Brenda Combs Tag Archives — Page 2 of 2 — Securities Fraud Lawyers Blog

A brief history of bankruptcy in the United States.

Published on: December 21, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Contrary to pop culture belief, bankruptcy existed long before the game show Wheel of Fortune. Remember when contestants would lose their prize money if they spun the wheel and randomly landed on the ominous black wedge, “BANKRUPTCY”? Bankruptcy also existed way before celebrities like M.C. Hammer, Billy Joel, Burt Reynolds, and Mike Tyson each filed for bankruptcy protection. P.T. Barnum, a famous American showman and businessman, filed bankruptcy in 1877. K-Mart filed bankruptcy in 2002.

Bankruptcy in the United States dates back to the United States Constitution itself. Article I, Section 8 of the U.S. Constitution gives Congress the power to enact uniform laws on the subject of bankruptcies. Although Congress had this power beginning in 1787, Congress did not pass a bankruptcy law until about 13 years later in 1800 and, even then, the law passed was short lived and was limited to involuntary bankruptcy proceedings brought against merchant and traders. In 1803, Congress repealed the Bankruptcy Act of 1800, citing excessive costs and corruption.

"Debts canceled by bankruptcy still mar consumer credit scores," but consumers can fight back.

Published on: November 29, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

On November 12, 2014, the New York Times published an article entitled “Debts canceled by bankruptcy still mar consumer credit scores.” In the article, the author, Jessica Silver-Greenberg, explains that “Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court.” This article was also featured in the Tampa Bay Times on Friday, November 21, 2014.

Lawyers with the United States Trustee Program, a group charged with overseeing federal bankruptcy cases, are investigating certain banks, such as JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial (f/k/a GE Capital Retail Finance), because these banks are suspected of violating bankruptcy law and ignoring the discharge injunction. Section 524 of the bankruptcy code provides a “discharge injunction” where creditors are no longer allowed to pursue debts canceled or discharged in the bankruptcy case. The banks allegedly ignore the discharge injunction when they know (or should have known) the debt was canceled but still seek to collect the debt, whether by continuing to report it on the person’s credit report, sending letters, or making telephone calls about the canceled debt. Often times, these are not clerical errors, but debt-collection tactics. In some cases, the banks purportedly refuse to correct the “mistakes,” insisting that the canceled debt be paid. An example cited in the article was The Vogts, a couple in Denver, who paid JPMorgan $2,582 on a debt that was discharged in bankruptcy because they needed a clean credit report to get a mortgage.

U.S. Supreme Court to review Eleventh Circuit ruling where Chapter 7 debtors are allowed to strip off second mortgages

Published on: November 24, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

On November 17, 2014, the United States Supreme Court granted a petition for writ of certiorari in two cases: Bank of America, N.A. v. Caulkett (In re Caulkett), 566 Fed. Appx. 879, 2014 U.S. App. LEXIS 9407 (11th Cir. Fla., 2014) and Bank of Am., NA v. Toledo-Cardona (In re Toledo-Cardona), 556 Fed. Appx. 911, 2014 U.S. App. LEXIS 9035 (11th Cir. Fla., 2014). In both cases, the United States Court of Appeals for the Eleventh Circuit ruled that a Chapter 7 debtor could strip off a second mortgage when the home’s value fell below the amount owed on the first mortgage.

What that ruling means is, if you file bankruptcy and the second mortgage on your home is completely “underwater,” like many second mortgages after the recent housing bust, then you could keep your house subject to the first mortgage and strip off the second mortgage completely leaving the debt secured by that second mortgage to be discharged in the bankruptcy. In the Toledo-Cardona case, the debtor kept his home and stripped off the second mortgage that had a value of over $100,000.00. That is why Bank of America and other lenders are not pleased with the decision.

In Florida, can a creditor garnish my wages?

Published on: October 25, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

So you owe money to a creditor, like a credit card company, and the creditor sues you. Eventually, a court awards your creditor a money judgment, say for $10,000. Can the creditor now garnish your wages in an effort to satisfy that judgment? Put another way, can the creditor get a court order directing your employer to pay over part of your paycheck whenever you get paid?

The short answer is “yes,” but there are important limitations and exceptions to wage garnishment. See § 77.0305, Fla. Stat., entitled “Continuing Writ of Garnishment Against Salary or Wages.” The general rule is that a creditor can continue to garnish your wages under a continuing writ of garnishment until the judgment, or in this example, the $10,000, is paid in full.

I haven’t been able to pay my bills. Could I lose my car?

Published on: October 19, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

If you miss car payments, the company that loaned you the money to purchase the car can likely take back your car in what is called “repossession.” The right to take back your car for nonpayment usually comes from the terms of the signed loan paperwork when you buy your car. Usually, a few missed payments and the loan company will start calling you and sending you warning letters. Warning calls and letters will ultimately lead to repossession. Once the loan company repossesses, it can then sell your car at an auction and apply that money to pay down the amount that you still owe. This can also happen with car title loans (e.g., where you receive a loan and agree to give the loan company your car title as security and part of your promise to pay back the loan. This is called a security interest). In situations where the car is part of your promise to pay back a loan, the answer is “yes”: you could lose your car if you don’t make your car payments. Bankruptcy can immediately stop this process.

If you haven’t paid other bills, like a credit card or a payday loan, you could still lose your car, but the situation is a bit different and the company must take a few extra steps. For example, the company must first sue you to get a judgment in court. With a judgment in hand, the company can then apply to the court to have the sheriff take your car and sell it. This process is similar to repossession and is called a writ of attachment. The company would then use the money from the sale of your car as payment down on the amount that you owe. Bankruptcy can immediately stop this process too.

Is a bad faith action still viable when an insured defendant files bankruptcy?

Published on: October 15, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Johnny Smith accidentally runs a red traffic light and slams his pick-up truck into a motorcyclist, Drew Lenders. Sadly, Drew was not wearing a helmet and suffered significant head trauma and memory loss. Drew’s hospital bill alone is $50,000 He also missed 3 months from work and, therefore, lost about $12,000 in wages. Drew hires an injury attorney and formally demands the $50,000 policy limits from Johnny’s auto insurance, ABC Insurance Co., within 30 days. But believing that the motorcyclist should have been wearing a helmet, ABC Insurance allows Drew’s demand to expire and, instead, hires a biomechanical engineer to find out if Drew’s injuries would have been prevented had he worn a helmet. Meanwhile, Johnny files bankruptcy.

One year later, a jury awards $200,000 verdict against Johnny and in favor of Drew. ABC Insurance pays the $50,000. Because Johnny is not responsible for an excess judgment by virtue of his prior bankruptcy, is a bad faith claim against ABC Insurance even a viable cause of action? The answer is “yes.”

So far in 2014, consumer bankruptcy filings are down 12 percent nationwide.

Published on: October 9, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

Consumer bankruptcy filings are down 12 percent so far in 2014, according to Epiq Systems, Inc., and as reported by the American Bankruptcy Institute. See “Bankruptcy Filings Through First Three Quarters of 2014 Fall 12 Percent from 2013, Commercial Filings Fall 22 Percent.” The total consumer filings nationwide this year are 705,452. Commercials filings are down 22 percent over the same period. The total commercial filings are 26,767.

The top bankruptcy-filing states per capita are Tennessee, Alabama, Georgia, Utah, and Indiana. Surprisingly, Florida is not in the top 5.

Is marijuana legal in your state? Don't count on bankruptcy protection if your weed business fails.

Published on: September 28, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, with Savage, Combs and Villoch, PLLC

A federal judge recently dismissed a bankruptcy case filed by a marijuana business owner in Colorado, according Tom McGhee of the Denver Post. Why? Because marijuana remains illegal under federal law and that causes major impediments in obtaining relief under federal bankruptcy law. See Dkt #74, In re Arenas, Case No. 14-11406 (Bankr. D. Colo. Aug. 28, 2014); see also “Judge denies bankruptcy protection to Denver marijuana business.”

In that case, Mr. Arenas, the debtor in bankruptcy, produced and distributed marijuana in Colorado at the wholesale level. He possessed all of the required licenses and permits to legally produce and distribute marijuana. The bankruptcy court even acknowledged that Mr. Arenas’ marijuana business was perfectly legal under Colorado law. But the court also found that leasing space to a marijuana dispensary and cultivation of marijuana made Mr. Arenas liable for criminal penalties under the the federal Controlled Substances Act, 21 U.S.C. § 801 et seq. (the “CSA”). Because of that, the bankruptcy court dismissed Mr. Arenas’ case upon a motion filed by the United States Trustee.

I filed bankruptcy. What is the 341 meeting of creditors?

Published on: September 27, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs and Villoch, PLLC

This meeting is named after section 341 of the bankruptcy code. It’s usually held about one or two months after you file for bankruptcy. You are required to attend this meeting in order to successfully complete bankruptcy and discharge your debts. Your attorney will attend the 341 meeting with you and will make sure that you are comfortable and prepared. You should bring your driver’s license and social security card.

A trustee is the person who administers your bankruptcy case. The 341 meeting is an opportunity for the trustee appointed in your case to ask you questions generally about your assets, liabilities, and financial affairs. The trustee will investigate possible fraud, genuine mistakes in the paperwork, and will make sure that your paperwork is in full and complete order. The trustee will also speak with you about:

Tampa Bay Business Journal reports that Arigato Japanese Steakhouse, LLC, abruptly closes the doors of its three Tampa Bay restaurants.

Published on: September 20, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, at Savage, Combs & Villoch, PLLC

Arigato Japanese Steakhouse, LLC, a restaurant with three locations in the Tampa Bay area, including a popular location in the Carrollwood area, has permanently closed its doors, according to Eric Snider with the Tampa Bay Business Journal. The restaurant was founded in 1971 and has been in the Tampa Bay area since 1978.

Mark Douglas with WFLA quotes Arigato’s owner, Dale Del Bello, as stating that he is “currently working very hard and doing everything in [his] power to make good by everyone we are in debt to.” See “Arigato’s owner saddened by his restaurant closures in Clearwater and St. Petersburg.” While this is an admirable quote from the owner, it is likely a hollow promise based on recent filings with the bankruptcy court in Tampa.