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Year In Review…..SC Bankruptcy Law and My Office, 2007 (Part One)

January 20th, 2008    •  by Showell    •   Comments Off on Year In Review…..SC Bankruptcy Law and My Office, 2007 (Part One)

Well, one of my goals for 2007 was to Blog daily, because so many things are happening in the field of bankruptcy law these day, and I’m doing several things to try to keep ahead. However, I failed miserably at Blogging.

So, I came up with the bright idea of at least doing a Year-End Roundup, highlighting whatever I had done, education/office-change-wise, and trying to recap a few major changes in the law or the practice in SC and NC that I remember. THEN I will try to blog daily.

In January, I went to Washington, D.C. as part of a National Association of Consumer Bankruptcy Attorneys group who was trained by our lobbyist, Maureen Thompson, and we spent a couple of days meeting with members of the “new” Congress regarding the new bankruptcy law and changes we would like to see or actions we wanted, such as oversight hearings regarding the U.S. Trustee (in hindsight, we got this and numerous other things). I met with Congressman John Spratt, representatives of Senator Lindsey Graham’s office and of Congressman Jim DeMint’s office. They seemed receptive to supporting change.

In March, 2007 I went to Max Gardner’s Boot Camp at his Lizmere Farm in North Carolina, which is a four-day intensive session teaching us the nuts-and-bolts of his Litigation Model for improving our practices and pursuing banks, collectors and loan servicers. It was a motherlode of information which I am slowly incorporating into my practice. The first step for me was to get a laptop, clean up my forms system and go paperless and wireless, which we finally did December 1, 2007.

In 2008 I hope to wade into the loan servicing and discharge violation litigation. This should help my clients keep their credit clear after bankruptcy and protect them from overpaying on their mortgages while, inevitably, they are serviced by someone other than the lender from whom my clients obtained their loan. I sure saw a lot of evidence of misuse of funds and just bad practices which appear to be rampant in the loan servicing industry and which appears to have gone unchecked for years (you know how every loan you get is SOLD to another lender after you close on the loan? Simply put, it is sold to a “Loan Servicer” which collects the money for investors who are hoping you will make your mortgage payment so that they actually can get the money/return that the investment bank who sold the investment in your stream of income promised they would get…..as you can see from the news these days, that return on investment is not happening these days and “reputable” houses like Bear Stearns are having to borrow literally billions from the Chinese and Saudis just to keep afloat because of these lousy investments…..at least it would be easy to argue that).

In May, 2007 I went to the annual convention and seminar of the National Association of Cosumer Bankruptcy Attorneys (NACBA) in Philadelphia. I am the SC State Chair for NACBA and we had a breakfast with the SC attendees while we were there. This always is a great overview of bankruptcy law from the debtors’ perspective and it shows you the cutting edge issues that aren’t always put forth at more moderate presentations. Most of the former attendees of Max Gardner’s Boot Camp who were there met for dinner one night to see how we were implementing the Model. These groups have been very helpful in that I have met really good bankruptcy lawyers from all over the United States and am able to email them with questions about their states’ laws. This is helpful since the exemptions, or what we can protect in a bankruptcy, could depend on where a person has lived for the two years before he moved to SC or NC.

In July, 2007 I was named NACBA’s State Chair of the month, which was pretty cool. There were no cash prizes, but I did get a warm, fuzzy feeling for it.

In August we went paperless. Then my paperless paralegal left for greener pastures (family business….I hope the paperless thing did not run her off)….so we delayed until December 1, 2007. So far, it is working out really well. My new paperless person, Meredith Emerson, is keeping everything working smoothly.

During the year in SC several of us worked to organize the attorneys who represent people who file bankruptcy, or debtors. Several of us tried to get everyone to join NACBA so we could act as one voice, and a lot of attorneys did, or at least they renewed their membership (of course, we could have had nothing to do with that). Anyway, we now have a secure listserve and post questions to and argue with each other. It is very helpful when, as happens daily or at least weekly, a new question comes up for one of our clients and the answer isn’t clear in the law, or it has never happened here before (which has happended a lot since the New Bankruptcy Law, or BAPCPA, in the last 2 years). We have had one telephone teleconference meeting of our group and when we went to the SC Bankruptcy Law Association conference and seminar in September, our smaller group had our first face-to-face meeting. I hope to do another teleconference soon.

Along the lines of speaking with “one voice” we sent representatives to meet with one of our bankruptcy judges regarding the new chapter 13 repayment plan and the provisions relating to the payment of attorneys fees under it. This would allow more attorneys to take less money up front to do a chapter 13, as it won’t take so long and be such a risk to put the money in the plan.

In September, 2007 I went to the SC Bankruptcy Law Association annual seminar in Asheville. This is a group of most of the SC attorneys who represent debtors, creditors, and the government (the U.S. Trustee, Clerk of Court for the US Bankruptcy Court, the SBA, the IRS, the U.S. Attorney who represents the United States government in court, & the SC Dept. of Revenue) as well as the Bankruptcy Judges and their Clerks. It is a good place to get a balanced perspective of the law as it has developed in the last year and to meet with people with whom we deal on the phone all the time but may not get to see or argue with in person. The judges’ clerks always give an overview of what they think are important cases/trends, and the judges do the same thing. The U.S. Trustee usually gives its overview of where the government is headed regarding particular issues and our Clerk of Court usually presents its State of the Clerk’s Office address. This is when we had our NACBA meeting as well, as a short morning session.

The rest of the year has been spent implementing paperless, dealing with being gone from the office, and dealing with what has been, if not an increase in actual filings, but an increase in people coming in to see me. I heard the other day (theoretically, lawyers are notorious gossips) that bankruptcies increased in 2007 by 40%. I doubt that that is what has happened in SC, but I certainly am busier. However, 40% of NOT MUCH is still nothing to crow about if you are counting increases.

I have seen way too many people who are suffering from lousy mortgages. By that I mean variable loans that they cannot afford when they adjust even once….I am seeing numerous folks from the same neighborhoods coming in. It is very sad to see. I am seeing lots of folks come in who have higher end jobs…well HAD is the operative verb; I’m seeing bankers and formerly self-employed or small corporate owners who finally have to admit that they are overwhelmed when they lose their jobs; and, of course, I am seeing people with 100’s of thousands in medical bills and no health insurance.

One thing that might happen in 2008, and I am working on that a little bit (my really smart friend Dana Wilkinson drafted a version of the bill), is we are hoping to get INCREASED SOUTH CAROLINA HOUSEHOLD EXEMPTIONS! This would not be for the actual residence because the homestead exemption for SC just increased in 2006 from $5000 per person to $50,000 per person, which was the first time it had increased since 1981. We are trying to introduce a bill this session of the SC legislature which would bring the rest of the things we can protect, or exempt, from creditors in bankruptcy or in general in line with the rest of the Southeast. Right now, the exemptions are pretty low and also have not changed since 1981. Think of what’s happened to jobs, the cost of living, etc….since 1981. This change would be excellant and would help ordinary folks when their fortunes change by protecting their assets from their creditors. It would also help more folks be able to file bankruptcy without losing anything. Finally, it should encourage entrepeneurship, as the basic necessities of life would be protected if you decide to start your own business and it doesn’t work out like you’d hoped.

  • Can I go to Jail for not Paying my Bills?

    No, not unless you committed a crime in the creation of the debt (for example, fraud). Simply borrowing money and not being able to pay it back is not a crime. Many creditors representatives will tell you lies on the telephone and say that they will have you put in jail. Perhaps they are too ignorant to know they are wrong or that it is illegal for them even to say that. See More Bankruptcy Q&A