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December 2010 Archives

Governor's Approval memo: Exemption update law

Governor Patterson signed the bankruptcy and judgment debtor exemption update bill, A7034, on December 22 (Note: the press release for the signing was issued the next day, Dec. 23.)  The law is now known as Chapter 568 of the 2010 session Laws of New York State. Below is the Governor's official approval memo #38.  The governor noted in his support that an amendment to exclude New York and its municipalities from the judgment debtor car exemption should be amended in the next legislature.  I also note that the approval memo misstates the new homestead exemption.  It is actually $75,000, $100,000 and $150,000.

MCBA Plans Exemption Update Law CLE Jan. 18 at 2:30

The Bankruptcy Committee of the Monroe County Bar Association will conduct a two hour CLE (Continuing Legal Education) seminar on the new exemption update law signed by the Governor last week on Tuesday, January 18 at 2:30 PM. This is a change from the originally-anticipated date, January 21.  We moved the CLE from the 21st to the 18th so that we would get maximum attendance and not conflict with trustee or plan confirmation hearings.

Bankruptcy Poetry: The Night Before. . .

In 2008 I wrote the poem below, the night before our annual Bankruptcy Committee lunch.  I agreed to read something at the event, and I had writer's block; I wanted to write a poen in the style of "T'was the Night before Christmas. . ." but nothing was working for me.  So I started by writing about how hard it was to start.  I then went into poetic flights about how it is easier drafting  bankruptcy paperwork than drafting poems, ending on a serious note about what we (bankruptcy attorneys) are actually accomplishing for our clients.  I will probably repost this each year:

New Bankruptcy Exemption Update Law Noticed Around the State

After Governor Patterson signed the new bankruptcy exemption law yesterday, news outlets from buffalo to New York City noted the impact of the statute.  Jonathan Epstein, Business reporter at The Buffalo News, quoted Jeffrey Freedman, Judge Bucki and me in an article published today.

It Will Be a Happy Holiday for New York Debtors!

Governor Patterson signed today a bill updating the bankruyptcy exemptions available to New York judgment and bankruptcy debtors.  I will have more extensive commentary in the near future, but meanwhile, here is the press release from the Governor's Office, just released (note: the last paragraph is incorrect; the homestead exemption actially goes up $75,000 in western New York, $100,000 in the Hudson Valley, and $150,000 in Metro New York):

Bankruptcy Committee Lunch: Carson Redux

Forty attendees had a wonderful time at the annual holiday lunch of the Bankruptcy Committee of the Monroe County Bar Association this afternoon at the Rochester Plaza Hotel.  Judge Ninfo spoke informally about the unexpected decline in bankruptcy filings in the Western District of New York (see my blog under the Statistical Trends category.) The highlight, without question, was the appearance of Carnac the magnificant (who looked a lot like Committee Chair Bill Nield) and his trusty side-kick (Chris werner.) If I can get the material, I will post it here.

Governor Patterson; Santa or Scrooge? Exemption Update Decision Less a Week Away

Within a week, we will know if Governor Patterson will be delivering a holiday present to bankruptcy and judgment debtors, or if there will be only coal in their stockings. The bankruptcy exemption update bill was sent to the governor December 15, and he has 10 days to veto it (excluding Sundays and holidays), or else it will automatically become law. By my calculation, "V" day is December 28. Earlier today (Tuesday, Dec. 21), New York City bankruptcy attorney Charles Juntikka organized a press conference at the state capital for supporters of the update bill. Mr. Juntikka brought in two of his bankruptcy clients from New York to present a human face to the problem of antiquated motor vehicle exemptions. Each have cars with equity above New York's $2,400 exemption limit, an amount set in 1982 and not changed since. One used her car to get to work and to transport her disabled mother; the other delivered car parts for a living. Both stand to lose their employment if they cannot pay their bankruptcy trustee the excess above the current exemption.Joining Mr. Juntikka at the conference was Russ Haven, staff attorney at NYPIRG (New York Public Interest Research Group); bankruptcy professor S. David Cohen of Pace University Law School, Kristen O'Keefe from the Empire Justice Center; bankruptcy professor Edward Janger of Brooklyn Law School, and myself, representing the western end of New York State. The press conference took place at 11:00 this morning in the Legislative Office Building, across the street from the New York State Capitol Building. Attending the press conference included representatives of WNYT Channel 13 Albany; the Associated Press, the Albany Times Union, and a student political journal.After the conference, Mr. Juntikka, Mr. Haven and I dropped by the Albany office of the Gannett News Service and discussed the issue with Cara Matthews. Later in the day, Mr. Haven phoned Jonathan Epstein, business reporter at the Buffalo News, and I also called him with the Western New York angle on this story.As of this evening (12/21), there were already two internet links concerning the press conference:Rick Karlin, Capitol bureau in General; Albany Times Union Capital Confidential December 21, 2010: "Advocates to Patterson: Don't Be a Scrooge" WNYT Channel 13 Albany: Increase urged in protected Amounts During Bankruptcy Filing; by Bill Lambdin; posted Dec. 21, 2010My picture accompanies the Times Union article, and I can be seen in the back of the group scene in the Channel 13 vid.

Mr. Scribner's wardrobe courtesy of Hickey Freeman, Rochester New York.

Exemption Update Bill Press Conference 12/21 in Albany

I will be participating in a press conference in Albany on Tuesday morning, December 21 at 11:00 AM on the bankruptcy and judgment debtor exemption update bill, now sitting on the Governor's desk.  New York City attorney Charles Juntikka has organized the event, along with NYPIRG (New York State Public Interest Research group.)  The conference will take place in Room 130 of the Legislative office Building, located at the corner of State Street and South Swan Street in Downtown Albany. I will be expressing the viewpoint of Western new York consumer bankruptcy attorneys, and will also be speaking of my experiences in collecting unexempt assets from debtors while I was a Chapter 7 trustee.

Failure to Assign: Travesty or Triviality? Brooklyn Judge May Decide

In a Bloomberg News article December 8, 2010 (Authors: Thom Weidlich and Karen Freifeld), the Amherst, NY foreclosure law office of Steven J. Baum is apparently the subject of several state and federal court lawsuits concerning alleged shoddy legal practices - and is defending its practices vigorously. The article reports that in one state court case, the Baum office has been ordered to pay $14,532.50 in legal fees and costs and a $5,000 fine (Federal Home Loan Mortgage Corp. v. Raia, SP 002253/10, District Court of Nassau County, New York, Hempstead; Hon. Scott Fairgrieve ). The article further reports that Baum's office has also been sued in Federal Court over charging attorney fees for foreclosure settlement conferences (Menashe v. Steven J. Baum P.C., U.S. District Court, Eastern District of New York; Central Islip; case #10-cv-5155). One lawsuit mentioned in the article summarizes two different orientations to current foreclosures. In a class action federal suit brought in Brooklyn, the court is being asked to chose between two dramatic alternatives: are mistakes made in litigating foreclosures trivial errors easily corrected? Or are they stunning examples of widespread fraud and litigation abuse?

The Heat is on the Governor's Office to Sign the Exemption Update Bill

The clock is ticking. The Governor has 10 days from December 15 (actually 11 days, since the 10th day falls on some sort of a holiday) to veto the exemption update bill, or it automatically becomes law. Bankruptcy attorneys, public interest groups like NYPIRG, and several New York bankruptcy law professors have submitted substantial documentation in support of the proposal. We assume the banking industry and perhaps New York City (unhappy about the alleged implications on parking ticket enforcement) have been equally vigorous in opposition. I understand that Attorney General-Elect Eric Schneiderman, who was the State Senate sponsor of the bill, may be speaking directly to Governor Patterson about the legislation.But time is short and the Governor's legal staff is doing double-duty; wrapping up end-of-session legislation while also preparing for the Gubernatorial transition. One key player in this decision may be Lawrence F. (Larry) Schwartz, Governor Patterson's Chief-of-Staff and former Deputy Executive of Westchester County. If anyone reading this blog happens to be an old college room-mate or golfing buddy of Mr. Schwartz, now might be a good time to rekindle old times and maybe mention the importance of this legislation.If the governor vetos the exemption update bill, the proposal will undoubtedly be dead for at least the next two years. The Republicans are expected to retake control of the State Senate January 1, and under former Republican leadership the exemption update bills never got to a vote. The main bill this year, S7034A, was passed with significant Republican support on June 23, with a vote of 47 to 14. Monroe County Senators Robach and Alesi voted for the bill. But when the chapter amendment, S8451, excluding New York State and its municipalities from the judgment debtor car exemption was voted on in August, the vote was a much closer 34 to 26 (Senators Alesi and Robach voted against that one.) The assumption is that the banking industry encouraged a Republican no vote on the chapter amendment in order to kill the whole bill.

Exemption Change Backlog?

As posted yesterday, bankruptcy filings in both Rochester and Buffalo are way down the pace of filings from a year ago. What could be the cause? The local economy is no better - or worse - than a year ago, and as bankruptcies are a lagging indicator of a recession, bankruptcy filings ought to be increasing rather than decreasing as our higher unemployment rates drag on.After my blog several local attorneys have pointed to a rather simple explanation as to why filings may be down: the anticipated change in exemption law. For six months now we have been waiting for New York to finalize the updating of the exemption law (see legislative updates for the latest). In the mean time, if a bankruptcy attorney is holding cases that would benefit from the change, this would decrease temporarily the number of cases being filed.It makes sense to me. If every active bankruptcy attorney has four or five cases on backlog, that would account cumulatively for the drop in local filings. If so, anticipate a big upturn in early 2011, whether or not the exemption law is enacted. My thanks to Rochester attorney Bill Neild for first suggesting this possible explanation to me.

Bankruptcies way down in Rochester, Buffalo

Bankruptcy filings in both Rochester and Buffalo are significantly down from last year. When last we checked, on October 5, bankruptcy filings were about two weeks behind the pace set last year. Two months later, filings are a full month behind 2009's rate.Bankruptcy cases are numbered consecutively when filed, and the last case filed in November in Rochester was 2,866. Case 2866 was filed in 2009 on October 29, one month sooner. In Buffalo, case 5,107 was the last November 2010 filing. That case number a year earlier was filed October 30.Looking back in history, here is the date Rochester case 2,866 was filed:
2010: Nov. 30
2009: Oct. 29
2008: Nov. 3
2007: Nov. 15
2004: July 2 (last year before the 2005 change in the bankruptcy code)
1996: Oct. 2
1995: December 4The pattern is similar in Buffalo, with case 5,107:
2010: Nov. 30
2009: Oct. 30
2008: Nov. 18
2007: Dec. 21
2004: July 9
1996: Nov. 7
1995: (only 4,532 cases filed that year)The percentage of local bankruptcy cases filed in Buffalo as opposed to Rochester has increased slightly. Through November 30, 35.9% of all Western District of New York cases were filed in Rochester. In this percentage of Rochester/Buffalo cases continues to the end of the year, it will be the smallest percentage of Rochester cases in the recent past and represents a two percentage point drop over the past three years. In 2009 36.1% of WDNY cases were filed in Rochester; in 2008 37.1% were Rochester cases and in 2007 38.0% were filed in Rochester. In 2004, Rochester constituted 37.0% of all WDNY filings.

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