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As readers know, our office has a significant bankruptcy practice (more bankruptcy information is available there). I addition to the issues Mr. Schlissel addressed yesterday, below are some more frequently asked questions and Mr. Schlissel’s answers. For help with Bankruptcy, or any other matter, you can always contact our office.

Q: How does filing for bankruptcy affect others, like creditors, family members, and co-signors

A: It depends on the type of bankruptcy. If it’s a Chapter 7 Bankruptcy, which is very often called a “straight bankruptcy,” the purpose of that is to eliminate your debts completely.  In a Chapter 7 bankruptcy, all of your assets are basically liquidated, except for exempt assets, and distributed to your creditor. Now, if you don’t have any assets, such as a house, chapter 7 is usually the way to go and at the end of the bankruptcy, you have no debts at all.

The problem is that if you file a Chapter 7 bankruptcy and you have a co-debtor, only you are discharged from the debt. At the end of the bankruptcy, the co-debtor still owes the debt. Whatever portion you didn’t pay, or if you didn’t pay anyportion of it, the co-debtor or guarantor owes the balance of he debt. In those situations where there’s husbands and wives or co-debtors, it is very often recommend that they both file for bankruptcy.

In a Chapter 13, you’re entering into a “plan” where you pay a percentage of the amount owed. If it’s a secured creditor which has a lien on your car, or a bank that has a mortgage on your house, very often you’re paying 100% of what is owed to them.  If the debt is owed to credit card companies, some plans have you paying as little as 10-15% of what you owe.

In a Chapter 13, there is a stay, or injunction, preventing any creditor from taking legal action against a co-debtor or guarantor. But that is only a temporary form of relief. It doesn’t release the co-debtor for the amount of the debt that is not paid under the Chapter 13 plan.

The law is complicated, even more so than a lot of other areas of law that consumers have to deal with. Not only that, but not all attorneys do bankruptcy work. In fact, most of them do not do bankruptcy. Very few attorneys get involved in dealing with federal proceedings such as bankruptcy.

Q: How long does the bankruptcy process usually take?

A: Chapter 7, from start to finish, will usually take between three and six months. But a Chapter 13 proceeding can take anywhere from three to five years.

Q: What sorts of things do you usually do to help your clients rebuild their credit after bankruptcy?

A: After filing for bankruptcy, most good attorneys talk with their clients about how they can rebuild their credit. If done correctly, you can rebuild your credit within six months to a year after filing for bankruptcy.

When an individual falls behind on their financial obligations, all sorts of negative credit information is placed on their credit report. Filing for bankruptcy can help most people in the long run as they can develop good credit becxause if you fall behind on your mortgage, credit card payments or car payments, your credit score goes way down.

After you file for bankruptcy and you’re discharged, you don’t have any debt. If you enter into an agreement for a secured credit card or something else of that nature, you can rebuild your credit score. People whose bankruptcies I have handled have credit scores of 750 because they have no debt.  they are now debt-free and the have been able to reestablish credit and show that they’re making payments to their creditors on a timely basis.

Any good bankruptcy attorney should want to have a long term relationship with his clients and should discuss rebuilding the person’s credit.  It’s something we always do for our clients. We feel that it’s part of the process of educating them on how to rebuild their credit after the bankruptcy is complete.

Contact us anytime for bankruptcy help.

Picture courtesy of hrbor.org.

frequently asked questions head question markAs readers know, our office has a significant bankruptcy practice (more bankruptcy information is available there). Below are some frequently asked questions and Mr. Schlissel’s answers. For help with Bankruptcy, or any other matter, you can always contact our office.

Q: Have you seen a lot of new bankruptcy filings due to the economy?

A: Yes, there has been a significant increaes in bankruptcies, but it is important to understand that the bankruptcy law was amended during the Bush administration. It is more complex, time-consuming and more expensive to file for bankruptcy since the law changed several years ago.

The basic changes were that before filing bankruptcy, one must take an online course. After they file, they must take a second  course. The filing requirements are a little more complicated and more detailed as well.  For instance, one must have filed tax returns for the last two years in order to file bankruptcy.  the record keeping and bookkeeping circumstances of hte filings are also more detailed.

In addition, if individuals have a high income or high expenses, there are detailed requirements that sometimes prevent those individeuals from filing a Chapter 7 bankruptcy. In such cases, they’ have to file a Chapter 13 Bankruptcy instead.

The purpose of the amendments to the bankruptcy statute was ostensibly to prevent bankruptcy abuse, but the reality of the situation was that the statute was written by the banking industry for the purpose of preventing or making it more difficult for consumers to file bankruptcy. It was basically an anti-consumer statute. It makes the process more difficult, more time-consuming and more expensive than it used to be.

Q: What does it generally cost to file for bankruptcy?

A: The cost could be anywhere from $1,500 and up.

Q: How would someone pay for a bankruptcy when they don’t have any money? Isn’t it a Catch 22?

A: Very often lawyers will tell their clients to stop making certain payments. For example, if you have a mortgage on a house and you fall behind, the bank will generally accelerate the debt, meaning that the whole remaining balance becomes due and you can’t make your mortgage payment.  At that point in time, the individual is basically saving their mortgage payments because the bank won’t accept their payments.

The same can be true for credit card payments. At some point, it doesn’t make sense to make the payments, so a debtr should just acumulate the money, stop making the payments, use it to pay the administrative expenses of filing the bankruptcy and pay the attorneys’ fees. Also many attorneys will accept payment plans from their clients.

Consumers should know that there is indeed a way out. They should speak with an attorney who will be able to educate them on how to accumulate money even while they’re in debt in order to file the bankruptcy.

Contact us anytime for bankruptcy help.

Picture courtesy of Adam Stradt.

Common Law Marriage Versus Regular Marriage

The majority of states have laws establishing that marriages are only recognized when created with a marriage license and an official marriage ceremony. This is very important because many rights are dependant on the existence of a valid marriage. For instance, only a wife is entitled to an equitable share in the couple’s marital property and only a husband in a valid marriage will  inherit from his wife if she dies without a Last Will and Testament. 

Many situations exist, however, where a couple lives as husband and wife without ever formalizing their relationship with a marriage license and ceremony. This is referred to as a “common law marriage.” The parties will only have marital rights if their common law marriage is valid in one of the few states that still recognize common law marriage. Those states include Pennsylvania, Alabama, Colorado, District of Columbia, Georgia (if created before 1/1/97), Iowa, Kansas, Montana, New Hampshire (for probate purposes), Oklahoma, Rhode Island, South Carolina, Texas, Utah, Ohio, and Florida (if created before 1968). 

New York’s Recognition of Out-of-State Common Law Marriages

Even where a couple lives in a state like New York that has abolished common law marriage, if the marriage is valid in a state that does recognizes common law marriage, then New York would recognize the marriage as well,[1] pursuant to the “full faith and credit” clause of the Constitution. 

For instance, if a common law married couple lived in New York, and merely vacationed briefly in a state like Pennsylvania that does recognize common law marriage, New York State courts may very well recognize that marriage as valid.[2] This is because “Pennsylvania [does] not require that the couple reside within its borders for any specified period of time before their marital status will be recognized.”[3] 

Not only that, but “behavior in New York before and after a New York couple’s visit to a jurisdiction that recognizes common-law marriage, like Pennsylvania, may be considered in determining whether the pair entered into a valid common-law marriage while cohabiting, even briefly, in the other jurisdiction.”[4] Evidence of either actual cohabitation in Pennsylvania (like hotel receipts) or the renewal of the private marriage vows in Pennsylvania would still be required.[5] 

Because New York only recognizes a common law marriage where that marriage is valid under the laws of a state that validates common law marriage, it is important to understand what the elements of a common law marriage are in that state. This will determine what one must prove in order to have the marriage recognized in New York. Using our Pennsylvania law example, there is one primary requirement that must be met to validate a common law marriage. 

Common Law Marriage Under Pennsylvania Law

“A common law marriage can only be created by an exchange of words in the present tense, spoken with the specific purpose that the legal relationship of husband and wife is created by that.”[6] “Present tense” means that there must be evidence that the couple made a verbal commitment to enter a marriage at the time of that verbal statement. This means that making statements affirming or acknowledging a pre-existing marriage status or verbally expressing the intent to get married in the future do not qualify. 

Where one or both of the parties are unable to testify that words were spoken in the present tense to create a marriage status, Pennsylvania law will create a rebuttable presumption that a common law marriage exists when the party alleging the existence of the common law marriage offers “sufficient proof” that the couple was in (1) Constant Cohabitation and a (2) reputation of marriage “which is not partial or divided but is broad and general”[7] 

Interestingly, in September of 2003, the Commonwealth Court of Pennsylvania in its PNC Bank decision purported to abolish all common law marriage going forward, after the date of that case.[8] However, other Pennsylvania courts may not be bound by its decisions,[9] and the Supreme Court of Pennsylvania declined to abolish common law marriage, deferring that decision to the legislature.[10] 

But even assuming that the PNC Bank decision were binding, many common law marriages will still survive. If the facts that gave rise to the common law marriage took place before September 13, 2003, when PNC Bank was decided, the marriage would still be valid.[11] This means that if the couple made their private statements creating the marriage, cohabited in Pennsylvania, and had the general reputation of being married prior to Sept. 13, 2003, then their common law marriage would still be recognized under Pennsylvania law, even if PNC Bank were held to be binding precedent. 

Conclusion

If a couple has (1) made statements to each other to effect their marriage, (2) has lived together continuously (and at least temporarily on vacation in a state like Pennsylvania that recognizes common law marriage), and (3) has held themselves out and has had the reputation generally of being husband and wife, then New York Courts may indeed recognize their marriage as valid for the purpose of equitable distribution in divorce, a spousal share in an estate, and many other purposes. 

As always, these legal issues are complicated, and it is worth noting that our office has extensive experience in matrimonialand estate law. If you need legal representation in general, or if you find yourself in a situation where you may have legal rights under the theory of common law marriage in the divorce or estate contexts, please do not hesitate to contact our office.


[1] See, e.g., In re Steiner, 786 N.Y.S. 2d 83, 84 (N.Y. App. Div. 2nd Dept. 2004); Sears v. Sears, 700 N.Y.S. 2d 626, 627 (N.Y. App. Div. 4th Dept. 1999); Lancaster v. 46 NYL Partners, 651 N.Y.S. 2d 440, 443 (N.Y. App. Div. 2nd Dept. 1996); Tornese v. Tornese, 649 N.Y.S. 2d 177, 178 (N.Y. App. Div. 2nd Dept. 1996).

[2]Tornese at 178.

[3]Carpenter v. Carpenter, 617 N.Y.S. 2d 903, 904  (N.Y. App. Div. 2nd Dept. 1996); In re Landolfi, 727 N.Y.S. 2d 470, 472 (N.Y. App. Div. 2nd Dept. 2001).

[4] Carpenter at id.; In re Landolfi at id.

[5]In re Landolfi at id.

[6]Staudenmayer v. Staudenmayer, 714 A.2d 1016, 1020 (1998).

[7] Id.

[8]PNC Bank Corp. v. Workers’ Compensation Appeal Board, 831 A.2d 1269, 1272 (Commw. Ct. Penn. 2003).

[9]Stackhouse v. Stackhouse, 862 A.2d 102, 104-05 (Pa. Super. Ct. 2004).

[10]Staudenmayer at 1020 (1998).

[11] Id. at 108.

Picture courtesy of ehow.com.

funeral-home

Robert Harper, of the NY Trusts & Estates Litigation blog, recently wrote about the law as it relates to the right to decide how human remains are disposed of in New York. The article quoted NY Public Health Law § 4201(2)(a), which identifies an order of priority of who has the right to direct how a deceased person’s remains are disposed of.  An individual may execute a document specifying whom she wishes to decide issues related to how to dispose of her body, but if no such written instrument exists, then the individuals listed in § 4201 determine the order of priority.

Other important issues exist regarding how a loved one’s body is treated after death as well regarding whether a body is autopsied or cremated.

Cremation

With regard to the decision whether bury or cremate an individual’s body, there is an order of priority for how that decision is made, as noted above, and there is an exception to the rule.

1.      If the decedent left a document specifying how her remains should be disposed of (i.e. burial versus cremation), then that document controls. NY Public Health Law § 4201(2)(a)

2.      If no such document existed, but the decedent’s actions or expressed wishes dictated how her body should be handled after death, then those wishes control, even over the objections of family members. Application of Hillard, 91 N.Y.S. 2d 547, 549 (N.Y. Sup. Ct. 1944).

3.      If the decedent had no discernable wishes as to how her body should be disposed of, then the statutory order of priority determines which relatives decide how the decedent’s body is disposed of. NY Public Health Law § 4201(2)(a)

However, there is an exception to the order of priority listed in the § 4201. For instance, a surviving spouse and children are high in the order of priority to decide how a body is disposed of us a surviving spouse, but where there is evidence that the decedent was estranged from his or her spouse or children, the courts look beyond those individuals to decide how a decedent’s body should be disposed of. In re Solomon, 766 N.Y.S. 2d 294, 295 (N.Y. Sup. Ct. 2003).

In one relatively recent Nassau County Supreme Court case, a deceased person’s estranged wife and daughter were planning to have him cremated, and his body was already in the custody of a crematorium. Based on testimony that the decedent led a somewhat observant Jewish life, and based on the expert testimony of Rabbi Moshe Weinberger that orthodox Jews consider cremation unacceptable, the court held that evidence of the decedent’s desire to have a traditional Jewish burial overcame the wishes of the surviving spouse and daughter, the provisions of § 4201 notwithstanding. Id.

The Performance of an Autopsy

NY Public Health Law § 4210 gives the medical examiner the power or right to perform an autopsies on, “… the bodies of persons dying from… casualty, … suddenly when in apparent health, … or in any suspicious or unusual manner.” But § 4210-c(1) states that absent some compelling public policy need, “no dissection or autopsy shall be performed over the objection of a surviving relative … that such procedure is contrary to the religious belief of the decedent, or, if there is reason to believe that a dissection or autopsy is contrary to the decedent’s religious beliefs.”

Absent one of the circumstances specified in § 4210, the medical examiner may not do an autopsy on a body without notice to the family of the deceased. Dick v. City of New York, 2002 WL 31844745, *3 (N.Y. Sup. Ct. Oct. 30, 2002). However, “the burden is upon a decedent’s next of kin to convey a religious objection to the medical examiner’s office” were the death occurred in some unusual manner, or upon notice, absent some unusual or suspicious circumstances surrounding the death.” Id.

If an autopsy is performed despite notice that there are religious objections, the hospital may be held liable for civil damages. In Rotholtz v. City of New York, 582 N.Y.S. 2d 366, 367 (N.Y. Sup. Ct. 1992), the decedent’s brother informed a doctor at Lenox Hill Hospital that an autopsy should not be performed on his sister, but the hospital failed to convey this message when it turned the body over to the medical examiner, who performed an autopsy. The court there held that the hospital was responsible because when it failed to inform the medical examiner of the family’s religious objection to the performance of an autopsy, it thereby “caused or procured” the unauthorized autopsy. Id. at 670.

The Appellate Division reinstated a jury’s decision to award a surviving family $75,000 compensatory damages and $1,350,000 in punitive damages when an employee at Riverside Chapels caused the medical examiner’s office to perform an autopsy even though the family had told Riverside employees that they were orthodox Jews and that no autopsy should be performed. Liberman v. Riverside Memorial Chapel, Inc., 650 N.Y.S. 2d 194, 197-99 (N.Y. App. Div. 1996).

Conclusion

The safest way to ensure that one’s wishes regarding how his or her remains are disposed of after death will be honored is by executing a Will which makes those wishes clear. The named Executor will be able to ensure that the appropriate people know of your wishes. And as for family members, even though it is a very difficult time after the loss of a loved one, miscommunications can be avoided more easily if everyone they speak to at the hospital, the nursing home, and the medical examiner’s office (if they are involved) are made aware of your wishes with regard to how the deceased’s body should be treated.

And of course, if you need assistance with any estate planning documents like Living Wills, Powers of Attorney, Wills, or Trusts, our office has extensive experience with these documents. Feel free to contact our office at any time for assistance.

Picture courtesy of the Hoven Funeral Home. 

Update 8/26/09: Indiana Creates Funeral Planning Directive

clock alarm tickingIf you have already completed your Chapter 13 payment plan or Chapter 7 bankruptcy proceeding, and have received a discharge, you will hopefully be in good shape to begin a new financially unencumbered life. You will hopefully have taken our advice and attained financial health.  But life does not always cooperate with our plans and so you may need to know whether you can refile for bankruptcy protection again.

In the event that this does become necessary, it is worth noting that a second (or third or fouth) Bankruptcy filing is possible and may be advisible, based on circumstances. However, time limits do apply. 

The waiting period after a Chapter 7 Bankrutpcy discharge is 8 years for another Chapter 7 discharge, but only 4 years for a Chapter 13 discharge. However, if you received a Chapter 13 discharge, the waiting period is 2 years for another Chapter 13 discharge and 6 years for a Chapter 7 discharge.

As always, it is worth noting that our firm has a significant bankruptcy practice and can assist anyone with information and help with filing for bankruptcy. Just contact the office.

Picture courtesy of markettalk.

spotlightTwo articles that originally appeared on this blog were recently featured at GetLegal.com.

One article which originally appeared here was published at GetLegal at the very end of last month: COMMENTARY:  Fetal Homicide Laws & Legal Abortion – The Common Denominator

The other article which originally appeared here was published this past Monday: Driving While Intoxicated (DWI) Without Actually Driving

Picture courtesy of Daron Sutton.

beth din rabbinic tribunal artibrationAs reported here, and as Mitchell Rubenstein predicted, the Appellate Division of the Supreme Court will consider a teacher’s appeal of a Kings County Supreme Court’s nullification of a rabbinical arbitration panel’s decision in an employment case.

Following a dispute between the Hebrew Academy of Five Towns and Rockaway and one of its teachers, Nachum Brisman, regarding the school’s decision to terminate his employment, both sides agreed to have their dispute arbitrated by a well-known rabbinic panel, the Beth Din of America. The rabbinic panel’s arbitration decision favored the teacher in the dispute and when the teacher brought the decision to the Kings County Supreme Court to enforce the decision, it instead vacated it. Judge Balter’s decision can be read here.

Now, Brisman has appealed the lower court’s vacature of the arbitration before the Appellate Division. Three major orthodox Jewish organizations, the Orthodox Union, Agudath Israel of America, and Torah U’Mesorah, joined together last week to file a “Friend of the Court” brief, arguing that the Appellate Division should reverse Judge Balter’s vacature of the arbitration panel’s decision.

You can read the amicus brief here.

The organizations’ amicus brief emphasized that their support of Brisman’s appeal “should not be construed as advocacy on behalf of either party with respect to their underlying claims.” Rather, they clarified in the brief that they are advocating for the reversal of the Supreme Court’s vacature of the rabbinic arbitration agreement in order to prevent the weakening of the rabbinic arbitration system in general.

Indeed, it is difficult to fathom how the court could nullify an arbitration decision that both parties had agreed in advance to abide by. Such a decision seems to encourage the losing party in any kind of arbitration decision to appeal any decision if he knew that the state courts would vacate any decision that the losing party was unhappy with, as long as he could convince the court that the arbitration panel’s decision is “irrational.”

We will see if the Appellate Division agrees. Update 2/19/10: It does!

Picture courtesy of vosizneias.com

bankruptcyDavid Ingram, of the LegalTimes blog, reported on some startling statistics about sharply increased bankruptcy filings this year over last year.

While overall bankruptcy filings are up 35%, the numbers for Chapter 7 liquidation filings by individuals and Chapter 13 filings by companies are much starker. Chapter 7 filings are up 47% and Chapter 11 filings by companies are almost double what they were last year, at 91% according to the U.S. Bankruptcy Courts.

While this information may certainly take away some of the stigma that individuals who are in need of bankruptcy protection may feel, it represents a startling indication of the financial difficulties many people are facing. 

Our firm has a significant bankruptcy practice and can assist anyone with information and help with filing for bankruptcy. Just contact the office.

For more information on Bankruptcy, you can read any of the following recent articles on the topic:

Who Should File for Bankruptcy?

Which Type of Bankruptcy Should I File?

Chapter 7 Bankruptcy

Chapter 13 Bankruptcy

How Do I Rebuild My Credit After Bankruptcy?

Can A Creditor Pursue a Debtor’s Co-Signor After Discharge?

[youtube=http://www.youtube.com/watch?v=mvBcnDnIH7g]

In addition to his wide-ranging experience in most major areas of law in general, and his extensive experience in Matrimonial and Family law  in particular, Mr. Schlissel has a particular expertise representing fathers in child custody matters.

Feel free to browse his Father’s Rights website for more information about that, or contact the office directly.

co-signorMany people have loans or debts where a friend or relative has guaranteed or co-signed a loan. In these situations, individuals considering filing for Bankruptcy are often concerned whether any discharge of indebtedness would absolve co-signors of their responsibility for the debt.

Generally, Bankruptcy discharge does not absolve a co-signor or guarantor of the responsibility to pay a creditor for any deficiency owed by the party who filed for Bankruptcy.[1]  Creditors can still go after a co-signor for any unpaid balance after a Chapter 7 Bankruptcy discharge. Similarly, under a Chapter 13 repayment plan, at the conclusion of the payment plan, a creditor can still go after a co-signor for the difference between the amount paid under the payment plan and the original contract amount of the debt (the “deficiency”).[2] 

A Chapter 13 Bankruptcy filing stays actions by creditor against co-signors during the pendency of the Bankruptcy case,[3] but this is not the case in a Chapter 7 Bankruptcy. 

The Ninth Circuit Court of Appeals explained that “[g]enerally, discharge of the principal debtor in bankruptcy will not discharge the liabilities of co-debtors or guarantors.”[4] Explaining that “[t]he bankruptcy court ‘has no power to discharge the liabilities of a bankrupt’s guarantor,” the court clarified that “‘[t]he bankruptcy court can affect only the relationships of debtors and creditor. It has no power to affect the obligations of guarantors.’”[5] 

The New York Appellate Division further clarified that “a defendant’s liability as a guarantor generally is not impaired by the discharge of a principal’s obligation in a bankruptcy proceeding and, thus, plaintiff may seek recovery from defendant notwithstanding [the debtor’s] bankruptcy petition.”[6] 

The exact language of the agreement in which the co-signor or guarantor took on the obligation is important. If the co-signor only assumed the obligation to pay the debtor’s indebtedness where the debtor himself was still obligated to pay the loan, then the debtor’s discharge would probably absolve the co-signor of her obligation to guarantee the loan as well, pursuant to the terms of that original guarantee. But where the guarantee never says that the co-signor’s obligation is contingent on the primary party’s obligation, or where it states explicitly that the co-signor is obligated regardless of any discharge of the primary party’s indebtedness, the creditor can still go after the co-signor for any amount still due.[7] 

Based on these rules, it is imperative that anyone who would like to help out a business associate, family member, or friend by co-signing a loan or guarantee should carefully consider whether they are willing and able to pay that person’s debt off if the person who asks for help becomes unable to fulfill his financial obligations or files for Bankruptcy.

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[1] 11 U.S.C. § 524(e).

[2] Id.

[3] 11 U.S.C. § 1301(a), (c).

[4] Underhill v. Royal, 769 F.2d 1426, 1432 (9th Cir. 1985), rev’d on other grounds 494 U.S. 56, 64 (1990).

[5] Underhill, at id. (citations omitted).

[6] Culver v. Parsons, 777 N.Y.S.2d 536, 538 (N.Y. App. Div. 2004).

[7] First National Bank of Scotia v. Proem-a-Net Economics Corp., 652 N.Y.S.2d 405, 407 (N.Y. App. Div. 1997).