAPCPA”) reforms, debtors could retain personal property (mortgages, car loans, etc.), provided they remained current on the monthly payments, called "ride through". However, BAPCPA largely eliminated the so-called “ride through” option for security interests in personal property; the result of which is that now, in order to keep personal property securing a loan, the debtor and creditor would have to execute a reaffirmation agreement. In a reaffirmation agreement, the creditor would contractually exclude the debt from discharge in bankruptcy.
While the law was clear that BAPCPA imposed a reaffirmation requirement on personal property transactions, the law made no clear indication as to whether a debtor could retain a security interest in real property, absent a reaffirmation agreement. Recently, in In re Caraballo, the Connecticut Bankruptcy Court addressed this issue, and determined that debtor’s ongoing retention of real property does not require the execution of a reaffirmation agreement. 386 B.R. 398, 400 (Bankr. D. Conn. 2008). As such, bankruptcy petitions may keep their property during and after bankruptcy, as long as they remain current on their payments. Additionally, the “ride through” option preserves the previous terms of the loan or finance agreement, thereby preventing creditors from imposing harsher terms on debtors during the bankruptcy process.”
The Caraballo court, in reaching its conclusion, held that the mortgage holder could not foreclose on the debtor who did not reaffirm as long as payments continued on the mortgage, thereby providing an additional layer of protection to a debtor who has not reaffirmed his mortgage debt (either intentionally or at the lender’s refusal), and adds an additional layer of complexity when determining whether or not to reaffirm mortgage debt.
Prior to the 2005 Bankruptcy Abuse Protection Act (“BAPCPA”) reforms, debtors could retain personal property (mortgages, car loans, etc.), provided they remained current on the monthly payments, called "ride through". However, BAPCPA largely eliminated the so-called “ride through” option for security interests in personal property; the result of which is that now, in order to keep personal property securing a loan, the debtor and creditor would have to execute a reaffirmation agreement. In a reaffirmation agreement, the creditor would contractually exclude the debt from discharge in bankruptcy.
While the law was clear that BAPCPA imposed a reaffirmation requirement on personal property transactions, the law made no clear indication as to whether a debtor could retain a security interest in real property, absent a reaffirmation agreement. Recently, in In re Caraballo, the Connecticut Bankruptcy Court addressed this issue, and determined that debtor’s ongoing retention of real property does not require the execution of a reaffirmation agreement. 386 B.R. 398, 400 (Bankr. D. Conn. 2008). As such, bankruptcy petitions may keep their property during and after bankruptcy, as long as they remain current on their payments. Additionally, the “ride through” option preserves the previous terms of the loan or finance agreement, thereby preventing creditors from imposing harsher terms on debtors during the bankruptcy process.”
The Caraballo court, in reaching its conclusion, held that the mortgage holder could not foreclose on the debtor who did not reaffirm as long as payments continued on the mortgage, thereby providing an additional layer of protection to a debtor who has not reaffirmed his mortgage debt (either intentionally or at the lender’s refusal), and adds an additional layer of complexity when determining whether or not to reaffirm mortgage debt.
Tuesday, September 21, 2010
Protecting your Home: Reaffirmation of Mortgage Debt
Upon filing for bankruptcy, the assisted debtor has the option of discharging mortgage debt, meaning that they are not obligated to continue to make a monthly mortgage payment. Of course, it is a near certainty that the secured creditor will foreclose on the mortgage and take the debtor’s house. Occasionally, during the course of a bankruptcy proceeding, a debtor will determine that it is in his or her best interest to keep their primary residence, and continue to pay the mortgage.
Reaffirmation is an undertaking not to be considered lightly. Once you receive a discharge under Chapter 7, you may not file bankruptcy again for 8 years. So, if you experience economic hardship after you have received your discharge and re-obligated yourself to pay the mortgage, you may be held personally liable for any deficiency in the event of a foreclosure. This could mean liens, wage garnishments and personal property attachments.
If you and your attorney believe it is in your best interest to reaffirm mortgage debt, you must execute a reaffirmation agreement: a contract between you and your creditor indicating that you wish to remain liable on a debt. The reaffirmation is complete when the creditor prepares the formal reaffirmation agreement, which the debtor reviews and signs, and is then filed with the bankruptcy court by the creditor.
Unfortunately, you cannot force a creditor to reaffirm a debt – you can only indicate your willingness to do so. A creditor’s refusal to reaffirm happens more often than you may think. Unlike personal property, the bankruptcy law does not require an executed reaffirmation agreement for a debtor to retain real property securing a debt. (Put another way, if your lender is unwilling to reaffirm your car loan, you can either pay off the loan in full or allow the lender to repossess the car. If your mortgage company refuses to reaffirm, there is no requirement that you must turn the house over to the bank unless the bank initiates a foreclosure). In the current market, lenders will rarely, if ever, attempt to foreclose on a loan if the creditor is current with the payments and remains current on the mortgage. Practically speaking, the lender wants to continue to earn interest on the loan and not inherit the burden and expense of foreclosing the mortgage and auctioning your property.
So, even if your lender refuses to reaffirm despite your intention to do so, if you stay current, you can keep the home. If the lender attempted to foreclose at a later date (say, when you had significant equity accumulated after paying down the principal), certain equitable remedies (e.g., latches) would provide you with a defense to a foreclosure action.
Often, the greatest impact of a bank’s refusal to reaffirm mortgage debt is that after discharge, subsequent “on time” payments will not be reflected on your credit report, thus hampering your ability to repair your credit post-discharge. To get 'credit' again, you may want to refinance, and you would start fresh with a new loan.
Reaffirmation is an undertaking not to be considered lightly. Once you receive a discharge under Chapter 7, you may not file bankruptcy again for 8 years. So, if you experience economic hardship after you have received your discharge and re-obligated yourself to pay the mortgage, you may be held personally liable for any deficiency in the event of a foreclosure. This could mean liens, wage garnishments and personal property attachments.
If you and your attorney believe it is in your best interest to reaffirm mortgage debt, you must execute a reaffirmation agreement: a contract between you and your creditor indicating that you wish to remain liable on a debt. The reaffirmation is complete when the creditor prepares the formal reaffirmation agreement, which the debtor reviews and signs, and is then filed with the bankruptcy court by the creditor.
Unfortunately, you cannot force a creditor to reaffirm a debt – you can only indicate your willingness to do so. A creditor’s refusal to reaffirm happens more often than you may think. Unlike personal property, the bankruptcy law does not require an executed reaffirmation agreement for a debtor to retain real property securing a debt. (Put another way, if your lender is unwilling to reaffirm your car loan, you can either pay off the loan in full or allow the lender to repossess the car. If your mortgage company refuses to reaffirm, there is no requirement that you must turn the house over to the bank unless the bank initiates a foreclosure). In the current market, lenders will rarely, if ever, attempt to foreclose on a loan if the creditor is current with the payments and remains current on the mortgage. Practically speaking, the lender wants to continue to earn interest on the loan and not inherit the burden and expense of foreclosing the mortgage and auctioning your property.
So, even if your lender refuses to reaffirm despite your intention to do so, if you stay current, you can keep the home. If the lender attempted to foreclose at a later date (say, when you had significant equity accumulated after paying down the principal), certain equitable remedies (e.g., latches) would provide you with a defense to a foreclosure action.
Often, the greatest impact of a bank’s refusal to reaffirm mortgage debt is that after discharge, subsequent “on time” payments will not be reflected on your credit report, thus hampering your ability to repair your credit post-discharge. To get 'credit' again, you may want to refinance, and you would start fresh with a new loan.
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