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January 2011 Archives

Albany Bankruptcy Lawsuit Seeks to Void Wells Fargo Mortgage

While most of the New York State lawsuits seeking to void mortgages due to falty paperwork arise out of the New York City area, at least one case is pending before the United States Bankruptcy Court for the Norther District of New York: Prisco v. US Bank (Bk #07-13408; AP #09-90083. Judge Littlefield issued a preliminary decision on January 3, 2011, denying the debtor's motion for a default judgment (available at the court's website under Judge Littlefield - 2011 decisions.)

State Exception to Car Exemption Passes Legislature

With the new exemption update law set to go into effect tomorrow (January 21), the state legislature has passed the 'chapter amendment' bill A851, which excepts the State and its municipalities from the judgment debtor motor vehicle exemption. As reported in previous blogs, New York City and other municipalities objected to the update law, fearing that it would prevent their parking violations bureaus from seizing cars to enforce parking violations. When Governor Patterson signed the update law, he expressed his reservations, and may well have vetoed it had supporters of the bill not promised to support a chapter amendment excepting the state from the car exemption.The Assembly passed A851 on Tuesday and the Senate passed it yesterday. The bill has been forwarded to the Governor for signature. As one of the supporters of the exemption update bill, I sent a letter of support for the chapter amendment to four of my local legislators (two Assembly members, two senators.) In response to the letter, the office of Senator Joseph E. Robach of Rochester called me today to inform me the bill had passed the Senate, with Senator Robach's support, which I thought was a very thoughtful thing to do, and is appreciated. This was not exactly a highly contested piece of legislation; the Assembly approved it 142-0. If signed by thge governor, the chapter amendment will have the same effective date as the exemption update law (January 21.)

Q&A - new New York Exemptions

If you would like to discuss publically the new exemption update law in New York State, going into effect January 21, leave a comment below. I will answer the comments to the best of my knowledge, and other readers may leave answering comments as well.

New Bankruptcy exemptions - can a debtor exempt TWO cars?

A strict reading of the exemptions allowed debtors under the new exemption update law in New York reveals an interesting analysis: a bankruptcy debtor could claim two separate car exemptions. Whether a court will allow this interpretation is another matter. 

Trustee May Sell Car Over Debtor's Objection, Says Judge Bucki (in re Burgio)

Judge Bucki in Buffalo has fully supported a bankruptcy trustee's motion to have a partially exempt car turned over, and denied the debtor's motion that the asset be abandoned, in a case released January 11 (In re Burgio; WDNY Ch. 7 Bk #10-12259; decision Dec. 23, 2010.) 

Law Schools Oversell Their Value, Leading to Underemployed Grads with Enormous Student Loan Burdens - NY Times

As an attorney, I, of course, went to law school; in my case SUNY Buffalo, and I greatly enjoyed the experience. But the New York Times ran a long article January 8 (Author David Segal), question ng the value of a law school education, at least if the student piles up loan debt. 

Supreme Court Decides: Means Test Car Ownership Expense Applies Only If Debtor Has a Loan: Ransom

The Supreme Court issued a decision in Ransom v. Fia Card on January 11, interpreting the statutory provisions of the 'means test.'  In brief, the Court states that debtors who do not have a car loan cannot claim the 'ownership expense' for that car on the means test form. This is basically the current practice in local bankruptcies. I am sure that more extensive analysis will be forthcoming from this case.

A851 Moves on to the Assembly - Excludes NYS from Car Exemption

Chapter amendment A851 was reported out of the Judicial Committee of the New York State Assembly this morning, without opposition or even discussion.  Both Democratic and Republican members of the Committee voted in favor of the bill, which excludes New York State and its municipalities from the new judgment debtor motor vehicle exemption.  New York City had advocated for the exclusion, to protect its parking tickets collection process. many bankruptcy practitioners around the state, including myself, have submitted letters in suppport of the bill. A floor vote in the Assembly is expected soon, and a similar bill, S1198 is moving through the State Senate.

More information on Webcast of Exemption CLE

I reported yesterday that the Exemption Update Law CLE Bill Neild and I will be doing next Tuesday, January 18 at 2:30 for the Monroe County Bar Association will be available nationwide via webcast.  Several people have expressed interest in the webcast option, so here are some additional details:

MCBA Exemption Law CLE the only one in the State - available online 1/18 at 2:30

As previously reported, Bill Neild and I will be doing a two hour CLE (Continuing Legal Education) seminar on the New York Updated Exemptions Law on January 18 at 2:30 PM.  The CLE is being done for the Monroe County Bar Association at the Bar Center in Rochester, but the CLE is also available online as a live webcast.  As near as I can tell, this is the only CLE scheduled in New York State on this issue at this time.  The new law goes into effect January 21, so bankruptcy practitioners around New York need to become familiar with the changes in state law - and equally familiar with the newly available federal exemptions.  You may contact the link above to register for the live webcast, or find it at the Monroe County Bar Association website, under CLE.

NYS Exception to Car Exemption for Judgment Debtors Introduced in Legislature

As has been extensively reported in previous blogs, Governor Patterson signed the Exemption Update law despite the misgivings of New York City, which was concerned that the new motor vehicle exemption for non-bankruptcy debtors would impact their collections of parking violations.  Parking Violations Bureaus in New York has statutory authority to enforce unpaid parking tickets just like money judgment (New York Vehicle & Traffic Law sect. 237(5)). In New York City, and perhaps some other municipalities, the PVB use this power to tow cars of owners with unpaid parking tickets, even if the car is legally parked (call it the 'New York yank' as opposed to the 'Denver boot.')

New York Joining 20 other Non-opt out States / Jurisdictions

The new exemption update law will allow New York bankruptcy debtors the option of using the federal exemptions rather than just the state exemptions. New York 'opted out' of allowing bankruptcy debtors to use federal exemptions in 1982. By no longer opting out of the federal exemptions, New York joins twenty other states and jurisdictions that allow use of the federal exemption. Interestingly, every state adjoining New York, and every New England state other than Maine, has not opted out of the federal exemptions. Bankruptcy attorneys may want to pay close attention to case law interpreting the federal exemptions arising out of non-opt out states.

MCBA Exemption Update Law CLE Jan. 18: On-Line registration Now Available

As previously reported, Bankruptcy Committee Chair Bill Neild and I will be doing a two hour CLE on the new Bankruptcy Exemption Update Law on January 18 at 2:30.  You can now register for that CLE online at the Monroe County Bar Association website, at this link.

Effective Date of Exemption Update Law is Officially January 21, 2011

The new Exemption Update Law goes into effect 30 days after passage. There has been some question as to when that date is, but the official answer is January 21. The official legislature information service of the State of New York confirms the amendments are effective the 21st. The confusion arises because Governor Patterson's office released the news that the Governor had signed the bill on December 23, but the Governor actually signed the bill the day before, Dec. 22 (see my blog of December 28, posting the Governor's approval memorandum.)

AP's in Rochester Way Down in 2010 (not so Buffalo); Big Drop in Exceptions to Discharge Lawsuits

At the annual holiday luncheon of the Bankruptcy Committee of the Monroe County Bar Association in December, Rochester Judge John C. Ninfo asked the attorneys present why bankruptcy filings in the Western District of New York were down in 2010 compared to 2009. I will review that question in a later blog, but perhaps the judge should have asked why bankruptcy litigation - adversary proceeds - was waaaay down in Rochester - but not Buffalo - this past year. I did a quick scratch-pad analysis of all adversary proceedings filed in Rochester 2007 through 2010. According to my analysis, only 67 adversary proceedings (AP's) were filed in the Rochester division of the Western District of New York in 2010 (an adversary proceeding is a federal lawsuit filed in connection with a bankruptcy case.) In 2009, 119 AP's were filed in Rochester, so AP's dropped by more than one-third this past year.

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