October 21, 2019

Interim Bankruptcy Rules Published for Public Comment

On February 19, 2020, the Small Business Reorganization Act of 2019, P.L. 116-54 (SBRA) will go into effect – long before the normal three-year rules amendment process runs its course. As a temporary measure, the Advisory Committee on Bankruptcy Rules has drafted interim bankruptcy rules and amendments to the official bankruptcy forms to address the new law that are now available for public comment through Nov. 13, 2019.

The proposed amendments and instructions on how to submit comments are posted on uscourts.gov.

When an advisory committee recommends an amendment to its rules or forms, it must obtain the approval of the Judicial Conference Committee on Rules of Practice and Procedure to publish the proposed amendment for public comment. During the comment period, the public is encouraged to submit written comments and may also request to testify at public hearings on the proposed amendment.

There are two rules packages out for review.

August 19 Package

On June 25, 2019, the Judicial Conference Committee on Rules of Practice and Procedure (Standing Committee) approved publication of proposed amendments to the following:

  • Appellate Rules 3, 6, 42, and Forms 1 and 2;
  • Bankruptcy Rules 2005, 3007, 7007.1, and 9036; and
  • Civil Rule 7.1.

The comment period is open from August 19, 2019 to February 19, 2020. Read the text of the proposed amendments and supporting materials:

Preliminary Draft of Proposed Amendments to the Federal Rules of Appellate, Bankruptcy, and Civil Procedure (pdf)

Public Hearings on the August 19 Package

Members of the public who wish to present testimony may appear at public hearings on the proposed amendments.

How to Submit or Review Comments on the Proposed Amendments to the Federal Rules & Forms (August 19 Package)

Written comments are welcome on each proposed amendment. The advisory committees will review all timely comments, which are made part of the official record and are available to the public. The comment period closes on February 19, 2020.

Comments and supporting files must be submitted electronically using the regulations.gov portal. After choosing the appropriate link below, click the “Submit a Comment” link. This will display the comment on the web form. You can then enter your submitter information and attach your comment as a file (up to 10MB), or type your comment directly on the web form. When you have finished attaching or typing your comment, click the “Preview Comment” link to review. Once you are satisfied with your comment, click the “Submit” button to send your comment to the relevant advisory committee. Upon completion, you will receive a tracking number for your submission.

Detailed instructions on how to submit a comment are given in the Regulations.gov FAQs.

October 16 Package

On February 19, 2020, the Small Business Reorganization Act of 2019, P.L. 116-54 (SBRA) will go into effect – long before the normal three-year rules amendment process runs its course. As a temporary measure, the Advisory Committee on Bankruptcy Rules has drafted Interim Bankruptcy Rules that can be adopted by courts as local rules or by general order when the SBRA goes into effect. The Advisory Committee has also drafted amendments to the Official forms to address the SBRA. The Standing Committee now seeks comment on the proposed SBRA rules and forms for a short four-week period prior to making final recommendations.

  • Interim Bankruptcy Rules 1007(b), 1007(h), 1020, 2009, 2012(a), 2015, 3010(b), 3011, and 3016.
  • Official Forms 101, 201, 309E, 309F, 314, 315, 425A, and new Official Forms 309E2, and 309F2

The comment period is open from October 16, 2019 to November 13, 2019. Because of the short publication period for the Interim Rules and related Official Forms, there will be no public hearings.

Read the text of the proposed amendments and supporting materials:

Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy Procedure – Interim Bankruptcy Rules and Official Forms (pdf)

How to Submit or Review Comments on the Interim Bankruptcy Rules & Forms (October 16 Package)

Written comments are welcome on each proposed amendment. The Advisory Committee on Bankruptcy Rules will review all timely comments, which are made part of the official record and are available to the public. The comment period closes on November 13, 2019.

Comments and supporting files must be submitted electronically using the regulations.gov portal. After choosing the appropriate link below, click the “Submit a Comment” link. This will display the comment on the web form. You can then enter your submitter information and attach your comment as a file (up to 10MB), or type your comment directly on the web form. When you have finished attaching or typing your comment, click the “Preview Comment” link to review. Once you are satisfied with your comment, click the “Submit” button to send your comment to the relevant advisory committee. Upon completion, you will receive a tracking number for your submission.

Detailed instructions on how to submit a comment are given in the Regulations.gov FAQs.

SOURCE

History of Labor Day

Labor Day 2019

On September 2, 2019, the U.S. Department of Labor celebrates and honors the greatest worker in the world – the American worker. Labor Day 2019 is the 125th anniversary of Labor Day being celebrated as a national holiday.

Labor Day: What it Means

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

Labor Day Legislation

The first governmental recognition came through municipal ordinances passed in 1885 and 1886. From these, a movement developed to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During 1887, four more states – Colorado, Massachusetts, New Jersey, and New York – created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 more states had adopted the holiday, and on June 28, 1894, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

Founder of Labor Day

More than a century after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers.

Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, was first in suggesting a day to honor those “who from rude nature have delved and carved all the grandeur we behold.”

But Peter McGuire’s place in Labor Day history has not gone unchallenged. Many believe that Matthew Maguire, a machinist, not Peter McGuire, founded the holiday. Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, N.J., proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. What is clear is that the Central Labor Union adopted a Labor Day proposal and appointed a committee to plan a demonstration and picnic.

The First Labor Day

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.

By 1894, 23 more states had adopted the holiday, and on June 28, 1894, President Grover Cleveland signed a law making the first Monday in September of each year a national holiday.

A Nationwide Holiday

Women's Auxiliary Typographical Union

The form that the observance and celebration of Labor Day should take was outlined in the first proposal of the holiday — a street parade to exhibit to the public “the strength and esprit de corps of the trade and labor organizations” of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.

The character of the Labor Day celebration has changed in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression. Labor Day addresses by leading union officials, industrialists, educators, clerics, and government officials are given wide coverage in newspapers, radio, and television.

The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pays tribute on Labor Day to the creator of so much of the nation’s strength, freedom, and leadership – the American worker.

SOURCE: U.S. Department of Labor

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Proof of Claim 101

A proof of claim is a written notice that the creditor – individual or business that the debtor owes – is asserting his/her or its right to obtain a pay out from the bankruptcy estate. This written statement is used as a formal way of notifying the court, the debtor and other affected parties that the creditor is planning on taking action. In general, an unsecured creditor is required to file a proof of claim if they want to get paid in Chapter 7 and Chapter 13 bankruptcy cases. Without filing a proof of claim, the unsecured creditor can lose the right to assert a claim against the debtor.

There are different types of creditors in the eyes of law. The term “secured creditor” is used to describe a creditor who has acquired a lien on the debtor’s property. This lien can have been acquired either with or without the debtor’s consent. An example of a lien acquired with the debtor’s consent is a home mortgage; an example of a lien acquired without the debtor’s consent – or involuntarily – is a tax lien. The term “unsecured creditor” is used to describe a creditor who has not acquired a lien on the debtor’s property. Therefore, an unsecured creditor hasn’t secured repayment of the debt owed to him/her or it.

Proof of Claim 101 | Bankruptcy in CT

There are deadlines regarding when a proof of claim must be filed by in Chapter 7 and Chapter 13 bankruptcy proceedings. Typically, the notice of bankruptcy filing sent to the creditor contains the deadline to file a proof of claim. Non-governmental creditors have 90 days after the initial meeting of creditors to file a proof of claim. Government entities have 180 days after the order for relief to file a proof of claim.

The contents of a proof of claim have to adhere to Official Form 10. This form includes:

  • Debtor’s name
  • Case number
  • Creditor’s name and address
  • Amount of claim (as of the date the case was filed)
  • Basis of claim
  • Type of claim
  • Any supporting documents attached, and
  • Creditor’s original signature.

A proof of claim can be objected to if it contains an error or misrepresents the situation in some way. Part III of the Federal Rules of Bankruptcy Procedure, Rules 3001-3022, contain rules on filing a proof of claim and objecting to a proof of claim.

The District of Connecticut also has some Local Bankruptcy Rules. Local Bankruptcy Rule 3002-1 states that, in a Chapter 13 bankruptcy case, the filing creditor must send a copy of the proof of claim to the trustee when he or she files the original claim.

For more information about proofs of claim, or inquiries about other areas of bankruptcy law, please click here.

Lost your wallet? Here’s what to do!

With vacation season in full swing, it’s easier than ever to lose track of a wallet in a winding airport security line, or on a crowded, sunbaked beach. Rather than spiraling into a panic about your wallet taking a vacation of its own, here are some steps to take right away.

Report the loss immediately. If your wallet contains a credit, debit, or ATM card, contact your card issuer right away to let them know what happened. Many companies have 24-hour, toll-free numbers to call in these situations.

Acting fast limits your liability for charges you didn’t authorize if your card is lost or stolen. Your protection against unauthorized charges depends on the type of card — and when you report the loss. Learn more about how to limit your losses.

Double-check your card statement. If you see charges or withdrawals on your statement that you don’t recognize, report them to your card issuer immediately.

Follow up. Send a letter to your card issuer to confirm that you reported the problem, and request a return receipt for your records. Include your account number, and two important points: the date and time you realized your card was missing, and when you reported it to them.

Check your insurance policies. Some homeowner’s and renter’s insurance policies may cover your potential losses from a stolen credit, debit or ATM card. If you learn that this is not the case, check to see if you can change your policy to include this type of coverage.

Protect your cards in the future. Carry the minimum — only the cards you absolutely need — and don’t bring along any sources of sensitive information, like PINs and Social Security cards. Keep a copy of the phone numbers of each of your card issuers so you can report a loss right away.

SOURCE: Theresa Rodriguez, Consumer Education Intern, FTC

Secured Debt vs. Unsecured Debt

When it comes to debt there are two main types, secured and unsecured. In Chapter 7 and Chapter 13 bankruptcy knowing the difference between both is very important so you can implement a proper plan. Even if you aren’t filing bankruptcy it is still good to know what the differences are between the debts.

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First, what is secured debt? Secured debt is when something of value is used as collateral for a loan. If you fall behind on your loan payments the lender has the right to place a lien on what you used as collateral. This means they have the right to take ownership of it. Usually the lender will liquidate the asset and use that money to pay off what is due. However, if the selling price isn’t enough to pay off the debt completely the lender may then attempt to collect the difference from you, which is called a “deficiency.”

Examples of secured debt:

  • Mortgages – The loan is attached to the home and the home is the asset. If payments aren’t made the bank may take the home, known as a foreclosure
  • Car loans – The loan is attached to the car and if payments are not made the bank has the right to repossession
  • Auto loans and cash loans secured by a car title or other property
  • Boat loans
  • Furniture

So what do you do? You can obtain legal protection from creditors by filing bankruptcy. When you file Chapter 7 you have to decide if you will retain or surrender the property. You can only discharge secured debt if you surrender the property used as collateral. If you want to keep the property, you must continue making the payments. When you file Chapter 13 Bankruptcy it’s common that you will create a payment plan to make up the payments over a certain period of time while staying current on your regular monthly payments. For example, if you have a foreclosure on your house, filling a Chapter 13 bankruptcy will stop the foreclosure and implement a plan whereby you pay back the debt in increments until it is complete. To make the plan work you need to demonstrate that you will have enough income in the future to support the payment plan. If there were no legal proceedings or lawsuits brought against you before you file, filing bankruptcy sets forth a law that prevents the lender from bringing any lawsuits or legal proceedings, such as a foreclosure, against you. Additionally, you can sometimes use Chapter 13 bankruptcy to reduce debt to the replacement value of the property securing it, then pay off that debt through a plan. Therefore you are only paying what the asset is actually worth.

Next, what is unsecured debt? Unsecured debt is not tied to collateral and doesn’t result in repossession of the asset if you fall behind on payments. There is still an agreement to repay the lender but there is no asset. Therefore the debt isn’t attached to something that the lender can just take back. Instead lenders may take other actions in order to get you to pay. These actions may include the lender hiring a collection agency or taking you to court in order to get you to pay.

Examples of unsecured debt:

  • Credit card bills
  • Medical bills
  • Personal loans
  • Utility bills
  • Pay day loans

How can bankruptcy help unsecured debt? Once you file bankruptcy collection actions will be suspended and you may be allowed to temporarily or permanently avoid paying any debts. These debts may be eliminated or a plan can be formulated so you can repay creditors while remaining under the protection of bankruptcy. Under chapter 7 bankruptcy some debts may be completely discharged while others mat not. If some debts aren’t discharged there may be a plan created to help pay it back over a period of time. Filing bankruptcy sets forth a law which generates an automatic stay on the debt. This means the creditors or debt collectors cannot push for the collection of debt. Once you file bankruptcy the creditors can’t harass you to pay the debt. Filing bankruptcy prevents that and buys you time to negotiate a plan to pay back the debt you owe.

Overall, bankruptcy is a powerful tool for debtors and a lot can be done to help out if you are facing financial hardships. Debt is a serious issue and knowing the differences between the kids of debt and what can be done about each is very important. If you have any questions don’t hesitate to contact Attorney Theresa DeGray at 203-713-8877.

This is no April Fools’ Joke: Means Test Numbers are Going Up as of April 1, 2019!

After your initial consultation, I will analyze your financial circumstances and perform your Means Test. A Means Test is an assessment used to determine if you qualify to file a Chapter 7 Bankruptcy.

Before 2005 it was easy to file for bankruptcy; virtually anyone could do so. In 2005 Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)1 and added the Means Test requirement to prevent abuse of the Bankruptcy process. Simply put if you “pass” the means test, you are a qualified candidate and can file a Chapter 7 Bankruptcy Petition. If you “fail” the means Test, you may not file a Chapter 7 Bankruptcy but you may enjoy other alternatives such as a Chapter 13 Bankruptcy.

The Means Test primarily encompasses a two-step analysis:

STEP ONE: Your (the “debtor’s”) gross income is calculated on an average over a six month period prior to filing for Bankruptcy. Gross income for means testing purposes includes wages, salary, tips, bonuses, overtime and commissions. It does not include social security benefits. The figure derived from taking the average is than considered the Debtor’s Current Monthly Income which is then compared to the median income for your state and household size. If your current monthly income is less than the median income for your state and household size, than you “pass” the means test and are allowed to file a Chapter 7 Bankruptcy Petition. If, however, your current monthly income is greater than the median income for your state and household size, you may proceed to Step Two.

STEP TWO: If your current monthly income is greater than the median income for your state and household size, there is, in technical terms, a “presumption of abuse.”2 In order to rebut the presumption, or in other terms, to pass the means test by using the second step, the means test’s second section allows you to subtract from your current monthly income certain allowable and deductible expenses.3 These allowed deductions include, but are not limited to, expenses for living (mortgages and property taxes), transportation (car loans and car taxes), health insurance and charitable donations. After the calculations are performed, and the allowable deductions are taken, and if you then have no disposable monthly income available, you will then have passed the Means Test and may file a Chapter 7 Bankruptcy. If, on the other hand, you do have remaining disposable income, you may consider a Chapter 13 Bankruptcy.

The discussion above is an overview of the Means Test in basic terms and is in no way intended as a specific analysis of your personal financial circumstances.

For an analysis of your own financial circumstances, please contact Attorney Theresa Rose DeGray, to schedule your free consultation today!

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1See: 11 U.S.C. § 707(b)

2See: 11 U.S.C. § 707(b)(2) and 11 U.S.C. § 707(b)(3)

3See: 11 U.S.C. § 707(b)(2)(A)

GOOD NEWS: Updated Census Bureau Median Family Income Data

March 14, 2019

The Census Bureau’s Median Family Income Data accessible through the “Means Testing Information” page has been updated. The U.S. Trustee Program will apply the updated data to all cases filed on or after April 1, 2019.

SOURCE: https://www.justice.gov/ust

Turn Your Tax Refund Into Debt Relief Today

“Leverage: the use of a small initial investment…to gain a very high return.”

— Dictionary.com

          I have been debating how to talk about this in a delicate manner and I simply could not figure it out. So, I will just come out and say it: People being crushed by debt can leverage their tax refunds to file Bankruptcy and get a Fresh Start. There, I finally said it.

          It may not sound kosher but it is. Instead of using your tax refund to pay off a portion of your debt, or to buy a big screen TV, people can pay for their legal fees to get out of massive amounts of debt if they qualify and it is the right thing for them to do based on their circumstances.

          If you are struggling with debt and want to explore this option, please contact my office and schedule a free and confidential consultation.

CLICK HERE TO SCHEDULE

BANKRUPTCY COURT OPEN DURING PARTIAL GOVERNMENT SHUTDOWN

Mindful Money Management: 3 Strategies for Financial Success | By Caroline Wetzel, CFP®, AWMA®

How do you feel when you think about your financial situation? If you experience anxiety, uncertainty, or other unpleasant symptoms, you are not alone. Finances are a significant concern for many people. A 2017 study by Guardian Life Insurance Company of America entitled “Mind, Body, and Wallet,” found that money is cited as the #1 source of stress for a majority of American workers. The same survey showed that worry about personal finances is the leading cause of emotional stress and contributes to lower physical wellness.

But managing your money does not have to be an upsetting experience that negatively impacts you. Applying mindfulness techniques to your finances can help you cultivate a deeper awareness of your total financial picture, enabling you to approach your financial decisions with greater conviction and calculated risk.

What is Mindfulness?
Mindfulness is an intentional focus on the present moment. It has evolved over time to become a secular, psychological practice of developing and sustaining attention to thoughts, feelings, body sensations, and environmental stimuli that impact our experience of “now”.

Non-judgmental awareness of each moment is cultivated through mindfulness. Practitioners challenge themselves to attain a heightened sensitivity to the present through a variety of techniques including, but not limited to, meditation, pauses, and gentle movements. The impact of mindfulness on physical, mental, and social well-being is documented widely through scientific and academic studies.

Strategy 1: Create Space
Mindfulness promotes a consistent, ongoing process of using our senses to become more attuned to what is going on inside our bodies and outside us in our surrounding environment. This disciplined activity of “creating space” on a regular basis enables practitioners to experience feelings of groundedness and centeredness in the midst of racing thoughts and life’s busyness.

Try incorporating this strategy of “creating space” to your approach to your finances. Do you think about your finances beyond just paying the next bill that’s due? Do you know what you save and spend and check your statements? Do you review your insurance policies and ensure they continue to make sense for your needs?

Consider dedicating time – it can be as brief as a few minutes, or as long as 30 minutes, as long as it’s recurring – to pay your bills and consider questions like this as part of understanding your total financial picture. Formally reserve this time in your calendar and don’t cancel the appointment.

In the same way you go to the gym on a regular basis to take care of your physical health or ensure that you get a certain number of hours of sleep for your mental health, “create space” in your lifestyle to take care of your financial health.

Strategy 2: Plan with a Purpose
Mindfulness emphasizes awareness and non-judgment. Through mindfulness, we discover that our thoughts are narratives that we create as a result of our own unique perceptions and life experiences. Repeated practice of mindfulness empowers us to let go of the constant chatter – especially the negative thoughts – that monopolize our focus, and just be.

Adopt this same open, curious awareness to your financial situation. Without worrying about how you’ll do it, ask yourself “What do I want to do with my money?” Reflect on this question repeatedly during the spaces that you have created in your schedule, and observe what bubbles up for you. If the same priorities emerge each time you reflect on this question, these could be the goals that form the foundation of your unique financial plan.

When you are able to articulate clearly without judgment what is important to you and what you want to do with your money you can formulate a purpose-filled financial plan comprised of actions and behaviors that you can implement to make your financial goals a reality.

Strategy 3: Invest with Intention
Mindfulness facilitates sustained focus. It enables practitioners to cultivate greater clarity and improve their capacity to tune out distractions. As a result, mindfulness facilitates the ability to make decisions.

Apply this objective, intentional focus to your investment strategy. Do you know what you have invested your money in? Do you know why you chose the investments you selected? Are your investments in line with your values, comfort level with risk, and do they consider your tax situation?

When you invest with intention, you know what you invest your money in and why. This disciplined approach provides comfort and structure when the financial markets – and life – inevitably surprise us.

When you apply techniques promoted through mindfulness to manage your money, you can obtain greater control over your finances, confidence with your financial goals, and comfort that you are taking steps to realize your financial dreams.

By Caroline Wetzel, CFP®, AWMA®

Disclosure:

Caroline Wetzel is a Certified Financial PlannerTM (CFP®) and Vice President, Private Wealth Advisor with Procyon Private Wealth Partners, LLC.  Procyon Private Wealth Partners, LLC and Procyon Institutional Partners, LLC (collectively “Procyon Partners”) are registered investment advisors with the U.S. Securities and Exchange Commission (“SEC”). This article is provided for informational purposes only and for the intended recipient[s] only. This article is derived from numerous sources, which are believed to be reliable, but not audited by Procyon for accuracy. This article may also include opinions and forward-looking statements which may not come to pass. Information is at a point in time and subject to change. Procyon Partners does not provide tax or legal advice.

For more information:

Caroline Wetzel, CFP®, AWMA®

Vice President

Private Wealth Advisor

Procyon Private Wealth Partners, LLC

1 Corporate Drive. Suite 225  |  Shelton, CT  06484

M: (844) Procyon |  D: (475) 232-2713 |  F: (475) 232-2736

cwetzel@procyonpartners.net   |  www.procyonpartners.net   |  https://www.linkedin.com/in/caroline-wetzel/

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