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When someone decides to file for bankruptcy in New York, one of the first things they wonder about is their bank account. Will they be allowed to keep the funds they have there? Or is the account just another asset that needs to be itemized and liquidated by the bankruptcy trustee? It is a complex question, and it is important to understand the ins and outs of the applicable bankruptcy law going forward so you can be prepared.
 
Federal and State Bankruptcy Exemptions
The first thing to be aware of is that there are no specific exemptions for bank accounts, but they will often fit admirably under wildcard or general exemptions. In New York, however, a difficult choice sometimes must be made. New York is one of the states that allows debtors to choose between using the federal and state bankruptcy exemptions. If you choose the state exemptions, you can only use the wildcard exemption for your bank account in lieu of the homestead exemption. If you own real property, you may be forced to make a choice. Under the federal exemptions, however, you may use $1,225 plus $11,500 of any unused portion of your homestead exemption.
New York is, however, one of the states that allows you to keep income earned right before your filing – up to 90% of it, or 100% if you are a non-commissioned member of the U.S. Army. Also, you may claim up to $600 if it is on deposit with a savings and loan institution. However, if you do not have enough exemption room to cover all the money in your bank account, it will be turned over to the trustee. All non-exempt assets, even liquid cash, must be turned over to the trustee in order to comply fully with the U.S. Bankruptcy Code.
Issues With Banks
Another way a Chapter 7 filing can affect your bank accounts is if you owe a debt to the bank which holds them – for example, a mortgage or credit line. If you do, the bank is within its rights to “set off” your debt – to hold some or all of your funds in order to pay the debt. In some states, no notice whatsoever is required, but in New York, the debtor must be given notice of the bank’s intent to exercise the right of set off at least on the day before the action. Also, a bank may not set off a debt with funds from a Social Security or supplemental income account.
Another issue that can be very frightening is that some banks, such as Wells Fargo, will freeze the accounts of debtors after they file for bankruptcy, whether or not they owe money to the bank. This arguably violates the automatic stay (which is nearly always granted in Chapter 7 cases, against nearly all creditors), and indeed, the Bankruptcy Appellate Panel for the Ninth Circuit held in 2010 that it did. However, as of this writing, the Second Circuit has not decided whether or not to side with the Ninth, so the possibility of having your accounts frozen is still possible in New York. If it does happen, you must petition the trustee to have them unfrozen, which will usually happen if no money is owed to that bank.
Contact A Bankruptcy Attorney
If you need assistance dealing with the bankruptcy trustee or the Court, we can help. The Law Offices of Stephen B. Kass, P.C. boasts experienced attorneys that will work hard for you. Contact us for a consultation today.
 
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The House of Representatives have passed a bill that will permit banks to file for bankruptcy.
The bill, passed on Monday, is known as The Financial Institutional Bankruptcy Act of 2014. It will allow financial institutions to willingly begin the process of bankruptcy, or in some instances, allow the Federal Reserve to start the process.
This bill was a rewrite to current bankruptcy law and was supported by Wall Street banks. The law will not only apply to financial organizations but also to other large commercial firms, such as insurance companies.
“This process will allow a failing financial institution to transfer its assets to a newly formed bridge company over a single weekend, which will promote confidence in the financial marketplace,” Ranking Member John Conyers (D-Mi) said in a floor speech, urging colleagues to pass the bill.
The bill employs a “single point of entry” method, which will permit a holding company to enter bankruptcy and allow subsidiaries to remain outside the process.
This law builds upon previous efforts to avoid taxpayer bailouts of financial institutions. Under the Dodd-Frank financial reform law, known as the Orderly Liquidation Authority, there is a stipulation to allow an administratively-led resolution procedure.
In his speech, Conyers argues that bankruptcy is a better option; he also stated he supported the bill because it did not reduce any particular conditions of the law.
Critics feel the bill favors large banks at the expense of their trading associates and has no direct promise to prevent future taxpayer bailouts.
The Financial Institutional Bankruptcy Act of 2014 was passed with bipartisan support. It was co-sponsored by Rep. Spencer Bachus (R-Al.), House Judiciary Committee Chairman Bob Goodlatte (R-Va), John Conyers. It is part of an ongoing response to the fallout of the 2008 collapse of Lehman Brothers.
The post The Financial Institutional Bankruptcy Act of 2014 Passed appeared first on The Bankruptcy Blog.

PInellas County authorities have charged a local doctor with writing fraudulent prescriptions so she could obtain controlled substances. Bay News Nine reported in this article that Dr. Lynne Columbus was arrested and charged with two counts of actually obtaining or trying to obtain controlled substances by fraud. Citing the Pinellas County Sheriff’s Office, the article states that an investigation began sometime last month. Pinellas County Detectives received information that Dr. Columbus wrote prescriptions in other people’s names and tried to fill them.
Obtaining a controlled substance by fraud is a third degree felony in the state of Florida. If convicted of using fraud to obtain controlled substances, the maximum penalty is five years in prison and a $5,000.00 fine. The burden of proof lies with the state that a person  obtained  controlled substances through misrepresentation, fraud, forgery, deception or subterfuge.
It is extremely important for anyone charged with prescription fraud to contact a Florida Criminal Defense Attorney immediately. Typically prescription drug crime offenders are dealing with a serious addiction problem and need help. They are often suffering from serious pain and are prescribed strong medications that often become addictive, which is why they search for other ways to obtain more drugs. These types of cases require the assistance of a compassionate Florida Criminal Defense Attorney that can work towards getting unnecessary charges dropped or reduced so the accused can get the help he or she needs.
First time offenders may have many options available to them. If you have been arrested for possession of a controlled substance or obtaining controlled substances by fraud, contact us today for a free case evaluation. The attorneys at The Reissman Law Group, P.A. can provide you with compassionate care, while pursuing the truth and justice you deserve.
The post State Files Charges Against Local Doctor for Obtaining Controlled Substances appeared first on St. Petersburg Law Blog.

After filing a chapter 7 bankruptcy, you will be required to attend "the meeting of creditors".  The meeting takes place at court around 45 days after you file bankruptcy. If you have to attend the hearing.  If you do not attend, the trustee, who runs the meeting will likely file a motion asking the court to dismiss your case.   The meeting is referred to as the "meeting of creditors" because creditors are notified that they may attend and question you about your assets and any other matter relevant to the administration of the case. The good news is that creditors rarely attend the meeting.  On the rare occasions when they do, they are usually trying to locate secured property.  Commonly I see jewelry shops shops asking for the location and return of jewelry where the debtor defaulted on the loan.  Other creditors may ask questions to see whether a debtor should be in a chapter 7 when they can afford to pay back their creditors.  Again, it is rare that a creditor shows up to ask questions.  The meeting usually lasts only a few minutes and may be continued if the trustee is not satisfied with the information provided by the debtor. Often meetings are continued when the debtor fails to provide acceptable identification and proof of Social Security number. Also, many debtors fail to send the trustee tax returns and pay stubs 7 days before the hearing, per California Eastern District Bankruptcy Court rules.  In short, make sure you are prepared for the meeting.  If you have hired an attorney, the attorney will make sure to send the documents to the trustee and remind you to bring your driver's license and social security card to the meeting.  

If you fail to provide the information requested at the meeting, the trustee will likely set another date for you to return to provide the information.  Multiple instances of non-compliance will likely lead to the trustee requesting that the bankruptcy case be dismissed or that the debtor be ordered by the court to cooperate or be held in contempt of court for willful failure to cooperate. The information enables the trustee to understand your financial circumstances for filing bankruptcy and speeds up the questioning process. The trustee will ask questions to ensure that your financial information is correct, that you do not have assets that can be sold with proceeds going to creditors and to make sure you understands the positive and negative aspects of filing for bankruptcy. 
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