BBA Webinar: Expanding Access for Low-Income and Elder Clients to Pro Bono Bankruptcy Relief Tues., May 25th 12:00-1:00pm Online

Description:

The BBA presents live webinars and virtual events via Zoom. Please register for this program through your BBA account at least two hours before the start time of the program to receive the Zoom webinar link.

Join our Bankruptcy Law Section for a Lunch and Learn co-hosted by the Volunteer Lawyers’ Project (VLP) and Greater Boston Legal Services (GLBS) to learn how you can help assist low-income and elder clients preparing and filing their bankruptcy petitions. We anticipate the need for volunteer lawyers will increase in the months and years ahead and want to prepare willing lawyers to address the need when it arises regardless of whether those clients are referred through VLP or GBLS.

BBA Webinars & Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

BBA Virtual Event: Speed Networking with Bankruptcy Attorneys for New Lawyers and Law Students Thurs., May 20th 5:30-7:00pm Online

Description:

The BBA presents live webinars and virtual events via Zoom and Remo. Please register for this program through your BBA account at least two hours before the start time of the program to receive the link.

This event gives law students and new lawyers a unique opportunity to meet with several Boston-area bankruptcy law attorneys in just one evening. Those who attend this event will have the chance to meet all of our guest attorneys in small groups to learn about lawyering in a pandemic, career paths, and legal opportunities available in Boston.

This will be a virtual event, and log-in information will be provided in advance. Please reach out to the BBA staff contact listed below with any questions.

Registration Categories:
BBA Member – Free. Included as part of your membership.
Non-Member – $50.00

BBA Webinars & Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

The COVID-19 Relief Extension Act Extends Bankruptcy Provisions of the CARES Act to March 27, 2022

Article by Heesoo Park, J.D. Candidate 2022, Boston College Law School

On March 27, President Joe Biden signed the COVID-19 Relief Extension Act into law. The Act extends for another full year, the provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that temporarily modified the Bankruptcy Code and the Small Business Reorganization Act of 2019 (“SBRA”), subchapter V of chapter 11. The SBRA was enacted to make chapter 11 more accessible and affordable for small businesses.

In response to the financial crisis caused by the COVID-19 pandemic, certain provisions of the CARES Act provide financially distressed small businesses and individuals greater access to bankruptcy relief. The relevant modifications of the CARES Act were originally set to expire on March 27, 2021, but with the new law, it will now expire on March 27, 2022. A summary of the extended provisions are as follows:

1. Increased debt limit for debtor eligibility under the SBRA

            One of the most important bankruptcy related changes made by the CARES Act was an increase in the aggregate debt limit for debtor eligibility under the SBRA. §1113(a)(1). Originally, the SBRA defined a debtor as the Bankruptcy Code’s §101(51D) definition of “small business debtor”, which capped debt limit at aggregate noncontingent, liquidated, secured and unsecured debt of $2,625,625. The CARES Act redefines a debtor under the SBRA, temporarily raising the debt limit to $7,500,000, until March 27, 2021. As a result, it significantly increased access to the SBRA for many small businesses and individuals impacted by the pandemic that were previously ineligible due to lower debt limit. The newly signed COVID-19 Relief Extension Act extends the temporary increased debt limit to March 27, 2022.

2. Excluding COVID-19 Related Benefits from “Current Monthly Income” Under §101(10A) of the Bankruptcy Code

            Another important change brought under the CARES Act was the provision excluding COVID-19 related relief payments from the Federal Bankruptcy Code’s §101(10A) definition of “current monthly income”. §1113(b)(1)(A)(iii). This has significant implications for determining whether an individual is eligible for chapter 7 or chapter 13.

            In a chapter 7, consumer debtors must complete the “means test”. If current monthly income exceeds a certain threshold, chapter 7 relief may be unavailable and chapter 13 may be the only option. COVID-19 related payments artificially inflate a debtor’s income. Excluding those payments will generate a more realistic picture of the debtor’s income consistent with the purpose of chapter 7 – providing a fresh start to honest but unfortunate debtors.

            Excluding COVID-19 related payments can also have a significant impact on determining the applicable commitment period of chapter 13 debtor in plan confirmation. The debtor’s current monthly income is an important factor in determining the length of the plan. Therefore, excluding COVID-19 related payments ensures that the relief payments do not result in lengthening the term of the chapter 13 plans from three years to five years.

3. Excluding COVID-19 Related Benefits from “Disposable Income” Under §1325 of the Bankruptcy Code

            The CARES Act excludes COVID-19 related payments from “disposable income” for the purposes of confirming a plan under chapter 13. §1113(b)(1)(B). In order to confirm a plan under chapter 13, the plan must provide for payment of all the debtor’s disposable income to unsecured creditors.

            Excluding COVID-19 related payments from disposable income prevents an artificial increase in the amount of money that a debtor would have to devote to the payment of unsecured creditors. The CARES Act applies to future chapter 13 debtors and pending cases without confirmed plans.

4. Allowing Modification of a Confirmed Plan under Chapter 13 for “Material Financial Hardship” due to COVID-19

            The CARES Act added a new provision §1329(d)(1). It allows a chapter 13 debtor with a plan that was confirmed before the enactment of the CARES Act (March 27, 2020), to seek modification of the plan if the debtor is “experiencing or has experienced material financial hardships due, directly or indirectly” to COVID-19. The recently signed extension preserves this change but now applies to any plans confirmed before the enactment of the COVID-19 Relief Extension Act (March 27, 2021), allowing more debtors to qualify for the relief. Under this provision, the plan term may be extended up to seven years after the date of the first payment under the original plan. The previous chapter 13 permits plans for up to five years.

            The Act is silent as to what amounts to “material financial hardship” or the scope of the term “indirect”. However, there is case law addressing the issue of whether a plan default prior to the enactment of CARES Act is a cause for modification under §1329(d)(1). In In re Fowler, 2020 WL 6701366 (Bankr. M.D. Ala. Nov. 13, 2020), the court held that the only requirements under §1329(d)(1) are that (i) the plan was confirmed before March 27, 2020 and (ii) that the debtor experienced or is experiencing a material financial hardship due to COVID-19. Therefore, the court allowed the debtor with pre-CARES Act plan default to avail herself of the 7-year plan modification.

Conclusion

            The CARES Act significantly opened the doors to bankruptcy relief for individuals and small businesses in financial distress due to the pandemic. The decision by the Congress and the Biden administration to extend these protections for another full year continues this positive step. The effects of COVID-19 pandemic still linger and many households and small businesses will continue to suffer financial distress. Given the successes of the SBRA, and the CARES Act, Congress should begin the discussion now on making these changes permanent.

Pro Bono Volunteer Opportunity from GREATER BOSTON LEGAL SERVICES

In these difficult financial times, many low-income people are in need of bankruptcy assistance. Greater Boston Legal Services is seeking volunteers to accept referrals of GBLS low-income and elder clients. Your expertise can really make a difference in someone’s life. GBLS is looking for attorneys with experience in Chapter 7 cases, as our limited resources mean we cannot offer mentoring for these cases. 

Attorneys taking these cases on a pro bono basis will be covered by GBLS’ malpractice insurance. If you are open to referrals, please contact Todd Kaplan at tkaplan@gbls.org.

BBA Webinar: LIVE EVENT- Bankruptcy and Taxes: An Overview of IRS Practice and Procedure Tues., March 16th 3-4:30 pm Online

Description:

The BBA presents live webinars and virtual events via Zoom. Please register for this program through your BBA account at least two hours before the start time of the program to receive the Zoom webinar link.

During this 90 minute program, the IRS Insolvency Group will explain their practices and processes for handling bankruptcy cases, discuss common tax issues that arise in bankruptcy proceedings, and review the best practices for resolving them. Please note that this program will not be recorded, and will only be accessible live on March 16th via Zoom. Please reach out to the BBA staff contact listed below with any questions.

BBA Webinars & Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

BBA Virtual CLE: Healthcare Insolvency in the Age of COVID-19

Thursday, March 4, 2021 12:00 PM to 1:30 PM
On-Line

Description:

The BBA presents live webinars and virtual events via Zoom. Please register for this program through your BBA account at least two hours before the start time of the program to receive the Zoom webinar link.

Hospitals and health systems are facing significant financial distress due to the international pandemic caused by Covid-19.  The pandemic has caused additional expenses  at the same time that revenue is declining due to cessation of non-emergent care and reduction in emergency cases.  This has increased the financial distress faced by many hospitals and health systems and is likely to increase the need for restructuring services going forward.  Against this backdrop, this program will provide an overview of key issues in health care insolvency cases and new developments from emerging case law.  The discussion will be led by a panel of lawyers who have been involved in virtually every facet of a health care case—from debtor to secured party, committee, and government representations.

Registration Categories:

Premier Member – Free. Included as part of Membership

Premier Sponsor Firm Government Lawyer/ Legal Services – Free. Included as part of Membership

BBA Member – $120.00

BBA Member – Legal Services/ Government Lawyer – $70.00

Non-Member – $240.00

Law Student – $30.00

BBA Webinars &  Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

Lender Beware – Judge Hoffman provides guidance on the meaning of Bankruptcy Rule 3002.1 and the consequences of failing to comply.

Case Summary by Donald R. Lassman, Law Office of Donald R. Lassman

Infrequently the subject of court review, Judge Hoffman recently had the opportunity to consider Rule 3002.1 and, in particular, the penalties that may be imposed upon a creditor that fails to comply with requirements of the Rule relating to the timely filing of notice of post-petition fees, expenses and charges. 

Rule 3002.1 applies in Chapter 13 cases (1) to claims that are secured by the debtor’s principal residence and (2) where the plan provides for payment of the claim by contractual installment payments.  Rule 3002.1(c) provides as follows:

“The holder of the claim shall file and serve on the debtor, debtor’s counsel, and the trustee a notice itemizing all fees, expenses, or charges (1) that were incurred in connection with the claim after the bankruptcy case was filed, and (2) that the holder asserts are recoverable against the debtor or against the debtor’s principal residence.  The notice shall be served within 180 days after the date on which the fees, expenses, or charges are incurred.”

In the Chapter 13 case of In re Lescinskas, 2021 Bankr. LEXIS 360, 2021 WL 623698 (Bankr. D. Mass. Feb. 17, 2021), the mortgage lender filed a Notice on March 11, 2020 that included unpaid legal fees, costs and expenses incurred by the lender since case commencement in 2015.  The Debtor objected to the Notice on the grounds that it violated Rule 3002.1(c) because it included fees, expenses and charges that were incurred more than 180 days before March 11, 2020, the date that the claim was filed, and requested that the Court allow only those fees and expenses incurred after September 13, 2019 (i.e. the date that is 180 days before the filing date of the Notice). 

The Court explained that the purpose of the rule was to prevent lenders from accumulating fees and charges during the pendency of a bankruptcy case and then springing the charges on the debtor at the conclusion of a case when the debtor may have no ability to pay.   Requiring notification of fees and charges during a case provides debtors with the opportunity to review and contest fees and charges and, if appropriate, adjust plan payments to address the post-petition charges.  Concluding that the mortgage lender’s “kitchen sink defenses were unavailing”, the Court ruled that the mortgage lender’s fees and charges would be limited to those incurred within 180 days of the filing of the Notice, thereby reducing the amount recoverable from the debtor by over 90% from $11,278 to $1,207.34.  The lesson of the case is clear – creditors holding claims secured by a debtor’s residence should file Notices of Charges every 180 days in order to preserve their ability to collect those charges from the Debtor. 

BBA Virtual Event: Young Bar Meets Bankruptcy Bench Thurs., Feb. 25th 5:30-6:30pm Online

Description:

The BBA presents live webinars and virtual events via Zoom and Remo. Please register for this program through your BBA account at least two hours before the start time of the program to receive the link.

Are you a young lawyer who is tired of never having your day in virtual Court? Today is your lucky day!

Back by popular demand for the second time, the BBA’s Bankruptcy Law Section is hosting the Young Bar Meets Bankruptcy Bench program to give new lawyers their day in Court (virtually, this year!). Participating attendees will have the great opportunity to argue a “mock” motion before esteemed Bankruptcy Judges and an audience of fellow New Lawyers in a virtual courtroom.  Those attendees who don’t argue a motion will have the great opportunity to observe their peers, learn tips and strategies about oral advocacy, ask the Judges questions during the Q&A segment, and make new connections during the Program’s networking segment. 

If you would like to argue a motion, please email Michael Jusczyk at MJusczyk@seyfarth.com. Please reach out to the BBA staff contact listed below with any questions.

BBA Webinars & Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

BBA Webinar: Enhancing Your Bankruptcy Practice: Advising Veterans and Servicemembers Facing Bankruptcy Wed., Feb. 17th 3-4pm online

Description:

The BBA presents live webinars and virtual events via Zoom. Please register for this program through your BBA account at least two hours before the start time of the program to receive the Zoom webinar link.

This program will provide an overview for Bankruptcy attorneys on how to work with veteran and servicemember clients. 

Topics covered will include:

  • Military Culture: Overview of military structure and tips for working well with servicemembers and veterans.
  • Determining when Bankruptcy Can or Should be Avoided: Financial resources to avoid bankruptcy and special considerations that may make bankruptcy a bad choice for some servicemembers.
  • Special Protections for Servicemembers: Bankruptcy Code and SCRA provisions that practitioners can leverage to benefit servicemember clients.

Please reach out to the BBA staff contact listed below with any questions.

BBA Webinars & Virtual Events are supported by the Joan B. DiCola Fund. To learn more or support this fund, click here.

Sponsoring Section/Committee(s):

Speakers:

Contact:

Douglas Newton
dnewton@bostonbar.org

REGISTER HERE!

Need Anticipated for Pro Bono Chapter 7 Bankruptcy Attorneys

During these challenging economic times, it is anticipated that there will be an increased need for pro bono Chapter 7 Bankruptcy attorneys. As protections for vulnerable groups expire, more volunteer attorneys will be sought to assist those facing Chapter 7 bankruptcy.

To this end, the BBA has hosted two virtual training programs to educate interested volunteers on the basics of Chapter 7 bankruptcy. Each training provided attendees with the building blocks of Chapter 7 Bankruptcy laws and procedures. The first training was held in July of 2020, and the recording for this program can be accessed here. The second training took place in November of 2020, and the recording of this training can be accessed here. Both programs covered identical materials, though the November training was geared more towards western Massachusetts.

If you have any questions about either program, please contact Doug Newton at dnewton@bostonbar.org.