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Here at Shenwick & Associates, our clients are both debtors and creditors. When a person or entity files for bankruptcy protection (such as in the recent Sears bankruptcy), we’re often contacted by creditors who are seeking to protect their claim against the debtor. Usually, this requires the filing of a proof of claim. In this post, we’ll examine some of the basics of filing proofs of claim.
1. In the context of a chapter 7 case, claims and proofs of claims are not usually a factor, since most chapter 7 cases are “no asset cases” (there will be no assets for the chapter 7 trustee to distribute from the debtor’s bankruptcy estate after the debtor’s personal property is exempted). However, if the chapter 7 trustee does find assets in the bankruptcy estate (so creditors can have some recovery on their claims), the chapter 7 trustee will file a notice of assets and request to set claims bar date (which will trigger the bankruptcy court to send a notice to all creditors listed in that bankruptcy case, and proofs of claim must be filed by the “bar date”).
2. In the context of a Chapter 11 case, § 1111(a) of the Bankruptcy Code provides that a proof of claim is deemed “filed” for any claim that appears in the schedules except if it is listed as disputed, contingent or unliquidated. Therefore, to know whether to file a proof of claim, an unsecured creditor must examine the debtor’s bankruptcy schedules to determine how their claim was scheduled, i.e., whether it was listed as disputed, contingent (the claim is dependent on another event) or unliquidated (the claim amount is uncertain). Many creditors will just file a proof of claim when they receive notice of a bankruptcy filing.
3. Therefore, unless a creditor’s attorney or a creditor can obtain the schedules by going to court or through PACER, the better practice is to file a proof of claim as soon as possible. The best practice may be to file a notice of appearance and a proof of claim as soon as an attorney is retained to represent a creditor in a chapter 11 case. If an attorney or a creditor does not file a proof of claim early in a case, then they must file the proof of claim on or before the “bar date.” If the proof of claim is not filed by the “bar date,” then that creditor is barred from receiving a distribution in the case, unless the creditor was listed in the debtor's schedules as not having a claim that’s disputed, contingent or unliquidated. Creditors should review the instructions for preparing a proof of claim.
4. Once the proof of claim is signed, and backup (which will evidence the amount of the claim, such as invoices, a spreadsheet or collateral for the claim if the claim is secured, such as a mortgage) is attached to the proof of claim, the proof of claim should be filed with the bankruptcy court. It can be uploaded to the claims register for the case via ECF (Electronic Case Filing) or sent to the bankruptcy court by Federal Express or another delivery service with a short letter of direction requesting that the clerk file the proof of claim. In cases with many creditors (“megacases”), the bankruptcy court may require that the debtor retain a claims agent to process the proofs of claim instead of the bankruptcy court.
Anyone who has questions regarding the filing of proofs of claims or creditors’ rights in bankruptcy cases should contact Jim Shenwick.
By Danielle Furfaro and Gabrielle Fonrouge
Another debt-burdened New York City cabbie has committed suicide — the eighth for-hire driver to kill himself in the past year, Taxi and Limousine Commission officials confirmed on Wednesday.
Roy Kim, 58, of Bayside, Queens, hanged himself with a belt in his home on Nov. 5, according to the city’s medical examiner’s office. There was no immediate sign of a suicide note.
Kim, who had just purchased his taxi medallion last year, was more than $500,000 in debt from the deal and struggling to stay afloat, say friends.
“He was in a lot of debt from that,” said fellow driver Young Lee, who made friends with Kim while picking up fares from airports. “For a while he was making money but then it just went slowly down and down and down. All drivers are really struggling.”
For-hire drivers have been in a freefall for the past few years, and many blame the epidemic on the unchecked growth of ride-share companies such as Uber and Lyft. The city enacted regulations this summer, but some critics called them too little too late.
TLC Commissioner Meera Joshi offered condolences to Kim’s friends and family and promised to look for more ways to help anguished drivers.
“This tragedy underscores the importance of finding new ways for government, the industry and lenders to work in unity to address the financial challenges that are weighing so heavily on our licensees,” she said. “Modifying, restructuring and lowering loans would go a long way in providing relief and keeping taxi services available to New Yorkers for years to come.”
Taxi driver advocates say the city and TLC need to do more to help.
“Owner-drivers have suffered a deep and vicious slide from the middle class into crushing poverty, in a just a few short years,” said NY Taxi Workers Alliance Executive Director Bhairavi Desai. “This crisis can be fixed. The struggle for owner-drivers is reminiscent of the 2008 housing crisis. In that crisis, the industry, government, advocates, and philanthropy came to the table to find solutions. Now, banks and lenders need to work with the city and philanthropy to write off 20 percent of outstanding debts, lower interest rates, and restructure contracts so that no owner-driver has to lose more than 20 percent of their monthly income to the mortgage.”
Kim is the fourth cabbie and eighth driver overall to commit suicide since November of last year.
In October, Uber driver Fausto Luna jumped in front of an oncoming A train.
In June, cash-strapped yellow cabbie Abdul Saleh, 59, hanged himself in his Brooklyn apartment.
In May, another yellow cab driver Yu Mein “Kenny” Chow flung himself in the East River off the Upper East Side.
In March, Nicanor Ochisor, 65 — another yellow cabbie — hanged himself in his garage in Maspeth, Queens.
Corporate black car driver Douglas Schifter, 61, killed himself with a shotgun outside City Hall on Feb. 5.
In December, livery hack Danilo Corporan Castillo, 57, wrote a suicide note on the back of a summons he received — and then jumped out the window of his Manhattan apartment.
And in November, livery driver Alfredo Perez hanged himself.
The news of the suicide comes on the same day that the city council passed a bill introduced by council member Ydanis Rodriguez that will create a commission to look at falling taxi medallion values and come up with ways to help struggling drivers.
© 2018 NYP Holdings, Inc. All Rights Reserved.
The news article headline in the Salt Lake Tribune this week says it all:
Average Utah payday loan interest rate rises to nearly 528% annually — double what Mafia loan sharks charged in the 1960s
And to think: It’s legal. Payday loans — avoid them. Do something else to tide you over to the next paycheck. If you take out a payday loan, you’ll only be making your problem worse. If you’re maxed out and struggling, talk to a lawyer and examine all your options before you make uninformed decisions and start rejecting effective solutions out of hand.
The recent rough economic times have placed millions of people under financial duress. Dealing with burdensome debt and the stress associated with it can certainly be hard. The situation can get worse when your house is on the line. However, bankruptcy can prove to be your best way to prevent foreclosure and protect your home. […]
The post Can You Declare Bankruptcy Without Losing Your House in California? appeared first on The Bankruptcy Group, P.C..
The October 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.
1. The volume of transfers rose dramatically from September. In October, there were 106 unrestricted taxi medallion sales.
2. However, 99 of the 106 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value). One transfer was an estate sale for no consideration and another transfer was from an individual to an LLC for no consideration, which also does not reflect fair market value and which we have also excluded from our analysis.
3. The large volume of foreclosure sales (approximately 94%) is in our opinion evidence of the continued weakness in the taxi medallion market.
4. The five regular sales for consideration ranged from a low of $150,000 (one medallion), $160,000 (three medallions) and a high of $175,000 (one medallion).
5. Accordingly, the median value of a medallion in October was $160,000, down 8.5% from $175,000 in September.
In Jim Shenwick’s opinion, the new NYC law restricting the number of Uber, Via and Lyft licensesdoes not seem to have yet increased the value of taxi medallions.
Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at j[email protected].
Economists have always been fond of Uber. Its willingness to battle incumbents, use of technology to match buyers and sellers, and embrace of “surge” pricing to balance supply and demand make the ride-hailing giant a dismal scientist’s dream. Steven Levitt, the author of the bestselling “Freakonomics”, called it “the embodiment of what the economists would like the economy to look like”. But if economists subjected Uber and its competitors to a cost-benefit analysis, they might not be so impressed.
This might surprise customers. A study in 2016 by researchers from Oxford University, the University of Chicago and Uber itself found sizeable benefits from ride-hailing services for consumers. Using data from 48m Uber trips taken in four American cities in 2015, they estimated the difference between how much customers were willing to pay and their actual fare. Each $1 spent on UberX rides generated a “consumer surplus” of $1.60. Across America, that surplus was estimated to be $6.8bn a year.
Drivers also benefit. Few sign up for lack of anything else, as is true of some gig work: in America roughly eight in ten have left another job to get behind the wheel. The typical American Uber driver makes $16 per hour ($10 after expenses), higher than the federal minimum wage. In London earnings after expenses come to £11 ($14) per hour and a recent survey found Uber drivers reporting higher levels of life satisfaction on average than other workers.
But against these benefits, there are costs to weigh. Far from reducing congestion by encouraging people to give up their cars, as many had hoped, ride-hailing seems to increase it. Bruce Schaller, a transport consultant, estimates that over half of all Uber and Lyft trips in big American cities would otherwise have been made on foot or by bike, bus, subway or train. He reckons that ride-hailing services add 2.8 vehicle miles of driving in those cities for every mile they subtract.
A new working paper by John Barrios of the University of Chicago and Yael Hochberg and Hanyi Yi of Rice University spells out one deadly consequence of this increase in traffic. Using data from the federal transport department, they find that the introduction of ride-sharing to a city is associated with an increase in vehicle-miles travelled, petrol consumption and car registrations—and a 3.5% jump in fatal car accidents. At a national level, this translates into 987 extra deaths a year.
What could be done to tip the balance back to benefits overall? “Congestion pricing is the most direct solution,” says Jonathan Hall of the University of Toronto. Several cities, including London, Stockholm and Singapore, have moved in this direction, charging drivers for entering busy areas at peak hours. If ride-hailing firms tweaked their pricing to encourage carpooling, that would help, too.
One of the worst things a city can do, says Mr Barrios, is to cap the number of ride-hailing cars on their streets, as New York did in August. That marked a step back towards the days when barriers to entering the taxi market were high and competition was low. A dismal outcome, as most right-thinking economists would agree.
Copyright © The Economist Newspaper Limited 2018. All rights reserved.
By Ashley Cullins
Wesley Snipes must pay millions to the IRS after failing to convince a tax court that he doesn't have the assets to pay more than six figures.
After the IRS tried to collect $23.5 million in back taxes, the actor asked for an offer-in-compromise which would let him settle his debt for less than the amount owed and for the notice of federal tax lien that was filed against his home to be withdrawn. He put up just shy of $850,000 in cash as an OIC, but the IRS rejected the offer and sustained its lien. So Snipes filed a petition asking the tax court to overturn the decision.
U.S. Tax Court Judge Kathleen Kerrigan on Thursday upheld the IRS decision finding Snipes failed to provide sufficient proof of his assets and financial condition and the settlement officer didn't abuse her discretion in rejecting his request.
The lien was placed in August 2013, just a few months after the actor was released from prison following his conviction on related tax crimes. At the time, he owed $23.5 million for the years 2001 through 2006. Snipes then requested an installment agreement or OIC and made his cash payment. A settlement officer looked into his real estate holdings and assets but was unable to determine that he no longer owned certain properties that he claimed to have unloaded. Following the investigation, the officer determined that the reasonable amount that could be collected was about $17.5 million, but Snipes didn't increase his OIC offer.
During the proceedings that followed, Snipes claimed his financial adviser had taken out loans and disposed of assets without his knowledge and offered up an affidavit from the adviser admitting to misconduct — but he didn't provide documentation showing the diversion of the assets.
The settlement officer later reduced Snipes' estimated liability to $9.5 million, but Snipes stayed with his original offer.
"Given the disparity between petitioner’s $842,061 OIC and the settlement officer’s calculation of $9,581,027 as his RCP, as well as petitioner’s inability to credibly document his assets, the settlement officer and her manager had ample justification to reject the offer," writes Kerrigan in the opinion, also noting that Snipes failed to show paying the bill would result in economic hardship. "Accordingly, we conclude that the settlement officer did not abuse her discretion in determining that acceptance of petitioner’s OIC was not in the best interest of the United States."
© 2018 The Hollywood Reporter. All rights reserved.
Who gets paid first in a Chapter 13 Bankruptcy case in Tacoma?
Most people who file for Chapter 13 bankruptcy in Tacoma are neck deep in debts because of credit card bills, medical expenses, and mortgages. If you are one of these people, it is best to know the basics about bankruptcy so that you are well informed on how your debts are going to be paid. It will help to understand how debts are settled in a Chapter 13 case. A Chapter 13 bankruptcy is also called a wage earner’s plan or reorganization bankruptcy. It empowers individuals with regular income to come up with a repayment plan in order to repay all or part of their debts. Our skilled Tacoma bankruptcy attorneys can counsel you so that you may fully understand how reorganization bankruptcy works.
What are the types of debt and how are they paid in Chapter 13 Bankruptcy?
No bankruptcy clears you of all debts. Bankruptcy can eliminate many other debts, but it will be more difficult to borrow in the future. You must know that debts fall under two categories:
1. Dischargeable Debts – Debts for which the debtor will no longer be liable when the bankruptcy is discharged.
2. Non-Dischargeable Debts – Debts for which the debtor will still be liable even after receiving a discharge.
It is apparent that these distinctions are important information for debtors regardless of which chapter they file under. Apart from being categorized as dischargeable or non-dischargeable, debts are also classified into a few additional categories, which include:
1. Priority Debts
2. Secured Debts
3. Unsecured Debts
These classifications are important because they affect the order in which the debts must be paid and the extent to which the debts must be settled.
What are the definitions of Secured, Unsecured, and Priority Claims in Chapter 13?
Secured debts are debts which are “secured” by collateral. If the borrower falls behind on payments for these debts, the lender can seize, foreclose, or repossess the collateral. Your assets such as your home or car are usual examples of secured debts because they can be used as collateral for a loan (such as an auto loan) or a mortgage (for your house). You never fully own the asset tied to secured debt until the loan has been paid off. Because of the collateral, you now owe your creditor a “secured debt” and he now has a “secured claim”.
On the other hand, unsecured debts are debts that are not backed by collateral, such as a car or home. Credit card and medical debt are examples of unsecured debts in Chapter 13 bankruptcy. Both also happen to be dischargeable debts under both Chapter 7 and Chapter 13. Student loan debt is also unsecured debt but is usually non-dischargeable in any type of bankruptcy, unless the debtor can prove extreme hardship. A creditor who is owed an unsecured debt has an unsecured claim.
Unsecured debts can be further divided into two subcategories:
1. Priority Unsecured Debts – Debts that fall into this category include child support payments, alimony or spousal support payments, and certain types of tax debts, though income tax debts are sometimes dischargeable as long as they meet certain requirements. These are paid first in Chapter 13 bankruptcy.
2. Nonpriority Unsecured Debts – Nonpriority unsecured debts are the least urgent debts in bankruptcy. Creditors with unsecured claims are the last to be paid with any funds that remain after secured claims and priority unsecured claims have been settled. The amount to be paid on these debts will depend on how much is your disposable income and the amount the creditors should have received had you filed for Chapter 7 bankruptcy.
If you are short on cash and faced with the difficult decision of paying only some bills, it is best that the secured debts are prioritized. These payments are often harder to catch up with and you risk losing essential assets – like your home- if you are delinquent on payments.
On the other hand, you might want to pay off unsecured debts because they have higher interest rates that make it expensive in the long run. Even when you have a debt repayment plan, it is crucial to be updated with the minimum and installment payments on all your accounts.
It is also important to note of the following secured and priority debts that Chapter 13 debtors should fully pay before they are discharged:
– Alimony
– Child support
– Debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs
– Debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime
– Long-term obligations such as home mortgage
– Debts for most government funded or guaranteed educational loans or benefit overpayments
– Most tax debts, with some exceptions
To get more information on what the differences are, do not hesitate to call our Tacoma bankruptcy attorneys.
What are benefits of filing Chapter 13 bankruptcy if I am still required to fully pay my debts?
Chapter 13 allows debtors to propose a repayment plan so they can pay off creditors within three to five years, in manageable terms and in amounts they can afford. Homeowners who filed for Chapter 13 also have a chance to save their homes from foreclosure because once they file for Chapter 13 bankruptcy, foreclosure proceedings are stopped. Chapter 13 also allows debtors to pay off missed payments on car loans and mortgages without losing their assets. However, if you fall behind on your mortgage payments during your Chapter 13 plan, the lender can seek the court’s permission to foreclose on your home or seize your car, as the case may be.
On a positive note, once the bankruptcy is discharged, the debtor can heave a sigh of relief of having improved his financial situation and can now move forward in building a better credit standing.
Do not delay in taking that first step towards bankruptcy filing. Call our Tacoma bankruptcy attorney for professional legal advice if Chapter 13 bankruptcy is the best option for you.
The post Chapter 13 Bankruptcy in Tacoma appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
By Danielle FurfaroThe city will apply the brakes on millions of dollars in fees due this week from taxi-medallion owners in an attempt to stem a rash of cabby suicides.
Taxi and Limousine Commission head Meera Joshi agreed to waive what would amount to nearly $20 million in fees to give struggling medallion owners some breathing room.
She made the move after nearly a year of driver deaths led to mounting criticism from other cabbies, pols and city officials.
Councilman Mark Levine (D-Washington Heights) has been pushing legislation to provide longer-term solutions for medallion owners and asked for the break for taxi drivers who are already on the brink financially.
“This is a short-term step to provide some relief to the drivers while we work out a longer-term policy,” said Levine.
“It’s critical that we take steps to help out the drivers who have seen their life savings evaporate through no fault of their own.”
The city usually requires hacks to pay $1,650 every two years — a biennial $550 taxi-medallion renewal, six $90 inspection fees and a $10 renewal for the medallion tin. Handicapped-accessible medallion owners must pay another $540.
With 11,286 regular medallions on the streets and 2,301 accessible ones, that’s nearly $20 million in fees that the city is now waiving.
And all of that was set to come due this week.
"Absolutely anything could help out right now,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “People are struggling and they would definitely appreciate it.”
TLC commissioner Meera Joshi, who has been scorned by taxi drivers for not doing enough to help them, agreed that the hacks need a hand.
“The renewal fee is one more payment for medallion owners at a time when every penny counts,” said Joshi. “It is certainly prudent to pause collection of that fee while [Levine’s] bill moves through the legislative process and, if passed, the study it requires would be in motion.”
The city could try to recoup the fees in the future.
Levine’s bill would require the TLC to conduct a study of medallion owners’ and drivers’ debt and propose ways to help them out.
Seven for-hire drivers — three of them cabbies — have committed suicide over ruined finances since November.
The most recent was Uber driver Fausto Luna, 58, who jumped in front of an A train on Sept. 26 because of massive debt.
In June, cash-strapped yellow cabby Abdul Saleh, 59, hanged himself in his Brooklyn apartment.
In May, yellow cab driver Yu Mein “Kenny” Chow, 56, jumped into the East River.
In March, cabbie Nicanor Ochisor, 65, hanged himself in his garage in Maspeth, Queens.
Black car driver Douglas Schifter, 61, killed himself with a shotgun outside City Hall on Feb. 5, leaving a scathing note blaming the city for his woes.
In December 2017, livery hack Danilo Corporan Castillo, 57, wrote a suicide note on the back of a summons and jumped out the window of his Manhattan apartment.
A month earlier, livery driver Alfredo Perez hanged himself.
© 2018 NYP Holdings, Inc. All Rights Reserved.
By Ron Lieber
The program that public servants can use to have their federal student loans forgiven is such a quagmire for borrowers that Congress had to set up a relief program for the relief program.
So far, it’s not performing much better.
It has been nearly five months since the Department of Education released instructions for a $350 million pot of money that some public servants can use if they received bad information about the loan forgiveness program and ended up in the wrong type of repayment plan.
Tens of thousands of people have applied for the relief program. But so far, most have been rejected, and as of late last month, none among the few thousand who remain in the running have seen their debt balances go to zero.
In response to an inquiry led by Senator Tim Kaine, Democrat of Virginia, the department disclosed last week that 28,207 people had submitted requests as of Sept. 28 and that it had found 21,672 ineligible almost immediately. It then culled “approximately” half of the remaining 6,535 for other reasons. That leaves just over 3,000 applications still under consideration.
It can take up to six months or so to review these requests because of the complexity of both the forgiveness program and the relief fund application process. The Department of Education has shifted some staff to work more closely with the loan servicer that handles the forgiveness program.
The relief fund was created after it became clear that scores of teachers, social workers and other government and nonprofit employees had received bad information from their loan servicers about the forgiveness program’s complex terms. So far, fewer than 1 percent of applicants have had their loans discharged through the program, which got its start just over a decade ago but is only now having borrowers become eligible.
To qualify for tax-free loan forgiveness, borrowers need to make 120 on-time monthly payments (while working in an eligible public-service position), have the right kind of loan (some federal loans qualify while others do not) and be in the right kind of payment plan (the income-driven ones designed to help lower-income borrowers). I explained the process in more detail in an earlier column.
When it became clear in recent years that loan servicers had told public-servant borrowers that they were doing everything right even when they were in the wrong kind of loan or payment plan, pressure grew on elected officials to help borrowers who thought they were being meticulous only
to find that years of payments had not counted for forgiveness.
Enter the Temporary Expanded Public Service Loan Forgiveness initiative, which is a pool of $350 million designed to help borrowers who were in certain ineligible payment plans, often because their loan servicers specifically told them to use those plans or stay in them. The relief program comes with its own rules and restrictions, which I outlined in a previous article and are available on the Department of Education’s website.
Five months in, that website is no model of clarity.
For instance, one paragraph tells borrowers that they must submit a public service loan forgiveness application and wait to be rejected (for payments that were not in a qualifying payment plan) before being potentially eligible for relief. The very next paragraph, however, tells them that they do not need to wait before submitting a request under the temporary plan.
Jolie von Suhr, a psychologist in a state psychiatric hospital in Lakewood, Wash., who was in an ineligible payment plan for years before realizing she had a problem, said the site’s conflicting information left her both perplexed and afraid.
“It kind of sounds like you can submit them both at the same time, but I’m not sure,” she said. “I’m so anxious now about doing anything incorrectly that could get me booted out of consideration.”
In fact, you do not have to wait for a public service loan forgiveness denial in order to request consideration under the temporary expanded program. I asked if the department intended to clarify this on its site and received assurances that it “will continue to review communications to borrowers and will adjust them as appropriate.”
Some eligibility determinations are easier to make than others — rejecting people who have not made 120 payments or who were in an ineligible loan, for example. The Department of Education’s loan servicer often has a tougher time producing an accurate count of months of repayment.
Plus, it now has to account for a rule under the temporary program that applies to people who thought they were in the right kind of repayment plan but found out much later that they were not. They are eligible for the temporary program only if their most recently monthly payment and the
one they made 12 months before their application were higher than what they would have paid if they had been enrolled in a qualifying repayment plan. Yes, it’s complicated, and clearing this hurdle may require documentation.
The Education Department seems tired of bearing blame for all of this.
“We implement the programs Congress creates,” said the department’s press secretary, Liz Hill. She added that the forgiveness program and the temporary program were “poorly constructed programs, the rules of which are highly complex and difficult for students to navigate.”
“We are working to make it as straightforward as the rules allow,” Ms. Hill said.
Some borrower advocates are not surprised by the delays thus far.
“This is a new program in that we’re still in the first year or so of forgiveness applications,” said Betsy Mayotte, president of the Institute of Student Loan Advisors, a nonprofit adviser to debtors. “I have high hopes that the process will become more seamless and quicker over time.”
© 2018 The New York Times Company. All rights reserved.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.