Boston Bankruptcy Lawyer Blog

In a bizarre personal bankruptcy case back in 2001 in Louisiana, with ramifications for us here today, a lawyer and a judge conspired to commit fraud. This got the lawyer suspended and the federal judge convicted of a crime and removed from the bench! Apparently when federal judge Gabriel Thomas Porteous sought counsel from bankruptcy attorney Claude Lightfoot for debt relief under the bankruptcy act, Attorney Lightfoot concocted a plan to file the personal bankruptcy under the name "Ortous, G.T." and then, the next day, amended the bankruptcy petition to "Gabriel Thomas Porteous," in a rouse to avoid the judge's name from going into the local newspaper. When asked, Attorney Lightfoot misled the Trustee in Bankruptcy, saying that the reason for the amendment was "typos." Ironically, the newspaper figured it out a few months later and exposed the scheme.

After a hearing by the Louisiana Attorney Disciplinary Board, Attorney Claude Lightfoot was suspended from the practice of law for six months, with all but 30 days deferred. Attorney Lightfoot was found responsible for counseling "a client to engage in...conduct that a lawyer knows is fraudulent."

The House of Representatives impeached Judge Porteous, a/k/a Ortous, and the United States Senate removed him from his position as a federal judge; it was only the eighth federal judge removal. It was the first impeachment trial since the acquittal of Bill Clinton. Apparently he was also charged with taking money from attorneys and bail bondsman who had cases before him. His attorney stated that he had the derivation of the problem was a gambling addiction.

Medical bankruptcies in Massachusetts are up despite the new Massachusetts health care law. In a study published in the American Journal of Medicine, three Harvard affiliated researchers conclude that the new Massachusetts Health Care law is resulting in more, not fewer, bankruptcies. The numbers, according to the researchers, are that as a percentage of all bankruptcies, "Massachusetts bankruptcies with a medical cause went from 59.3 percent to 52.9 percent," however, the Harvard folks say this is a "non-significant decrease of 6.4 percentage points," and then go on to point out that the total bankruptcies in Massachusetts (as everywhere since the Great Recession) is up, so, therefore, medical bankruptcies are up, too. The conclusions seem to be that folks are underinsured.

While we have no resources to undertake a similar study, nor are we able to review the elaborate statistical analysis undertaken by the doctors and professors at our Ivy neighbor (all of whom, by the way now seem to be stationed in New York, it strikes us as too little too soon with too much of a political agenda. Further, since only a nominal percentage of our Chapter 7 personal bankruptcies are "medical bankruptcies," antidotal evidence says that these researchers could be simply using minimal facts to promote an agenda. Is that being too critical? Perhaps, but perhaps not since one of the co-authors is promoting a Canadian style single payer model, where there are fewer medical bankruptcies: "American families need the kind of comprehensive coverage that protects people in nations with single-payer national health insurance, such as Canada, " said Dr. Steffie Woolhandler, currently a professor of public health at City University of New York and formally a professor at Harvard.

When you file a Chapter 7 personal bankruptcy you can protect your tax refunds from the Bankruptcy Trustee! Many of our Massachusetts bankruptcy clients need to be counseled to fully declare the tax refund on the Petition and Schedules as the Bankruptcy Trustee is absolutely entitled to know about it. The next step is to claim the refund as exempt. Of course, the exemption is limited, but with proper planning, our clients can generally keep the refund.

What happened if you need to divide the refund with your ex-spouse, who is not filing bankruptcy, but who you filed taxes with? The Massachusetts Supreme Judicial Court, HUNDLEY V. MARSH SJC #10729 under a certification request from the federal First Circuit Court, HUNDLEY V. MARSH 603 F.3D 95 recently ruled that the refund should allocated based on what each debtor would have received it s/he had filed separately rather than jointly. This analysis was undertaken by our colleague and esteemed bankruptcy attorney, Richard Olson, of Perkins Olson in Portland, Maine.

As we reported late last year, there is a new Massachusetts Homestead law which goes into effect this week. The new law has the same citation as the old Homestead statute, Massachusetts General Laws, Chapter 188, and has a few key provisions that protect Massachusetts homeowners. The good news from a Massachusetts bankruptcy lawyer is that everyone will be protected with up to $125,000 of equity. Anyone who does not file a homestead with the Registry of Deeds will be protected up to that amount. Thus, it will apply to pre-existing debts, but not to pre-existing liens on the property.

The law also provides up to $500,000 in equity protection for those that file a Homestead Act declaration with the Registry of Deeds. This can be doubled for a married couple that files a declaration, and qualifies as elderly or disabled. When there are multiple owners, they can each declare a homestead of up to $500,000, so long as they qualify as elderly or disabled.

Another considerable change in the law is regarding people who put their homes into a trust. To effectuate a homestead with real estate in a trust, there are numerous requirements including that the trustee file the homestead, that the names of the homestead protection beneficiaries be listed, and that the property is their principal residence.

Continue reading "New Massachusetts Homestead Act Effective March 16, 2011" »

With two million homes in foreclosure nationally, and another 2.2 million homes defined as at risk of foreclosure, a proposal being discussed in Washington this week seeks to help homeowners with new rules and regulations. Apparently Elizabeth Warren, the head of the newly established Federal Consumer Financial Bureau, is taking the lead on this program, which is backed by the Department of Justice, the Federal Trade Commission and Housing and Urban development. The perspective of a Massachusetts bankruptcy lawyer might be that this could help many families who want to save their home and could, with a modified mortgage. Supporters of the proposals say they would be fair and they would stabilize the housing market and countless neighborhoods.

The proposals include preventing foreclosure while a homeowner is actively trying to modify his or her loan. A frequent problem we hear all the time is that the homeowner is sending and faxing documents, sometimes for months, when the bank simply starts a foreclosure process. The second aspect of the new rules is that a trial modification program would be set up; if the homeowner makes three payments under that program, it would go into effect at the new rate. Third, any denials of a modification would go to an independent reviewing panel.

Continue reading "Massachusetts Foreclosure Procedure Could Change" »