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01

May 2022

Colorado Bankruptcy Homestead Just Increased to $250,000

Posted by / in Virginia Bankruptcy, Weekly Posts /

In Bankruptcy, Can I Protect the Equity in My House?

Bankruptcy is set up by the Federal government, but each state sets its own rules on how much equity you can protect if you file Chapter 7 bankruptcy.  That protection is called your homestead exemption.  In April 2022, Colorado raised their homestead exemption from $75,000 to $250,000.

Colorado is one of five states that has increased their homestead since 2020. Let’s see how they compare.

California increased to $300,000

Colorado to $250,000

Connecticut to $250,000

Washington state to $125,000

Virginia to $30,000

July 2020 was when Virginia increased their homestead exemption from $5,000 to $30,000.  At the time that seemed like a big boost. And that did move us out of last place in the entire country.  But it’s still one of the lowest anywhere. 

Now the good news for most married people is that the Virginia’s homestead exemption is mainly needed by singles.

Homestead exemption

Virginia has one of the smallest homestead exemptions in the country.

Virginia Does Have a Better Rule for Married Couples       

Virginia recognizes tenancy by the entirety, which gives great protection to real estate owned by married couples.  Under tenancy by entirety, real estate owned by a married couple is safe from the creditors of only one.  Some married people, for cultural reasons or bad advice, put the house in only one name. And entirety doesn’t protect you for loans you co-signed for each other. 

Widows, divorced people, singles need the protection of a bankruptcy homestead exemption or Chapter 13

Widows, divorced people, singles and poorly advice married people need the protection of a homestead exemption. Virginia’s is near the bottom.  Now, having too much equity does NOT mean you automatically lose your house when you can’t pay your credit cards.  The bankruptcy court can help you with a Chapter 13. Chapter 13 is a payment plan through the bankruptcy court. That payment can be quite painful. Because the Virginia homestead exemption is one of the smallest in the country, people who could file Chapter 7 bankruptcy in most places end up in a Chapter 13 payment plan here.   

Want to know more about Virginia exemption law?    

I’ve written more about Virginia exemption law here.                

  

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08

Aug 2021

A Million Dollar Mistake: Personal Injury and Bankruptcy

Posted by / in Virginia Bankruptcy, Weekly Posts /

A Million Dollar Mistake: Personal Injury and Bankruptcy

Under Virginia law, the bankruptcy court cannot take away a personal injury claim.  Injured in a car accident? Hurt in the hospital? Anyone in Virginia can file bankruptcy and still keep those claims.

Steven Ramsdell, one of the top bankruptcy lawyers here, is desperately trying to save a possible million dollar injury claim involving a Mr. Barnes, who “forgot” to tell the bankruptcy court about his personal injury.

Barnes filed bankruptcy in June 2020 and it was discharged in October 2020.  Two months later, Barnes sued a Loudoun County doctor for a million dollars, claiming a wrong prescription caused permanent damage to his liver.  In May 2021, the Loudoun County Circuit Court court threw Barnes put of court.

That’s How To Lose Your Personal Injury Claims In Bankruptcy

Here’s what happens when someone forgets to tell the bankruptcy court about your car accident or any other personal injury.

Injured in a car accident? Hurt in the hospital? You can file bankruptcy and still keep your rights. As long as you remember to tell the bankruptcy court.

Those rights are forfeit. Two ways.

First, because forgetting to tell the bankruptcy court about the claim means forgetting to protect that claim. So the injury claim now belongs to the bankruptcy trustee. Sometimes in law, “you snooze, you lose.”

Now, Barnes will ask the bankruptcy court to cut him some slack.  If the bankruptcy judge finds Barnes “forgot” because of “excusable neglect,” he may get a second chance to claim and protect his rights. 

Supposed a mortgage company overcharged someone and they didn’t know they were owed a refund. Forgetting to tell the bankruptcy court about that would easily be excusable neglect.

Barnes, on the other hand, sued his doctor less than three months after his bankruptcy was over.  Does that look like “excusable neglect.”  Or does it look like lying? 

Second, even if the bankruptcy judge helps him out, the state court judge can still toss out the suit for judicial estopple.  If Banes told the bankruptcy court that nobody owed him any money, how can he come into the state court and claim the doctor’s insurance owes him a million dollars?

Imagine this in the state court.  “You are telling this court, Mr. Barnes, that you are in constant pain? But you didn’t mention that pain when you met with your bankruptcy lawyer? Why should any jury believe you?”

Today, we don’t know how the Barnes case will turn out. Last week, the bankruptcy judge agreed he’d at least give Barnes a chance to explain his side.

PS  I should add that Steven Ramsdell was NOT the lawyer who first handled Barnes bankruptcy case. Barnes, of course, may be tempted to blame the problem on the first lawyer who handled his bankruptcy.  That first lawyer knew Barnes hadn’t worked for five months. Was that because of this injury? Should the bankruptcy lawyer have asked?

A lot of people will be sweating when the bankruptcy judge decides on “excusable neglect.”

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24

Jan 2021

Chapter 7 Trustee Donald F King

Posted by / in Blog, Chapter 7 Bankruptcy, Virginia Bankruptcy /

Chapter 7 Trustee Donald F King

Donald F King is one of the four Chapter 7 trustees in the Alexandria Virginia Bankruptcy court. When you file a bankruptcy case in Alexandria, the computer assigns you to one of the four trustees.

Lawyers are appointed Chapter 7 trustees as a part-time assignment.  He’s a partner in the law firm of Odin Feldman & Pittleman PC, located in Reston. King and is head of that firm’s bankruptcy and creditors rights practice.

When he was younger, he was a NCAA Football official.  During the 2012 NFL referee strike/lockout, he was a replacement referee in one game and umpire in three.

As a Chapter 7 Trustee, he has two sets of bosses.  The US Justice Department, through the Office of the United States Trustee.  And the two Bankruptcy Judges here, Judge Brian F. Kenney and Judge Klinette H. Kindred.

We paid a $338.00 filing fee when we filed your bankruptcy case. Sixty dollars of that went to Trustee King. For each case, including yours, he is paid an additional $60.00 that is indirectly collected from Chapter 11 bankruptcies. (Congress thinks the bankruptcy courts to raise enough in fees to pay for themselves.  No other part of the federal court system does that.)

bankruptcy trustee Donald King

Chapter 7 Bankruptcy Trustee Donald F. King

As your Chapter 7 Trustee, Donald King is in charge of your bankruptcy hearing, which is called the “meeting of creditors.” There are very, very rarely any creditors at the meeting of creditors.  So the Chapter 7 Trustee asks the questions. (Because the trustee is not a judge, he should be called “sir” not “your honor.”)

The bankruptcy court computer schedules fourteen hearings an hour.  That’s just over four minutes per case.

For now, bankruptcy hearings in Alexandria are by telephone. For the Donald King hearings, you should call (877) 953-3011 using the code 1445548.

Donald King is a stickler on paperwork and deadlines.  We are required to send in bank statements for each of your accounts one week before your hearing is scheduled.  If we are a couple days late on that one week requirement, Trustee Donald King will most likely make you, and me, come back two weeks later.

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24

Jan 2021

We’re Zooming Virtual Bankruptcy Consultations

Posted by / in Blog, Virginia Bankruptcy, Weekly Posts /

We’re Zooming Virtual Bankruptcy Consultations

We’ve been Zooming–doing virtual bankruptcy consultations–since April 2020. We’ll continue through 2021.

We stopped in-office consultations with the March 2020 pandemic lock down.  (I first heard of Zoom when my church started using it. We’re a small congregation and can see everybody on screen.) 

Since April 2020 I’ve Zoomed bankruptcy consultations probably five hundred times.

There are three advantages I’ve seen in doing virtual bankruptcy consultations.

First, it saves travel time.  The pandemic is still raging.  But the traffic in Northern Virginia is as bad as it’s ever been. It takes too long to get anywhere.

Second, people are more comfortable.  Especially on the initial contact–what I call the Quick Call–it works out well. I’m at my own computer, where I can access all my info. And you are at home–or wherever–more comfortable and maybe more open than you’d be in an unfamiliar office.

I didn’t expect that. But I often feel we cover more ground and clear up more concerns with a virtual consultation.

Bankruptcy consultation on Zoom

I’m at my own computer, where I can access my info. And you are at home more relaxed than you’d be at a meeting in an unfamiliar office.

Third, safety is most important. Sitting across the desk with the same person for an hour, passing papers back and forth, that’s a risk we don’t need to take.

Alexandria Bankruptcy hearings are telephonic.

Hearings at the bankruptcy courts are virtual, zoom and telephonic–until 60 days after the President declares an end to the emergency.  We’ll keep Zooming at least through the end of 2021.

Documents can be a problem.

After our quick call, I invite you to fill in my Be Happy form.  That’s here on my website.  Then we’ll send you a password and links to upload the required documents. Transferring documents can be the hardest part of the virtual consultation.

You likely already have some of the documents in pdf.  You can take a photo on your phone for the required ID.  Having access to a scanner can be helpful.  Usually we can find a convenient solution.

 

 

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05

Dec 2020

Chapter 7 Trustee Jason Gold

Posted by / in Virginia Bankruptcy, Weekly Posts /

Chapter 7 Trustee Jason Gold

Jason Gold is one of the four Chapter 7 trustees in the Alexandria Virginia Bankruptcy court. When you file a bankruptcy case in Alexandria, the computer assigns you to one of the four trustees.  

Being a Chapter 7 Trustee is a part time job for lawyers. Gold is a partner in the Nelson Mullins law firm, where he heads up the bankruptcy and financial restructuring group.  That means he does complicated business and real estate bankruptcy work.

Chapter 7 Trustee Jason Gold

Chapter 7 Trustee Jason Gold

As a Chapter 7 Trustee, he has two sets of bosses.  The US Justice Department, through the Office of the United States Trustee.  And the two Bankruptcy Judges here, Judge Brian F. Kenney and Judge Klinette H. Kindred.  

Out of the $335.00 filing fee that you paid to the court when we filed your case, $60.00 of that went to Trustee Gold.  Since his regular hourly rate is $580.00 an hour, that $60.00 would be his fee for 6 minutes 12 seconds.  (A recent study suggested $120.00 for Chapter 7 trustees would be better.)

As your Chapter 7 Trustee, Jason Gold is in charge of your bankruptcy hearing, which is called the “meeting of creditors.” There are very, very rarely any creditors at the meeting of creditors.  So the Chapter 7 Trustee asks the questions. (Because the trustee is not a judge, he should be called “sir” not “your honor.”)

NOTE for call-in hearings. During the covid emergency, the bankruptcy hearings are telephonic. The telephone number for the Gold hearings is (877) 973-4749 using the code 9974082

The court’s computer here schedules fourteen hearings an hour.  That’s just over four minutes per case.  

The fast schedule, and the low fees, give the  Chapter 7 trustees an incentive to move through the cases quickly. To keep his cases moving, Gold has a form we fill out before your hearing.  If there’s nothing unusual about your case, he asks his questions straight from his form.  Here it is.

To Keep his Cases Moving, Jason Gold uses this form.

Notice here he asks specifically about the Order to Debtor. Besides telling you to show up for your hearing, the Order to Debtor says that if someone dies and leave you money in the next six months, you have to tell the court.

 

 

 

 

 

UPDATE  The Bankruptcy trustees get their raise.

The Chapter 7 bankruptcy trustees did get their fee increase from $60.00 to $120.00 per case.  Congress passed it in December and the President signed January 12, 2021.  

It was the first raise for Bankruptcy Trustees in nearly 30 years.

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21

Nov 2020

Chapter 13 Trustee Thomas Gorman

Posted by / in Virginia Bankruptcy, Weekly Posts /

Chapter 13 Trustee Thomas Gorman

Thomas Gorman is a lawyer. He’s the Chapter 13 Trustee for the Alexandria VA Division of the US Bankruptcy Court. That’s a full time job. He was appointed in 2009.

He runs your Chapter 13 bankruptcy hearing, called the “meeting of creditors.” Creditors hardly ever attend the meeting of creditors. Gorman asks you the questions.

Here’s the call-in info for your bankruptcy hearing with Trustee Thomas Gorman.  (866) 630-6853 using the code 6786636.

Here’s What to Expect on your Meeting with Chapter 13 Thomas Gorman

More than any other trustee in Alexandria VA, Gorman looks for opportunities for humor.  When these hearings are in person, he does things like make fun of the lawyer’s ties. (Sometimes I wear and ugly tie just so he can make fun of it.)  That’s harder with phone meetings, but if something comes up that he can turn into a joke, he does.  I think that’s a good thing. It helps everyone relax.

One thing does make him mad.  He asks everyone if you have filed bankruptcy before. If the answer is Yes, but you say No, he hits the ceiling. So you do not want to make that mistake. You don’t want the person in front of you to make that mistake, either. He stays crabby even when he’s on to the next person.

He usually does NOT ask about any unusual calculations we make. Some people’s budget will have higher average medical expenses or help for elderly parents.  Typically he will NOT ask about them during your hearing. But then…

Expect an objection in the mail in a couple weeks

Thomas Gorman office 300 N Washington St

When he goes back to his office, at 300 N Washington St, Chapter 13 Trustee Thomas Gorman searches for things he can object to.

When he goes back to his office, he looks over your papers very, very closely, looking for things to object to. When he was first appointed, the judge told Trustee Gorman to bring close questions into court, instead of settling them himself. That’s what he does. He finds something to object to in almost every case.

The friendly, funny Trustee Gorman who did your hearing turns mean in writing a couple weeks later.  He says he doesn’t like this, you didn’t explain that, and your lawyer made a mistake about this other thing.  He asks for your case to be dismissed.

People who read those written objections freak out. But that’s just the way it works in the Alexandria VA bankruptcy court. 

Trustee Gorman thinks it’s his job to squeeze a little more money out of everybody. Working out Gorman’s objections is just next step in the process of getting your case approved.  

Reminder: Here’s the Chapter 13 Mailing Address

There’s a bank in Memphis that handles the payments for most of the bankruptcy courts in the country. (They have different PO Boxes for the different Chapter 13 trustees.)

Here’s the payment address for Thomas Gorman, the Chapter 13 Trustee in Alexandria VA.

 

                                               Thomas Gorman, Trustee
                                               P.O. Box 1553 
                                               Memphis, TN 38101-1553

Be sure to put your case number on your check. Otherwise it could go into  the account of another person with a similar name. And don’t bounce your checks.

 

 

 

 

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06

Sep 2020

Virginia Homestead Exemption too low to protect this Widow.

Posted by / in Virginia Bankruptcy, Weekly Posts /

Told a Widow this Week, She’ll Lose her House because of COVID and Business Debts

I had a heart-breaking call this week with a widow, who lost her small shop in the COVID depression.

Small business

Widow lost her small shop in the COVID depression. The Virginia homestead exemption is too small to protect her house.

She has about $65,000 in business debts and no way to pay them. 

If she tries to file Chapter 7 bankruptcy here in Virginia, the bankruptcy trustee will sell her house to pay those debts. Virginia law protects real estate that belongs to a married couple–but she’s a widow.

Bankruptcy is set up by the Federal Government, but each state sets its own rule on how much real estate equity you can protect. (That’s called your homestead exemption.) Thanks to the new majority in the Virginia General Assembly, you can protect $30,000.00 in equity. (Up from $5,000.00. The Virginia homestead exemption had been the lowest in the country.)

This widow has a little over $100,000.00 in equity, so the Virginia homestead exemption isn’t enough for her. She may need to sell the house to get cash to survive, because she lost her business, and isn’t social security age yet.

I like to say I can help almost everyone who contacts me; but I can’t help her.

PS Virginia Homestead Exemption is still near the bottom

While Virginia increased our homestead exemption from $5,000.00 to $30,000.00, it’s still near the bottom of the fifty states. You can protect 100 acres of Texas, 160 acres of Florida.  You could own the entire District of Columbia. Just this week California increased their homestead exemption from $75,000 to $300,000, in the rural counties. And up to $600,000 in in the urban areas.

Here’s a slightly outdated breakdown of the homestead exemption of all fifty states.

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13

Aug 2020

In Chapter 13, Don’t Bounce Your Checks!

Posted by / in Blog, Virginia Bankruptcy, Weekly Posts /

In Chapter 13, Don’t Bounce Your Checks!

Please don’t bounce your checks, when paying the Chapter 13 Trustee.

At least here in Northern Virginia, after two bounced checks, they require you to start sending money orders.  Money orders are expensive, hard to get during the pandemic, and even harder to trace if they are lost in the mail.

It’s better to be a couple weeks late in your payment than to bounce checks. So please, don’t bounce your payment checks.

bounced check

Do NOT bounce your check to the Chapter 13 Trustee

Reminder: Here’s the Chapter 13 Mailing Address

There’s a bank in Memphis that handles the payments for most of the bankruptcy courts in the country. (They have different PO Boxes for the different Chapter 13 trustees.)

Here’s the payment address for Thomas Gorman, the Chapter 13 Trustee in Alexandria VA.

 

                                               Thomas Gorman, Trustee
                                               P.O. Box 1553 
                                               Memphis, TN 38101-1553

Be sure to put your case number on your check. Otherwise it could go into  the account of another person with a similar name. And don’t bounce your checks.

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10

Apr 2020

Bankruptcy Hearings: Now Telephonic

Posted by / in Virginia Bankruptcy, Weekly Posts /

The Alexandria Bankruptcy Court Trustee Hearings are now by Telephone.

Bankruptcy Trustee hearings are now telephonic. That’s the policy of the Alexandria VA bankruptcy court, effective April 9, 2020. (Richmond and Norfolk, too.)

woman calling into bankruptcy hearing

Instead of a location, your hearing notice will have a phone number to call.

People who file bankruptcy are required by law to “appear” in front of the bankruptcy trustee to answer questions.  (For most people, the questions are, “Did you go over these papers when you signed them, and is everything you put there true?”) Those hearings by law are between four and six weeks after we send your papers to the court.

Starting now, you and I will appear by phone. (Some parts of the bankruptcy court have moved to Zoom, but NOT this. This basic hearing is on a telephone conference call.)  

The trustee does about a dozen hearings per hour; and everybody will call in the same phone number. So you and I will be listening in on the hearings for every other person that hour. (This is the same as it would be if we were all sitting in the hearing room together.)

Mute your phone. When you call in, don’t say “Am I on? Am I on?” You’re on an open mic to the whole room. If you talk when it’s not your turn, you are interrupting the bankruptcy trustee. (You don’t want the trustee to be grumpy when it’s your turn.)

The trustee is supposed to check your ID and social security number. On the phone there’s no way they can match your picture. But having an ID that matches the name on the bankruptcy papers at least proves something. So take a picture, or scan, of your ID and social security card.  [email protected] will send you a link.

We Will Talk Privately Before and After

You and I will have a call-in a Saturday before scheduled time. To go over what’s going to happen. And make sure you are ready to call in.

On the day of, I’ll email you about ten minutes before; to make sure you are there; and cover any last minute jitters.  Afterwards, I send an email wrap-up. And set a time for a call later in the day to handle any follow up questions you have, or action items that came out of the hearing. Those calls will only be between us.

I’ll be looking at my email during the hearing, so if you want to whisper me a question, do it by email.  Use [email protected].  That’s the email I’ll be watching. (It gets to me 45 second quicker than [email protected])

Here are documents you should get 

The Notice of a Bankruptcy case comes to you in the mail about a week after the papers go in.  It tells when when your telephonic “appearance” is. It’s also a notice to the people you owe money to that they are required to leave you alone.  And that anybody who is garnishing you has to stop. 

Your Order to debtor  tells you that you are required to show up for the telephonic appearance.  And that if somebody dies and leave you money in the next six months, the bankruptcy trustee can come and get it. You get this in the mail with the Notice of a Bankruptcy Case.

Here’s stuff you need to look at before your telephonic bankruptcy hearing

The Bankruptcy information sheet is a form I’m required to give you.  Congress really wants you to know you have four choices under the bankruptcy law.  Chapter 12 is only for farmers (and fishermen.) I’ve never done a farmer. Chapter 11 is for people like Donald Trump. I’ve never done Donald Trump. Chapter 13 is a payment plan through the court. Chapter 13 can get you five years to catch up your house or pay off your taxes, You can also be forced into Chapter 13 if you are making too much money to get approved for Chapter 7.

Chapter 7 says ‘sorry I can’t pay these debts.’ For most people that’s what we want.

This Hearing Info is from me. It explains that you need to get us bank statements that cover the date your bankruptcy was filed.  For ALL your bank accounts including the ones “I never use.” It also lists the questions they usually ask.

Finally here’s my 15 minute video

Ignore the parts about where to go and where to park–these are telephonic bankruptcy hearings, remember.  But the other stuff is still right.  PS Actually one other correction. We use Moneysharp.org for the required class.  (The video mentions Hummingbird. They stopped covering Virginia.)

UPDATE Zoom is Coming

Zoom will replace telephone calls for bankruptcy court trustee hearings.  At the end of the pandemic, the government will NOT resume in person bankruptcy trustee hearings.   Instead the system will switch over to using zoom, in place of telephone conference calls.

No word yet how fast this will happen.  

 

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24

Mar 2020

Bankruptcy Trustee Hearings Postponed Due to Virus

Posted by / in Blog, Virginia Bankruptcy, Weekly Posts /

The Bankruptcy Court is Alexandria is Postponing the Trustee Hearings.

Because of the corona virus, bankruptcy hearings in Alexandria VA scheduled up through April 10 are postponed. (I’m guessing the rest of April will get postponed, too.)

Postponed Until When?

There’s no news on when they will be reschedule, or how.

Some courts have adopted call-in hearings. No word on that here.

What do I need to do?

The bankruptcy trustees are still nagging us to get the bank statements in on schedule. So if you haven’t sent us your bank statements or your 2019 tax papers, please send those in to your paralegal.  And I’m guessing they will want you to send in a proof of your drivers license and social security card. So take that picture now, so you have it. (Or scan, if you have a scanner.) 

Don’t forget to take the second class.

And if you haven’t yet, don’t forget to take the second class, at Moneysharp.

 

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