Chapter 7

Published on: January 16, 2012

“Show Me the Money!” Jerry Maguire inspiration files Chapter 7

Leigh Steinberg files Chapter 7 Show Me the Money Leigh Steinberg filed for Chapter 7 bankruptcy protection last Wednesday in the face of a warrant being issued for his failure to appear in court over a $1.4 million dollar debt owed to a landlord. While Steinberg recognizes that he owes several million to creditors, he claims that since his 2008 divorce, his only assets are stock.

In 1996, Steinberg’s inspiring story was embodied in the classic film, “Jerry Maguire” staring Tom Cruise. However, since the films release, the sports agent has faltered, having faced a divorce and subsequent rehabilitation treatments for his alcoholism. While coming to terms with his alcohol problem, one of his employees took an unauthorized loan from an NFL client. This loan that violated the NFL Player’s Association regulations. That player subsequently fired Mr. Steinberg and signed on with a rival agency -one lead by an ex-Steinberg employee.

Due to a suit against him by a the National Football League Player’s Association (NFLPA), Steinberg cannot be certified by the union. Without certification, he cannot return to the work he does best -representing players. He has struggled with his debts for some time, but it has become apparent that bankruptcy may be the only way he can return to work.

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Published on: January 6, 2012

How Anna Nicole Smith Altered Bankruptcy Jurisdiction

By David M. Goldman

Anna Nicole Smith Changes Bankruptcy Jurisdiction
Being married to a billionaire did little to prevent Anna Nicole Smith from filing a Chapter 11 bankruptcy. When she did, her son in law, E. Pierce Marshall, filed a claim in her bankruptcy case for defamation of character. His claim was based on her suing him for tortuous interference with an expectancy interest i.e., unduly convincing his father to disinherit her.
E. Pierce Marshall had originally filed suit in Texas state court but Smith filed bankruptcy in California federal court. Each court made independent decisions of their own and the Supreme Court eventually was required to hear the case to determine which court had jurisdictional authority to hear the cases already decided.
It was found that while the bankruptcy court has statutory authority to hear non-core (weakly related to bankruptcy) cases, they lack the constitutional authority to hear those cases. As such, the bankruptcy court could determine that Anna Nicole Smith had an interest in suing E. Pierce Marshall, but the court lacked jurisdiction to determine the amount of that claim. Resulting from this, Marshall was awarded the inheritance of his late father, but as he himself had also passed away, the property was given to his surviving spouse and children.

Published on: December 30, 2011

How does inheritance relate to a Bankruptcy case?

By David M. Goldman

Inheritance can be an issue in bankruptcy law. One might think that after you receive a discharge in your bankruptcy case, your case is done and the court does not have an interest in your finances. This is not always so.

In a Chapter 7 case, if a loved one dies and leave you an inheritance within 180 days from the date of filing your case, then this money becomes part of your bankruptcy estate. The trustee may want some or all of the inherited funds to distribute to creditors. The important thing to remember is that the date that you become eligible for the inheritance that is the date to use in this 180 day analysis. This is the date of the loved one’s death, not when you actually receive the money or property.

In a Chapter 13 case there is an ongoing obligation to keep the trustee appraised of what property you own. Once they learn of an inheritance, they will likely take those funds for the benefit of your creditors. This can occur any time during the case. Since Chapter 13 cases are often as long as five years, it is important to make arrangements with relatives who may pass on during this time.

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Published on: December 29, 2011

What Kinds Of Questions Will The Trustee Ask At A 341 Meeting Of Creditors?

By David M. Goldman

If you file for Chapter 7 or Chapter 13 bankruptcy, you must attend a 341 Meeting of Creditors at the federal courthouse. This is a hearing with the trustee, and any creditors are invited to attend, though usually they decline to. You will be put under Oath and asked to produce a photo I.D. and social security card. Then the trustee will ask you some questions. Here are some sample questions that a trustee might ask.

1. Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct?

2. Are all of your assets identified on the schedules?

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Published on: December 27, 2011

Common Bankruptcy Myths

By David M. Goldman

As is most legal processes, bankruptcy can be a difficult thing to maneuver. There is a lot of misinformation out there, you need to be careful to get your information from a trusted source. Here are some myths regarding bankruptcy:

Myth 1: If I file for bankruptcy, everyone will know.

Like most legal proceedings, most bankruptcy documents are public record. Since I work at a law firm in the bankruptcy department, I search these records all the time. I even have a special username and password that allows me access online. However, how many times do you think your friends, family, or co-workers search through federal court records? The truth is that while your bankruptcy documents will be public information, it is unlikely that those you know would search to find them.

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Published on: December 26, 2011

The Automatic Stay

By David M. Goldman

Automatic Stay, Bankruptcy Upon filing for bankruptcy protection, an automatic stay is put in place. This means that creditors can not try and collect from you. So a creditor cannot call you to request payment, send bills to you, garnish your wages anymore, or repossess your car without court permission. If there is a foreclosure suit against you, that suit must also stop immediately. If your home is sold and you filed prior to the sale, that sale can be vacated. Obviously, this is a powerful tool bankruptcy. Many people file to stop creditors from taking actions against them or their property.

The automatic stay will remain in effect until one of the following things occurs:

1. A creditor petitions the court for relief from automatic stay and the court enters an order granting it;

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Published on: December 23, 2011

Louisiana Debtors Sentenced to 6.5 years for bankruptcy fraud

By David M. Goldman

Bankruptcy Prison, Fraud A Shreveport, Louisiana man was sentenced to 6.5 years in federal prison for concealing over $400,000 in assets in a joint Chapter 7 petition. He also attempted to discharge a debt of $750,000 which was supposed to be held in escrow for a real estate project. He was convicted of concealing assets, making a false statement under penalty of perjury and bankruptcy fraud. As part of his criminal monetary penalty, he is to pay the U.S. Trustee $754,000. According to the National Association of Bankruptcy Trustees, the case was investigated by the FBI and the United States Bankruptcy Trustee’s Office and prosecuted by the Assistant United States Attorney.

Many people forget that bankruptcy relief is a privilege with limitations and that abuse of the system can be severely penalized. Before taking actions could lead to trouble, you should first consult experienced counsel. Contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Published on: December 21, 2011

Jacksonville Bankrupt Seek Rentals

By David M. Goldman

Many people who are considering bankruptcy are concerned that they will be unable to find a place to live if they give up their home. Although I have addressed this concern in the past by calling housing complexes around the city to see if they will rent to those who are bankrupt, there are still people who worry. Of course there is always the thought, “Sure, it someone else who filed for bankruptcy found a place to rent, but it what if it won’t happen for me?”. It’s easy to understand this concern as almost nothing is more important than having shelter, especially if you have children.

According to the Consumer Bankruptcy Project of 2007, 70% of those who who surrender their home in bankruptcy rent thereafter. Others chose to live with relatives, purchased a different house, etc. I still keep a list for my clients of properties around Jacksonville who will rent to those who file bankruptcy. If you would like more information regarding bankruptcy or would like to get your complex added to our list, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Published on: December 20, 2011

Bankruptcy Petition Preparers In Big Trouble With The Court

By David M. Goldman

Two bankruptcy petition preparers in Wisconsin are in big trouble with the Court, facing possible criminal charges. Jennifer Abbott, who is a disbarred attorney, was cited with contempt by a bankruptcy judge. The Court said that she has violated bankruptcy Court Orders repeatedly and she refused to obey a subpoena issued by the U.S. Trustee’s office. Abbot has also been convicted of felony theft for stealing from a client.

The second bankruptcy petition preparer, Gaynor Morrison, is in trouble for failing to appear in bankruptcy Court when ordered to do so. Also, he was alleged to have been overcharging clients and failed to return fees to clients after being ordered to by the Court.

Bankruptcy petition preparers are non-attorneys who help people file for bankruptcy. Courts and trustees often comment that the petitions or other required documents are flawed when drafted by a bankruptcy petition preparer. If this happens and the case gets dismissed without discharge, people could lose valuable assets or have to pay additional filing fees. Not all bankruptcy petition preparers are unprofessional, but it is best to have a licensed attorney with knowledge of the complexities of the Bankruptcy Code prepare your bankruptcy documents. To contact a Jacksonville Bankruptcy Attorney today, call 904-685-1200.

Published on: December 20, 2011

Saab files for Bankruptcy

By David M. Goldman

Saab Bankruptcy The first automobile company to come up with heated seating has filed for bankruptcy in it’s home country of Sweden. Although it began as an aircraft manufacturer, Saab entered the growing automobile market after World War II. Saab sales peaked in 1988 at sales of nearly 135,000 and nearly returned to that peak in 2006. USA Today’s, data shows a decline in Saab sales by 20.3% from 2006 to 2009.

According to Inside Line, the Swedish Company Reorganization Act requires that a bankruptcy application be approved only if there is reasonable cause to assume that the purpose of the reorganization will be achieved. Since the purpose of this reorganization is to keep the company running, it will be interesting to see what transpires.

Of course, the worst of the impact of a corporate bankruptcy is borne by the employees of the company. BBC News reports that Saab’s employes have complained that they’ve not been paid since last month. Since corporate bankruptcies often take months (if not years) to complete, it’s hard to imagine just how many personal bankruptcies this corporate one will cause.

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