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Charles J. Schneider, P.C.
39319 Plymouth Road, Suite 1
Livonia, MI 48150
Phone: 734-237-1523
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Wayne County Bankruptcy Law Blog

The Final Report of the ABI National Ethics Task Force Creating Second Class Legal Professionals

The formulation of local bankruptcy rules is rarely, if ever, a democratic process where the consumer bankruptcy attorney has a voice in its composition. Indeed, it is solely within the province of the local bankruptcy bench with the approval of the District Court that the rules become effective. Much credit must be given to the judges of the Bankruptcy Court of the Eastern District of Michigan who have opened up the process of changing the local bankruptcy rules to local practitioners. Under the guidance of the court they have formed subcommittees to recommend changes. Among these subcommittees has been the formulation of an Ethics Subcommittee. The local Ethics Subcommittee's preliminary recommendations have been highly influenced by the FINAL REPORT OF THE AMERICAN BANKRUPTCY INSTITUTE NATIONAL ETHICS TASK FORCE as it appears to be written whole cloth from the report. The report sets forth a particular bias against consumer bankruptcy attorney fueling the view inspired by BAPCPA that most consumer bankruptcy attorneys are more ethically challenged than other bankruptcy attorneys. It, therefore, fuels the view that consumer bankruptcy attorneys are second class legal professionals in need of particular attention, scrutiny and monitoring. The bias appears to stem from the limitation of the rule as it applies to only those attorneys who file Chapter 7 cases on behalf of individual debtors, whose debts are primarily consumer debts and thereby engage in limited representation. The Final Report of the ABI National Ethics Task Force creates the same limitation under the heading: Best Practices for Limited Services Representation in Consumer Bankruptcy Cases on page 49. The heading is misleading as it goes much further than a recommendation for best practices. It provides for a local rule to be drafted that would compel the local consumer bankruptcy attorney to provide a client a single contract for limited representation services (the Agreement and Consent to Limited Representation in Consumer Bankruptcy), and file the same with the court. The local Ethics Subcommittee emphasizes that the failure to follow any local rule will result in 9011 sanctions.

Retaining Your Income Tax Refund in a Chapter 13 Bankruptcy

The tax season is upon us when most Americans can expect a personal income tax refund. If you are presently in a chapter 13 bankruptcy, you may not be rejoicing at the expectation of receiving an income tax refund because your chapter 13 plan requires that you pay the income tax refund to your chapter 13 Trustee for payment to your creditors. If you are represented by the law firm of Charles J. Schneider, P.C., you would have been advised that the payment of the income tax refund would not necessarily reduce the length of your chapter 13 plan. Most chapter 13 plans propose to pay less than a 100% dividend to unsecured creditors, therefore, the payment would only increase the dividend to your unsecured creditors and not reduce the length of your plan. You are committed to pay both the sum confirmed as well as the sum paid for the length of the plan "whichever is greater". If you are a client of the law firm of Charles J. Schneider, P.C. you almost certainly were advised that a chapter 13 plan is modifiable. The payment of the income tax refund is one of the terms which may be and is quite often modified for extraordinary purposes.

Retail giant RadioShack files for Chapter 11

As some business owners can likely attest to, staying afloat can be challenging, especially in today's uncertain economy. In order to survive, companies must always be turning a profit. One bad business deal or mismanagement of finances can cause a company's profits to crash. When this happens, business bankruptcy may be the best option.

Many Michigan residents have shopped for electronics at the retail giant RadioShack. However, it has long been predicted that the company would hit hard times as a result of online competitors. Well, the company, which has been around for 94 years, is now facing these hard times and has filed for Chapter 11 bankruptcy.

How do Chapter 7 and Chapter 13 bankruptcy differ?

Many Michigan residents likely have some idea of what bankruptcy entails. Most understand that bankruptcy is an option for those who need escape from a desperate financial situation. However, that is often where a person's understanding of bankruptcy ends. Sometimes, the many details involved in filing for bankruptcy can prove to be a mystery. One facet of bankruptcy that some Michigan residents may not be aware of is the difference between Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 and Chapter 13 bankruptcy differ in one major way -- income level. Only those who are under a certain income level are able to file for Chapter 7 bankruptcy. For those who do meet the income criteria, Chapter 7 bankruptcy is more basic and less time-consuming than Chapter 13. However, those who file for Chapter 7 are often unable to retain possession of certain property.

Airline magazine file for bankruptcy protection

In order to be successful, businesses need to turn a profit. In some cases, businesses are profitable because they fill a void in a specific niche market. For these businesses, they thrive because they are doing something that no other businesses has been capable of doing. However, when other businesses move into the niche, it can be harder for the original business to compete.

This seems to be the case with the once popular airline magazine SkyMall. The magazine use to entertain passengers of major airlines as they flew to and from their destinations. Featuring unusual and specialty items, SkyMall provided a service to a completely captive audience. However, as technology has changed SkyMall has lost business. Airline passengers are now able to use certain electronic devices while flying and airlines often provide personal televisions.

Detroit Bankruptcy Court Aids Wayne County Homeowners

In our December 8, 2014 Newsletter, we discussed the possibility that the U.S. Supreme Court would come to the aid of Wayne County Homeowners and permit the "strip off" of a second mortgage. What is not widely known is that the Bankruptcy Court for the Eastern District of Michigan has taken the lead in helping homeowners to obtain loan modifications. The loan modification process currently takes place only when the homeowner files a chapter 13 bankruptcy. The loan modification process is not dependent on whether the homeowner is behind in payments on the mortgage. It does not matter whether there has been a prior request for modification. It does not matter if there was a prior rejection to a request or whether there is an ongoing request already in process.

Can you modify terms of a mortgage?

A home is one of the most important assets that a person owns. Not only does a house have a lot of financial value, there is often significant emotional value associated with a family's home.

When you are facing financial challenges, it can be difficult to imagine losing your home. However, through a foreclosure, a mortgage lender can reclaim the property. Thankfully, there are often ways to stop foreclosure and get some debt relief.

We help make Chapter 13 bankruptcy work for Michigan residents

This is a very uncertain financial time for many Michigan residents. As the economy continues to recover from the recent recession, many people are learning to live with less. However, many people are stuck in a cycle of borrowing to pay what they owe and struggling to make minimum payments. For many people this has led to creditor harassment and the threat of foreclosure.

People in this situation should know that there are legal options available that can help. In particular, Chapter 13 bankruptcy can be a favorable solution. Through a Chapter 13 bankruptcy, people can eliminate creditor harassment and so much more. By filing for bankruptcy, people can give themselves some breathing room to pay down their debts while keeping important personal property. Through a Chapter 13, people can stop a foreclosure on their house or the repossession of their car, for example.

Michigan personal bankruptcy: methods to stop repossession

When Michigan residents are struggling with finances, they often have a lot of debt problems on their mind. In addition to considering debt relief options, debtors in Michigan are also concerned with the possibility of asset forfeiture such as vehicle repossession. For those financing or leasing a vehicle, the repossession of an automobile could occur if the consumer missed a payment or defaulted on their loan. In these matters, it is not only crucial that the debtor understands their consumer rights but also how to stop repossession of their vehicle and even get their vehicle back.

As soon as a consumer defaults on a loan or lease for a vehicle, their contract will state what will occur in this event. In most situations, the failure to make timely payments will result in repossession. There are various options for debtors to avoid or stop this outcome.

Resolving to stay on top of financial challenges in 2015

Like many Americans, Wayne County residents are starting off 2015 with a new set of resolutions. They want to make changes in the new year, and often those changes are financial in nature. Even for those dealing with serious financial challenges, New Year's resolutions can provide an important opportunity to think about where they are, where they want to be and how to get there.

One bit of advice to keep in mind is to keep financial goals specific, measurable, attainable, realistic, and time-sensitive -- or SMART. In other words, don't resolve just to "get out of debt" or "pay down credit card debt," for example. Those are vague goals not easily measured and without a timeline. Depending on one's debt load, they may not even be realistic.

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