Massachusetts Bankruptcy Lawyer

Unpaid child support in bankruptcy

Administrator — Sun, 08 May 2011 21:47:59 +0000

Single mothers who are owed child support would have as a personal property asset the amount still unpaid. There is no exemption available for such amounts, but they are only likely to be seized by a trustee who knows that a payment from the father would come soon after the time of the bankruptcy filing. If local child support enforcement authorities have been unable to secure these payments, it is unlikely a bankruptcy trustee would.

Are employment claims exempt in bankruptcy?

Administrator — Sun, 08 May 2011 21:40:58 +0000

While there is a federal law exemption for a personal bodily injury claim, a recent court decision specifies that this would not apply to an employment law claim, such as a wrongful termination claim (MCAD in Massachusetts). The $21,625 exemption amount is available for personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss. The court in In Re: Flattery, Francine Anne, et al. (Lawyers Weekly No. 04-035-11) (7 pages) (Hoffman, J.) (USBC) (Chapter 7 Case No. 10-43964-MSH) (March 23, 2011) found that this exemption was limited to payments on account of personal bodily injury, not applicable in employment law claims.

Can I discharge court ordered attorney fees through bankruptcy?

Administrator — Mon, 02 May 2011 19:45:27 +0000

A recent court decision, In Re: Johnson, Steven G. (Lawyers Weekly No. 04-034-11) (24 pages) (Feeney, J.) (USBC) (Chapter 7 Case No. 09-19214-JNF; Adv.P.No. 09-1387) (March 21, 2011), found that legal fees ordered to be paid to defend a complaint for modification of child support were a nondischargeable domestic support obligation. By awarding attorney fees against the complainant, the family court was finding that the complaint was without merit and therefore intended to penalize the complainant for his actions in filing the modification action. The family court award for defense of the Complaint for Modification and the four-day trial were “fair and reasonable under all of the circumstances.”

Debt collection letter language

Administrator — Sat, 30 Apr 2011 19:11:49 +0000

A recent federal decision in Massachusetts, Waters v. Kream, et al. (Lawyers Weekly No. 02-059-11) (6 pages) (O’Toole, J.) (USDC) (Civil Action No. 08-11912-GAO) (March 16, 2011), ruled that a debt collection letter did not violate federal (Fair Debt Collection Practices Act, FDCPA) or state (Chapter 93A) consumer protection statutes. The letter was written after the filing of a lawsuit and service of summons and complaint upon the defendant for an account with an outstanding balance of $21,472. The letter stated in part, “you have been served with process in a court case. If you get in touch with us, we may be able to come to a settlement. If that happens, you will be spared the costs of defending the case in court.” The defendant was advised to contact the law firm and set up a regular payment schedule if he could not pay the balance in full and warned that failure to respond to the letter would result in the firm proceeding with the lawsuit. Judge George A. O’Toole Jr. found that “[the correspondence] did not purport to advise the plaintiff as to his obligations, such as telling him he had to do something specific.” Strict liability under the FDCPA does not require clarity in all writings and is not a command to write “at a sixth grade level,” according to the ruling. The judge used a least-sophisticated consumer test to reach his decision, saying “this standard, while protecting naïve consumers, also prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness . . . The reference to the ‘Summons to appear in Court’ was, in the context of the entire letter, simply a way of introducing the nub of the letter, which was the suggestion that the plaintiff get in touch with the lawyers.”

Will the bankruptcy court be open during a government shutdown?

Administrator — Fri, 08 Apr 2011 19:59:18 +0000

The Bankruptcy Court in Massachusetts will stay open even if there is a shutdown of the federal government due to a lack of funding. New filings will be accepted and all pending cases will continue as scheduled. Building maintenance, security and creditors’ meetings will all continue their operations.

Tax Refund of Non-Working, Non-Bankrupt Spouses

Administrator — Wed, 06 Apr 2011 11:30:36 +0000

Recent Massachusetts case law has established a standard for how much of the money refunded from a jointly filed tax return an individual bankruptcy debtor spouse has an interest in. According to the court in Hundley v. Marsh, Trustee (Lawyers Weekly No. 10-031-11) (16 pages) (Cowin, J.) (SJC) Certification of questions of law to the Supreme Judicial Court by the 1st U.S. Circuit Court of Appeals. (Docket No. SJC-10729) (March 7, 2011), this is determined by whether the spouse would have been entitled to a refund had both spouses filed separate tax returns, contributions to the joint refund and hypothetical individual tax liability. This could mean a non-working spouse may not be entitled to even a portion of a tax refund.

Adding creditors to petition after 341 meeting is held

Administrator — Wed, 06 Apr 2011 11:27:13 +0000

If a debtor in a bankruptcy case is waiting to hear from the trustee as to potentially nonexempt property in their estate, motions to amend would be allowed without the need for objections. This would allow a debtor whose meeting is already completed to still add additional creditors if necessary and then wait for the trustee’s action on nonexempt property or hopefully a report of no distribution. The addition of creditors only extends the general deadline for objections to the debtor’s case, resulting in a longer wait for the debtor to receive their order of discharge.

New median income figures for Massachusetts

Administrator — Wed, 06 Apr 2011 11:24:09 +0000

New median household income figures based on U.S. Census information will take effect and apply to cases filed after March 15, 2011. The new median household income levels have increased for all household sizes, allowing more single filers, couples and families with children to qualify for a Chapter 7 discharge of debts. Two-person households filing for bankruptcy would benefit the most from these changes, since the two-person household median income level actually decreased last fall. You can see the median income figures at the US Trustee’s website here.

Can I keep my timeshare if I file bankruptcy?

Administrator — Wed, 06 Apr 2011 11:19:48 +0000

A bankruptcy debtor keeping their residence may wish to lose other nonexempt real estate they have an interest in, such as a timeshare. Often, it is difficult to actually give up an interest in timeshare real estate if the trustee for the case themselves does not pursue the property. The company providing the timeshare may have their own policies for surrendering the property back to them, but they may still pursue such owners for unpaid maintenance fees. Such fees can, of course, be discharged in a Chapter 7 case.

Joint ownership of foreclosed house

Administrator — Wed, 06 Apr 2011 11:17:31 +0000

If a house is in the name of two unmarried people, the foreclosure of the house may result in two separate bankruptcy cases. Even though the house would have been held jointly, only a married couple can file a joint bankruptcy petition. A relative or other non-spouse also responsible for the mortgage would have to file their own bankruptcy case in order to not have to pay the amount still owing after foreclosure sale.