Rochester Bankruptcy Attorney Blog

WDNY Bankruptcies Continue to Decline

2012-04-18T19:22:07Z

Bankruptcy cases for the Western District of New York continue their three year decline. For the first three months of 2012, only 1,615 cases were filed in the court, which includes Rochester, Buffalo and the Southern Tier. This represents a 8.7% drop from the first three months of 2011. In the Rochester Division alone, cases were off 11% this year compared to January - March 2011. Cases filed by Monroe County residents were down 11.8%.

Only 2,478 cases were filed in 2011 in the Rochester Division of the Court, a 20.7% drop from 2010, and a 29% drop from 2010. In the early 2000's, before the changes made to the bankruptcy code in 2005, annual bankruptcy filings in Rochester topped 5,000 per year.

Details of the bankruptcy statistics for WDNY thru March 31, 2012 are found at this link.

Speculation as to the cause of the local bankruptcy drop ranges from tighter credit card standards following the Great Recession, to the higher cost of filing bankruptcy, to the fact that Western New York did not suffer the housing bubble experienced elsewhere in the country. However, with fewer bankruptcy filings, it is all the more important that cases that are filed are prepared carefully: with fewer cases to review, the bankruptcy system (the trustees, the United States Trustee, creditors and the Court) can review individual cases more carefully, looking for errors and abuse.

If you are considering bankruptcy, and wish to be sure that your case is carefully prepared, please contact me for a free phone analysis (see the contact page on my web site.)

New Means Test Figures: Median Income, Expenses Up in NY

2012-04-18T19:16:30Z

New income and expenses figures are now available for bankruptcy Means Test calculations, effective May 1, 2012. In New York, median incomes and expenses are generally up.

Under the means test, a debtor's household income for the previous six months is compared with the median income for a similar size family in the debtor's state. Median incomes in New York had actually dropped in New York the last time these figures were adjusted (see my Oct. 17, 2011 blog); now they have gone back up.

Median incomes in New York, for cases filed now and for cases filed after May 1, 2012:

Family of 1: $45,931 goes up to $47,381
Family of 2: $56,113 goes up to $57,884
Family of 3: $66,953 goes up to $69,066
Family of 4: $81,212 goes up to $83,775

National expense standards also rise. For example, the National expense for food, clothing etc. for a single person household rises from $534 to $565 per month; for a family of four, the rise is from $1,377 to $1,450.

Regional housing and utility expenses are almost unchanged (for Monroe County, NY, the figures adjust a dollar or two up or down.) The regional operating cost for a motor vehicle, $278 p/m, remains unchanged. But the ownership cost for a vehicle in the North East Region (outside the major metro areas) rises from $496 to $517.

Higher income debtors, especially single debtors or small families, need to have their means test situation reviewed very carefully before filing bankruptcy. If you are considering a bankruptcy and wish a free phone consultation, please see the contact page of my web site.

Judge Warren to appear at Bankruptcy Committee Meeting March 27

2012-03-27T17:08:36Z

Newly sworn-in Rochester bankruptcy judge Paul Warren will make an appearance at the start of the next Bankruptcy Committee meeting of the Monroe County Bar Association on Wednesday, March 27, 2012 at 12:15 PM. The Judge is expected to stay only for the beginning of the meeting, but apparently his law clerk may become a regular attendee to the meetings.

Paul Warren to be Sworn In As Judge March 15

2012-03-13T15:21:28Z

Multiple reliable sources have reported that Paul R. Warren, Esq., currently Court Clerk for the Bankruptcy Court, will be sworn in as the new Bankruptcy Judge for Rochester NY in a private ceremony this Thursday, March 15 2012. There is no official confirmation. The next motion calendar for the court is March 16, starting at 9:00 AM with the monthly trial calendar and evidentiary hearings calendar, and it is assumed Mr. Warren will be presiding.

Big Collection Agencies to be Subject to Regulator

2012-02-17T01:51:15Z

As reported in the New York Times today, the newly-created Consumer Financial Protection Bureau is proposing rules that would empower the Bureau to regulate the biggest consumer collection agencies, law firms and debt buyers, as well as big credit reporting companies. The proposed regulation does not impose any new regulations on these entities; it sets the stage for future regulations by specifying what large collection companies will be subjected to its future regulation.

]]> For debt collectors, the threshold would be $10 million in collection receipts per year. This only includes receipts from consumer financial debts, not commercial debt or non-financial debts, such as medical debts. I would assume that student loans would be included, but I cannot verify that.

The entities that would be included would be non-bank third party collectors (such as collection agencies), non-bank debt buyers who purchase debts in default, and collection attorneys.

I doubt any Western New York collection law firm receives anywhere near $10 million in consumer financial product debts. A few huge collection law firm in the Metro New York City area may well be included. We see collection activity on consumer debts in our neck of the woods from these firms all the time.

The proposal aggregates receipts from affiliated companies; the intent, I am sure, is to prevent collectors from avoiding the requirements by simply splitting into separate legal entities controlled by the same parties. Aggressive collection agencies are infamous for operating under a bewildering array of different company names, all of which are actually controlled jointly.

The Bureau estimates that about 175 of the largest collection entities in the country, out of a total of about 4,500 collectors, would be subject to its regulations. This large entities collect about 63% of all consumer debt collection receipts.

Third party debt collectors of all sizes, including debt buyers and attorneys are now subject to the Fair Debt Collections Practices Act (FDCPA). This act provides for serious sanctions against collectors who violate its provisions. But enforcement is mostly left up to litigation by individual debtors, with some common enforcement through class actions or attorney general lawsuits. If I am analyzing this new proposal correctly, the Consumer Financial Protection Bureau intends to get into a position where it can regulate the larger entities in the consumer collections market, in the same way banks or other financial institutions are regulated.

I will be curious to know if the end result of such regulations is a standard model for fair collections, used by collectors not directly regulated by the Bureau, or if this would simply give smaller collectors a competitive edge (if the smaller entities can engage in lucrative abusive collection that are forbidden to thge larger companies.

The proposal would also bring the Bureau into a position to regulate credit reporting services with revenues of over $7 million. This is outside my area of expertise, so I am providing no additional analysis on this portion of the proposal.

Paul Warren Anticipated as Next Rochester Bankruptcy Judge - BREAKING NEWS!

2012-02-15T19:08:43Z

I can report that, based upon reliable sources of information, it appears that Paul R. Warren, Esq., the Clerk of the Bankruptcy Court for the Western District of New York, will shortly be appointed the next bankruputcy judge for the Rochester Division of the Bankruptcy Court. Mr. Warren attended the chapter 13 plan confirmation hearings last Thursday in Rochester, something he would not need to do as Court Clerk. I have received other confidential information that would colaborate this information.

According to Lawyers.com, Mr. Warren received his undergraduate degree from St. John Fisher College and his law degree from the University of Dayton. He was admitted to practice in the Western District of New York (among other places) in 1984. Mr. Warren and I, along with a third person (Renee Davidson) were all appointed Chapter 7 panal trustees at the same time in 1994. Mr. Warren was then working for the Law Firm of Boylan Brown (now Boylan, Code.) A few years later, he was appointed the Clerk of the Bankruptcy Court. Based in Rochester, Mr. Warren has split his time working in the Rochester and Buffalo offices of the Clerk's office.

Scribner interviewed by Ch. 13 on Student Loan Debt

2012-02-10T15:12:06Z

Rochester's Channel 13 news interviewed me two days ago on the issue of student loans and bankruptcy. Here's the link. As I have stated in previouys blogs, we (bankruptcy attorneys) do not have much to offer student loan debtors. A hardship discharge in bankruptcy is extremely difficult to obtain; it pretty much requires permanent disability. People going into school should be very clear-eyed about the potential to generate income at the other end sufficient to pay off whatever loans are incurred to finance the education.

Bankruptcy Attorney Almost Victim of Debit Card Fraud - Almost

2012-01-17T18:04:58Z

Seven years of higher education, and you would think that I would see a bank card scam a mile away. But some unknown scammer almost got away with my debit card information. Almost.

My debit card is, of course, connected to my bank account. I do not use it often as a MasterCard debit card. But on my recent trip to California to visit with my mother (age 90 and doing fine, thank you for asking), I used it at a tiny used book store. Two days later, when I returned home, I received an 'automatic message' phone call stating that "your HSBC Debit Card has been locked down." In retrospect, this was a brilliant strategy; by engaging me via an automatic phone call, I couldn't ask any questions in reply. And to me, it made a certain amount of sense. After a visit to California last year, HSBC fraud control called me just a few hours after I used my card at O'Hare Airport in Chicago, to verify that I authorized that use; I was impressed. So getting a call the day after returning from my last trip, after a rare use of the card in a tiny retail store, seemed to me to make sense.

In any case, the automatic call wanted my 16 digit debit card account number, which I proceeded to provide. I paused when the automatic call asked for the expiration date; but I gave that up as well. I think the automatic call scammers got too greedy by having the call ask for my four digit PIN. Even gullible me thought that was way too much. I hung up, went online to check my account to verify no unexpected transactions the past few days (there were none), and then called HSBC using the phone number on the card. Customer Service shut down my debit card instantly (the service representative apologized for sounding rushed, because she was shutting down the card even while still obtaining information from me.) She said they had received several similar calls that day - January 4.

Interestingly, the automatic call did not come from a restricted phone number; the incoming number showed up on caller ID (with a Baltimore MD area code) and I passed that on to the bank. In any case, the card was shut down and nothing was taken. But, boy, did I come close to creating a complete mess. Even after seven years of higher education.

Syracuse Temporary Bankruptcy Judgeship May Be Extended

2011-12-21T21:42:54Z

One rumor floating around related to the soon-to-be-vacant bankruptcy judgship in Rochester is that the Hon. Margaret Cangilos-Ruiz, currently the bankruptcy judge in the Northern District of New York, Syracuse Division, would be appointed to the Rochester position.

I have absolutely no inside information to substantiate this rumor, but if it is based on the assumption that Judge Cangilos-Ruiz is somehow a 'temporary' judge, with a term soon to expire, this is an incorrect assumption. And a bill now pending in Congress would extend the temporary judgeship in the Northern District for another five years.

]]> Section 152 of Title 28 of the United States Code assigns a specific number of bankruptcy judges to each court in the country. The Western District of New York (Rochester and Buffalo) is assigned three permanent judges, while the Northern District of New York (Albany to Syracuse) is assigned two. Bankruptcy judges are appointed for fourteen year terms, and are appointed by the circuit court of appeals (not by the President, unlike District Court judges.)

No permanent slots for bankruptcy judges have been added anywhere in the country in nearly twenty years; instead, Congress has expanded the bankruptcy bench by adding 'temporary' judgeships. So, for example, the number of bankruptcy judges in the Northern District of New York was 'temporarily' enlarged from two to three in 2005. Judge Cangilos-Ruiz was that third judge added to the district, effective February 16, 2007. However, she was appointed to a full 14 year term, and can be reappointed just like any other bankruptcy judge.

So what does it mean that the third judgeship is 'temporary' in the Northern District? It means that any vacancy in the district five years after the third judge was appointed will remain vacant. The actual wording of the statute (28 USC Sect. 152, as amended in 2005) is as follows:

"The first vacancy occurring in the office of bankruptcy judge in each of the judicial districts set forth in paragraph (1) - (i) occurring 5 years or more after the appointment date of the bankruptcy judge appointed under paragraph (1) to such office; and (ii) resulting from the death, retirement, resignation, or removal of a bankruptcy judge; shall not be filled."

Therefore, unless the temporary judgship is extended, the first death, retirement, resignation or removal of a Northern District bankruptcy judge after February 16, 2012 will not be replaced; the third judgship will be considered to have lapsed. But until then, all three judges in that district may serve full terms and are eligible for reappointment.

A bill now pending in Congress (H.R. 1021) would extend many temporary bankruptcy judgeships an additional five years, including the Northern District of New York. The bill passed the House of Representatives December 6, 2011. A companion Senate bill, S.1821, was referred out of the Judiciary Committee December 15 and could be enacted by the Senate at any time.

It is possible that a judge in the Northern District could sit in the Western District (or vice versa.) 28 US 152(d) includes this provision: "(d) With the approval of the Judicial Conference and of each of the judicial councils involved, a bankruptcy judge may be designated to serve in any district adjacent to or near the district for which such bankruptcy judge was appointed."

Debtor Who Spent Annuity After Filing Bankruptcy Granted Discharge - In re Leone Albany Case

2011-12-16T01:49:17Z

"Something went awry in this case", and indeed it did. This understated line opens the conclusory paragraph of the decision by Judge Robert E. Littlefield Jr. in In re Leone, Bankruptcy Court Northern District of New York (Albany Division) Chapter 7 #05-16603; AP #07-90199; Decision Dec. 9, 2011.)

The debtors refinanced their home, filed bankruptcy, and transferred the refinance funds to an annuity while the petition was being filed. The original chapter 13 trustee did not go after the refinance cash or object to the annuity exemption. When converted to chapter 7, the new trustee objected to exempting the annuity, but by them the money was mostly spent. The chapter 7 trustee sought to deny the debtors a discharge.

But denial of discharge "is the death penalty of bankruptcy", so said Judge Littlefield later in the conclusory paragraph, "a harsh remedy to be reserved for a truly pernicious debtor." The judge declined to impose such a penalty here.

]]> That something went awry in this case might have had to do with the date of its initial filing - September 17, 2005, a month before the momentous changes to the bankruptcy code, known as BAPCPA, went into effect. The decision never mentions this factor, but massive numbers of bankruptcy cases were filed in the period leading up to BAPCPA's effective date, October 17, 2005. The Rochester court alone had two thousand filings in October that year, almost as many as all of 2011.

In the wake of this wave of filings, some attorneys may have rushed the preparation a little, and some trustees, overwhelmed with new cases, might have overlooked details that would have been picked up in a calmer period.

In any case, in July 2005 the debtors refinanced their house, and received a little over $35,000 in cash. They then consulted a bankruptcy attorney in early September, who advised them to shift the money into an annuity to protect it from creditors and bankruptcy.

The attorney apparently failed to advise them that an annuity purchased within six months of filing bankruptcy would only be exempted up to $5,000; the debtors would have been better advised to have waited six months before filing, but people were scared at that time that BAPCPA would make it all but impossible to file bankruptcy (incorrect, as it turned out), so I am not surprised that the debtors and their attorney rushed out a bankruptcy filing.

The bankruptcy petition was signed Sept. 12, when the refinance funds were still in a regular bank account, and they listed as an unexempt asset in the amount of $27,500. But the debtors on the same day wrote a $21,000 check to an annuity company, where it was received on Sept. 16. The chapter 13 petition was filed Sept. 17, and the annuity check cleared the debtors' bank account September 21.

Awry indeed. As the decision pointed out, the assets of the bankruptcy case are those assets existing on the petition date - Sept. 16 - and as the check had not yet cleared the bank, the cash in the bank was still an asset - an unexempt asset - of the bankruptcy case.

The debtors amended their schedule of assets and exemptions (Schedules B & C) on February 16, 2006. The amendment claimed - incorrectly - that the debtor's money was in an exempt annuity when the case was filed, but the trustee never objected to that amended exemption claim (the deadline to do so is 30 days after the close of the trustee hearing.) And for some reason the chapter 13 trustee also never demanded turnover of the pre-petition cash which had been deposited into the annuity.

The debtors chapter 13 plan was confirmed March 14, 2006. The confirmation order included a provision stating that "no article of property, real or personal, with a value of more than $2,500 may be sold or otherwise disposed of without prior consent of the Trustee" (chapter 13 plans in Rochester have a similar provision, for assets worth more than $1,000.)

Never the less, the debtors ran out of money and invaded the annuity to pay bills. Things didn't work out in Chapter 13, so the debtors voluntarily converted the case to Chapter 7 Sept. 12, 2006. A new chapter 7 trustee was appointed.

Perhaps I should point out that as frantic as the period of September 2005 was for the bankruptcy system, September 2006 was extraordinarily calm. So many cases were filed before BAPCPA went into effect that few new cases were filed afterwards. In Rochester, over 7,600 cases were filed in 2005 before October 17 and none more were filed the rest of that year. So a chapter 7 trustee appointed in September 2006 would have had plenty of time to review the nuances of this case, the exact opposite of the situation when it was first filed.

I should also point out that the debtors, rather than converting to chapter 7, could have withdrawn their chapter 13 case and then filed a new chapter 7. Given all the trouble they have gone through the last four years, that might have been the better strategy. Chapter 13 is completely voluntary, and a debtor can always withdraw. Chapter 7 cases, on the other hand, can only be dismissed if it is in the best interest of creditors, and if a debtor is asking for their chapter 7 case to be withdrawn, it is usually because something bad has happened - like an unexempt asset has been discovered - and it is rarely in the creditor's interest to dismiss such a case.

In any case, the new chapter 7 trustee obtained several extensions of the deadline to object to exemptions, finally filing a bankruptcy lawsuit (adversary proceeding) a year later, October 17, 2007. The trustee also sought a money judgment against the debtors for the depleted annuity funds, and a denial of discharge for false statements on the schedules and for spending the annuity without permission.

First, the exemption issue: as stated above, a trustee has only 30 days after the conclusion of the "341" hearing to object to an exemption. When a case originally filed in chapter 13 is converted to chapter 7, a new 341 hearing is scheduled. The debtor claimed that the deadline to object to exemption expired after the conclusion of the 341 hearing in Chapter 13, and the new chapter 7 hearing did not restart the clock. Judge Littlefield noted that courts are split on that issue (he cites multiple cases on both sides of the question), but said that in this case the debtors never objected to the repeated requests by the trustee to extend the exemption objection deadline in chapter 7, which were granted by court order, so it was now too late for the debtors to object to the chapter 7 trustee's authority to make an exemption objection motion.

PRACTICE NOTE FOR ATTORNEYS: If a case is originally filed in chapter 13, and then converted to chapter 7, and the chapter 7 trustee wants an extension of time to object to exemptions, and that exemption objection period had run out during the chapter 13 phase of the case, DON'T CONSENT TO THE EXTENSION!

So the court concluded that the cash in the bank was an asset of the case when the petition was filed, and that the chapter 7 trustee was correct that the funds were not exempt. So far so good for the trustee. So far, but no farther. Because the chapter 13 trustee had not objected to the exemption, the debtors were free to treat the annuity funds as exempt, even though it turned out later they weren't. So objection to discharge because of allegedly violating the plan order (spending an asset of over $2,500 without permission) was denied. So was the request for a money judgment for the depleted amount, for the same reason.

The court found that the debtors never attempted to hide the funds, disclosing what they were doing all along, so denial of discharge for making false oaths, or failure to maintain records, was also denied.

Most interesting, perhaps, was the issue of whether the debtors transferred assets post-petition with intent to hinder, deceive or delay a trustee; that is, by converting the refinance cash, an unexempt asset, into an annuity, an exempt asset. Such a transfer after the petition is filed (or within a year before a petition is filed) is grounds to deny discharge under 11 USC Sect. 727 (a)(2)(A) and (B). The key is the debtor's intent.

That the original source of the funds was an exempt asset, namely, equity in the debtor's residence which was turned into cash by the refinance two months before filing, may have had some influence on the court. The debtors argued that they converted an exempt asset into an unexempt asset, temporarily, and then back to an exempt asset (well, so they thought, anyway.)

The court concluded that the debtors were acting in good faith based on advise of counsel. To quote from the decision:

The court recognizes that "reliance upon advice of counsel" is not an "impenetrable shield" behind which a debtor may continually hide. In re Dubrowsky, 244 B.R. 560, 575 (E.D.N.Y. 2000). "The advice of counsel is not a defense when it is transparently clear that the advice is improper." Id. (citing In re Kelly, 135 B.R. 459, 462 (Bankr. S.D.N.Y. 1992)). After reading the four documents prepared by the Debtors, the court finds the Debtors to be forthcoming and credible. The Debtors believed that the purchase of the annuity was permissible and in conformance with the advice they received from their attorney. There is nothing in the record to counter this. Thus, the court cannot conclude that the Debtors‟ reliance on advice of counsel was not reasonable and in good faith.

The bottom line of this awry case is very careful pre-petition preparation of a bankruptcy case is absolutely essential. Once a case is filed, it cannot be unfiled, at least in chapter 7. I tell my clients that almost all of my work is done by the time I file the case. A carefully prepared bankruptcy case should sail through the bankruptcy system with no problem, or at least with no unexpected problems. It is only when a case is not quite properly prepared that things go awry.

For more information about filing bankruptcy in the Rochester area, contact me for a phone analysis, at no charge, of your situation.

NY Homestead Exemption Applies to Entire Property Even If Partially Rented Out: In re McCarthy (Syracuse case)

2011-12-15T23:49:40Z

Syracuse bankruptcy judge Margaret Cangilos-Ruiz has ruled that a bankruptcy debtor can claim a homestead exemption on an entire parcel or residential property, even if the debtor only resides in part of the property.
In re Craig Michael McCarthy; WDNY Bk #11-31499; decision Nov. 18, 2011.

Mr. McCarthy owned property containing a two family house, both units of which were rented out, and a smaller building in the back where the debtor both worked and lived. In my review of the docket, it appears that the debtor moved to avoid the judicial lien of a creditor, and the creditor, in turn, objected to the debtor's homestead exemption claim. The creditor argued that the homestead exemption should only be allocated to that portion of the lot that is used as the debtor's residence.

The court ruled that the debtor could exempt the entire parcel.

]]> The ruling in part relied on an earlier ruling of Judge Cangilos-Ruiz, In re Ford, 415 BR 51 (Bankr. WDNY 2009). In Ford, the debtor lived on one parcel, an the septic and well water for the homestead parcel came from an adjoining vacant parcel. The parcel with the residence also included two sheds used by the debtor for both personal and commercial purposes. The judge in that case allowed the debtor to extend the homestead exemption to the vacant land parcel as well as the property with the residence. The discussion of the exemption issue in Ford did not include any comments regarding the partial commercial use of the residential parcel.

The McCarthy decision also relied on a decision of WDNY Bankruptcy Judge Michael J. Kaplan, In re Rupp, 415 Br 72 (Bankr. WDNY 2008.) In Rupp, Judge Kaplan allowed the owner of a double house to exempt the entire parcel as a homestead. Both Rupp and McCarthy rely on an earlier New York City case, In re Vizentinis (Bankr. EDNY 1994; Judge Marvin A. Holland), where a debtor who owned a four unit apartment house, and only resided in one of the units, could, never the less, exempt the entire building under the homestead exemption.

Not cited in the McCarthy decision is an unpublished 1992 decision of the Hon. Michael A. Telesca, District Court Judge for the Western District of New York: Randall v. Mastowaki, CIV-92-6049T. Mastowski was an appeal of a decision by our former Rochester Bankruptcy Judge, Hon. Edward D. Hayes, In re Mastowski, 135 BR 1; Bankr. WDNY 1992). The debtor in that case owned two double houses, and only lived in one of the four units. Judge Telesca ruled that the debtor could only claim a homestead exemption "on that part of the property . . . that she occupies as her primary residence."

Judge Kaplan in Buffalo, in his 2008 Rupp case acknowledged the Mastowski district court case, but held that "the binding effect of the decision of a district judge of this district upon all bankruptcy judges of this district depends on whether the district judge published the decision. The rationale for that proviso, first articulated by this writer in the case of In re Phipps [217 BR 427; Bankr. WDNY 1998], was the fact that a bankruptcy judge cannot presume to know the holding of a district court judge of this district if the district judge's holding has not been published."

It has been assumed in Rochester that retiring Judge John C. Ninfo II would follow the reasoning of Mastowski, and only allow a homestead exemption on that portion of a parcel that is actually used as the debtor's residence. The Rochester bankruptcy trustees certainly follow that approach. However, with the retirement of Judge Ninfo, and the new McCarthy opinion coming out of Syracuse, which follows the Rupp decision out of Buffalo, that assumption is now in question.

This issue has not been extensively litigated in the past, probably because the homestead exemption was only $10,000 until 2005. Now that it is between $75,000 and $150,000, depending on the debtor's location in New York State, I would expect more of these homestead exemption claims for multiple-use properties.

Determining what assets owned by a bankruptcy debtor are exempt from creditors and from the bankruptcy trustee is an important part of the bankruptcy process. I believe I am second to none in the Rochester area in analyzing the exemption status of assets, including homestead properties.

If you are considering bankruptcy, and have significant or unusual real estate properties, you should consult a bankruptcy attorney with extensive experience in this area. See my website for more information about asset exemptions in New York State, and contact me for a phone analysis, at no charge, of your situation.

Retirement Package for Bankruptcy Judges - Full Salary after 14 Years if Over 65

2011-12-15T21:00:32Z

With the impending retirement of Bankruptcy judge John C. Ninfo II of Rochester, it might be interesting to review the retirement package available to bankruptcy judges. Under 28 USC Sect. 377, a bankruptcy judge over the age of 65 who has served at least 14 years is entitled to a lifetime annuity equal to his or her salary upon retirement.

The retired judge is not entitled to the annuity if he or she starts practicing law after retirement. Bankruptcy judges are paid 92% of the salary of United States District Judges (28 USC Sect. 153). A bankruptcy court judge's current salary is $160,080.00.

In the Western District of New York, retiring Judge Ninfo graduated from Georgetown in 1968 and was appointed to the bench in 1992. Buffalo judge Michael J. Kaplan graduated from Columbia University in 1968 and was appointed a bankruptcy judge in 1991. Chief Judge Carl L. Bucki graduated from Cornell in 1974 and was appointed bankruptcy judge in 1993.

Bankruptcies continue decline to 23 year low; Share a Judge with Syracuse?

2011-12-08T06:20:22Z

Through the end of November, bankrutcy filings in the Western District of New Yor continue to decline, off 20% from the first eleven months of of 2010. Rochester's share of filings are down slightly more - 21%, with Buffalo's filings down 19%. This follows a 10% decline in WDNY filings in 2010, compared to 2009.

While the 2010 decline was unusual compared to most of the country, the 2011 drop reflects a national trend. According to the Wall Street Journal (blog by Sara Murray dated 11/2/2011), consumer bankruptcies for teh first ten months of this year are down nationally nearly 20% from a year earlier.

2,302 bankruptcy cases were filed by the end of November in Rochester. The last time fewer cases than that were filed by the end of November in our division was twenty-three years ago - 1988. Buffalo cases have declined to a level last seen in 1995 (4,287 thru 11/30.)

By my calculations, bankruptcies have also dropped significantly in the Northern District of New York. For example, 2,540 cases had been filed in the Syracuse Division of NDNY thru 11/30/2011, compared to 3,082 in 2010, a drop of 17.6%.

At this level of filing, and with the federal judiciary under pressure to save money, it would be loigical that the Second Circuit Court of Appeals might be holding off appointing a new bankruptcy judge in Rochester. The latest rumor that has come our way is the possibility that Syracuse bankruptcy judge Margaret Cangilos-Ruiz might be transferred to the Rochester judgship.

Pillar Processing Closes in Buffalo - Fallout of Baum Closure

2011-12-01T15:00:10Z

As I reported two weeks ago, the large-volume foreclosure firm Steven J. Baum PC of Amherst NY is closing. The Buffalo News is now reporting that Pillar Processing LLC, a foreclosure services company affiliated with the Baum office is also shutting its doors. Pillar employees 590 full-time and part-time employees in Amherst.

I wrote an extensive blog last year (October 22, 2010) exploring the unisual arrangement between Pillar and the Baum office. My analysis is that Baum basically spun off the back office foreclosure processing services into a separate non-law firm entity, and then sold it to private investors for something like $60 million. If this is accurate, I would suspect those investors might be somewhat unhappy now.

Baum Firm to Shut Down

2011-11-22T15:14:06Z

The New York Times (DealBook article by Peter Lattman, 11/21/2011), and The Buffalo News (article 11/21/2011 by Jonathan Epstein) , are reporting that the troubled foreclosure law firm Steven J. Baum PC is shutting down. The firm filed notices with the government of intention to dismiss a mass number of employees. The firm has at least 90 employees.

No official word on the fate of Pillar Processing, the spun-off foreclosure services business affiliated with Baum, but the Buffalo News article reports that similar dismissals are expected there by the end of February.

Until recently, the Baum firm administered 40% of the foreclosures in New York State. As I reported last Thursday, the Baum firm was just recently banned from future foreclosure and bankruptcy work on Fannie Mae and freddie Mac mortgages. The firm was alleged to have ridiculed foreclosed homeowners, as I posted on October 31 this year. A year ago, I posted an extensive blog analyzing the Baum business model and its privatization of ancillary work to its spin-off, Pillar Processing. The firm has been subject to several counterclaims and lawsuits regarding its foreclosure practices, as I also posted a year ago.