Instant Home Value (no annoying sales calls)

TRUSTEE NOT ENTITLED TO ATTORNEY'S FEES HELD OVER FOR POSTPETITION SERVICES

In a well-drafted opinion that protects the debtor’s attorney’s use of the portion of a prepetition retainer fee that is reserved to cover postpetition services, the court denied the trustee’s attempt to recover the funds for the estate.The debtor paid his attorney a prepetition retainer fee for a chapter 7 case. The retainer fee consisted of cash plus an assignment of the debtor’s expected tax refund, due to be paid postpetition. At time of filing the petition, a portion of the retainer, including the tax refund, was unused, but clearly earmarked by the debtor and attorney to cover postpetition services.Trustee moved for disgorgement, on the theory that the unused portion of the cash, and the tax refund, were property of the estate, and the debtor’s attorney was prohibited from being paid out of the estate by the Supreme Court ruling in Lamie v. United States Trustee, 540 U.S. 526, 124 S.Ct. 1023 (2004), unless appointed by the court to represent the estate.In this case, the Court, acknowledging that the cases are split on the issue, held that the rights an individual has to property is a matter of state law, and that under Kansas state law an assignment of property transfers all right, title and interest in the property to the assignee (i.e., the debtor’s attorney). In such event, the only interest retained by the debtor (and hence the estate) is “limited to a right to the return of any portion that remains after paying the reasonable value of the services and expenses the Firm provides.”In so holding, the court observed that the integrity of the bankruptcy system depended on debtors being competently represented, and that without assurance of being paid for postpetition services, such representation would be impaired.The court quoted from an article by Morgan King** on the problem of adequate compensation for consumer bankruptcy attorneys: “The efficient and honest functioning of the bankruptcy system requires a robust, confident, and motivated debtors’ bar.” The Court said, “The Court agrees with these observations.”*The case is In re Wagers, BK case # 03-24484, Adv. # 04-6095, Feb. 23, 2006, District of Kansas, Dale L. Somers judge presiding

ADJUSTMENTS TO PERMISSIBLE EXPENSES FOR MEANS TEST, CALCULATION OF DISPOSABLE INCOME

Where the means test or the disposable income calculation, as determined by the IRS standards and the § 707(b) permissible expenses pursuant to Official Forms B22C or B22A (see Folder 2 on CD), comes out substantially larger than the debtor’s actual ability to pay as shown by the actual income and expenses on schedules “I” and “J,” in some cases it is because the debtor is actually spending more than the IRS standards or 707(b) expense guidelines allow. In that case, how much discretion does the court have to allow the excess spending? An argument can be made that, for good cause, the court can vary from the limitations of the IRS standards and the 707(b) expense guidelines. Code § 1325(b)(2)(A)(i) provides that the plan may provide for such expenditures as may be necessary “for the maintenance or support of the debtor or a dependent of the debtor …” . Code § 1325(b)(3) provides that, where the debtor’s current monthly income is greater than the state median, the “Amount reasonably necessary to be expended under paragraph (2) shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2)…” Turning to subparagraphs (A) and (B) of § 707(b)(2), we read at § 707(b)(2)(B), “In any proceeding brought under this subsection, the presumption of abuse may only be rebutted by demonstrating special circumstances …” The “special circumstances” may be “such as” a serious medical condition, or a call to active duty. Note that the language does not explicitly list medical condition or active military duty as the only two circumstances that may constitute special circumstances, but anything “such as” these to examples. Another element of discretion is found at § 707(b)(2)(A)(ii) which provides for a 5% adjustment upward for food and clothing if reasonable and necessary. Finally, Code § 707(b)(2)(A)(ii) provides that the expenses may include the IRS standards for a category called “Other Necessary Expenses.” The U.S. Trustee’s web site for IRS Guidelines has a link to a special page of the IRS web site containing expense guidelines for use in bankruptcy cases. However, neither the Trustee’s page nor the IRS page appears to make reference to, or have a link to, the “other necessary expenses.” To find the other necessary expenses, refer to IRM § 5.15.1.10. The IRS “Other necessary expenses” may be found at the following link: http://www.irs.gov/irm/part5/ch15s01.html#d0e175066

BANKRUTPCY LAW COMMITTEE QUESTION

Please share what fees the judges have been approving for chapter 13s and chapter 7s in DuPage, Will and Cook counties? You can email me privately (kharry@oakbrooklaw.com) or post to the blog. Ultimately, I want to provide the all committee members with some info on the subject.Also, which service providers have you used for appraisals, credit counseling, asset searches and the like? Which do you like, not like, etc?Thanks, Kathryn Harry, Chair

In re Patrick and Kim Del Monico (04 B 38235)

Date of Issuance: February 15, 2006 Judge: A. Benjamin Goldgar

BACP and Family Law

The Impact of the BACPA on the Family Law Practitioner By Joeseph L. Schwartz and Kevin J. Larner of Riker Danzig Introduction The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”)1 was enacted on April 20, 2005, when it was signed into law by President George W. Bush. The enactment of BAPCPA brought to an end a turbulent decade-long legislative reform initiative, the end product of which represents “one of the most comprehensive overhauls of the Bankruptcy Code in more than twenty-five years.” 2 This overhaul significantly changes consumer bankruptcy law by imposing many new requirements on debtors before bankruptcy relief will be granted. 3 Included within the changes resulting from the passage of BAPCPA are significant modifications to the manner in which bankruptcy law and family law interact. For the family law practitioner, knowledge of these changes is essential, due to the frequency with which family law and bankruptcy issues overlap. This paper will attempt to outline the major changes to the Bankruptcy Code that are associated with family law and particularly to how child support obligations are treated in bankruptcy, and will point out the many new issues that the family law practitioner will have to face as a result of BAPCPA’s passage. The list below briefly summarizes certain changes to the Bankruptcy Code that are most significant to a family law practitioner: § 101(14A) of the Bankruptcy Code is added to give a uniform definition of the term “domestic support obligation;” § 507(a)(1) of the Bankruptcy Code is amended to provide domestic support obligations a first priority claim among unsecured claims; § 362 of the Bankruptcy Code is amended to expand the scope of the exceptions to the automatic stay for domestic support obligations, to include within the exception income withholding orders, revocation of licenses, seizure of tax refunds and other common support collection techniques; § 523(a) of the Bankruptcy Code is amended to broaden the scope of domestic support related debts that are nondischargeable in a bankruptcy case; § 547(c)(7) of the Bankruptcy Code is amended to broaden the scope of prepetition payments on support debts that are not avoidable as preferences in a bankruptcy case; and § The Bankruptcy Code is amended so that in order for a chapter 11 or a chapter 13 debtor to obtain a confirmation of his plan with the accompanying discharge, that debtor must be current on all support payments. § 101(14A): Definition of Domestic Support Obligations Under the Amended Code, 4 a new term, “domestic support obligation,” is used whenever the Bankruptcy Code affects alimony, maintenance or child support payments. Section 101(14A) has been added to the Amended Code, which defines a “domestic support obligation” as a debt that accrues before, on, or after the date of the order for relief5, and which includes interest that accrues pursuant to applicable nonbankruptcy law. 6 This definition broadens the scope of the obligations covered by the Bankruptcy Code, as it includes a debt owed to or recoverable by “(i) a spouse, former spouse, or child of the debtor, or such child’s parent, legal guardian or responsible relative; or (ii) a governmental unit.” 7 To qualify as a “domestic support obligation,” the debt must be “in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child’s parent, without regard to whether such debt is expressly so designated.” 8 It must be “established or subject to establishment before, on, or after the date of the order of relief” pursuant to: (i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit. 9 It does not apply to a debt assigned to a nongovernmental entity, unless it was assigned voluntarily by a spouse, former spouse, child or parent solely for the purpose of collecting the debt. 10 Prior to the implementation of BAPCPA, the Former Code defined these support-type obligations on a section-by-section basis, which led to some inconsistency throughout the Former Code. 11 Now, under the Amended Code and with BAPCPA’s definition of “domestic support obligation,” there will now likely be a uniform understanding of those family law debts and how those debts are dealt with under the Bankruptcy Code. § 507(a)(1): The Priority of Domestic Support Obligations Under the Amended Code, Section 507(a)(1) of the Bankruptcy Code is amended to accord first priority status to allowed unsecured claims for domestic support obligations that, as of the bankruptcy petition date, are owed to or recoverable by a spouse, former spouse, or child of the debtor, or the parent, legal guardian, or responsible relative of the child. First priority status is granted without regard to whether such claim is filed by the claimant or by a governmental unit on behalf of such claimant, on the condition that funds received by such unit be applied and distributed in accordance with nonbankruptcy law. In contrast, under the Former Code, allowed unsecured claims for debts owed to a spouse or former spouse for alimony, maintenance or support of a spouse or child had seventh priority unsecured status. The importance of this change lies in the meaning of priorities, which determine the order in which claims are paid from the property of the bankruptcy estate. In addition to elevating the priority of domestic support obligations under the Amended Code, what is included as a domestic support obligations is expanded. By elevating domestic support obligations to first priority status, these obligations have priority over all unsecured claims in a bankruptcy case, including most administrative claims. Administrative claims include professional fees incurred during a bankruptcy case. This means that unless a domestic support creditor agrees to accept a lesser payment, that creditor will be fully paid before other unsecured creditors, as long as there are sufficient assets in the estate to allow a distribution to unsecured creditors. 12 § 362: The Automatic Stay and Exceptions Thereto Generally, upon the commencement of a bankruptcy proceeding, all prior judgments and enforcement actions against the debtor are stayed automatically. 13 However, the Bankruptcy Code enumerates certain exceptions to this general rule. Prior to the implementation of BAPCPA, under § 362(b)(2) of the Former Code, relevant examples of one such exceptions to the automatic stay were for actions or proceedings (1) “for the establishment of paternity;” or (2) “for the establishment or modification of an order for alimony, maintenance or support.” 14 BAPCPA makes several revisions to the automatic stay provisions of the Bankruptcy Code, all of which appear to broaden the scope of the exceptions to the automatic stay for support-related proceedings. First, BAPCPA replaces the reference to “alimony, maintenance or support” in § 362(b)(2)(A) with the term “domestic support obligations,” which is broader than the former reference in the Bankruptcy Code. Second, BAPCPA adds to the exceptions to the automatic stay actions or proceedings concerning: (1) child custody or visitation; (2) the dissolution of a marriage (except to the extent such proceeding seeks division of property that is property of the estate); and (3) domestic violence. 15 Third, BAPCPA permits as an exception to the automatic stay the “withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation under a judicial or administrative order.” 16 Fourth, BAPCPA authorizes the reporting of overdue support owed by a parent to any consumer-reporting agency pursuant to section 466(a)(7) of the Social Security Act. 17 Fifth, BAPCPA permits the interception of tax refunds as authorized by sections 464 and 466(a)(3) of the Social Security Act or analogous state law. 18 Finally, BAPCPA allows medical obligations, as specified under title IV of the Social Security Act, to be enforced notwithstanding the automatic stay. 19 These changes could have a significant impact on child support collection practices. A common procedure used in collecting support payments is an income withholding order. Under the Former Code, the withholding of a debtor’s income was barred by the automatic stay upon the filing of a bankruptcy petition if the debtor’s income was property of the bankruptcy estate. 20 Now, after the implementation of BAPCPA, under the Amended Code, the use of income withholding orders is expressly excepted from the automatic stay. 21 Moreover, under the Amended Code, a debtor’s driver’s license, professional or occupational license, or recreational license can be withheld, suspended or restricted as a result of the debtor’s failure to pay a domestic support obligation without regard to the automatic stay. 22 Further, the Amended Code adds an exception to the automatic stay to allow support creditors to seize tax refunds, which should make it less troublesome for support creditors to collect from debtors in bankruptcy cases. 23 The legislative history behind the addition of the foregoing provisions included the following: This key provision will mean that support deducted from an employee’s wages by an employer and paid to the support creditor will not be interrupted. This provision applies to both the ongoing support obligations and support arrears. In addition, other means of enforcement will remain available after the filing of a bankruptcy petition. Such enforcement tools include: (1) the revocation or non-renewal of drivers, professional and recreational licenses; (2) the reporting of overdue support to credit reporting agencies; (3) the interception of tax refunds to pay support arrears; and (4) the collection of medical support obligations. 24 As a result, the changes to the automatic stay provisions of the Bankruptcy Code implemented by BAPCPA will likely have a profound effect on support creditors in receiving payment from debtors upon the filing of a bankruptcy case. § 523(a)(5) & (15): Nondischargeability of Certain Debts Other important changes to the family law practitioner brought about by BAPCPA are those made to §§ 523(a)(5) and 523(a)(15) of the Bankruptcy Code, which address the nondischargeability of debts in a bankruptcy case. Generally, one of the major benefits a consumer debtor seeks by filing for bankruptcy is obtaining a clean slate by receiving a discharge of all prepetition debts upon the completion of the bankruptcy case. Under § 523 of the Bankruptcy Code, however, certain debts maybe excepted from discharge and would need to be paid even upon the completion of the bankruptcy case. Under the Former Code, § 523(a)(5) excepted from discharge all domestic obligations for support, alimony or maintenance to a spouse, former spouse or child of the debtor. 25 Further, under the Former Code, non-support obligations and property distribution obligations were also excepted from discharge under certain circumstances. 26 However, under the Former Code, a debtor maintained the ability to seek to discharge non-support obligations and property distribution obligations. 27 Under the Amended Code, all domestic support obligations, as defined in § 101(14A), are excepted from discharge. 28 Further, under the Amended Code, all debts to a spouse, former spouse or child incurred in the course of a divorce or separation, whether or not designated as a “domestic support obligation,” are excepted from discharge in a bankruptcy case. 29 To summarize the implications of the changes to § 523, a recent treatise on the effects of BAPCPA states that the impact of the changes to §§ 523(a)(5) and (15) are as follows: Essentially, the combination of amended §§ 523(a)(5) and (15) would be to exclude from discharge all marital and domestic relations obligations, whether support in nature, property division, or hold-harmless, provided that they were incurred in the course of a divorce or separation or established in connection with a separation agreement, divorce decree, or other order of a court of record or a determination made in accordance with state or territorial law by a governmental unit. 30 However, while BAPCPA does add some certainty into the discharge arena where it did not exist before, questions may still arise in certain cases. For example, under the Former Code, several courts had ruled that attorney’s fees arising out of divorce proceedings owed by the debtor to a former spouse were dischargeable notwithstanding § 523. 31 While it appears that the changes made by BAPCPA to sections 523(a)(5) and (15) cause these types of debts to fall within the nondischargeability provisions, these sorts of issues that fall along the edges of the Amended Code will still most likely have to be decided in the coming months and years by the courts. The final significant change to the dischargeability provisions of the Bankruptcy Code as a result of BAPCPA relates to the timing requirements for filing nondischargeability complaints. Under the Former Code, complaints under § 523(a)(5) could be filed at any time, but complaints under § 523(a)(15), could only be filed within sixty days of the date of the first meeting of the creditors. Under the Amended Code, just as under § 523(a)(5), complaints under § 523(a)(15) can be filed at any time, “and the debtor’s discharge would automatically exclude both (a)(5) and (a)(15) debts from discharge unless a complaint for determination is filed.” 32 § 547(c)(7): Protection Against Preference Actions Under the Bankruptcy Code, payments made (1) to or for the benefit of a creditor; (2) on account of a debt of the debtor; (3) while the debtor was insolvent; (4) on or within ninety (90) days before the filing of the petition; and (5) that enables the creditor to receive more than she would under a chapter 7 proceeding, is an avoidable transfer that can be recovered by a debtor or a trustee appointed for the debtor. 33 The Former Code, however, contained an exception to a debtor’s or a trustee’s ability to avoid and recover payments made by a debtor to a spouse, former spouse or child for alimony, maintenance or support. 34 The implementation of BAPCPA has changed the Bankruptcy Code so as to except from avoidance and recovery any payment made by a debtor that falls within the term “domestic support obligation,” as defined in § 101(14A). 35 Thus, after BAPCPA, under § 547(c)(7) of the Amended Code, all domestic support payments made by a debtor within ninety days prior to the filing of the bankruptcy will remain with the support creditor and cannot be avoided. Requirements for Obtaining Confirmation and Discharge in Cases Involving Domestic Support Obligations One other significant change to the Bankruptcy Code put into place with the implementation of BAPCPA is the establishment of self-executing checkpoints within the Bankruptcy Code to ensure the continuing payment of domestic support obligations by debtors. For example, BAPCPA added a new provision to the Bankruptcy Code, providing that if a Chapter 13 debtor fails to make any payment on a domestic support obligation that first became payable post-petition, the support creditor may move to have the case converted to a chapter 7 or to have the bankruptcy case dismissed entirely. 36 Additionally, a Chapter 13 debtor may not obtain a discharge of debts at all unless the debtor certifies that he has paid off all domestic support obligations. 37 Finally, BAPCPA amends the Bankruptcy Code to require a Chapter 11 debtor to demonstrate that it is current on his domestic support obligations in order to confirm a Chapter 11 plan. 38 Since confirmation of a plan is a requisite predecessor to a chapter 11 discharge, the requirement that all postpetition chapter 11 debts be paid in full limits the debtor’s ability to obtain a discharge. Moreover, in Chapter 11 bankruptcy cases, a support creditor has the power to require payment in full of all domestic support obligations on the effective date of the plan. 39 Miscellaneous BAPCPA Provisions Affecting Family Law BAPCPA also amends the Bankruptcy Code to require trustees in chapter 7, 11, 12, and 13 cases to provide certain notices to child support claimants and governmental enforcement agencies. 40 For example, the Amended Code now requires trustees to provide written notice to a domestic support creditor of the right to use the services of a state child support enforcement agency established under sections 464 and 466 of the Social Security Act in the state where the support creditor resides for assistance in collecting child support during and after the bankruptcy case. 41 The Amended Code requires this notice (i) to include the address and telephone number of the agency; and (ii) to explain the claimant’s right to payment under the applicable chapter of the Bankruptcy Code. 42 Moreover, if the debtor is granted a discharge, the trustee must then notify both the child support claimant and the state agency that the debtor was granted a discharge, as well as provide them with the debtor’s last known address. 43 Further, the trustee must also provide the name and address of the debtor’s last known employer, the name of each creditor holding a debt that is not discharged or that was reaffirmed. 44 Finally, BAPCPA amends the Bankruptcy Code to make exempt property liable for nondischargeable domestic support obligations, notwithstanding any contrary provision of applicable nonbankruptcy law. 45 Conclusion BAPCPA has made significant changes to consumer bankruptcy law. This paper has discussed most of those changes to the Bankruptcy Code significant to the family law practitioner. As can be seen from the discussion above, the changes to the Bankruptcy Code brought about by BAPCPA aim to prevent debtors from using the bankruptcy system as a way to avoid support obligations, while at the same time attempting to ease the support creditor’s ability to obtain payments. ************************ 1. BAPCPA amends 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”). A majority of the provisions of BAPCPA became effective for all bankruptcy cases filed on or after October 17, 2005. 2. Susan Jensen, A Legislative History of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 79 Am. Bankr. L.J. 485 (Summer 2005). 3.The amendments also impose significant modifications with respect to commercial bankruptcy law. 4. Throughout this paper, to distinguish between the Bankruptcy Code provisions that were in effect before BAPCPA and those that came into effect because of BAPCPA, we will refer to those sections as the “Former Code” and the “Amended Code,” respectively. 5. The order for relief is usually the date that a debtor files its bankruptcy petition. 6. 11 U.S.C. § 101(14A) (2005). 7. Id. 8. Id. 9. Id. 10. Id. 11. Compare, e.g., 11 U.S.C. § 362(b)(2)(B) (1994) with 11 U.S.C. § 523(a)(5) (1994). 12. It should be noted that under the Amended Code, all secured claims will still be paid before domestic support obligations. Some commentators have noted that because BAPCPA also expands the rights of secured creditors, the significance of the changes in priority under § 507 do not significantly advance the cause of support creditors. See, e.g., National Women’s’ Law Ctr., Statement of Joan Entmacher on the Bankruptcy Bill, April 13, 2005, http://www.nwlc.org/details.cfm?id=2212§ion=newsroom. 13. 11 U.S.C. § 362(a). 14. Id. § 362(b)(2)(A) (1994). 15. Id. § 362(b)(2)(A) (2005). 16. Id. § 362(b)(2)(C) (2005). 17. Id. § 362(b)(2)(E) (2005). 18. Id. § 362(b)(2)(F) (2005). 19. Id. § 362(b)(2)(G) (2005). 20. See Id. § 362(b)(2)(B) (Former Code). 21. See id. § 362(b)(2)(C) (2005). 22. Id. § 362(b)(2)(D)(2005). 23. Id. § 362(b)(2)(F)(2005). 24. Stmt. of Phillip L. Strauss, Dep’t of Child Support Svcs., San Francisco, reprinted in 22-4 Am. Bankr. Inst. J. 6 (May 2003). 25. 11 U.S.C. § 523(a)(5) (1994). 26. See 11 U.S.C. § 523(15); see also In re Dexter, 250 B.R. 222, 223 (Bankr. D. Md. 2000). 27. See, e.g., In re Moeder, 220 B.R. 52, 55-56 (BAP 8th Cir. 1998) (“the burden of proof lies with the debtor to show that an exception to nondischargeability under § 523(a)(15)(A) or (B) applies in a given case”); Gamble v. Gamble (In re Gamble), 143 F.3d 223, 226 (5th Cir. 1998) (upholding bankruptcy court's assignment of “the initial burden of showing that § 523(a)(15) was applicable to the debt in question” to the plaintiff and then assigning “the burden of proving that one of the exceptions applied to take it out” to the debtor); In re Jodoin, 209 B.R. 132, 140 (BAP 9th Cir. 1997) (“once the Plaintiff demonstrates that the debtor incurred the debt in connection with divorce, the burden shifts to the debtor to prove subparts (A) and (B)”); but see In re Butler, 186 B.R. 371, 373 (Bankr. D. Vt. 1995) (holding that the burden is on the creditor to prove all parts of § 523(a)(15)). 28. 11 U.S.C.. § 523(a)(5) (2005). 29. Id. § 523(a)(15) (2005). 30. Hon. William Houston Brown & Lawrence Ahern III, 2005 Bankruptcy Reform Legislation with Analysis, 32 (2005). 31. See, e.g., In re Lowther, 321 F.3d 946 (10th Cir. 2002); Adams v. Zentz0, 963 F.2d 197 (8th Cir. 1992). 32. Brown & Ahern, supra, note 30, at 32. 33. 11 U.S.C. §§ 547(b)(1) – (5) (2005). 34. Id. § 547(c) (7)(Former Code). 35. 11 U.S.C. § 547(c)(7) (2005). 36. 11 U.S.C. § 1307(c) (2005). 37. Id. § 1328(a). 38. Id. § 1129(a)(14). 39 Id. § 1129(a)(9)(B). 40. See Id. §§ 704(c)(1), 1106(c)(1), 1202(c)(1), 1302(d)(1). 41. Id. 42. Id. 43. Id. 44. Id. 45. Id. § 522(c)

Helpful BACPA Information

Certificates of completion for the post-filing debtor education course must be filed by chapter 7 debtors within 45 days of their 341 hearing. Chapter 13 debtors have until their last payment under their plan to file their certificate.

Maintaining contact with your clients until they have submitted their debtor education certificate is crucial. If the certificate is not filed in a timely manner, it can have a serious negative consequence for your client. Although chapter 13 debtors have a longer time period in which to complete the debtor education requirement, the Institute recommends that clients should complete their debtor education program as soon as possible. Why? That debtor is more likely to be successful on their repayment plan. They are also less likely to “disappear” before the debtor education certificate is submitted.

Many chapter 13 Trustees are seeking approval by the USTs and BAs to provide debtor education programs, and will be providing those services free of charge to their chapter 13 debtors. Check with your local chapter 13 trustee to see if they are participating.

The cost of the debtor education program is $45.00 for a single debtor, $65.00 for a couple. This price includes the workbook, shipping and handling charges, and the newsletter for one year afterward.

The Institute for Financial Literacy is a 501(c)(3) tax exempt organization whose mission is to make effective financial literacy education available to all American adults. The Institute accomplishes this mission through partnership with other non-profit, educational and governmental organizations, and through direct delivery of service.

Attorneys who wish to have their clients’ counseling or debtor education certificates sent directly to them can register as Facilitators with the Institute. Registering as a Facilitator with the Institute has several advantages:

Control. You sign the client up for services, are provided updates on their status, and receive certificates directly from the Institute. Since you control the services your clients are signed up for, there won’t be any “surprise” charges.

Transparency. Every attorney who registers as a Facilitator has full access to the budget information provided by the client and all of the analysis and recommendations made by the Institute during the counseling session.

Confidence. Every Facilitator is encouraged to go through the online counseling and education programs themselves at no charge so they will know exactly what their clients will go through.

Retention. The Institute does not offer debt management programs, debt settlement, credit repair or similar services. Our focus is educating and assisting the client, not selling them a bankruptcy alternative.

Flexibility. Our programs can be delivered by telephone or internet, and can be mixed and matched to meet clients’ specific needs. Couples filing jointly can now go through our internet and telephone programs together at the same time if they want to, and clients can be given access to the online program in several different ways.

Client Fund Management. The Institute understands the importance of following bar rules regarding the management of client funds. The Institute offers a number of methods for collecting client funds from its Facilitators, including bulk credit card transactions, ACH/EFT transactions and paper invoicing. Fees are collected on a weekly basis.

Client Fees:

Pre-filing Credit Counseling: $40.00 for a single client, $60.00 for a client and spouse. Post-filing Debtor Education: $45.00 for a single client, $65.00 for a client and spouse.

Fill out the Facilitator registration form below and fax to 207-221-3691.

If you have any questions or would like to know more about our programs, call 1-866-662-4932.

PLEASE SCROLL DOWN FOR FACILITATOR REGISTRATION FORM ON NEXT PAGE Facilitator Registration Form PLEASE TYPE or PRINT NEATLY

Form must be signed regardless of fee collection method

PO Box 1842, Portland ME 04104PH 207-879-0389 FAX 207-221-3691 (no coversheet required) Name of Organization: _______________________________________________________________ Law Firm (y/n)? __ Name of Primary Facilitator: _____________________________________________________ Title: _________________ Phone: (_____) ____________________________ Ext. ___________ Fax: (_____) ______________________________ Administrative Email: _______________________________________________________________________________ In Office Counseling Email: ___________________________________________________________________________________________________________________________________________________________________________Mailing Address: Street City State Zip Code To ensure we have sufficient capacity, how many clients are you likely to refer for services each month, on average? _____ Judicial District(s) served by organization (if known):___________________________________________________________ Do you wish to participate in a training teleseminar? _____ Yes _____ No (participation highly recommended) Fee Collection Method: Please note: We are not charging Facilitators for services rendered to Clients. Facilitators are third parties that wish to help Clients sign up for services with the Institute. In order to smooth the process for Clients, Facilitators must agree to collect the Institute’s fee for services from the Client and hold those fees in trust (or escrow) until they are collected by the Institute. By signing this form the Facilitator acknowledges that they must collect the Institute’s fees and hold them in trust or escrow, and that they cannot charge the client additional fees related to the Institute’s services. It also allows the Facilitator to choose how they would like those Client fees held in trust or escrow to be collected by the Institute. The Institute for Financial Literacy provides services to clients without regard to the ability to pay. If a Facilitator believes that a Client is unable to pay for the Institute’s services, call the Institute at 1-866-662-4932 for instructions before signing the Client up for services. Select One: _____ Visa (debit/credit) _____ Master Card (debit/credit) _____ Paper Invoice Name as it appears on card: ______________________________________________________________________ Card Number (16 digits):____________________________________________ Expiration Date: ______/_______ Address Verification (address that credit/debit card statements are sent to, required by Financial Institution): Street: _________________________________________________________________City: _____________________________ State:_______ Zip Code:___________ By signing below, I authorize the Institute for Financial Literacy to collect fees from me using the method identified above on a weekly basis, in an amount to be determined based on the number and type of services that I have signed Clients up for during the relevant billing period. I will be provided with a list of these services itemized by Client and type of service on a weekly basis, regardless of fee collection method. __________________________________________________ ___________________ Authorized Signature Date Form must be signed regardless of fee collection method selected

Return of the Case Roundup (the Next Generation)

1st Circuit

Miles v. Beneficial Massachusetts, Inc. (02/07/06 - No. 05-1892)

District court's reimposition of an automatic stay in a bankruptcy proceeding is affirmed since a creditor could not prevail in its appeal since it did not directly or indirectly call into question the correctness of the district court’s rationale in reimposing a stay in the matter.

3rd Circuit

Stoe v. Flaherty (01/23/06 - No. 043947p.pdf)

Dismissal of plaintiff's state court action to recover unpaid severance benefits from current and former officers of his now-bankrupt previous employer is reversed where the district court committed errors of law in ruling that the Bankruptcy Code's mandatory abstention provision was inapplicable to plaintiff's case.

Youngman v. Fleet Bank, N.A. (01/19/06 - No. 04-3622)

Bankruptcy court orders granting defendant-mortgagee-bank's motion for an award of attorney's fees and expenses for services rendered relating to a foreclosure are reversed where recovery certain lending agreements at issue merged into a final judgment of foreclosure, and no exception to the merger doctrine applied.

ACandS, Inc. v. Travelers Cas. & Sur. Co. (01/19/06 - No. 04-3926, 04-3929)

Dismissal of a suit for a declaratory judgment involving an arbitration award for mootness and denial of a motion to vacate the arbitration award is reversed in a case involving an insurance coverage dispute over asbestos claims where an arbitration proceeding at issue had become subject to an automatic bankruptcy stay.

Will v. Northwestern Univ. (01/20/06 - No. 04-4387)

Approval of a bankruptcy settlement agreement involving claims against makers of products containing ephedra is affirmed where the district court properly approved the settlement under federal bankruptcy law and did not abuse its discretion in finding the settlement was made in good faith under state law.

4th Circuit

Jacksonville Airport, Inc. v. Michkeldel, Inc. (01/19/06 - No. 05-1242)

Bankcruptcy court holding that defendant did not have to count plaintiff-airport's vote to reject defendant's Chapter 11 plan of reorganization is affirmed where plaintiff had no right to vote on the plan under the Bankruptcy Code.

5th Circuit

G.H. Leidenheimer Baking Co., Ltd. v. Sharp (02/06/06 - No. 05-30445, 05-30455)

Bankruptcy court's treatment of preference payments certain suppliers received from a grocery store chain before it filed bankruptcy is affirmed with modification where none of the payments at issue qualified for the ordinary course of business defense, and a subsequent advance defense was properly applied to both suppliers.

In the Matter of: Whitaker Constr. Co., Inc. (02/01/06 - No. 04-30598, 05-30074)

Judgment for defendant in one action and plaintiff in another on claims by a subcontractor against a surety for construction work is affirmed where: 1) the subcontractor's filing of an involuntary bankruptcy petition against the debtor could not preserve one claim, and 2) a statutory peremption period was not triggered when notice of a construction contract was filed but notice of termination was not.

Stewart v. W. Heritage Ins. Co. (01/26/06 - No. 05-60405)

Order staying a breach of insurance contract and bad faith case involving a default judgment in an underlying wrongful death case pending the resolution of a related state court suit is reversed where the district court abused its discretion in staying the matter.

Warfield v. Byron (01/17/06 - No. 04-10796, 04-11041)

Summary judgment for plaintiff is affirmed in a suit alleging claims under the Uniform Fraudulent Transfer Act by plaintiff-receiver against investors in a Ponzi scheme, and an order declaring nondischargeability of the monetary judgments in bankruptcy is vacated as premature.

6th Circuit

In re: Comdisco, Inc. (01/17/06 - No. 05-1697)

Judgment for debtor in a bankrupcty case regarding the interpretation of a sale and leaseback arrangement of computers is affirmed where the contract at issue did not make the debtor responsible for errors by an appraiser which resulted in a substantial tax liability for creditor.

Murray v. GMAC Mortgage Corp. (01/17/06 - No. 05-8035)

Denial of class certification in a consumer class action against defendant-lender under the Fair Credit Reporting Act is granted where the district court's reasons for denying certification evinced hostility to all class litigation or were improper grounds for such denial.

8th Circuit

Roberts v. Pierce (01/25/06 - No. 05-1095)

Order granting in part, and disallowing in part, a proof of claim in a bankruptcy proceeding is affirmed where the bankruptcy court did not abuse its discretion by not conducting an evidentiary hearing since the parties did not request a hearing and notice was properly given.

Law v. Stover (01/26/06 - No. 05-6034)

Orders sustaining defendant-bankruptcy trustee's objection to plaintiff-debtors' claim of exemption in portions of their federal tax refunds involving the federal child tax credit are affirmed since plaintiffs' child tax credit was a contingent interest on the date their bankruptcy petition was filed, and thus, was property of the bankruptcy estate.

9th Circuit

DeRoche v. Arizona Indus. Comm'n (01/17/06 - No. 04-15258)

Denial of an attorney's fees request pursuant to a state statute for attorney's fees incurred in bankruptcy discharge litigation is affirmed since attorney's fees are not available for litigating federal bankruptcy issues.

11th Circuit

Official Comm. of Unsecured Creditors of PSA, Inc. v. Edwards (01/30/06 - No. 05-12320)

Dismissal of plaintiff-bankruptcy trustee's complaint against entities allegedly involved in a massive Ponzi scheme that defrauded investors is affirmed since the doctrine of in pari delicto barred his claims for violations of the Racketeer Influenced and Corrupt Organizations Act, and Georgia courts do not recognize a claim for aiding and abetting a breach of fiduciary duties.

Federal Circuit

Cent. Virginia Cmty. Coll. v. Katz (01/23/06 - No. 04–885)

A bankruptcy trustee's proceeding to set aside the debtor's preferential transfers to state agencies is not barred by sovereign immunity. Pursuant to the Bankruptcy Clause, Congress may, at its option, either treat states in the same way as other creditors insofar as concerns "Laws on the subject of Bankruptcies" or exempt them from operation of such laws.

The BK Blog has been added to Blawg.com

Just a note to let members of the committee know that our Blog has been added to Blawg.com, the official home of legal and law-related weblogs from all over the Internet. Salut!

Peter McDonald v. Bank Financial (05 A 00948)

Bankruptcy Caption: In re Peter McDonald Bankruptcy No.: 02 B 40019 Date of Issuance: January 17, 2006 Judge: Jack B. Schmetterer

Lawrence Fisher v. Enterprise Truck Line, Inc., et al.

Adversary Nos. 05 A 1370;05 A 1373;05 A 1380 Bankruptcy Caption: In re CXM, Inc. Bankruptcy No.: 03 B 28236 Date of Issuance: January 17, 2006 Judge: Jack B. Schmetterer

A.k.a., Let Me REALLY Put It To You In Texan (Denise Howell)

Austin American-Statesman, Judge takes Congress to task in bankruptcy case. Among the interesting aspects of the article is its mention of the role of the blawgosphere in propagating the discussion. Though I came up fairly empty with related — "monroe bankruptcy" — searches in Technorati and Feedster, I did find more from Steve Jakubowski.

P.S. So what are YOU doing on Superbowl Sunday?