Bankruptcy Judge Orders Trials in San Diego Priest Sex Abuse Cases

California based United States Bankruptcy Judge Louise DeCarl Adler ordered 42 clergy sex abuse cases against the Catholic Diocese of San Diego to go to trial recently. Judge Adler accepted the molested parties plaintiff attorneys’ arguments that trial would likely force the San Diego Diocese to settle and resolve the sex abuse claims made against their priests. In February of 2007, these trials were suspended the day before they were scheduled to begin when the San Diego Diocese filed for Chapter 11 bankruptcy protection.

Thus far, the Diocese has offered to settle with the victims of these heinous crimes for roughly $94 million. This amount is far short of the $200 million claimed by plaintiffs attorneys, who assert that the Diocese can afford more even though they are currently under Chapter 11 Bankruptcy protection. The victim’s attorneys also have stated that any less amount than a $200 million settlement would be insufficient to their clients for the damage and harm they have suffered. The trials have yet to be scheduled, but it is possible the first of the claims could begin within the next two months.

Filing for Chapter 11 bankruptcy relief has become a pattern for our nation’s Catholic Dioceses. In January 2007, the Spokane Catholic Diocese settled molestation claims against its clergy for $48 million to be repaid through its Chapter 11 bankruptcy reorganization plan. The Archdiocese of Portland, OR, Tuscon, AZ, Spokane, WA and Davenport, IA have also filed for Chapter 11 bankruptcy protection in response to the hundreds of sexual abuse lawsuits against their respective priests and clergy.

Washington State Bankruptcy Laws

What Are The Washington Bankruptcy Exemptions?

WashingtonWashington law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with a Washington bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Washington. In general, the major Washington bankruptcy exemptions include:

GENERAL WASHINGTON EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $40,000 of equity in your land, mobile home, and improvements is protected; Up to $15,000 of equity for other personal property used as homestead is protected.
Automobiles
Up to $2,500 of equity in any one motor vehicle can be protected. ($5,000 for more than one vehicle for a married couple).
Other Property
$1,000 in clothing; $1,500 in books; household goods, appliances, furniture, and home and yard equipment, not to exceed $2,700 for an individual or $5,400 for a couple; other personal property not to exceed $2,000 in value, of which not more than $200 in value may consist of cash, and $200 in bank accounts, savings and loan accounts, stocks, bonds, or other securities.In Washington, you have the choice of electing the federal exemption statutes rather than the Washington state exemptions. Consult with a Washington bankruptcy attorney for more details.
View the complete list of Washington bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

WashingtonGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Washington a community property state?

Yes, Washington is a community property state. Because it is a community property state, you are responsible for any debts that your spouse incurred while you were married. You are therefore equally liable for your spouse’s debts even if you did not voluntarily assume liability for them by, for example, cosigning for a loan given to your spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Cantwell (D-WA) — NAY
Murray (D-WA) — NAY

Washington Bankruptcy Court Locations:

904 West Riverside Suite 304
Spokane, WA 99201
(509) 353-2404

402 East Yakima Ave Suite 200
Yakima, WA 98901
(509) 454-5660

700 Stewart St., #6301
Seattle, WA 98101
(206) 370-5200

1717 Pacific Ave.
Tacoma, WA 98402
(253) 882-3900

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Washington Bankruptcy Attorney Locations:

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How States Differ on Bankruptcy

Ready to file bankruptcy? You should be aware that the state you live in might have an affect on certain aspects of your case. Although the various types of bankruptcy are all filed in the federal courts and governed by federal law, there are specific Chapter 7 and Chapter 13 bankruptcy rules that are specific to each state. When you are searching for bankruptcy help you will want to make sure that whatever attorney you choose is familiar with your particular state bankruptcy rules.  So how does bankruptcy work from state to state? The specific state bankruptcy rules are called “exemptions” and they differ from state to state due to a number of variables.

Exemptions are essentially rules that give the value of certain items that the state will allow a person filing bankruptcy to protect. Commonly “exempted” items are equity in real estate and/or vehicles, household items, and personal items. For instance, in Illinois the state exemption for equity in real estate will protect $15K for a single filer, and $30K for a joint bankruptcy. Any equity that exceeds the exemption amount is ultimately unprotected and could be liquidated by the bankruptcy trustee. If you are worried about the equity in your home being a potential problem, do the math yourself by subtracting the current fair market value of your home from the balance you owe on your mortgage. If the difference is a positive number, then make sure to either ask a bankruptcy attorney, or do your own research to look closely at your state’s equity exemptions.

The state exemptions also differ due to the how the state and its residents generate revenue. For example, in Texas there is a state exemption for livestock and crops, but you would not find anything like this in Rhode Island or New York because farming is not a major source of revenue. In Hawaii there is a specific exemption for fishing boats and nets, but in a landlocked state like Arkansas that sort of an exemption is unnecessary. The exemptions were created this way to give the most bankruptcy help possible to the citizens of each state, having a general list of exemptions would not have done this.

Sometimes the state bankruptcy exemption amounts differ because of the cost of living and median income. In Maryland, where the median household income is well above $60K the bankruptcy exemptions protect up to $6K in personal property. This is a vast difference from a poorer state like Alabama where the median income is much lower so the exemption amount for personal property is only $3K. Again, because these state exemptions are so specific, it is absolutely vital that you find a bankruptcy attorney who not only understands the different types of bankruptcy, but also understands how the different exemptions work with each type.

State bankruptcy exemptions are all unique, but so is your bankruptcy case.; in fact, knowing more about your state’s exemptions should give you confidence that there is protection available for your property.

Are You One Injury Away From Bankruptcy?

If you have a serious injury or illness you are likely to rack a up a large amount of debt and possibly face a reduction or loss of income. This is a financial combination that usually ends in filing bankruptcy.

In fact, medical bills and illness is the leading cause contributing to bankruptcy filings according to a study published in Health Affairs . The study, conducted by researchers at Harvard Law School and Harvard Medical School, found that medical problems contributed to about half of all bankruptcies. The author of the study, Dr. David Himmelstein commented: “Unless you’re Bill Gates you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who happened to get sick.”

If you are unfortunate enough to incur major medical bills, you can quickly find yourself in huge amounts of debt in a very short period of time, especially if you are one of the 44.8 million Americans who doesn’t have health insurance.

Things aren’t necessarily much better even if you do have health insurance! The study reported that most people who filed bankruptcy because of medical problems actually had health insurance. Uncovered medical debt averaged $13,460 for individuals with private insurance at the start of thier illness. The combination of high deductibles, co-pays, and exclusions can quickly reduce the amount coverage your insurer will provide. Without the ability to perform the same jobs, many also see a dramatic reduction in income.

This study highlights the fact that bankruptcy is designed for unfortunate individuals who have no realistic way of ever paying off their debt and truly need a fresh start.

#1 Resource for Finding Common Bankruptcy Forms

Filing bankruptcy may be the most emotionally- and financially-charged event in a person’s life.  Perhaps the most challenging aspect of the entire bankruptcy process is overcoming the stigma of filing personal bankruptcy. If bankruptcy truly is the most appropriate solution to overcome your crushing debt, then hold your head high because the U.S. bankruptcy code was penned to help and protect you at this difficult time.  The fundamental purpose of the federal bankruptcy laws is to give “the honest but unfortunate debtor… a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” (Decision of The Supreme Court, 1934)

When it comes to finding common bankruptcy forms, you need to be on the look out for local, national and official (mandatory) forms.  If you intend to seek the guidance of a qualified bankruptcy expert, your bankruptcy lawyer will assemble and organize all of the forms necessary for filing personal bankruptcy.

If you intend to take on filing bankruptcy by yourself, the best resource for finding common bankruptcy forms, explanations and instructions for the bankruptcy process is located on the U.S. Courts website.  All of the essential forms a bankruptcy lawyer utilizes are available for download from this site, including information on how to differentiate between local, national, mandatory and basic procedural forms.

The forms required for filing personal bankruptcy under Chapter 7 or Chapter 13 are listed for your benefit in Procedural Form B 200.  The U.S. Bankruptcy Court’s Form 200 contains required lists, schedules, statements and fees associated with successfully filing personal bankruptcy.

When searching for and finding common bankruptcy forms without the benefit of a bankruptcy lawyer, you must understand that all bankruptcy forms, whether official or procedural, come from one of two groupings under the bankruptcy code: the National Judiciary (National) or state (Local) categories, respectively.  Local forms differ from one state to another, while National forms are standardized and consistent across the United States.  Under the U.S. Bankruptcy Code, it is mandatory to use the official forms when filing for bankruptcy.  Making use of the procedural forms is not required, although it may simplify details your personal bankruptcy case for the court reviewing your petition.  If you have any doubt about which forms are essential to successfully filing bankruptcy, a bankruptcy lawyer can provide timely advice on which forms may help to avoid unwanted delays and in some cases, a judgment of dismissal.

As you begin finding common bankruptcy forms and gain a clearer understanding of bankruptcy procedures, you may recognize that a bankruptcy form is not a single document, but a comprehensive list of individual forms and documents.   Whether you choose to hire a bankruptcy lawyer or proceed with filing bankruptcy personally, you will need to be able to differentiate the required common bankruptcy forms from the procedural ones that can be overlooked with no penalty or delay to your case.

How to Avoid the Bankruptcy Blues

Is the thought of having to file bankruptcy getting you down? Don’t let it! There are benefits to filing bankruptcy that could really help you and/or your family get out of debt quickly, and achieve a financial fresh start. Filing bankruptcy happens for dozens of reasons from filing a Chapter 7 bankruptcy to get rid of recent payday loans to filing a Chapter 13 bankruptcy to halt a foreclosure. Not all the negative news you hear about bankruptcy is true, and I’m here to give you the inside scoop on how to avoid the bankruptcy blues.

1. Don’t believe everything you hear

Sure, bankruptcy gets a bad reputation from time to time, but put simply it is a process that helps thousands of Americans get out of debt and get their finances back on track. You may hear that bankruptcy is a “credit score killer,” but in reality it can help you rebuild your credit score to higher than it has ever been before. Once you file bankruptcy and wipe away unsecured debts like credit cards and medical bills you can rebuild your credit by making timely payments on secured items like your home or vehicle.

2. Do your own research

A sure fire way to avoid getting worried about filing bankruptcy is to go into the process with knowledge. There are hundreds of resources on the internet nowadays that do a great job of explaining bankruptcy in ways that anyone, not just attorneys, can understand. Be sure to look into bankruptcy rules called “exemptions” that are specific to your state and outline the value of certain items that can be protected from liquidation. If you aren’t comfortable researching on the internet try asking friends or family who have filed before or contacting local bankruptcy attorneys for free initial consultations.

3. Remember that your situation is unique

No two bankruptcies are the same, so if you hear negative things about someone else’s bankruptcy remember that your situation is unique and can turn out drastically different. To give yourself some confidence about the process sit down with several bankruptcy attorneys to discuss your specific situation and which Chapter of bankruptcy will help you the most. You will ultimately decide whether or not filing bankruptcy is best for you and/or your family – that’s really all that matters.

Deciding to file bankruptcy is a difficult decision and may not feel like your proudest moment, but if you are facing an overwhelming amount of debt that you cannot see yourself paying off in 1-2 years then it may be a decision you need to consider making. Remember that you aren’t alone and thousands of people file bankruptcy each year to gain a fresh start financially. Don’t let the bankruptcy blues get you down; go ahead and find the best bankruptcy attorney for you, get your paperwork filed with the court, and before you know it your case will be over and you will be debt free!

Do it Yourself Bankruptcy: Good or Bad Idea?

Although filing bankruptcy is a legal process there is a way for individuals and/or married couples to file the paperwork themselves without the aid of an attorney. This is called filing “pro se” and in most cases it is not recommended. However, if you are going to file without an attorney then you should only do so in the case of Chapter 7 bankruptcy and not Chapter 13. This is mainly because Chapter 13 bankruptcy is much more complex and the paperwork involved requires more than just filling in the blank.

If you decide to file Chapter 7 bankruptcy on your own then you should start by gathering your paperwork that you will need to complete the petition (bankruptcy form). This paperwork will consist of your recent pay stubs, bank statements, vehicle registration, mortgage or lease documents and the last few years of tax returns. With this information handy you will be able to fill out the necessary petition paperwork. The Chapter 7 bankruptcy forms you need can be acquired online or from your local federal courthouse.

Once you have correctly completed the forms you will need to complete the 2 courses necessary to file bankruptcy. Registration for those courses can be found online at www.bkcert.com. These courses can be taken online or over the phone and are not graded for correct answers, but rather for completion. The first course known as the Credit Counseling Course must be taken before your paperwork is filed with the courts. The second course called the Debtor Education course must be completed after your case is filed with the courts.

In order to file your Chapter 7 bankruptcy forms with the court you will be required to pay a filing fee of $306. This is typically a non negotiable fee, but if you feel that it will be a hardship for you to pay it then you can request a waiver from the court. Once your paperwork has been filed you will be notified by mail about the time and date of your bankruptcy hearing. The hearing is a requirement for anyone filing bankruptcy and must be attended. During the hearing you will be asked questions by your bankruptcy trustee about your financial situation and statements on your paperwork. The bankruptcy hearing normally lasts anywhere from 10-15 minutes.

Once you have completed your hearing you will wait 60-90 days before receiving your discharge paperwork in the mail stating that your bankruptcy case has been completed and it was successful. You are the only person that can decide whether or not a do it yourself bankruptcy is for you, but if you have any hesitation at all it may be best to consult with an attorney. Don’t let the attorney’s fees intimidate you, in most cases bankruptcy attorneys are willing to work with you on a monthly payment plan. Hiring an attorney could mean the difference between your bankruptcy being successful and clearing away your debts, or being incorrect and dismissed from court.

Bankruptcy Required Credit Counseling Failing

A recent study by the National Consumer Law Center concluded that the credit counseling and financial education courses required by the new bankruptcy laws (BACPA) have failed to provide significant benefits to individuals seeking bankruptcy protection.

New Burdens but Few Benefits: An Examination of the Bankruptcy Counseling and Education Requirements in Massachusetts, based its review on the implementation of the required courses in Massachusetts. The study cites several problems and proposes a number of recommendations to improve the process.

In my opinion, the required courses are largely ineffective do nothing more than impose an unnecessary expense and obstacle to individuals who need to file bankruptcy.

The pre-filing credit counseling course is designed to provide bankruptcy alternatives, but the individuals who are taking these courses often have explored all other avenues of debt relief and don’t have any realistic alternatives. They have to spend up to $50 for someone to tell them they should file bankruptcy, even if they already had consulted with a bankruptcy attorney and determined that was the best course of action. The requirements have inundated various credit counseling agencies, making it harder for them to provide counseling to individuals who actually good benefit from their services.

There is some value to the pre-discharge debtor education course, which educates individuals emerging from a bankruptcy about budgeting and financing with a focus on avoiding financial difficulties in the future. As the report details, the debtor education course has some problems, but I think it could be refined and made into a valuable education resource.

Isn’t one course enough? Why not eliminate the pre-filing requirement? The bankruptcy court could then focus its efforts on creating a meaningful, uniform, and widely accessible pre-discharge debtor education course.

What is a Credit Report?

A credit report typically contains a history of every time you have borrowed money and details any time that you may have fallen behind or defaulted on a loan. It also reveals any collection actions, bankruptcies, or judgments to which you have been a party.

Bankruptcy - What is a Credit Report 1

Your personal information, including your name, social security number and current and previous addresses, as well as information about the number of times you have recently applied for credit also appears on the report.

Three major bureaus, Equifax, Experian, and TransUnion each sell potential lenders the information on your credit report. Lenders then use this information to determine whether they will offer credit to you, and if so, the interest rates and terms they will offer. Lenders rely heavily on the information contained in your credit reports when assessing your credit risk, but also consider a variety of other factors. See Credit Basics

Not all creditors report to the three credit reporting bureaus and your credit report is likely to be an incomplete picture of your financial history. In fact, most credit reports are inherently inaccurate in some respect. If a creditor does not report your loan information to one of the bureaus, it will not appear on your credit report unless it becomes part of the public record. The three bureaus work independently, and it is rare to see credit reports from all three showing exactly the same information. You need to review all three bureaus’ credit reports to get a complete and accurate picture of your credit.

After a bankruptcy, it is the responsibility of your creditors to notify the credit bureaus that their accounts were discharged in a bankruptcy, and the balances owed should appear as zero. However, reporting bankruptcies is not a top priority for many creditors, and you can’t be credited with eliminating your debts in a bankruptcy if the bankruptcy is not reported to the bureaus. Find out how to repair your credit

Bankruptcy Adversary Proceedings

Although I spent years working as a bankruptcy paralegal at one of the nation’s largest firm I rarely saw bankruptcy cases that involved adversary proceedings. Perhaps that is why they were always so interesting to me. Not many people have heard of an adversary hearing so let me first start by explaining what it is. An adversary proceeding is a lawsuit that is brought within a bankruptcy proceeding and based on conflicting claims, usually between the debtor (or the bankruptcy trustee) and a creditor. Adversary proceedings are governed by special procedural rules under Part VII of the Federal Rules of Bankruptcy Procedure.

So what does this mean in layman’s terms? Basically an adversary hearing starts when one of the creditors involved in an individual’s bankruptcy decides that they do not think the debt they hold should be able to be erased in the debtor’s bankruptcy. This could be for various reasons, but in most cases the claims a creditor makes against a defendant in an adversary proceeding are for fraudulent transfers (transfers of the debtor’s assets to a third party, with the intent to prevent creditors from reaching the assets to satisfy their claims).

Adversary proceedings are handled in civil court, which means that in most cases debtors hire a separate attorney or pay their bankruptcy attorney extra fees to handle their adversary proceeding. This is something that you should discuss with your bankruptcy attorney even if you do not thing that an adversary hearing could happen to you. Ultimately you have no control over which of your creditors will choose to pursue an adversary proceeding so you should be prepared either way.

Some common reasons that adversary proceedings are filed are:

1. To recover money or property
2. To determine the validity or extent of lien or other interest in property
3. To object or revoke a discharge
4. To revoke an order of confirmation of a plan (Chapter 13)
5. To determine the dischargeability of a debt

Typically an adversary is first filed by the plaintiff and the court clerk will issue a summons to alert the debtor that the paperwork has been filed. The summons will include a complaint so that the debtor will be aware of exactly what the creditor is filing the adversary case for. The adversary will be considered “open” until the Judge creates a decision, judgment, or the parties agree on a settlement.

Bankruptcy can sometimes be a complex process, but adding an adversary hearing to a bankruptcy can truly make for a confusing experience. Ask any attorney that you may consider hiring how they handle adversary proceedings and how much, if any, they would charge on top of their normal fees. The good news is that in most cases the adversary hearings only include 1 or 2 debts out of the dozens you will likely be filing on. This means that even if the adversary proceeding goes in favor of the creditor, your bankruptcy can still eliminate other debts that are causing you grief.

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