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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Lawyer to Lawyer

Bankruptcy Court Says $5,000 Chapter 13 Legal Fee Is Reasonable

Posted on Thursday (December 6, 2012) at 3:00 am to Chapter 13 Bankruptcy
Lawyer to Lawyer
Recent Bankruptcy Court Decisions
Suffolk Lawyer

Bankruptcy legal fees in Chapter 13 casesWritten by Craig D. Robins, Esq. 

 Recent Brooklyn Bankruptcy Court Decision Reviews Legal Fee Factors
 
What is a reasonable legal fee for a typical Chapter 13 bankruptcy case?  That issue was addressed in a decision just released by Judge Jerome Feller, a bankruptcy judge in the Eastern District of New York, sitting in the Brooklyn Bankruptcy Court.

 

In that case, Chapter 13 trustee Marianne DeRosa objected to a $7,500 flat legal fee that the debtor’s attorney had charged.  She insisted that the debtor’s attorney, Paul Hollender, of New York City, bring a formal fee application to approve his fee.  She then filed opposition to his fee, arguing that it was in excess of the fees customarily charged for routine cases in this district. 

Judge Feller issued a twelve-page decision on October 11, 2012 in which he concluded that reasonable compensation for a routine Chapter 13 filing in this jurisdiction is $5,000.  In re: Nicholas Moukazis, (01-12-42200-jf, Bankr. E.D.N.Y.).  (In her motion papers, Trustee Marianne DeRosa pointed out that the customary Chapter 13 legal fees in this jurisdiction are between $3,500 and $5,000.)

This is important news as Long Island bankruptcy attorneys have at times been at odds with the two Chapter 13 trustees in this district over what a reasonable fee is. 

For a period of time, the other Chapter 13 trustee in our district, Michael J. Macco, insisted that every bankruptcy practitioner charging over $4,000 had to bring a fee application to seek approval of the fee.  Now we have a current judicial determination indicating what is reasonable for routine Chapter 13 cases.

For those who are not familiar with Chapter 13 practice, these bankruptcy proceedings, which involve a payment plan, usually require several court appearances, and often involve at least twice as much work as a typical Chapter 7 case.

Factors In Determining What a Reasonable Bankruptcy Attorney Fee Is In a Consumer Case

Judge Feller began the legal analysis in his decision by reviewing the elementary bankruptcy law concept that the Bankruptcy Court not only has the authority, but the duty, to determine the reasonableness of compensation paid or agreed to be paid for representing a debtor in a bankruptcy case regardless of whether a party in interest objects to it.

The Judge then determined that the following factors were necessary to assess the reasonableness of the legal fee: the necessity of the services rendered, the benefit to the debtor, the time expended, the customary fees and reasonable hourly rates for the services performed, and public policy concerns.

Judge Feller observed that the Moukazis case was unexceptional and uncomplicated.  The debtors’ income was about $150,000 per year.  They owed about $92,000 in unsecured debt.  Their mortgage was current.  The plan proposed a distribution of about 44% to unsecured creditors. 

The debtors retained their attorney about seven weeks before the petition was filed. There was only one meeting of creditors.  The Court confirmed the Chapter 13 plan less than six weeks after that.  The attorney performed the legal work well.

The retainer agreement the attorney used provided for the $7,500 flat legal fee, and also indicated that this was for the bare minimum of possible legal services in a Chapter 13 case. 

The attorney also indicated that he reserved the right to charge additional fees for services such as amendments, attendance at additional meetings of creditors or hearings, and routine motion practice. 

Of the $7,500 fee, the debtors paid $2,000 prior to filing.  In his fee application, the debtor’s attorney claimed he spent 12 hours devoted to the case, and that his paralegals expended a total of 23 hours.

The debtors were actually able to afford the higher fee; however, that did not sway the judge.  He observed that they were paying a portion of the fee through the Chapter 13 plan, and that unless there is a 100% plan, unsecured creditors will effectively pay the fee while receiving a lower pro rata distribution.

Public Policy Considerations Come In To Play In Determining Reasonableness of Bankruptcy Legal Fee

The Judge also commented on the public policy considerations for ensuring that Chapter 13 legal fees are reasonable.

Empirical evidence shows that Chapter 13 cases are much more likely to succeed when debtors are represented by counsel.  Accordingly, in order to ensure that debtors have access to counsel, they should not be overcharged.

Thus, a reasonable fee must be one which protects the debtor, while being generous enough to encourage lawyers to render the necessary and exacting services that bankruptcy cases often require.

Some districts in other parts of the country have “fee caps” in consumer cases which essentially permit bankruptcy counsel to charge any fee up to the cap without having to obtain court approval.  Our district is not one of them. 

Judge Feller, in the decision, expressly stated that “this Court is not hereby endorsing fee limits in Chapter 13 cases” and “does not intend to establish a fee cap in Chapter 13 cases.”

Looking back to other decisions which addressed Chapter 13 legal fees in this district, in 2010, Judge Robert E. Grossman, sitting in the Central Islip Bankruptcy Court, addressed the propriety of a $15,000 fee charged by an attorney who apparently was less than competent in representing the debtor. 

In that case, Chapter 13 trustee Michael J. Macco objected to the fee and the Judge reduced it to $4,000 stating that “the bankruptcy proceeding was not complicated” and the attorney “performed at an incompetent level.”

In his decision (which is now several years old), Judge Grossman pointed out that experienced counsel charged between $4,000 and $4,500 for cases in the district.  He therefore reduced the fee to $4,000 for this attorney and ordered him to disgorge the rest.  The attorney appealed to the District Court, which affirmed.  In re Arebelo, 2011 U.S. Dist. LEXIS 37449, 2011 WL 1336676.

The takeaway here is that an experienced Chapter 13 bankruptcy attorney, who does a proper and professional job, can charge as much as $5,000 for a typical Chapter 13 case, and more if unusual or additional legal work is necessary.

In addition, if the trustee or court challenges the legal fee, the bankruptcy attorney bears the burden of demonstrating the reasonableness of the fee.

Incidentally, this relatively high legal fee is indicative of the large amount of work that a bankruptcy attorney must put into a typical Chapter 13 case, which was made somewhat more complex and complicated by the significant changes to the bankruptcy laws in 2005 (BAPCPA).
 
To see a copy of the Mouzakis decision, click this link:   In re: Nicholas Moukazis, (01-12-42200-jf, Bankr. E.D.N.Y.). 
 
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About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the December  2012 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Mastic, Patchogue, Commack, West Babylon, Coram, Woodbury and Valley Stream.      Call (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.  
 
 
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Creative Lawyering with Chapter 20 Bankruptcy Case Tests Limits

Posted on Wednesday (December 5, 2012) at 6:00 pm to Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Lawyer to Lawyer
Suffolk Lawyer

Chapter 20 bankruptcy discussed on LongIslandBankruptcyBlog.comWritten by Craig D. Robins, Esq.

 
Judge Rules That Debtor Engaged in Unfair Manipulation of Bankruptcy Code
 
Judge Alan S.Trust, sitting in the Long Island Bankruptcy Court in Central Islip, New York, just issued an interesting decision in a case which the Judge stated “tests the outer limits of how debtors may seek to utilize the Bankruptcy Code and Rules to obtain the maximum advantages of the process known as ‘Chapter 20′.”  In re: Adam John Renz, No. 11-73471-ast, (Bankr. E.D.N.Y., Aug. 1, 2012).
 
What is a Chapter 20 Bankruptcy?
 
First, let’s discuss the concept of “Chapter 20.”  There is no actual Chapter 20 of the Bankruptcy Code.  Instead, this refers to the situation in which a consumer debtor files a Chapter 7 case and receives a discharge, and shortly thereafter files a Chapter 13 case.
 
There are several reasons why debtors may try to use a Chapter 20 strategy.  The objective is to obtain more relief than filing for Chapter 7 or Chapter 13 alone.
 
One common reason why debtors will do so is to discharge their unsecured debts through the Chapter 7 filing and then cure mortgage arrears over an extended period of time with a Chapter 13 plan.
 
Chapter 20 also enables consumers who need Chapter 13 relief, but don’t qualify because they owe more unsecured debt than Chapter 13 jurisdictional requirements permit, to become eligible for Chapter 13 filing.
 
In the past several years, some savvy bankruptcy practitioners have utilized Chapter 20 in a more creative way – to cram down a second mortgage that they could not have done if the debtor only filed for Chapter 7 relief, as most judges do not permit debtors to strip off second mortgages in Chapter 7 cases.
 
This has become a controversial maneuver as some jurisdictions do not permit this, having concluded that a debtor cannot strip off a second mortgage that has already been discharged, or that the second filing was not done to further the purpose of Chapter 13 relief, which is to pay debts through a plan, but instead to seek cram-down relief.
 
It should be noted that once a debtor files for Chapter 7 relief and obtains a discharge, the debtor is not entitled to receive a Chapter 13 discharge unless more than four years have passed from the date of the first filing to the date of the second filing.  Code section 1328(f)(1).
 
Thus, the objective in most Chapter 20 scenarios is not to discharge any debt, but instead, to use the payment plan features of Chapter 13 to cure mortgage arrears over a period of time.
 
Many debtors successfully cram down their second mortgages in Chapter 13 cases in this district and that has become a large part of consumer bankruptcy practice here during the past few years.  To do so, the debtor brings an adversary proceeding against the mortgagee seeking to strip off the second mortgage.
 
The Renz Case – An unsuccessful Chapter 20 Bankruptcy
 
In the Renz case, the debtors filed for Chapter 7 relief in 2009 and received a discharge.  Sixteen months later, they filed a Chapter 13 case.
 
Since less than four years passed from the date of the prior filing, they would not be entitled to a Chapter 13 discharge.
 
The debtor had a second mortgage on his home with with JPMorgan Chase for $100,000 that was clearly underwater.  Chase did not file a proof of claim, so debtor’s counsel, before the bar date, filed one for them.  (Bankruptcy Rule 3004 permits a debtor to file a proof of claim on behalf of a creditor).  As it turned out, Chase failed to file any papers whatsoever in the entire case.
 
Bankruptcy counsel also filed a cram-down adversary proceeding against Chase seeking a determination that the second mortgage was wholly unsecured.  Since Chase never responded to the adversary proceeding, the debtor obtained a default judgment.
 
The judgment specifically provided that “the claim held by Chase, secured by a mortgage lien on the Debtors’ real property . . . [shall] be deemed a wholly unsecured claim, and that the entire subordinate mortgage lien be declared null and void upon the filing by the Chapter 13 Trustee of a Certification of Completed Chapter 13 Plan.”
 
Here’s the kicker: two weeks later, debtor’s counsel filed a letter with the Court withdrawing the Chase claim.  He also amended the Chapter 13 plan calling for a one hundred percent distribution to unsecured creditors.  However, since the proof of claim had been withdrawn, Chase stood to receive no distribution whatsoever.
 
Chapter 13 Trustee Marianne DeRosa thereafter filed an objection to confirmation, arguing that the plan was not proposed in good faith, that the debtor did not have statutory authority to withdraw the proof of claim, and the debtor had sufficient income to satisfy the Chase claim in full.
 
Debtor’s counsel argued that the plan was proposed in good faith and that Chase’s failure to participate or file papers in any part of the proceedings was a tacit acceptance of debtor’s withdrawal of the Chase claim.
 
Judge Trust determined that the debtor’s actions here went too far and that the case “exemplifies an unfair manipulation of the Bankruptcy Code.” 
 
The judge noted that while the debtor appeared to have sought bankruptcy protection in good faith, the circumstances concerning the Chase claim demonstrate an attempt to abuse the purpose and provisions of Chapter 13.   As such, the Judge sustained the trustee’s objections to the plan.
 
Judge Trust held that the debtor did not have any cognizable basis for withdrawing the proof of claim and that it should be treated as an allowed unsecured claim.  He also held that the debtor had the ability to pay the Chase claim in full.
 
Although debtor’s counsel argued that the Chase mortgage debt had been discharged by the prior Chapter 7 case, the Court held that the debtor was required to satisfy the terms of a proposed plan before the mortgage lien could be stripped off.  Since the debtor’s gambit did not work, the case will likely be dismissed.
 
Here’s what I gleaned from this decision.  In a Chapter 20 case before Judge Trust, the debtor must file it in good faith and for the purposes that Chapter 13 is intended for.  In addition, the debtor can cram down the second mortgage, but should expect to pay it as an unsecured debt through the plan.
 
Creative lawyering and using novel theories to test the bounds of the law and to achieve extraordinary results is the mark of a smart attorney.  Many great results have been obtained this way.  After all, you don’t know where the limits are until you’ve exceeded them.  However, counsel must be careful not to tread too far over the line, which may have been the case here.
 
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About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the October  2012 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Mastic, Patchogue, Commack, West Babylon, Coram, Woodbury and Valley Stream.      Call (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.  
 
 
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Two Bankruptcy Attorneys Get Into Serious Trouble Over E.C.F. Filings

Posted on Monday (April 30, 2012) at 9:15 pm to Bankruptcy Practice
Lawyer to Lawyer
Recent Bankruptcy Court Decisions
Suffolk Lawyer

Attorneys who file bankruptcy petitions and papers by E.C.F. must abide by the court rulesby Craig D. Robins, Esq.

 

Flouting E.C.F. Filing Rules Has Grave Consequences

 

 

“The following is a cautionary tale of what occurs when the uninitiated attempt to practice before the bankruptcy court without a firm grasp of the Bankruptcy Code and Federal Rules of Bankruptcy Procedure.” 

 

“Even the most well intentioned practitioners can inadvertently wreak havoc on unsuspecting clients by failing to appreciate the complexity of the bankruptcy process. It is also a prime example of how things can escalate when an attorney is less than candid with the Court about his or her mistakes.” 

 

The preceding words were taken verbatim from a recent Massachusetts decision that severely castigated an attorney for messing up a consumer debtor’s bankruptcy filing and then lying about it to the court.  This month I will discuss that case, and another from one of our own courts here in the Eastern District of New York, both of which lambasted attorneys who utterly failed to abide by the rules.

 

Inexperienced Attorney Makes Mess of Bankruptcy Filing

 

In the Massachusetts case, Bankruptcy attorney Georgia S. Curtis was authorized to use E.C.F., but was grossly unfamiliar with how to do so.  “E.C.F.,” which stands for Electronic Case Filing System, is the computerized court website system through which attorneys file court documents such as bankruptcy petitions  In Re:  Jackquelyn D. Stallworth, 2012 Bankr. LEXIS 740 (Bankr. D. Mass 2/8/12). 

 

Since 2003, every petition and other court document that I’ve filed with the court has been done through my office computer, while logged into the court’s E.C.F. website.  For almost a decade, all bankruptcy attorneys are required to file their bankruptcy petitions, motion papers and other documents by E.C.F.

 

When Curtis filed her client’s petition, which was only the second petition that the attorney had ever filed, her inexperience got the best of her as she neglected to file the Creditor Matrix or the Statement of Social Security Number.  These are mandatory requirements, and failure to abide by them, as Curtis soon learned, is fatal.

 

Nine days later the court dismissed the petition.  Curtis also failed to file the Credit Counseling Certificate and page 3 of the petition, which is one of the petition pages that contains the attorney’s signature. 

 

Curtis then thought she could file a motion to vacate the dismissal by e-mail (which is not the appropriate procedure for filing a motion).  However, she messed this up as well, by attaching the wrong PDF document.  The court ordered her to correct this mistake within two days.

 

Did Curtis do that?  No.  Instead of correcting the deficient filing, two weeks later she filed a second Chapter 7 case without her client’s knowledge.

 

The petition in the second case contained only the debtor’s name, which was spelled incorrectly, the last four digits of her Social Security number, and the county of her residence, omitting her street and mailing addresses, as well as reference to her prior filings.

 

Additionally, the schedules accompanying the Debtor’s petition were blank or were otherwise incomplete, which, if taken literally as pointed out by the judge, reflected that she had neither assets nor any creditors. 

 

The judge then issued a sua sponte order to show cause directing Curtis to show cause why the court should not sanction her and suspend her E.C.F. filing privileges.  Because this petition was basically a blank, it also caught the attention of the United States Trustee who brought a motion against Curtis seeking to have her disgorge the legal fee. 

 

Over several order to show cause hearings, Curtis testified that she did indeed file all necessary documents when that was not true.  She also offered conflicting and contradictory explanations of what had happened. 

 

The judge wasn’t happy.  He suspended Curtis’s E.C.F. privileges, but indicated that Curtis could purge her “civil contempt” by becoming re-certified with E.C.F.  (All attorneys are required to participate in an E.C.F. training course as a prerequisite to obtaining authority to file by E.C.F.).

 

In addition, the judge stated that he had reasonable cause to believe that Curtis violated the Rules of Professional Conduct and referred the matter to the District Court for further disciplinary proceedings.

 

Curtis had a problem adhering to the court’s E.C.F. rules: she violated them.  That led to a suspension of her E.C.F. privileges.  But her problems increased exponentially when she lied to the court.  That led to a most serious referral that might result in her losing her license to practice. For a legal practitioner, not knowing what you’re doing is bad enough; perjuring yourself in court: indefensible.

 

Suspended Attorney Files Petitions in Other Attorney’s Name

 

On March 22, 2012, Judge Carla E. Craig, sitting in the Brooklyn Bankruptcy Court, issued another interesting decision involving attorney ineptitude and impropriety with the E.C.F. system.  In re:  Clyde Flowers, (01-12-40298-cec, Bankr. E.D.N.Y.) 

 

Peter J. Mollo was a Brooklyn bankruptcy attorney who had just been suspended from practicing law in this state in January 2012 by the Appellate Division for several reasons such as endorsing a check without permission.

 

That left him with a bunch of bankruptcy clients whose petitions he had not filed.  What he should have done was transferred the files to another attorney after first consulting with his clients.  Instead, he called another local attorney, Brian K. Payne, and asked him if he would take over representation.  However, no final agreement was reached. 

 

Mollo, nevertheless quite eager to get these four cases filed, revised the petitions to indicate that the debtors’ attorney was now Payne — even though Payne never agreed.  Mollow then filed these four petitions under his own E.C.F. account and forged the electronic signature of Payne on each petition. 

 

When the U.S. Trustee got wind of this after Payne sent a letter to the Chief Judge and others indicating that Mollo had filed petitions without his knowledge, consent, authority or signature, the UST immediately brought a motion to sanction Mollo, revoke his authorization to use the E.C.F. system, disgorge his fees, and compensate replacement counsel. 

 

At the hearing, Mollo admitted that he “made terrible egregious, unbelievable errors.”  The judge determined that Mollo violated Bankruptcy Rule 9011 by filing a forged document, an act that warranted sanctions.

 

Mollo agreed to disgorge all legal fees received, which was complicated by the fact that he kept such poor records that he was not sure how much he actually did receive.  He also agreed to compensate each debtor’s replacement counsel.  He lost his E.C.F. privileges, not that he would have been legally able to use them in light of his suspension. 

 

Finally, the judge thought additional sanctions were warranted given the egregious nature of Mollo’s violations and their similarity to the conduct that got him suspended in the first place (forging signatures).  Judge Craig sanctioned Mollo an additional $3,000, stating that Mollo’s conduct compromised the integrity of the court system and the electronic filing process.

 

 

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About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the May  2012 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Mastic, Patchogue, Commack, West Babylon, Coram, Woodbury and Valley Stream.   (516) 496-0800  (516) 496-0800    (516) 496-0800  (516) 496-0800 . For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.  
 
 
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Update on Bankruptcy Attorney Sanctioned for Cheating on Credit Counseling Requirement

Posted on Saturday (March 5, 2011) at 7:00 am to Bankruptcy Crime
Issues Involving New Bankruptcy Laws
Lawyer to Lawyer

attorney misconduct in bankruptcy court caseWritten by Craig D. Robins, Esq.
 
Two years ago I wrote about a scandalous situation in which a consumer bankruptcy attorney in New York thought he had found a way to by-pass the requirement of having his clients go through mandatory credit counseling.  He had his secretary do it for them!
 
I wrote a detailed post about that attorney:  Attorney Caught Cheating on Credit Counseling Requirement .
 
This attorney didn’t even bother telling his clients about their obligation to do credit counseling.  He just had his secretary do it for them, in their names.  When the Chapter 7 trustee discovered this “irregularity” he told the debtor that there were serious problems with the case.
 
That debtor wound up coming to me for advice since he no longer trusted his attorney (and for good reason).  I took the case over and was successful in getting the former attorney to refund the debtor’s legal fees and pay my fees as well.
 
The U.S. Trustee then went on to investigate the attorney and sanctioned him $40,000.  In addition, the bankruptcy court suspended the attorney from practicing bankruptcy before the court for a year.  He was also required to take 16 hours of continuing legal education covering bankruptcy law, four hours of which had to be for ethics.
 
Here’s the update:  The New York Appellate Division for the Second Judicial District learned of the suspension and misconduct.  It disciplined the attorney by giving him a public censure.  This is the highest form of discipline short of suspension.
 
The attorney paid the full $40,000 sanction, took the required continuing legal education courses, and has since been reinstated to practice before the bankruptcy court.
 
In short, a very expensive price to pay for taking a foolhardy and highly improper shortcut around a bankruptcy law requirement.
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Professional Civility Has Been Ordered in the Bankruptcy Court for the Eastern District of New York

Posted on Tuesday (November 2, 2010) at 11:30 pm to Bankruptcy Practice
Info on Bankruptcy and the Court
Lawyer to Lawyer

Civility in the Bankruptcy CourtWritten by Craig D. Robins, remedy Esq.
 
Last week, viagra on October 28, 2010, Bankruptcy Judge Carla E. Craig, who is the Chief Judge of the Bankruptcy Court for the Eastern District of New York, issued an administrative order adopting guidelines for standards of civility for the legal profession.
 
These guidelines were originally developed by the New York State Bar Association and incorporated into the New York State Rules of the Code of Professional Responsibility.
 
In adopting these guidelines, the Bankruptcy Court seeks to set a standard of practice in the Court that will promote the professional, civil, efficient and effective practice of bankruptcy cases.
 
The rules are essentially a list of common sense manners and protocols that all lawyers should be following in any event.  It is unfortunate that some lawyers fail to act in a civil and professional manner, but having a set of standards will certainly make clear what is expected of the bar.  The guidelines are aimed at maintaining the status of the legal profession as honorable and respected.
 
For the past 20 years I have been actively involved as a board member of the Theodore Roosevelt Chapter of the American Inns of Court, which is an organization of attorneys, judges and law students dedicated to the enhancement of civility, ethics and legal excellence in the practice of law.  The recently-adopted guidelines are nothing new to our organization.
 
 
Click here to see the administrative order providing for the Adoption of New York State Standards of Civility
 
What Does Civility in the Bankruptcy Court Mean?
 
In a nutshell, here are some of the basic principals espoused by the guidelines.
 
1.    Attorneys should be courteous and civil.  “Lawyers can disagree without being disagreeable.” 
 
2.   Lawyers should cooperate with opposing counsel in an effort to avoid litigation and to resolve litigation that has already commenced.  As a pragmatic attorney, that echos my sentiments in all litigated matters.  I feel that most litigation emanates from matters in which the parties cannot work together to reach a reasonable disposition.
 
3.    A lawyer should respect the schedule and commitments of opposing counsel, consistent with protection of the client’s interests.
 
4.    A lawyer should promptly return telephone calls and answer correspondence reasonably requiring a response. 
 
5.    The timing and manner of service of papers should not be designed to cause disadvantage to the party receiving the papers.
 
6.    A lawyer should not use any aspect of the litigation process, including discovery and motion practice, as a means of harassment or for the purpose of unnecessarily prolonging litigation or increasing litigation expenses.
 
7    In depositions and other proceedings, and in negotiations, lawyers should conduct themselves with dignity and refrain from engaging in acts of rudeness and disrespect.
 
8.    A lawyer should adhere to all express promises and agreements with other counsel, whether oral or in writing, and to agreements implied by the circumstances or by local customs.
 
9.    Lawyers should not mislead other persons involved in the litigation process.
 
10.    Lawyers should be mindful of the need to protect the standing of the legal profession in the eyes of the public. Accordingly, lawyers should bring the New York State Standards of Civility to the attention of other lawyers when appropriate.
 
11.    A Judge should be patient, courteous and civil to lawyers, parties and witnesses.
      
 
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Want to Be a Bankruptcy Judge?

Posted on Tuesday (June 8, 2010) at 12:30 am to Central Islip Bankruptcy Court & Judges
Lawyer to Lawyer

 
Bankruptcy Judge Position Available

Bankruptcy Judge Position Available

 
Written by Craig D. Robins, Esq.
 
From time to time bankruptcy judgeships open up around the country for various reasons.
 
A judge may retire or sadly, as was the case with the late Judge Dennis E. Milton, a judge may pass away, leaving a vacant bench that must be filled.  [Click here to see the Bankruptcy Judge Dennis E. Milton obituary that I wrote last week].   
 
Bankruptcy judgeships may also open if Congress passes the Bankruptcy Judgeship Act of 2010, which I also wrote about last week:  Pay a Buck — Get a Bankruptcy Judge .
 
I just received an e-mail about an opening in the Ninth Circuit for a bankruptcy judgeship in the Western District of Washington — Seattle.
 
Since most bankruptcy practitioners are curious about what’s involved with applying for a bankruptcy judgeship, even if they have no plans to do so, here’s some information:
 
How Far in Advance do Bankruptcy Judgeships Become Available?
 
The selection process usually takes a good 10 months to complete.  The open position in Seattle is not available until January 2011.
 
How Long is the Term?
 
A bankruptcy judge is appointed to a term of 14 years which is renewable, subject to applicable reappointment procedures.
 
How Much is the Current Salary for a Bankruptcy Judge?
 
The current salary is $160,080 per year.  If you are applying from here in New York, and are accepted, you will not get any relocation expenses.
 
I wrote a more detailed post last year:  How Much Do Long Island Bankruptcy Judges Earn?
 
What is the Selection Process Like for Bankruptcy Judges?
 
It is open and very competitive.   I wrote about this last year — How Are Long Island Bankruptcy Judges Appointed?
 
Basically, all applications are screened by a local Merit Screening Committee which then selects a limited number of judicial candidates for interviews.  The committee also contacts references.
 
From this initial group, the Committee narrows down the applicants who then receive a further interview by a new committee composed of Circuit Judges.  The judges then submit their recommendation to the Court of Appeals.
 
What Are the Basic Qualifications for a Bankruptcy Judge?
 
Applicants must be admitted to practice before the highest court of at least one state, be a member of good standing in every bar in which they are a member of, and have at least five years of legal practice experience.
 
What Checks to Bankruptcy Judge Applicants Go Through?
 
Nominated applicants must undergo both FBI and IRS background investigations prior to appointment.
 
Are You Actually Interested?
 
If so, contact the Ninth Circuit official website for more information.   The deadline is August 5, 2010.  Incidentally, there is also a judical bankruptcy opportunity in the Central District of California — Los Angeles — but the deadline is June 17, 2010.
 
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Report from NACBA 2010 Annual Bankruptcy Convention

Posted on Wednesday (May 26, 2010) at 11:45 pm to Bankruptcy Means Test
Bankruptcy Practice
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Current Events
Foreclosure Defense
Issues Involving New Bankruptcy Laws
Lawyer to Lawyer
Suffolk Lawyer

nacba-banner-logo  

Written by Craig D. Robins, link Esq.

  

I am currently in San Francisco where I just attended the annual convention of the National Association of Consumer Bankruptcy Attorneys (NACBA).  I write this report from there on May 1, viagra 40mg 2010.
 
[Note:  this article was previously published in the May 2010 edition of the Suffolk Lawyer].
 
[I will soon post a number of photos that I took at the NACBA convention}
  
Many years ago I discovered how exciting it is to travel across the country to interact with fellow bankruptcy practitioners and learn the latest about strategies for protecting consumer bankruptcy debtors, and tips for running a bankruptcy law office.
 
Over the course of three days, some of the country’s leading bankruptcy attorneys as well as a number of bankruptcy judges, provide valuable insight at daily programs and seminars.
 
What I find just as important is trading notes and war stories with other bankruptcy attorneys from across the country and learning about new products and services at the accompanying trade show.
  
  
Here Are Some Highlights of the Bankruptcy Convention
 
 
New Trend in Interpreting the Means Test
 
In a half-day program which addressed the means test, the speakers concluded that both the United States Trustee and our country’s bankruptcy judges have become more lenient in interpreting the means test in Chapter 7 cases.  There are three reasons for this trend.
 
Apparently, the current recessionary climate and sentiment against large banking institutions is resulting in the U.S. Trustee bringing fewer Section 707 motions alleging that the debtor filed an abusive case. 
 
In addition, more and more debtors are providing information to the U.S. Trustee’s office in cases where there are means test issues.  This enables the U.S. Trustee to evaluate the issue of abuse and reach a conclusion that the U.S. Trustee should not object.
  
Finally, there seems to be a greater number of experienced bankruptcy attorneys who know what red flags to look out for and consequently these experienced attorneys refrain from filing abusive cases.
 
Wide-Spread Concern Over Bankruptcy Judge Salaries
 
Judicial salaries are relatively low.  It appears that we are losing a large number of bankruptcy judges because the level of judicial pay is so low.  When there is a vacancy on the bench, this causes the bankruptcy court’s entire case load to slow down, which means unhappiness and dissatisfaction to litigants and all others involved.
 
This was indeed the case just two three years ago here, in the Eastern District of New York.  Our Chief Bankruptcy Judge for the district, Hon. Melanie L. Cyganowski, left the bench to pursue a much more profitable position as a partner in a leading bankruptcy firm. 
 
I interviewed Judge Cyganowski at that time and she clearly indicated that her reason for leaving the bench was because of her unreasonably low judicial salary.  See:  Chief Bankruptcy Judge Melanie Cyganowski Stepping Down.
 
HAMP Bankruptcy Update
 
There was ample discussion about President Obama’s Home Affordable Modification Program (HAMP) which seems to be rife with problems as an unusually small percentage of homeowners actually get permanent relief.
Here’s why: 
 
a) there is a major lack of communication on the part of the lender;
 
b) lenders are continuing to threaten homeowners with foreclosure even as the lender is evaluating the homeowner for a modification, and even if the homeowner has been approved for a trial term; and
 
c) lenders are arbitrary in granting relief.
 
On a positive note, however, a new law is going into effect on June 1, 2010 that, among other things, makes it illegal for a lender to discriminate against a bankruptcy debtor because he or she is in the HAMP program. 
 
The new law will also provide certain protections to Chapter 13 debtors as mortgagees will be precluded from objecting to discharge.
 
Lower Prices for Credit Counseling
 
When the 2005 Bankruptcy Amendment Act first went into effect in 2005, there were only four approved credit counseling agencies in our jurisdiction (E.D.N.Y.), and they all charged the same rate – $50 per credit counseling session.
  
There must have been about 20 credit counseling companies exhibiting at the trade show and many now charge fees as low as $15 per session. 
 
In addition, they gave out so much shwag that my ten-year-old son, Max, will be delighted to receive from me upon my return a large number of squeeze toys, flashlights, keychains, fancy chocolates, playing cards, puzzles, T-shirts and what-not that I picked up from these exhibitors.
              
My hard-working office staff will also be the recipient of a good deal of this booty.
 
Emerging Technologies for Consumer Bankruptcy Practices
 
One of the most crowded exhibitor booths belonged to a OTB, an company that created BK Express, a comprehensive practice management system which is designed for consumer bankruptcy attorneys.
 
I actually just set up my office to use this software which is basically a special shell designed to work on top of LexisNexis’s Time Matters system. 
 
Problems with MERS Mortgages and Foreclosure Defenses
 
In a very dynamic session, we were told that 50% of all residential mortgages in this country are nominally owned by MERS, which is Mortgage Electronic Registration Systems, a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States.
  
The problem with MERS-recorded mortgages is that MERS really does not own the mortgage, thereby creating an interesting argument that MERS does not have any standing in bankruptcy court. 
 
I previously wrote about special defenses that a homeowner can assert to defend a foreclosure action involving a MERS mortgage.  See:  A New Powerful Mortgage Foreclosure Defense — Compliments of MERS.
  
If your client has a MERS mortgage, consider looking at the pooling and service agreement to make sure that there was a true and valid assignment at every link of the chain, including delivery and acceptance of assignment documents.  If there was not, you may have a good objection to a MERS proof of claim or motion to lift the stay.
 
Few Bankruptcy Attorneys From New York
 
I was rather surprised the very small turn-out from our state.  Out of about 1,600 bankruptcy attorneys who attended the convention, there must have been fewer than 20 from New York, and only one other member, I believe, from the Suffolk County Bar Association.  That was Allison Shields, who was actually one of the speakers – she spoke on managing a successful bankruptcy practice.
 
 
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Chapter 7 Bankruptcy Trustees Get Audited, Too

Posted on Friday (May 21, 2010) at 3:00 pm to Chapter 7 Bankruptcy
Info on Bankruptcy and the Court
Lawyer to Lawyer

Bankruptcy Chapter 7 Trustees Get AuditedWritten by Craig D. Robins, Esq.
 
We all know that as part of the Bankruptcy Amendment Act, debtors are audited from time to time to make sure that they are providing accurate information to the court (see:  Random Audits of Consumer Debtors).
 
Most people aren’t aware that Chapter 7 panel trustees are audited as well, but for different reasons. 
 
There Are About 1,100 Chapter 7 Trustees Across the Country 
 
In our district, which is the Eastern District of New York, there are 20 Chapter 7 trustees.  That breaks down into nine who receive cases in the Central Islip Bankruptcy Court (see:  Long Island Chapter 7 Bankruptcy Trustees ) and eleven who receive cases in the Brooklyn Bankruptcy Court (see:  Brooklyn Chapter 7 Bankruptcy Trustees ).
 
How Chapter 7 Panel Trustees Are Audited
 
The Executive Office forthe United States Trustee engages in full audits, field exams, trustee interim reports and performance reviews as part of its program to measure a trustee’s compliance with his or her fiduciary duties and other obligations under the U.S. Trustee program.
 
Chapter 7 panel trustees are fully audited at least once every eight years by an independent Certified Public Accountant.
 
Every four years, a staff person from the U.S. Trustee’s office conducts a field exam.
 
All trustees must submit regularly to a trustee interim report.
 
In addition, the Office of the U.S. Trustee evaluates each panel trustee every two years.
 
What Are the Most Common Findings in Audits of Chapter 7 Trustees?
 
The most common finding based on audits is that the trustee was not careful enough in reporting information about assets on a particular form that the trustee is required to file.
 
Findings that can lead to an “inadequate” opinion include not timely investigating or liquidating assets, failing to supervise support staff, and co-mingling bankruptcy estate funds with non-estate funds.
 
What Happens if the Chapter 7 Trustee is “Inadequate”?
 
The U.S. Trustee has determined that some findings are so important that if an auditor uncovers them, the trustee will be given an “inadequate” audit opinion. 
 
This usually happens when the auditor determines that the Chapter 7 trustee accounting and cash management practices are insufficient for safeguarding any funds the trustee is holding on behalf of a bankruptcy estate.
 
If a Trustee receives an “inadequate” opinion, the trustee gets suspended from the active rotation of receiving new cases.
 
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Six Reasons Why It’s a Tough Time for Debt Collection Attorneys

Posted on Wednesday (January 6, 2010) at 7:00 pm to Bankruptcy and Society
Chapter 7 Bankruptcy
Consumer Advice
Credit
Lawyer to Lawyer

Bankruptcy will stop Debt Collectors and Collection Law FirmsWritten by Craig D. Robins, Esq.
 
Although debt collection law firms are the fierce and hated adversaries of my Long Island bankruptcy clients, I have gotten to know several collection attorneys fairly well over the years.
 
Some of them are the same age as I am, and we started practicing at the same time, and were members of the same young attorney groups 25 years ago.  My practice happened to take me in the direction of helping consumers, whereas some of my colleagues ended up representing credit card companies.
 
Although my practice only helps consumers and business owners who have financial problems, I like to hear what it’s like on the other side — from those attorneys who actually pursue my clients before they have the opportunity to file for bankruptcy relief or achieve a negotiated settlement.
 
A Collection Attorney Colleague Recenty Confided In Me
 
My clients are always complaining about the unabated and aggressive pressure that bill collectors put on them, so it was interesting to have an informal chat with a collection attorney colleague who I’ve known for years and years.  He complained that those law firms who specialize in debt collection in New York are not exactly doing so well these days. 
 
He commented that his firm is facing the horrifying prospect of taking in millions of dollars in collection proceeds, but not making any profit whatsoever.
 
Here’s Why Bill Collectors and Collection Law Firms Will Have a Tough Time in 2010:
 
1.  Debt Collectors and Collections  are Under Greater Scrutiny.  It’s no secret that the entire debt collection business has come under great scrutiny during the past year as the result of some unscrupulous debt collection practices.  I’ve written extensively about this previously.  See:
 
 
2.  It’s Harder to Collect.  My colleague complained that he and his firm were working incredibly hard, yet not making much money.  Apparently, the economic pressures that are pushing more and more Long Island families to seek bankruptcy relief also mean that collection firms are having a much more difficult time collecting the amounts that they’ve collected in the past.
 
3.  Lenders and Their Collectors Are Paying the Price for Easy Credit.  One of the key reasons for the relatively low rate of collectability is that several years ago, banks and lenders were so loose with their credit policies and underwriting standards that they extended credit to too many consumers who weren’t credit-worthy.  That translates into greater difficulty collecting on delinquent accounts.
 
4.  Unemployed Debtors Mean No Funds for Creditors.  Many consumers do not have the funds to make any payment simply because they are unemployed.  Projections for continued unemployment mean continued difficulty into the new year with trying to collect.
 
5.  Changing Sentiment Against Banks, Bill Collectors and Collection Law Firms.  We now have a more consumer-friendly atmosphere in which courts tend to side with the consumer as opposed to the creditor.  In addition, there are always new debt collection laws and regulations, and the trend is to make it harder for the debt collector and easier for the consumer.
 
6.  BANKRUPTCY.  I saved the best for last.  Over a million and a half American consumers will probably file for bankruptcy in 2010, and most of them will be able to totally eliminate all credit card debts.  This is how my Long Island bankruptcy law firm and I will be helping many consumers in 2010.
 
 
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Foreclosure Law Discussed by Four Suffolk County Supreme Court Judges

Posted on Thursday (December 17, 2009) at 1:15 pm to Current Events
Foreclosure Defense
Lawyer to Lawyer
Mortgages & Sub-Prime Mortgage Meltdown
Suffolk Lawyer

Suffolk County Supreme Court Judges Hon. Jeffrey Spinner, Hon. Peter Mayer, Hon. Ralph Costello, and Hon. Thomas Whelan

Suffolk County Supreme Court Judges Hon. Jeffrey Spinner, Hon. Peter Mayer, Hon. Ralph Costello, and Hon. Thomas Whelan

Written by Craig D. Robins, Esq.

 

Four Suffolk County Supreme Court judges presented a views-from-the-bench program on December 9, 2009 about Mortgage foreclosure.  The well-attended seminar at the Suffolk County Bar Association had over 100 participants.  Cheryl Mintz was the moderator.
 
The program enabled the judges to provide some important insight into the rapidly-growing area of foreclosure litigation, especially considering a flurry of new legislation dealing with foreclosure procedural law and practice.
 
Foreclosure Caseloads Putting Strain on Court
 
Judge Ralph F. Costello commented on the lack of a sufficient number of Supreme Court judges that are necessary to adjudicate the ever-increasing number of foreclosure cases.  He acknowledged the difficulty that the Office of Court Administration would have to provide additional judgeships, but felt that it was entirely reasonable to find budgeting to enable each judge to hire a second full-time law clerk. Doing so, he believed, would enable each judge to double their caseload.
 
There was an in-depth discussion about Governor Patterson’s new comprehensive foreclosure legislation which was just passed last month.  The bill will greatly strengthen protections for homeowners, tenants and even neighborhoods, which can be plagued by blight.
 
Issue of Mortgagee’s Standing Is Becoming Increasingly Litigated
 
Judge Peter H. Mayer discussed the concept of standing and assignment, which is becoming an increasing source of consternation for mortgage companies.  Apparently, there are many problems resulting from the sale of mortgages on the secondary mortgage market.  Many foreclosing plaintiffs lack standing to bring the foreclosure suit, which can result in the dismissal of the case.
 
What a Foreclosure Judge Looks For
 
Judge Thomas F. Whelan broke his discussion into two sections, dealing with how the Court responds to foreclosure matters if an answer is filed, and if no answer is filed.  He discussed the importance of asserting affirmative defenses if available, and also addressed the new Request for Judicial Form that is now used in foreclosure actions.
 
He also discussed how the law clerks review cases to make sure that certain prerequisites have been met, such as adherence to the relatively-new 90-day foreclosure notice rule, whether parties appeared at mandatory settlement conferences, whether the subject property is owner-occupied (if so, special protections under the new statute exist), and whether additional default notices as required by the CPLR have been provided.
 
Mandatory Foreclosure Settlement Conferences
 
Judge Jeffrey Arlen Spinner, who is in charge of the Mortgage Foreclosure Conference Part, discussed the relatively new requirement of mandatory settlement conferences for all foreclosure proceedings involving sub-prime mortgages.
 
“My role as a judge is to be impartial.  I try to broker a settlement, if that’s at all possible,” said the judge.  He commented on the high number of these conferences, now numbering between 100 and 120 each Tuesday, saying “we’re buried in cases; we’re buried in motions.”
 
Ray Vorhees, Law Secretary to Judge Mayer, also addressed the audience to highlight the fact that the legislative intent of these various statutes is to protect homeowners, and that the court must and will honor the import of such legislative intent.
 
Judge Spinner’s Controversial Horoski Decision Which Canceled Mortgage
 
Towards the end of the evening, Cheryl Mintz asked Judge Spinner to comment on the case everyone wanted to hear about – Horoski – and the audience expressed their excitement.  This was the very recent case in which the Judge totally cancelled the mortgage in a foreclosure proceeding citing the bank’s egregious conduct. [See Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action ].
 
Judge Spinner, however, mentioned a prohibition on commenting publicly on any case that is pending.  He did mention that a new issue had arisen in the case which will result in the matter appearing before him on his calendar in the next few weeks.
 
In response to some pressing commentss about the case from one rather-insistent attendee, Judge Spinner did mention that his decision was one that is based in equity, rather than one based on law.
 
About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the December 2009 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Patchogue, Commack, Woodbury and Valley Stream. (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.
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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »

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