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Tuesday, May 28, 2013

Feds: Bankruptcy scam freed impounded vehicles

I saw the US Trustee's office discussing this matter on a case before Judge Cassling last week. The case was dismissed, namely because the debtor didn't file most of the required documents. It's a shame that these individuals were taking advantage of debtors, when a qualified attorney could get them much better results....get their cars back, and get rid of the fines, often for as little as pennies on the dollar with a Chapter 13 bankrutpcy!!  Contact me for a free consultation on how to do things the right way!  312-346-7400 Leeders & Associates

Feds: Bankruptcy scam freed impounded vehicles

Wednesday, May 22, 2013

T is for Terrance Leeders - head bankrutpcy attorney and owner of Leeders & Associates

Hi All.  I was recently interviewed for an article by BankruptcyHome.com.  I have enclosed a link to their article.   If anyone as has any further questions, feel free to contact me at Leederslaw.com, or call me at 312-346-7400.   I'm happy to help any consumer or small business debtors file for bankruptcy relief, and as always, we offer free consultations for Bankruptcy.

http://www.bankruptcyhome.com/attorney-interviews/terrance-leeders

Friday, May 17, 2013

S is for Setoff of bank accounts and bankruptcy


I see this issue frequently.
Debtor has a Bank Account at Bank A.   Debtor also has a debt owed to Bank A, say for a credit card, personal loan, or overdraft.
Any money in the bank account on the date of filing is vulnerable, as Bank A has the right of setoff against that account, to pay off the debt to Bank A. 
They say "Possession is nine tenths of the law."  Bank A has possession of the money in the account, a security interest if you will, and can take those funds to pay the debt.   
Now, it may be possible to force the creditor to return the funds to the bankruptcy estate if the amount in the account was exempted and it violated one of the preference transfer rules.   But there is case law that lets them hold those funds too.  
This is most frequently done by credit unions, I see it often.
The solution?   Open up a bank account at Bank B where the debtor owes no money.   Bank A can only get money in an account with Bank A, they can't cross over into Bank B to get those funds after the filing of Bankruptcy.

Here is the Bankruptcy code section that addresses this situation.
http://www.law.cornell.edu/uscode/text/11/553


11 USC 553 Setoff
(a) Except as otherwise provided in this section and in sections 362 and 363 of this title, this title does not affect any right of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case under this title against a claim of such creditor against the debtor that arose before the commencement of the case, except to the extent that—
(1) the claim of such creditor against the debtor is disallowed;
(2) such claim was transferred, by an entity other than the debtor, to such creditor—
(A) after the commencement of the case; or
(B)
(i) after 90 days before the date of the filing of the petition; and
(ii) while the debtor was insolvent (except for a setoff of a kind described in section362 (b)(6)362 (b)(7)362 (b)(17)362 (b)(27)555556559560, or 561); or
(3) the debt owed to the debtor by such creditor was incurred by such creditor—
(A) after 90 days before the date of the filing of the petition;
(B) while the debtor was insolvent; and
(C) for the purpose of obtaining a right of setoff against the debtor (except for a setoff of a kind described in section 362 (b)(6)362 (b)(7)362 (b)(17)362 (b)(27),555556559560, or 561).
(b)
(1) Except with respect to a setoff of a kind described in section 362 (b)(6)362 (b)(7),362 (b)(17)362 (b)(27)555556559560561365 (h)546 (h), or 365 (i)(2) of this title, if a creditor offsets a mutual debt owing to the debtor against a claim against the debtor on or within 90 days before the date of the filing of the petition, then the trustee may recover from such creditor the amount so offset to the extent that any insufficiency on the date of such setoff is less than the insufficiency on the later of—
(A) 90 days before the date of the filing of the petition; and
(B) the first date during the 90 days immediately preceding the date of the filing of the petition on which there is an insufficiency.
(2) In this subsection, “insufficiency” means amount, if any, by which a claim against the debtor exceeds a mutual debt owing to the debtor by the holder of such claim.
(c) For the purposes of this section, the debtor is presumed to have been insolvent on and during the 90 days immediately preceding the date of the filing of the petition.


Contact me today if you have this situation and are looking for an attorney to represent you in bankruptcy and want to protect the assets and money you have in the bank.   Call me at 312-346-7400 or visit my website at www.leederslaw.com. 
Happy Friday.
Terry Leeders

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