Archives for September 2017

U.S. Supreme Court to Hear Important Bankruptcy Case

Gavel on bankruptcy Law books

The U.S. Supreme Court is scheduled to hear arguments on a case that experts say could have far-reaching implications.

In the case of Czyzewski v. Jevic Holding Corporation, the court will determine how much power bankruptcy courts have to deviate from the priority rules established in the federal bankruptcy laws. Jevic Transportation Company was a New Jersey trucking firm that filed for bankruptcy protection in 2008. Employees of the company, including 1,785 drivers, say the bankruptcy was the direct result of fraud that was perpetrated as part of a leveraged buyout of the company in 2006. The employees sued for back wages under a federal law that mandates a 60 day notice when a company engages in mass layoffs.

The drivers and other creditors also filed a lawsuit alleging fraud, which the defendants settled, but only with the other creditors, leaving the drivers with nothing. As a part of the settlement, the bankruptcy action was dropped.

Under the bankruptcy code, creditors have the following priority:

  • Lenders with secured debt have top priority
  • Lawyers and other professionals who work on the bankruptcy are next
  • So-called junior creditors come next, starting with employees who are owed wages
  • All other creditors have less priority than employees to whom wages are owed

Advocates for the drivers say that, if the Supreme Court allows the settlement to stand, it could lead to situations where more powerful creditors in a bankruptcy collude to exclude other creditors, such as workers. Opponents argue, though, that it has long been the practice of the bankruptcy courts to permit these types of payments during the course of a bankruptcy proceeding and that forcing the courts to follow the priority rules would eliminate the flexibility often needed to resolve a bankruptcy without substantial loss of assets.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

How the Bankruptcy Trustee Investigates Fraud Allegations

The federal bankruptcy laws are designed to give you a second chance. They’re not a sign of failure—some pretty famous and successful people have filed for bankruptcy—some more than once. But the laws are taken seriously. If the bankruptcy trustee has any suspicion that your claim is fraudulent or that you have misrepresented your true financial condition, there are specific steps the trustee can take to determine if there’s any merit to those concerns.

A Bankruptcy Rule 2004 Examination

Often, the first step the trustee will take is to request that a debtor submit to a Rule 2004 examination. Under this provision, a debtor may be required to testify and to produce documents.

In addition, the trustee may solicit testimony and documents from other parties to discern whether there has been fraud. Specifically, the rule allows a trustee to investigate:

  • Any matter that may affect the administration of a bankruptcy estate
  • Any matter related to or affecting a debtor’s right to discharge a debt
  • Any acts, conduct, property, liabilities or financial condition of a debtor

Adversary Proceedings

An adversary proceeding is essentially a lawsuit filed in the bankruptcy court. Typically, the adversary proceeding is brought against a debtor, but the trustee has the authority to bring such an action against anyone.

Temporary Injunctions

If the trustee obtains evidence that assets are being wrongfully depleted or other fraud is being perpetrated, the trustee may ask the court for an injunction. The injunction is an order of the court prohibiting a person from engaging in specific actions, such as the transfer of property.

Criminal Proceedings

Fraud is both a civil and a criminal offense. If there’s evidence that you have engaged in bankruptcy fraud, the U.S. Attorney’s Office can prosecute you for violation of federal law.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Recording calls with debt collectors to document or deter abuse-watch out for these and other traps!

We have all heard the recordings telling us that our call “may be recorded for customer service”… Many of our clients in financial distress are dealing with debt collectors. Although there are well-established rules about what collectors can or cannot do, we hear all the time about abuses, such as threats of criminal action, repeated calls at late or early hours, calls of employers or relatives.

We suspect that these abusers think that most people will put up with the abuse and if they do pursue legal remedies, it will be a “swearing contest” in court. While debt collection is legal and proper, we have recommended that our clients document each call and consider recording such calls, but only if certain procedures are carefully followed.

In many states, including California and Pennsylvania, it is illegal to record a call or other interaction without the consent of all parties. So if the call originates in one of those states, a violation could trigger criminal action, or civil penalties. See Tape-recording laws at a glance

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So here is our recommendation: Start the interaction and your recording with a statement something like “I am recording this call, and will record any further calls from you. If you do not want to be recorded hang up and do not call again. If you continue or call again, I will assume you and your company consent”. If the person says they do not consent then hang up.

If a collector leaves a message on your answering service, save the recording. They knew they were being recorded and cannot complain.

Watch out for debt collection scams. Whenever dealing with a collector, be sure to get the name or extension number of who is calling, the name and address of the collection agency, the name of the creditor, the account number, and a telephone number to call back “in case we get disconnected”. Never give any information over the phone, such as Social Security or credit card numbers, dates of birth where you work etc. They are calling you. If they do not have this information that is their problem. Do not fall for the “we need this for verification” scam. Your goal is to get information from them. If they want further information, tell them to put it in writing and send it to the address they have so you can review it with an attorney.

Finally, most old debts have been sold off to debt buyers. While this is legitimate, sometimes companies or collectors who do not really own the debt may try to defraud the true owner by trying to collect on someone else’s debt. Or phony debt collectors. Be wary.

More importantly, if you are having trouble with debt collectors, get legal advice about your rights and options. And please note, every state and situation is different. This post is intended only to alert you in a general way to the potential issues and problems. It is no substitute for qualified and individual legal advice.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

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