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Ragues Law Book Review: The Color of Law

Wed, 31 Mar 2021 19:42:39 GMT

Ragues Law Book Review: The Color of Law

This eye-opening and thorough history of modern America cities, Richard Rothstein lays out precisely how segregation in America was the direct result of laws and policy decisions of local, state and federal governments. As he states in the Preface, “ When, from 2014 to 2016, riots broke out in places like Ferguson, Baltimore, Milwaukee, or Charlotte”…”we thought we knew how these segregated neighborhoods, with their crime, violence, anger and poverty came to be.” We thought it was the result of de facto segregation, the result of private practices by individuals, things like “white flight”, “redlining” and the fact that black families prefer to live with one another. While some of that may be true and definitely contributes to the problem, Richardson argues, and I think compellingly proves, is that segregation was not mainly de facto, but de jure, a result of systematic racially explicit laws and public policies. The book traces the means by which this racial segregation started in the 1920s with the great migration of African Americans from the South to the North, continued on through the flawed urban planning of the 1950s with the creation of white suburbs by federal subsidies given to builders on the condition that they do not sell to African – Americans and, where violent resistance to black families in these white neighborhoods was actively supported by the police. Sadly, even the passing of the Fair Housing Act in 1968 could not undo the harm that had already been done and which has led to the persistent racial unrest we see today. Rothstein argues that “residential racial segregation by state action is a violation of our Constitution and its Bill of Rights.” We need to learn and understand American urban history if we have any hope of remedying it in the future.

Grace Kaye

Ragues Law PLLC

Keeping Your Car

Wed, 31 Mar 2021 19:40:12 GMT

Keeping Your Car

After a house, most people are very concerned about keeping their automobile after filing for bankruptcy. Lets face it, without their car, people often cannot make it to work or get their children to school. In today’s mobile society, people need their car more than ever.

If you own an automobile and owe money on it, the creditor has filed a UCC statement which means the debt is a secured debt. This means they debt is secured by the automobile itself. Simply put, if you are not current with your auto payments, the creditor can go and pick up the car without the bother of a laws

uit.

However, if you filed for bankruptcy, the creditor will have to ask the court permission to lift the automatic stay that was created by your filing for bankruptcy. This means that any collection proceedings must be done only after the bankruptcy court gives the creditor permission to resume collection activity.

The creditor must make a motion in court to lift the automatic stay and try to repossess the automobile. It is during this time that the debtor has an opportunity to enter into an agreement with the creditor and try to keep the automobile, or if it is not worth it, to return the automobile to the creditor without any further obligations.

If the automobile is repossessed, it is our experience that debtors can still obtain leases on new or used cars or even purchase agreements on new or used cars despite their having filed for bankruptcy.

Why? Because creditors are always protected on secured debts like automobiles.

If you are considering filing for bankruptcy but are afraid of losing your car, have your attorney contact the creditor and try to arrange a plan in accordance with your wishes, either return it or a revised payment schedule that will allow you to keep your car and get to work.

Maybe The Bank Wont Let Me File?

Mon, 29 Mar 2021 19:47:04 GMT

Maybe The Bank Wont Let Me File?

This is a question that comes up often. Sometimes, a lending institution will ask you to sign a document that says you promise not to file bankruptcy before they lend you money. Generally, these prohibitions on filing are not valid and therefore not enforceable. If you qualify, you have a constitutional right to file bankruptcy. So why do these banks have these clauses if they are not enforceable? I think the banks believe these clauses might scare or discourage some of their customers from filing. They are counting not only their money, but also on the ignorance of the general consumer.

For you lawyers, this is the actual language of Section 363:

(l) Subject to the provisions of section 365 [11 USCS § 365], the trustee may use, sell, or lease property under subsection (b) or (c) of this section, or a plan under chapter 11, 12, or 13 of this title [11 USCS §§ 1101 et seq., 1201 et seq., or 1301 et seq.] may provide for the use, sale, or lease of property, notwithstanding any provision in a contract, a lease, or applicable law that is conditioned on the insolvency or financial condition of the debtor, on the commencement of a case under this title concerning the debtor, or on the appointment of or the taking possession by a trustee in a case under this title or a custodian, and that effects, or gives an option to effect, a forfeiture, modification, or termination of the debtor’s interest in such property.

Just remember this, bankruptcy courts routinely rewrite contracts, yours can also be rewritten.

Preparing the Petition

Mon, 29 Mar 2021 19:46:28 GMT

Preparing the Petition

The most important part in the bankruptcy petition process is preparing the Petition. This is where you tell the Court how much you owe, how much you have, how much you earn, etc Needless to say, you should be very complete and honest when you prepare these documents. Making false statements on these forms, even if by honest mistake, can result in your case being dismissed and even in criminal prosecution. You will also be preparing and submitting a budget of your income and expenses. Start with your rent or mortgage papers and add all your monthly expenses. Then determine your monthly income. If you are unemployed and are receiving unemployment, get your proof together as soon as possible. What is your monthly shortfall? You do not put all your debt payments because some will be discharged. But you do put those debts that cannot be discharged, like student loans, taxes, fines. You may be shocked to see what your monthly shortfall is.

Look around your house, what do you have? These are your possessions, your property. We need to notify the court of these items. Failure to do so will slow down your case. Trustees will become angry if you fail to list your property, even if it simply consists of your cell phone and pair of jeans. Put it on the lists. The technical name for lists is “schedules”. Your lawyer will know where to list the property. You just need to properly notify your lawyer of what belongs on the list.

Be thorough. Make sure your lawyer has all the necessary information as soon as possible.

Creditor’s Meeting

Mon, 29 Mar 2021 19:45:42 GMT

Creditor’s Meeting

I’m not sure why they call it a creditor’s meeting. The only ones that show up are the debtor, his or her attorney, and the trustee. While creditors have the right to show up, in the vast majority of Chapter 7 cases, they never show up. They know they are not going to get paid, so why would they want to show up? The answer is they don’t. The theory behind these creditor’s meetings, also known as 341 Meetings, is that the creditors can step in if they have evidence of abuse. But rare is the case where they is any such evidence of abuse. The vast majority of cases involve cases of no abuse and the creditors and their attorneys know that. At these meetings, the trustee gets to take the sworn testimony of the debtor and question the debtor about the bankruptcy filing. These trustees are highly experienced attorneys that can quickly discover problems with the case. It is their job to make sure that the case is properly administered and not abused by the debtor. If the trustee is satisfied that the petition is complete and accurate and properly documented, the trustee will close the hearing. If the trustee wants additional documentation, the debtor will be given a deadline by which to provide the missing documents. If the documents are properly provided, the trustee will then close the hearing without having another physical meeting. They will simply provide a control date by which the documents need to be provided. The less problems at the hearing, the easier the case will come to a conclusion. It is for this reason that the experienced lawyer will try to provide all the documents well in advance of the hearing to the trustee, if at all possible. But remember, the debtor must provide the documents to his or her attorney as requested.

Necessary Documents

Mon, 29 Mar 2021 19:36:30 GMT

Necessary Documents

Ideally, before you file, you should start getting the following documents together. Your two last taxes, pay stubs for the last three months if you are working, copies of your bank statements for the past six months and if you own any property, like a house or a car, you should get property evaluations. The trustee assigned to your case will need these documents in order to review your bankruptcy petition for accuracy and completeness. Some trustees are more demanding than others, assume the worse and be prepared. Your lawyer will also want to review these documents before filing for the same reasons. Trustees do not like to hear that these documents are unavailable. You will need them so start the search as soon as possible. Of course, if there is an emergency such as a garnishment of your wages, you may need to file before you have all your documents in hand, but you may be causing your lawyer additional work in making amendments to the petition. This causes more work for the trustee and sometimes requires additional and costly appearances in Court. So try to get these documents. These documents are required whether you are filing a Chapter 7, 11 or 13 Petition.

Step One in Chapter 7 Bankruptcy Cases

Sat, 27 Mar 2021 19:44:58 GMT

Step One in Chapter 7 Bankruptcy Cases

You cannot file a Petition in Bankruptcy Court without first taking a Credit Counseling Course. With a few exceptions, it MUST be taken. It costs approximately $35 to $50 to take and you can take it either on the phone or online. Shop around for the best deal and remember, you need to file within 180 days after you take the Course or you will need to retake the course.

Step Two In Bankruptcy Cases (the Means Test)

Sat, 27 Mar 2021 19:43:59 GMT

Step Two In Bankruptcy Cases (the Means Test)

Just so you know, the steps outlined need not be done in the order specified.

Here it can get technical, but lets not belabor the point. What you want to do is pass the Means Test.

What is the Means Test?

The Means Test is the way the Trustee determines whether you are abusing the system or not.

If you pass the Means Test, there is NO PRESUMPTION OF ABUSE.

If you fail the Means Test, there is a PRESUMPTION OF ABUSE. We can deal with this later because it is not a very common occurrence.

Passing the Means Test means your chances of successfully filing and completing a Chapter 7 case are good.

This leads us to the next issue, Do you want to file a Chapter 7 or a Chapter 13 Case?

Bankruptcy Law Basics

Sat, 27 Mar 2021 19:37:03 GMT

Bankruptcy Law Basics

Everyday, our office is inundated with basic questions about how bankruptcy law operates. These articles are written for both professionals who have little experience with Bankruptcy law and for consumers that contemplate filing bankruptcy. Another group of people that are concerned with bankruptcy is Creditors who are trying to collect on a debt. I apologize now to you Creditors, there is not much for you to like.

First thing you need to know is that the Bankruptcy Courts are creatures of federal law. This means they have some real power, including the power to rewrite contracts etc.

Make the Choice, Chapter 7 or 13?

Sat, 27 Mar 2021 19:33:21 GMT

Make the Choice, Chapter 7 or 13?

What is the difference?

The vast majority of filings are Chapter 7 filings. These are preferred by debtors because Chapter 7 cases generally result in the cancellation of your debt. The legal term is the discharge of your debt. In fact, the ultimate goal of a Chapter 7 case is to obtain an Order of Discharge from the Bankruptcy Judge.

Chapter 13 cases are more complex. In a Chapter 13 case, you are seeking to pay off a portion of your debt over a period of time. If you make above a certain some of money, a Chapter 13 case may take either 3 years of 5 years. In other words, you make payments to the Trustee pursuant to either a 3 year plan or a 5 year plan.

Once you make your payments into the plan, all the remaining debt is discharged.

The problem with most Chapter 13 cases is that many things can happen over a 3 or 5 year plan. If you lose your job or have a health problem or end up in divorce court, and you fall behind on your payments, the case may be dismissed by the court. When this happens, your lawyer has to take certain actions to protect your interests.

So why do Chapter 13? Because you might make too much money to qualify for a chapter 7 by virtue of the Means Test. I will give you much more details about the Means Test in some future posting.