Lawyer to Lawyer

 

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.

 

 

 

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.

 

 

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:

 

Attorney General Investigating Process Servers for Taking Illegal Shortcuts.

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

 

Well the deadline for the Bankruptcy Bill Bankruptcy Song Contest has arrived and nine songs are competing for awards and recognition — including my song, “Debt-Free Girl,” and two other surprises.

 

The first surprise is that my wife, Arlene, submitted a song.  Since she is especially witty (she writes song parodies for my birthday almost every year, and also for lots of her friends), I challenged her to submit something.  So she surprised me by submitting “Bankruptcy Wife’s Lament” which is about a bankruptcy attorney who neglects his wife and son because he is so busy.  That apparently is me.

 

The second surprise is that our very own Central Islip Bankruptcy Court Judge, Alan S. Trust, also submitted an entry, “Debts in Wrong Places.”  Hailing from Texas for the past 24 years, it was no wonder that Judge Trust submitted a country music song based on Garth Brook’s “Friends in Low Places.”  His song pokes fun at the ridiculous aspects of the bankruptcy means test.

 

There are other songs from other bankruptcy attorneys and a bankruptcy judge in California, Sheri Bluebond.

 

My song, “Debt-Free Girl” is based on Billy Joel’s “Uptown Girl” and is about a girl who becomes debt-free through bankruptcy, thanks to her bankruptcy man.

 

 

The winner of the bankruptcy song is the one with the most votes.  To vote, you must send an e-mail to Bill@BankruptcyBill.us.  You can include your choice for first, second and third place.

 

“DEBT-FREE GIRL”

(To the tune of Billy Joel’s “Uptown Girl“)

Oh wo oh oh oh oh oh oh. . . . .
Debt-free girl
She’s now living in a whole new world
No more bills or late-night collection calls
It is because – she finally got the balls

To become – a real debt-free girl
No more living in a creditor world
As long as anyone with bad debts can
Make an appointment with the bankruptcy man
That’s what I am

And when she learns that
She won’t have to pay
And then she can wake up
Stress free – there’s a stay

She’ll see it’s not so tough
Just because
I’ve made her into a debt-free girl
Filed her petition; no more creditor world
She got tired of the collection calls
Perhaps she overspent at stores and malls
She’s got a choice

Oh wo oh oh oh oh oh oh. . . . .
Debt-free girl
She filed a seven; now it’s her turn
She kept her assets – they were all exempt
Trustee overlooked the money she spent
It’s what she dreamt

She passed the means test
It’s really no big deal
Her lawyer knew best
Assisted with credit counseling

It’s really not so tough
To discharge
Lots of bills
Of a debt-filled girl
She’s been living in a bill-collecting world
As long as anyone with big debt can
And now she’s looking for a bankruptcy man
That’s what I am
[Oh wo oh oh oh oh oh oh. . . . .]

Debt-free girl
She’s my debt-free girl
You know I love to see
A real debt-free girl

My debt-free girl
Did you know I love to see
A real debt-free girl

My debt-free girl
Did you know I love to see
A real debt-free girl

 

 

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I am quite proud to post the song my wife, Arlene Gross Robins, wrote for the Bankruptcy Bill song contest.

 

Arlene, a full-time newspaper reporter, is especially witty and regularly writes song parodies and satire for her family and friends.

 

 

Click on this link to see the original version of Sunrise Sunset on Youtube.

 

 

  

“A BANKRUPTCY WIFE’S LAMENT”

(To the tune of “Sunrise, Sunset” from “Fiddler on the Roof”)

Once I had a hubby who’d come home nights
We’d have our dinner; share a song
Life was so happy – filled with de-lights
What went wrong?

[REFRAIN]
Chapter seven
Chapter thirteen
Filing is his life
Rescuing clients from their huge debts
At the expense of his son and wife

When the BAPCPA laws were changed in ‘05
I thought we’d have a nice reprieve
Debtors would no longer discharge their debts
Or so, I did believe

Chapter seven
Chapter thirteen
Filing is his life
Rescuing clients from their huge debts
At the expense of his son and wife

But now there were hurdles one must jump through
Credit counseling and a means test: de rigeur
Lawyers learned laws like they were brand new
And, thus, charged more

Chapter seven
Chapter thirteen
Filing is his life
Rescuing clients from their huge debts
At the expense of his son and wife

For a few years our son got to know his poppa
Then the economy went bad
Now dad works 24/7, non-stopp-a
And we’re so sad

Chapter seven
Chapter thirteen
Filing is his life
Rescuing clients from their huge debts
At the expense of his son and wife

As the recession slowly recedes
We’re hoping our attorney will come home
If not there’s divorce settlement proceeds
Either way, I’m raising our son alone

Chapter seven
Chapter thirteen
Filing is his life
Rescuing clients from their huge debt
At the expense of his son and wife

 

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Everyone these days is Googling everyone else.  Many of my Long Island bankruptcy clients have commented to me that they have searched the internet for information about their bankruptcy judge and trustee.

 

People want to know about the judges and trustees they have to appear before.  Often a debtor wants to know more about their trustee after having interacted with him or her for the first time at the meeting of creditors.  Sometimes colleagues who do not regularly practice in the Central Islip Bankruptcy Court contact me to inquire about what I know of a certain judge or trustee.

 

And even those who regularly practice in our court are curious about the backgrounds of those they regularly appear before.  Some of my readers have suggested that I provide something along the line of biographies of those affiliated with the bankruptcy court.

 

I have therefore decided to post profiles of all of the key players in Central Islip Bankruptcy Matters — the trustees, the judges, and eventually, perhaps, some others. 

 

The Central Islip Bankruptcy Court, which is one of the two bankruptcy courts in the Eastern District of New York, currently has a panel of nine chapter 7 trustees, two standing Chapter 13 trustees, and three bankruptcy judges.

 

I previously posted an article about Long Island Chapter 7 Bankruptcy Trustees  which contained a list of all of the Chapter 7 trustees that are currently on the Chapter 7 panel for the Eastern District of New York and assigned to the Central Islip Bankruptcy Court, as well as those who are no longer on the Chapter 7 panel.

 

Most of the information I’ll be providing is public information and readily accessible to anyone willing to spend the time to do so.  Obviously I don’t want to provide any sensitive personal information.  However, I will try to offer some of my own opinions about each trustee I profile.

 

In addition, with each trustee, I will also post contact info such as their office address and phone number.

 

The first post will be about our senior-most Chapter 7 trustee, Ken Kirschenbaum, who has a particularly colorful background.  All trustee profiles will be accessable on the page, Long Island Bankruptcy Trustee Profiles , which you can get to by clicking the link.

 

One final thing:  lots of people Google me, too.  So here’s the link to my bio — information about Craig D. Robins, Esq., Long Island Bankruptcy Attorney.

 

 

 

 

Every now and then I come across a situation that I just find incredible.  I just met with a potential client who was being subpoenaed by the attorneys for a Long Island Chapter 7 bankruptcy trustee.

The trustee is now going on a fishing expedition for assets involving a corporate Long Island Chapter 7 business bankruptcy filing.  The trustee retained counsel to assist in this endeavor. 

 

Apparently, the potential client and another fellow were each fifty-percent shareholders of a corporation that filed for Chapter 7 bankruptcy relief over a year and a half ago.  The amazing thing was that the potential client who I met with had just found out about the bankruptcy.  Consequently, we now have all sorts of sticky issues such as whether the corporate bankruptcy was filed in good faith or not.

 

 

Here’s why: any time a corporation seeks bankruptcy protection, it must have authority to file the bankruptcy petition.  That typically means that the corporation’s board of directors must meet, agree to permit the corporation to file for bankruptcy, and then acknowledge this authorization by preparing a corporation resolution authorizing the bankruptcy filing.

 

In this case, there was no corporate resolution!  Local E.D.N.Y. Bankruptcy Rule 1074-1(a) states that any bankruptcy petition filed by a corporation shall be accompanied by a duly attested copy of the corporate resolution authorizing the filing.  Such a document was never filed – nor could it have since it would have required the consent of both shareholders.  The shareholder I met with never consented to the bankruptcy filing, let alone knew about it.

 

So, here is a corporate bankruptcy filing that is fatally deficient.  If a corporate bankruptcy is not duly authorized, it can be dismissed.

 

 

In order for a corporation to have the appropriate authority to file bankruptcy, there must an agreement by the majority of the directors, which is necessary to constitute a quorum to transact business.

 

Shareholders, themselves, lack the authority necessary to file bankruptcy because they do not have the power of management.  Thus, one shareholder cannot decide, on his own, that he wants to put the corporation into bankruptcy, even if that shareholder is the president, unless he has over 50% of the voting shares of stock.

 

What is also perplexing is that the shareholder who filed the bankruptcy failed to include his partner as an interested party, which would have enabled the partner to then receive notice of the filing.

 

What happens now?   If this is brought to the attention of the court, the judge would have no choice but to find that the court does not have jurisdiction over the case and would be constrained to dismiss it.  It also appears that the subpoena that my potential client received cannot be enforced.

 

In any event, this matter leaves some serious questions upon the attorney who filed the case, considering that he may have filed a frivolous case.  The attorney, who holds himself out as a business lawyer, should know better.

 

Ever since I started practicing bankruptcy law over twenty years ago, I’ve relied on one law book more than any other:  Consumer Bankruptcy Law and Practice.

 

Published by the National Consumer Law Center, it is now in its Eighth Edition.  It is my favorite bankruptcy handbook and I often refer to it as the bankruptcy bible.

 

This is the definitive consumer manual and the must-have book for any attorney who practices bankruptcy.  It is now takes up two volumes for a total of well over thirteen hundred pages.  There are excellent summaries of almost every possible bankruptcy issue, together with case citations, sample pleadings, a full copy of the Bankruptcy Code and Rules and more.  It’s cost of $180 is well-worth it.  Also included is a CD-Rom.

 

The only downside for Long Island bankruptcy attorneys is that it does not focus on any New York issues or exemptions.

 

The publisher, the National Consumer law Center, is a not-for-profit operation that emphasizes education and advocacy to help and protect consumer rights.  You cannot go wrong with this book.

What happens if you are a debtor in a bankruptcy case and you can barely speak English?

 

The U.S. Trustee Program recently began offering free translation services.  The service is limited to assisting non-English speaking debtors at the meeting of creditors, which is also known as the section 341 hearing.

 

The first time I saw this in action I was amazed at how smoothly the process worked.  I was at a meeting of creditors a few months ago with some Spanish-speaking clients.  The trustee was Andrew Thaler who had never utilized the service before.  Using a telephone in the meeting room, the trustee called a central translation service switchboard, provided some info, and within minutes was connected to a Spanish-speaking interpreter.

The interpreter methodically translated through the speaker phone, and there were no problems at all. 

 

In the past, a debtor with limited English proficiency would have to bring their own interpreter with them, who was often a family member.  Although this had worked smoothly with most trustees, some trustees were not too willing to let family members serve as interpreters because of potential bias.

 

The new system, which is in accordance with an Executive Order from the President requiring federal agencies to have a Language Assistance Plan, provides interpretation services in as many as 196 languages.  Currently the service is only available in some areas and we are fortunate enough to have it in the Central Islip and Brooklyn Bankruptcy Courts.

 

To minimize delays at the meeting of creditors, debtors wishing to take advantage of this free service are encouraged to have their bankruptcy attorney contact the trustee in advance of the meeting. 

 

 

I previously wrote that Only Certain Attorneys Can Practice in Bankruptcy Court here on Long Island or Brooklyn.  The attorney has to be admitted to the United States District Court for the Eastern District of New York.

 

However, attorneys from other jurisdictions can also practice in our court by making a “motion pro hac vici.” 

 

“Pro hac vici” is Latin for “this time only.  So if an out-of-state attorney has a pending matter in our court, he or she can simply petition the court for temporary admission that is applicable to that one case.

 

The procedures for being admitted pro hac vice are set forth in E.D.N.Y. Local Bankruptcy Rule 2090-1(b), which include bringing a motion, an affirmation in support, and a proposed order.  The attorney must also file a Certificate of Good Standing issued within 30 days and pay a $25 filing fee.