Attorney Blog

Foreclosures in New Jersey Still Pose a Problem for Homeowners

Sat, 04 Feb 2012 08:00:00 EST

Home foreclosures are still leaving New Jersey residents in limbo, not knowing what they should do or where they should go. These days, foreclosure is taking so long that homeowners in distress now have more than 2 1/2 years, on average, from the time the lender first initiates the process to the time they actually are forced out of the home. However, this delay will only get worse.

In December of 2010, the Chief Justice of the New Jersey Supreme Court announced an initiative to clean up the "robo-signing" problem of many mortgage companies. These banks, and others, cannot proceed until all of their paperwork is in order. As a result, foreclosures dropped 80% in 2011. This is not to say that fewer homeowners are defaulting, only that the banks are being held back from proceeding.

After topping 50,000 in 2008, 2009 and 2010, foreclosures filed in the state dropped to about 11,000 last year, according to the New Jersey Judiciary. That suggests there are tens of thousands of foreclosures waiting to be filed. Thus, there is the inevitability of a flood of foreclosures, once everything gets straightened out.

In the meantime this creates an ambiguous situation for homeowners and lenders. Homeowners can live in their homes for free, allowing many to pay other bills, but they live with the stress of knowing they ultimately will lose their homes and ruin their credit. Plus short sales can be difficult, and aren’t much better than a foreclosure on your credit score. At the same time, lenders are stuck with assets that are losing value and are not producing any income.

This may seem like a good thing for homeowners, getting to live in their homes for free for years, but ultimately there is a bigger price to pay. Having properties sit in foreclosure for years can harm neighboring property values, because financially distressed homeowners often fail to maintain their homes. In addition, until the courts get rid of the backlog in foreclosures, the residential real estate market will continue to be in the tank.

The whole situation reads like a good news-bad news joke. The good news is, you can live in your house for years for free; the bad news is, the economy is far from a real recovery until they start throwing you out.

Why the U.S. Postal Service Must Adapt or Die

Thu, 02 Feb 2012 08:00:00 EST

In the history of business, it has proven true that you must adapt to change or die. Companies must be nimble and willing to change, especially with advances in technology. We have seen this prove true with Borders Books and Kodak with advances in electronic books and digital photography, but the same may well be the fate of the U.S. Postal Service if it doesn't act soon.

As you probably know from reading the news, the post office has been struggling with debt, closing several distribution centers across the country to save money. We also saw postage go up a penny. However, in my eye, they still remain resistent to change and lack a willingness to compete in the marketplace.

Recently, a client decided to "overnight" a fee payment check to me to be sure he got it to me on time. He did this on a Friday, and sent it by USPS overnight mail. Said postal service tried to deliver it on Saturday, but lo and behold the office was closed. They didn't leave a note saying "Sorry we missed you." They didn't try again on Monday. They just held the envelope at the post office. Also, since they didn't leave a note, neither my client nor I knew it was there! Had my client not called the post office, and then when they were non-responsive, the Department of Consumer Affairs, the packet would have been sent back.

While working in a position with the Knights of Columbus I had people sending me things by overnight mail in order to meet deadlines. If it was sent through the post office, they would come to my home, I wouldn't be there, and they would leave me a note saying to come to the post office to pick it up! With FedEx or UPS, if the sender did not require a signature from the recipient, they would leave it on the porch or inside the storm door. I finally told people not to use the post office because it was too inconvenient!

The point is, if it expects to survive, the post office needs to be more service and customer oriented, adapting to change, and offering services similar to those of their competitors. Barnes and Noble is struggling, but they are still a major force in the market with the Nook for eBooks. Nikon and Canon adapted by selling high quality digital cameras. Hopefully, we will see some real change soon that will not involve yet another hike in postage rates.

Don't Let the Vulture Capitalists Pick You Clean!

Fri, 27 Jan 2012 08:00:00 EST

As I have written here before, one of the symptoms of a bad economy is creditors selling off their old receivables to factors for pennies on the dollar. These “vulture capitalists” then turn around and try to collect your debt to MasterCard for a big profit. The only problem is that they may not be able to!

Companies like New Century Financial and LVNV Funding buy up lots of this debt and then file lawsuits in a scattergun approach to collection. They are banking on the statistic that most people will not oppose the suit, and they will get a judgment by default. The good news for you is that if you DO file an answer, they will often fold like a cheap suit.

This is because it is highly unlikely that they will be able to prove their case before a judge. Basic laws of evidence require that business documents, like your credit card agreement and their bill, must be qualified by someone with personal knowledge of their authenticity. The problem is that no one with the factor can do this!

A recent decision by the Missouri State Supreme Court really drives this point home. It ruled that a debt buyer has to be able to properly prove it owned an account before it could try to sue to collect the debt. It has to be able to provide testimony from the original lender on how the records of the account and transfer to the factor were prepared.

In other words, they could rely on business records from other companies — but those companies needed to provide witnesses to testify how those records were created and kept in order to use them in court. The debt buyer couldn’t simply use its own record-keepers — even if they knew how the bank usually did its work — to “authenticate” another company’s records.

If you are a New Jersey resident and suspect that a factor is trying to collect a debt from you, do not automatically assume that there is nothing you can do. Call my office at 856-686-9910 or contact me through this site for a free consultation to discuss your options. You could be saving quite a bit of money

How to Fight Claims on Old Debt

Protect Your Privacy: Log Off Google & Stop Using Gmail by March 1

Thu, 26 Jan 2012 08:00:00 EST

The Washington Post reported on Tuesday that as of March 1, Google plans to follow the activities of users across nearly all of its sites, including YouTube, Gmail and its search engine. What is worse, consumers won’t be able to opt out of the changes! Searches on Google and YouTube, e-mail content on Gmail, posts on Google+, etc. will be scanned and analyzed.

Why is Google doing it? For money, of course, in the form of ad revenue. As the Post observed,

“The move will help Google better tailor its ads to people’s tastes. If someone watches an NBA clip online and lives inWashington, the firm could advertise Washington Wizards tickets in that person’s Gmail account.”

Google justified its actions as a benefit to users, however.

“When someone is searching for the word ‘jaguar,’ Google would have a better idea of whether the person was interested in the animal or the car. Or the firm might suggest e-mailing contacts in New York when it learns you are planning a trip there.”

This capability kicks in when someone activates an Android mobile phone, signs into their accounts online, or enter search terms. However, users who have not logged on to Google or one of its other sites, such as YouTube, are not affected by the new policy.

So, Google has provided its users with a bit of a Hobson’s Choice: Either don’t use Gmail for communication and any Google service that requires an account, or lose some of your privacy rights. It looks like you can still use Google for search if you are not logged in, but it might be better if you looked into other options, such as those offered by Yahoo and Microsoft.

According to the Post, experts are saying that the policy shift will invite greater scrutiny from federal regulators of the company’s privacy and competitive practices. On the other hand, this might just drive users to the competition, thus causing this strategy to backfire. Only time will tell.

Kodak Bankruptcy Filing Could Hurt Others in This Economy

Fri, 20 Jan 2012 08:00:00 EST

As is often the case, bankruptcy affects those other than the debtor filing it; there is always a bit of a “ripple effect.” This is certainly true of the chapter 11 filing yesterday by industry giant Kodak after months of struggling to raise capital from the sale of patents and bringing patent licensing suits.

As reported in the Detroit Free Press today, others are worried about the company’s future and what it could mean to them. Its employees are worried about layoffs, retirees are concerned about the future of their health care coverage, and its creditors are preparing to take a hit financially.

Fortunately, from a jobs perspective, the ripple doesn’t go too far in the town of Rochester, New York, where Kodak is based. The Press quoted its mayor, Tom Richards, as saying that the bankruptcy has been more of a psychological blow than a financial one.

"We have a broader-based economy which is no longer dependent on one industry and one company. We're better off for it. Not what I wish this would happen, but it has happened, and we're just going to need to deal with it."

There is a bit of room for optimism for the company, though. Kodak has secured financing for operating costs and is still up and running with a brand name that still means something. But that doesn’t mean that people will keep their jobs, or that stockholders won’t take a big hit.

Even companies that are not in bankruptcy have been shedding jobs and closing stores. Just look at the recent bankruptcies by Friendly’s and A&P. On the other hand, it is better than a straight chapter 7 liquidation, which would create more of a tsunami than a ripple. At this point, people surrounding the filing are just hoping for the best.

Kodak Files Chapter 11 Bankruptcy in NY This Morning

Thu, 19 Jan 2012 08:00:00 EST

Earlier this morning, Kodak filed for chapter 11 bankruptcy protection in the Southern District of New York. At the time of the filing, it had more than 100,000 creditors, with debts totaling $6.75 billion. As I had reported earlier, the company had been facing serious financial problems, and had been attempting to stave off bankruptcy by selling off some of its patents. In addition, it has closed 13 manufacturing plants and 130 processing labs, and reduced our workforce by 47,000 since 2003. Even then, it has only had one full year of profits since 2004. This company, a good example of one that has fallen behind due to advances in technology like Blockbuster Video and Borders Books, must now hope that bankruptcy allows them to reinvent themselves and emerge profitable.

The reorganization is off to a good start with Citigroup providing $950 million in financing to allow the company to keep going. The thing to bear in mind here is that, unlike a chapter 7 liquidation, the goal of a chapter 11 is to revitalize a business and allow it to emerge as a viable, financially secure, entity. As such, Kodak plans to continue operating normally during bankruptcy.

There are many tools available to Kodak in chapter 11, including the ability to modify existing contracts and agreements. This is good because one of the other financial problems plaguing the company is hundreds of millions of dollars in pension obligations. The company has said that it contributed about $245 million to its U.S. pension obligations last year, and that it has been unable to shrink those liabilities to a more manageable level. Bankruptcy could also allow Kodak to shed some of this.

Individuals looking at bankruptcy should take some comfort in this news. Just as businesses can use chapter 11 to rebuild and reinvent themselves, so should consumers do so through a chapter 13 filing. In these tough economic times, the stigma of bankruptcy has lessened for businesses (although Kodak’s stock plunged 35% at the start of trading this morning) who are finding much needed relief in bankruptcy. Thus, what’s good enough for Kodak is good enough for you if you need a better way to pay your creditors and get a fresh start.

Do Not Let What You Read on the Internet Scare You Out of Filing Bankruptcy

Tue, 17 Jan 2012 08:00:00 EST

I know that most of my clients use the Internet to learn about bankruptcy way before contacting me. This is good in that it gives them a solid leg up on the subject before we meet, but it is also bad because there is a lot of misinformation out there. I have written before about not letting bankruptcy myths deter you from getting a fresh start, but I ran across something this morning that prompted me to revisit this subject.

Someone I follow on Twitter tweeted about a blog post entitled “7 Scary Facts You May Not Know About Filing Bankruptcy.” Geez! After reading the post, written by someone who states he has been in sales, marketing and management for over 27 years (i.e. not a lawyer or bankruptcy professional), I just had to respond lest people get the wrong idea on bankruptcy. According to the blogger, these scary facts are as follows. Let’s break it down and find out why none of this is scary.

If you are paying a home mortgage and want to keep your house, you will still have to make payments. Well, of course! If you don’t make your mortgage payments, the bank will foreclose. Bankruptcy certainly doesn’t change that! However, if you are behind on your mortgage payment, chapter 13 could help you get caught up and save your house!
You can surrender your house allowing the mortgage holder to take it back thus eliminating the payment. However, you will no longer have your home and have to find another place to live. Again, this is just common sense and has nothing to do with bankruptcy. But filing can discharge the mortgage obligation and allow you to move out with a fresh start.
If you have an automobile and want to keep it, a portion of the balance due the lender is added into your plan payment. Geez, more common sense! Make your car payment or the bank will repossess it. Also, if you are in a chapter 7, there is no plan payment; just pay the bank every month for the car!
You probably will not be able to keep such luxuries as boats and other recreational vehicles if the court feels they are an asset that you could turn into cash to pay down your other debts. How many of you out there have boats and RVs? Thought so. Most people’s assets are protected by exemptions, but there are a small percentage of cases where assets are lost. Don’t assume you will lose anything without talking to a bankruptcy lawyer.
If you owe the IRS, rest assured they will get their cut. Only if your IRS debt has passed the statute of limitations does if evaporate. Wrong! The dischargeability of tax debt is involved and not as straightforward as a “statute of limitations.” Many times, you can discharge taxes.
This one you can usually consider non-secured debt and it will be considered non-collectible. So bankruptcy can wipe out credit card debt; that’s a good thing!
Filing bankruptcy will cost you. All attorney fees, court fees, filing fees, calculated debt loss to creditors everything is added into your plan payment. Yes, attorney’s charge fees, and there are court costs involved in filing bankruptcy. But in most cases those amounts are less than 10% of your overall unsecured debt. Sounds like a good deal to me!

Wow! This is some incredibly misinformed stuff! The bottom line: don’t listen to the sales and marketing guy; listen to the bankruptcy professional. He or she knows what bankruptcy is and what it isn’t. If you are thinking about bankruptcy, check out this site for more information and contact my office for a free consultation. Oh, and don’t believe everything you read on the Internet!

Get Your Taxes Filed ASAP If You Are Thinking About Bankruptcy

Wed, 11 Jan 2012 08:00:00 EST

Well, Christmas and New Year’s are over, and the credit card bills are starting to come in. You really can’t put off bankruptcy anymore. I know you don’t want to; I don’t blame you. Although I do recommend that you file before the holidays, afterwards is the next best thing. Here’s why.

One of the big obstacles, especially these days, is affording to file bankruptcy in the first place. However, if you think you are going to get a refund for 2011, then now is the time to get it in gear, meet with an attorney, and get the ball rolling. I know that you would rather spend the refund on something more fun than bankruptcy (hey, 2011 was a tough year!), but what better Christmas present, or beginning of a new year, is a financial fresh start?

That said, one of the first things you should do is go to your accountant, H&R Block, or Turbotax, and get your tax return filed. If you are self-employed, you will need to allow a bit more time to prepare your business return first. This is especially important if you are looking to file a chapter 13 bankruptcy due to the deadlines for filing returns.

So, make a New Year’s Resolution to get a fresh start in 2012. Call my office at 856-686-9910 or contact me through the web site to schedule a free consultation. Bankruptcy can be scary and intimidating, but once you realize how much it can help you, it is the best thing you can do for your family's future!

Kodak May File Chapter 11 Bankruptcy

Thu, 05 Jan 2012 08:00:00 EST

A company synonymous with cameras and photography for 131 years is looking to file chapter 11 bankruptcy in the next few weeks if it can’t sell some 1,100 of its patents to raise capital. As part of their efforts to stave off the filing, the company had talked to hedge funds about borrowing hundreds of millions of dollars to bridge its finances until the patents sell, but the talks have fallen through. It is also in discussions with large banks including J.P. Morgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. for money to keep the company operating while in bankruptcy, should that be necessary.

Many might think that Kodak’s troubles came from the waning use of film cameras, but the situation is more complicated than that and goes back decades. They actually invented the digital camera in 1975, but ironically were not able to find a way to profit from the new technology. The company first started hitting financial trouble soon after, in the 1980s, when they had difficulty competing with foreign companies on film sales. This was then exacerbated by the rise of digital cameras and smartphones.

During this time, they tried selling chemicals, bathroom cleaners and medical-testing equipment, finally deciding to focus on consumer and commercial printers (which they have done for the past five years). However, that market has proven very difficult to get into, and a lot of capital was spent to subsidize sales of the printers in order to increase demand for the ink. These financial woes were further compounded by hundreds of millions of dollars a year in obligations to cover pension and health-care costs for retirees.

Kodak’s future is uncertain, and it could easily go the way of Polaroid, Borders, and Blockbuster, which succumbed to radical changes in their markets caused by advancements in technology. If it is to survive, it will have to do a much better job of reinventing itself than it has to date.

Two Biggest Ways People Wreck Their Finances

Mon, 02 Jan 2012 08:00:00 EST

It never ceases to amaze me how two things can so often derail people's financial health: Christmas and vacations. For some reason, people throw money concerns aside when it comes to gift giving and "treating themselves" to a vacation. What's more, even people already in financial difficulty fall victim to it. Every year I see clients and potential clients who know they are over their heads in debt put off bankruptcy until after Christmas or one last trip. All they are doing, however, is making things worse.

This tendency was well demonstrated in a comic strip that I read every day, Edge City, about a married couple with two kids that live in the 'burbs. The husband wants to go on a lavish vacation on the credit card (how many more opportunities will we have to take a family vacation), while all his wife can see is the destruction of their budget and the 18% interest. She eventually gives in, much to their regret later.

I have posted before about how to save money and stay on a budget, including scaling back the cable package and trimming the cell phone bill. However, people should also consider ways to economize on gift giving and leisure if they are going to maintain their financial health. When I was a kid, people had Christmas Club accounts at their bank where they would squirrel away money all year in order to afford gifts. This has been replaced with plastic.

Do yourself a favor and make a New Year's resolution to be ready for Christmas in 2012. Open a savings account and contribute a pre-determined amount every month. Just figure out how much you will need to purchase modest gifts for essential friends and family on your list and then divide that amount by 12. Plan your vacation well in advance also and set the money aside. Your wallet will be glad you did.

Teens Now Subject to Tougher Driving Laws in PA

Wed, 28 Dec 2011 08:00:00 EST

New Jersey is not the only state looking to toughen the laws for young new drivers. As reported in the Philadelphia Inquirer, yesterday, a new law went into effect in Pennsylvania that does just that. Concerned with distracted teen drivers and increased fatalities (proponents of the law cite an increase in fatal crashes involving 16- and 17-year-old drivers from 40 in 2009 to 57 in 2010), this law adds further restrictions regarding driver experience and passengers in the car.

According to the new law, new junior drivers

Can have only one passenger under the age of 18 who is not an immediate family member, without a parent or legal guardian in the car
Can have three passengers in the car that are under 18, if they have not had any violations or accidents in six months
Must have more behind the wheel training time, 65 hours instead of 50, including 10 hours of night-time driving and 5 hours of bad weather driving

In addition, PA’s seat belt law is a primary offense for teen drivers, i.e. a policeman can pull them over for that offense alone. Most people interviewed by the Inquirer applauded the law, but some critics of the law say it is not strict enough. They say that it should have extended the time driving under a learner’s permit from six months to a year before getting a license, which is the case with a proposed law in New Jersey.

Teens who violate this law could get a fine ranging from $10 to $75.

When the IRS Can No Longer Collect the Taxes You Owe

Wed, 21 Dec 2011 08:00:00 EST

There was an excellent article on the Bankruptcy Law Network recently talking about how long the IRS has to collect tax debt owed. In other words, what is the statute of limitations on tax debt? The article was written in the context of bankruptcy, in the sense that you do not always need bankruptcy to get rid of tax debt, but it is a good thing to bear in mind overall when looking at your finances.

According to the Internal Revenue Code (26 U.S.C. §6502), the IRS has 10 years from the date the tax is assessed to collect it (assuming there has been no fraud). The important thing to bear in mind, however, is that this period can toll under certain circumstances. Think of it in terms of stopping and starting a stopwatch that ticks away for ten years. Some of these are as follows:

If you file an Offer and Compromise with the IRS, for the time it takes for the IRS to consider it, and then another 30 days after rejection
If you have appealed a decision by the IRS to collect the tax by levy or seizure, for the time that is taken to review the appeal, plus 30 days
If you are out of the country for more than 6 continuous months, for the period of time that you are out of the country
If you file bankruptcy, for the period of time that you are in bankruptcy, plus six months, assuming the taxes are not discharged

This is not an inclusive list, and you should consult with a tax accountant before making any decisions, but it is something to bear in mind. If a big part of the reason you are considering bankruptcy is tax debt, you should talk to a tax professional about whether the debt is too old to worry about; it may have gone away!

If tax debt has you concerned, and you are thinking about bankruptcy, feel free to call me at 856-686-9910 or contact my office through the web site for more information..

Avoiding a DUI Around the Holidays

Fri, 16 Dec 2011 08:00:00 EST

It is December 16, and I have already attended three Christmas parties. You have probably been to about the same by now if you think about it. This is the time of year when people socialize more and, unfortunately, drink more. Some of them tend to have just a little too much of the holiday "spirits" and end up getting a ticket for DUI on the way home. Not a very good Christmas present!

What people do not realize is how quickly you can reach the legal limit in New Jersey (0.08%), and there are lots of myths out there about absorbtion rate, weight, and how much you had to eat with the alcohol. Don't believe any of them! If you are going to be drinking, do not drive! Get a designated driver. The consequences of getting a New Jersey DWI are just too high, not to mention attorneys fees that can start at $800 to $1,000!

The question I get is, just how easy is it to get to 0.08%? How many beers, glasses of merlot, or martinis does it take to get blotto? To get the answer I finally just "Googled it" and found a really neat web utility by the University of Oklahoma Police Department. Put in your weight, drinking time in hours, number, and type of drink, and it will kick out a blood alcohol level.

You should not rely on this app to keep you legal! But you should allow it to convince you of how quickly you can get drunk. For example, a 140 lb. college student (who shouldn't be drinking anyway, but that's another matter) puts away a six pack over a three hour period. He is now legally drunk, according to this calculator.

The holiday season should be one of joy and good cheer, not police sirens and breathalyzers. Although I am always looking for new clients, I do not want a DUI to ruin your holiday, career, or life. Be more mindful of how impaired even one drink can make you, and let the sober person drive if you have had too much of the egg nog. Have a happy holiday and a wonderful new year!

NTSB Recommends Ban on All Cell Phone Use While Driving

Thu, 15 Dec 2011 08:00:00 EST

For years New Jersey has had a ban on using a cell phone while driving (without a headset), and all cell phone usage, hands-free or otherwise, for school bus drivers and novice drivers. More recently, texting while driving was also banned. Naturally, this was done out of a concern about distracted driving leading to accidents.

However, the New York Times reported on December 13 that the National Transportation Safety Board (NTSB) is recommending a ban on all cell phone usage while at the wheel, even where it is hands-free, such as with a wireless headset. No state now has so broad a ban, but the board said that drivers faced serious risks from talking on wireless headsets, just as they do by taking a hand off the wheel to hold a phone to their ear.

Adoption of said recommendation by the states, however, is far from imminent. This is for two reasons:

the agency’s recommendation is nonbinding, meaning that states are not required to adopt such a ban, and
it will likely not garner much support among state legislators who would be hesitant to draw ire from their constituents, who have gotten used to these devices.

Another reason lawmakers may be hesitant is the impact such a law would have on many car makers that are offering integrated hands-free, voice-activated systems that allow drivers to talk and do other tasks, like calling up their phone directory.

NTSB chairman Deborah Hersan has said that the safety concerns were not just about keeping hands on the wheel and eyes on the road, but also about making sure people focus on the act of driving. Certainly distracted driving, as a whole, is what they are trying to address, so the ultimate decider is going to be whether hands-free use of these devices can be shown, statistically, to lead to accident and injury. The agency has said that it based its recommendation on evidence from its investigation of numerous crashes in which electronic distraction was a major contributing factor.

What Should Be Done About the Student Loan Crisis

Thu, 08 Dec 2011 08:00:00 EST

I have written here before about student loans, how next to impossible they are to discharge in bankruptcy, and how something just has to give. Young people are graduating every year with six figure student loan balances and no job prospects sufficient enough to pay it back. This continues to be a problem, as the cost of education goes up, the jobless rate continues to hover at over 9%, and people in dire financial straits have nowhere to turn.

A recent article on the Bankruptcy Law Network site makes some interesting points about the situation. It sets forth the following facts:

There is currently over $1 trillion in unpaid student loan debt out there
The jobs these graduates were told would be there are not
There are more and more degree programs out there
Tuition continues to increase out of step with the actual cost of the education to the college or university

The article makes the case that schools continue to hike tuition because they know the market will bear it due to the banks' open wallet. The writer states: "Nearly seventy universities in the U.S. have endowments of over a billion dollars." To what extent do they really need to increase tuition?

Keeping these graduates enslaved by debt does not help the economy, and is not good for America as a whole. But what do we do about it? Here are some ideas.

Force Banks to Adopt Realistic Lending Policies Towards Borrowers. Should education debt be treated like any other kind of loan, like a mortgage or car finance? Lenders need to be realistic, but in this world today you cannot expect to get ahead without a post-secondary education. Would this lead to a more "have v. have-not" society where lower income families cannot educate their children because they cannot get approved for the financing? Or would it be a matter of students going to the school they can afford, not the high priced one that accepted them?

Make Schools Responsible For Their Own Fraud. Far too many students are being sold a bill of goods on the value of the education and training by some institutions. Employment rates are over-inflated, along with the demand for graduates of the degree programs they are touting. There are many stories on the Net about law school graduates suing their law schools for fraud because they were promised jobs that weren't there upon graduation. What if the student, or the bank on their behalf, could go after that school for payment?

Make Non-Government Backed Student Loans Dischargeable. Banks now lend money more freely for the very reason that they know that they can't get stuck with the bill. On the one hand, they aren't getting paid now anyway, whether or not it can be discharged. On the other, making them dischargeable could lead to the problem with the first solution, unless lending regulations for guaranteed student loans made it more likely that those still in need would get the money necessary for a good education.

Personally, I like the last option. It would force banks to be more realistic about lending, and universities to be more realistic about what they charge, without more regulation and litigation. What do you think? What is the solution to the student loan debt crisis in this country? Post a comment below and let me know!

Bellmawr, NJ Post Office Could Close in 2012

Wed, 07 Dec 2011 08:00:00 EST

Individual Americans aren't the only ones trying hard to avoid bankruptcy in these hard times; the U.S. Postal Service is as well! According to an article in the Burlington County Times, the Service is looking to revamp its delivery systems to cut costs. Since delivery is accomplished through Processing and Distribution Centers, several of them (about 250 nationwide) could be closing, including the one in the Bellmawr Industrial Park (which is one of six in NJ facing this). The other New Jersey centers on the list for possible closing are in Eatontown (Monmount County), Edison (Middlesex County), Kearny (Hudson County), Pleasantville (Atlantic County), and Teterboro (Bergen County).

Closing post offices is not the only change being contemplated however. In an effort to save $20 billion in operating costs, the Service is also going to change its first-class delivery standards from the current one- to three-day delivery time to a two- to three-day standard. Public hearings on the proposed closings are expected to take place early next year, while closures could happen as soon as March, according to the Postal Service.

This is certainly not an unexpected decision by the Postal Service, as people move more towards e-mail and other forms of communication to save money. Documents can be scanned and e-mailed, packages can be sent by FedEx or UPS, and (unfortunately) SPAM has eclipsed junk mailers due to their lower cost and higher response rate. Like other businesses across the country, the Postal Service is working hard to reinvent itself in order to stay in business.

NJ Legislators Push for Tougher Teen Driver Laws

Wed, 30 Nov 2011 08:00:00 EST

New Jersey is known for having some of the toughest driving laws, along with supervision of new drivers through its tiered licensing system. Well, as a result of the deaths of four teenagers in an auto accident last summer, the laws could get even tougher.

Currently, 16-year-olds in New Jersey can obtain a learner's permit, allowing them to drive with a licensed adult in the car for six months after completing a 6-hour driving course. Once they turn 17, they can apply for a Graduated Driver's License (GDL), which has other restrictions. The legislation being considered would require that

Certified driving instruction be private and one-on-one;
The learner's permit phase be extended to one year for all new drivers up to age 21;
All drivers under 18 must have a parent or other adult complete an approved teen driver orientation program with the teen, either in person or online, before they can get a license.

In addition to that, the proposed law would require more practice hours with a supervising adult. One of the reasons given for extending the permit period to one year was to give the teen driver more experience with driving in all weather conditions during this phase.

Unlike other laws that have been proposed or enacted in New Jersey, this one was not in reaction to the auto accident that killed the four teens. These changes were recommended in 2008 by a commission created to study teen driver safety. Some of the changes in the report have already been implemented, and the accident renewed interest in implementing the rest. The legislation is still pending passage by the assembly and the senate.

Tips on Saving Money This Holiday Season

Wed, 30 Nov 2011 08:00:00 EST

These days, everyone is doing the best they can to survive in a bad economy. It can be tough, and there are instances where bankruptcy can help, but that should always be a last resort. There is lots of information on this site about bankruptcy, but I also post a lot of content about saving money and cutting costs in an effort to avoid filing bankruptcy. I also post interesting articles on Facebook about cutting spending.

Well, as we all know, "its the season," and holiday shopping, if not done wisely, can really sink a floundering ship at the end of the year. If you are struggling to stay within a budget (and these days, who isn't?), check out these posts on my Facebook page:

But don't stop there! Like me on Facebook and get more great tips in your newsfeed all throughout the holiday season! If you are struggling to make ends meet, these should help. I sincerely hope that they do. However, if you don't see that anything will really do any good, and the ship is still sinking, act now. Don't wait until after Christmas to talk to me about bankruptcy. Contact my office to set up an appointment.

New Yorkers Beware of NJ DUI / DWI Tickets

Fri, 11 Nov 2011 08:00:00 EST

If you are a New York State resident who has a prior DUI-DWI conviction in NY, you now potentially face enhanced penalties if you are convicted of the same offense in New Jersey. On November 9, 2011, New Jersey's Appellate Division ruled that New York's "driving while ability impaired" statute is substantially similar to New Jersey DWI statute. As a result, a prior conviction under the New York statute may be used to enhance a subsequent New Jersey conviction.

The Court reasoned that because New Jersey has interpreted "intoxication" to include any degree of impairment in driving ability, defendant's prior convictions were of a substantially similar nature as a DWI conviction in New Jersey. The only way to avoid this is if the driver provided clear and convincing proof that the prior conviction was based exclusively on a BAC of less than 0.08% (New Jersey's minimum to convict).

If you are a New York resident ticketed for drunk driving in New Jersey and are looking for further information, or to protect your rights in municipal court, please feel free to contact my office for a free consultation.

I'm Throwing a Social Networking Party! Feel Free to Join In!

Thu, 10 Nov 2011 08:00:00 EST

Being active online is absolutely exhausting! There are so many fun and interesting sites to use, especially in social media, that it is hard to keep up with it all. Having been a "techno-nerd" since high school, I am always looking for the next hot thing and trying it out right away. On top of that, I also like sharing great information with people. This has made the online marketing of my firm that much more fun!

On this site, there are lots of articles on topics like bankruptcy, traffic court, DUI, and foreclosure, along with FAQs, the latest news, and my blog. But I couldn't stop there. I also have a Facebook business page, Twitter feed, LinkedIn profile, and YouTube channel. As if that weren't enough, Google just added the capability to create business Pages on Google+, so I just had to have one! (My wife says what I have to have is my head examined, but that's just her!) Here is all that I currently do online:

Head on over to my Facebook Page and Like it to enjoy lawyer jokes on Monday, links to interesting news items, tips on saving money, and other content not found on my web site.
I also have an iPad equipped with a great program called FlipBoard that keeps me up to date on the latest news, which I then Tweet. Follow me on Twitter for fun and informative content on bankruptcy, technology, and economic news.
If you don't have a Twitter account, or you just want to resist that time-sucker's siren call, feel free to be a part of my network on LinkedIn. My Twitter feed appears there as well.
There is lots of video on my site, but if you would like to see it all in one place, subscribe to my YouTube channel.

Whether or not you ever decide to become a client, please feel free to join me in the social media space and check out the content. Better yet, post some comments or Tweet back. It is a two-way street, and I would love to hear from you.

If you think I am not doing enough, or there are some topics you would like to see, please post them below in a comment. Just don't tell my wife; she thinks I spend too much time online as it is!

Good News for People Looking to Get Rid of a Second Mortgage / Home Equity Loan in Bankruptcy

Tue, 08 Nov 2011 08:00:00 EST

Last month, a New Jersey bankruptcy judge issued a ruling in a case that could help many people strip off a second mortgage on their homes, even if they have previously filed bankruptcy.

People sometimes come to my office behind on their mortgage with no way to bring it current. Due to job loss or income reductions, they can barely make the regular payments even if they were up-to-date, let alone pay crushing credit card debt and medical bills. They often end up filing a chapter 7 bankruptcy to wipe out other bills and resign themselves to losing their home. But what happens if, a year or two later, things change, and they are able to get current in a chapter 13 plan? Assuming the mortgage company has not already gone to sheriff sale, is there anything that can be done? Well, thanks to this recent decision, there is!

In the case of In re: Gloster, decided on October 13, 2011, Judge Winfield in Newark ruled that, under certain circumstances, people can file a chapter 7, discharge their credit card debt, and then later file a chapter 13 to hold off a foreclosure by paying into a plan to bring the loan current! Colloquially called a "Chapter 20" (a chapter 7 followed by a chapter 13), this has been around for a long time, but the question has been whether this can still be done after the changes to the law in 2005. The judge said that this can be done as long as:

The chapter 13 was filed in good faith; and
The proposed payment plan meets all the requirements of the bankruptcy code.

The best part of all of this is that the debtors in that case were able to remove their second mortgage entirely and only pay the first one! This is an option in a chapter 13 where the first mortgage balance is greater than the value of the home. Thus the second mortgage does not have any equity to act as collateral for the loan. If a debtor completes a plan, the second mortgage can be removed permanently, leaving the homeowner with only one mortgage payment instead of two!

If you are a New Jersey homeowner who owns a home with more than one mortgage, but only enough value to secure one of them, and needs to file bankruptcy, contact my office today to discuss the possibility of stripping off the second mortgage. Although this ruling may not be followed by the other judges in New Jersey, it is certainly worth looking into!

Couples Without Children May Now Have a Harder Time Filing Bankruptcy

Tue, 25 Oct 2011 08:00:00 EST

Since the bankruptcy laws changed in 2005, means testing has been an important factor in whether someone can file a chapter 7 bankruptcy . Having a gross household income above the median could make your filing more problematic. Median incomes, however, can be a moving target, as they change periodically.

The last time this happened was on March 15 of this year, when all of the medians went up. Well, starting November 1, they are changing. But the interesting thing is, some of them are going up, while others are going down!

Here are the changes in the gross annual incomes:

Household of 1: $59,060 to $60,322 (Increase of $1,262)
Household of 2: $70,680 to $67,503 (decrease of $3,177)
Household of 3: $85,573 to $84,896 (decrease of $677)
Household of 4: $101,106 to $101,957 (Increase of $851)

These changes mean that married couples without children may well face a more difficult time in filing a chapter 7 bankruptcy. If you are a New Jerseyan thinking about taking this step, please call my office for a free consultation. Although this change could be significant, do not assume that you cannot file. Find out for sure if there is a fresh start in your future!

Don't Think That You Can't Afford Bankruptcy

Tue, 25 Oct 2011 08:00:00 EST

As the Great Recession drags on, people are becoming worse and worse off. Out of work for over a year, and with a home that is under water and a bank account with not much in it, screaming creditors are the least of their problems. Forget being able to pay the credit card bills, are they able to pay for food? Collection calls go to voicemail, dunning letters go into the trash, and life, such as it is, goes on.

If this sounds like you, you have probably given up on ever getting out from under, thinking that you are essentially judgment proof, so what good would bankruptcy accomplish, even if you could afford to hire an attorney to do it. However, this is the wrong approach for several reasons.

Giving up on bankruptcy is giving up on a brighter future. Although you may not have much now, when things get better (and they will) those creditors will still be there ready with a wage execution, bank levy, or a judgment on your home waiting to be paid when you sell or refinance it.
Foreclosures are taking years to get to sheriff sale, so there is no immediacy to file or come up with the money for the lawyer.
If you have no wages to garnish or money in the bank to levy, then creditors' efforts to collect are not creating an immediacy to file, and thus you have more time to get the fees and costs together.

Just like more and more stores are doing layaway to promote sales, bankruptcy lawyers like me are working with clients to fashion affordable payment plans that allow people to get the fresh start that they need.

Give me a call at 856-686-9910 or contact me through this site to set up an appointment to come in. I do a free consultation, so it costs nothing to see if bankruptcy can help you and, more importantly, if you can afford it. Don't let fear of "sticker shock" or the false security of thinking you are judgment proof keep you from getting the brighter future that a bankruptcy discharge can give you!

Bankruptcy Filing Fees Going Up in NJ on November 1, 2011

Tue, 18 Oct 2011 08:00:00 EST

These days, inflation is affecting everything, including the courts. For the last several years, those filing bankruptcy in New Jersey would pay a court fee of $299 for a chapter 7 and $274 for a chapter 13. This increases periodically, which is what is about to happen. The National Association of Consumer Bankruptcy Attorneys (NACBA) has announced that on September 13, the Judicial Conference of the United States adopted a new court fee schedule which will become effective November 1, 2011. The new filing fees will be:

Chapter 7: $306
Chapter 11: $1046
Chapter 13: $281

Other fees went up as well, such as the one for adding a creditor ($30 from $26).

People oftentimes delay the decision to file bankruptcy (maybe after Christmas) or do not know when it is time to do so. This can sometimes cause a problem with issues like means testing, especially where median incomes go down in the interim.

If you are thinking about filing, contact my office right away to schedule a free consultation. You do not want to risk making a bad situation even worse!

Silly Lawsuits: Are They Funny or Disturbing?

Tue, 18 Oct 2011 08:00:00 EST

I have posted before about how litigious our society has become. However, I have been reading (and Tweeting) lately about some really silly lawsuits that have me despairing that things will get any better. I wonder sometimes at the lawyers that bring these suits and what they are doing to the profession. Here are some examples that I have tweeted.

A Fear of Flying

First there is the woman who sued Continental Airlines over turbulence on her flight. In 2009, she flew from College Station to Houston, a trip that was supposed to take about 20 minutes. She claims that, at the time of departure, weather reports showed a threat of "tornados, wind shear, and dangerously strong winds with rotating and intense thunderstorms." The flight took off anyway. She claims that the airplane "fell repeatedly, and felt as if it had lost power and was falling out of the sky."

She asserts that the turbulence caused her "extreme fear during this flight and believed that she was going to die." In her defense, the situation was supposedly serious enough for the pilots to consider making an emergency landing, but it was aborted. This was certainly a scary and traumatic experience for her, and perhaps the airline should have delayed the flight, but suit? She is claiming to have been diagnosed with PTSD, which has led to a fear of flying, and has ended her dream to work for FEMA, which would require flying. Although she might have a claim, I just wonder if any of the other passengers are suing.

A Potty-Mouthed Doll

Second, A lawyer in Arkansas is suing Toys "R" Us over an allegedly cursing baby doll. Among the sounds that the doll makes, it also apparently calls its users a "crazy bitch." He says he first heard about the doll when a client complained about it and said her child began repeating the phrase. He claims the toy store chain said it would pull the toy off its shelves, but hasn't. His suit alleges misrepresentation, negligence and breach of contract. Here is what he says:

Can you hear "Crazy Bitch"? It's rather unclear to me. In any event, why is a lawsuit being brought? Why aren't parents' groups, consumer advocates, and the like simply calling for a boycott of the store until the doll is removed? Why aren't letters being written to the manufacturer? How about ads in the paper about this, blog posts and the like? Why are cases like this on the docket taking up court time that could be spent on more serious matters (even the one brought by the Texas woman now afraid to fly)?

But the Movie Wasn't That Good!

Third, feeling deceived by a movie trailer, a woman in Michigan sued its distributor for being misleading under her state's Consumer Protection Act. She claims that the trailer for the movie Drive made her think it would be like Fast Five, and she felt tricked into seeing an inferior film. This is despite the fact that the film received good reviews and the Best Director Award at the Cannes Film Festival. Huh? You have got to be kidding here! I can see maybe airline turbulence (that can really shake you up, no pun intended), and even a cursing baby (although other remedies for that may be more appropriate), but this? She is even hoping to make it a class action lawsuit!

What do you think? Are we becoming even more litigious? Even more willing to use the courts, rather than some other, more appropriate, solution to the problem? Please post in the comments below.

Friendly's Files Bankruptcy; Closing One NJ Location

Fri, 07 Oct 2011 08:00:00 EST

A long familiar iconic restaurant in New Jersey, Friendly's, filed for chapter 11 bankruptcy on October 4. Citing the economy, and increasing competition from other casual dining and ice cream chains, it states that it expects to emerge from the bankruptcy reorganization "stronger and more competitive." Fortunately for us, only one store is closing, one in Trenton, although 62 others are going in other states. 424 restaurants will remain open, however, including 31 in New Jersey.

According to a story posted yesterday on NewJersey.com,

"The company plans to sell itself at auction, with an affiliate of the owner, Sun Capital, as the lead bidder. . . . The company requested court permission to hold a Dec. 1 auction followed by a Dec. 5 hearing to approve the sale. Under the proposed timeline, all bids must be submitted by Nov. 24. Potential buyers would have to offer at least $122.6 million in cash to qualify for the auction."

The chain goes back to its first restaurant, opened during the Depression, in 1935, in Springfield, Massachusetts, and grew to a national chain. For many here in South Jersey, going out for ice cream meant going to Friendly's, whether it was just for dessert or a Happy Endings sundae following a Supermelt or a Fishamajig sandwich.

Hopefully, this great chain will continue on after the bankruptcy. Other places like Ben & Jerry's and Coldstone Creamery are nice (and oftentimes more expensive), but they cannot replace our childhood memories of ice cream at Friendly's.

Are Debit Cards No Longer a Good Idea?

Mon, 03 Oct 2011 08:00:00 EST

A good portion of my practice consists of helping people in New Jersey through bankruptcy and defending against collection actions by creditors. Part of that representation is getting my clients onto a budget and into a mindset of responsible spending. For most (especially those filing bankruptcy) this meant a little "plastic surgery." That's right, cutting up the credit cards.

However, life today is filled with things that cannot be done without a credit card, especially if it happens online. In the past, I have recommended the use of a debit card. It functions like a credit card, but takes the money directly out of your bank account. This is convenient, but takes discipline, and an eagle eye on your account balance (which can often be checked in real time on smartphones these days). Now, this option is going to get even tougher.

Debit Cards Becoming More Unattractive

Many of you may have read in the news that Bank of America is instituting a $5 monthly fee for debit card use, starting January 1, 2012. Other big banks are expected to do the same, citing that they needs the fees to recoup revenue they will lose because of new government regulations taking effect that cap what they can charge merchants for debit-card transactions.

Alternatives for Those Not in Bankruptcy

For those not in bankruptcy, or contemplating it, credit cards can often be the better option. People who pay off their balances in full (which happens anyway with debit cards) not only avoid expensive interest charges and fees, but also earn rewards of 1% or better. Credit cards can often offer better protections than debit cards in the case of fraud or theft.

Options for Those in Bankruptcy

But what about those in bankruptcy or those whose cards have been closed out due to delinquency in payment? Well, there are some options:

The secured credit card, which offers charging privileges as long as your balance does not exceed your security deposit (or a multiple thereof). Often they will convert to conventional credit cards after 12 - 18 months.
The prepaid card, but those often involve fees and may not report your payment history to the credit reporting agencies, thus not helping you inprove your credit (FICO) score.
A debit card at a smaller bank or credit union.

There is no question that in the months to come people will have to take a hard look at the cards in their wallets and decide which ones to keep, and which ones to toss. Unfortunately, even for those in good financial shape, it isn't getting any better.

Changes to Facebook Present Further Privacy Risks

Mon, 26 Sep 2011 08:00:00 EST

I have written here before about how indiscretion on the Internet, especially on social networks like Facebook, can lead to trouble. What goes on the 'net stays on the 'net . . . forever! Facebook is constantly facing criticism from privacy advocates on its policies and features, and recent changes about to be unveiled are no different. Here are two of them you should be careful about.

Timeline

To date, Facebook has been an endless, in-the-moment stream of information in your feed with a rather static profile page with information that often reads like a resume. If you wanted to reconstruct a person's past, you had to review diverse content on various tabs. Now, all of that information will be reorganized and presented as a scrapbook, with information about you annotated and punctuated with pictures and video. This is available to anyone with whom you share it (have you looked at your privacy settings lately?) along with Facebook itself. Who are they sharing it with? When this feature goes live, you should revisit your privacy settings and be careful about how you set them. Otherwise, your life could be quite literally an open book.

Offline Tracking

Privacy advocates and hackers have also pointed out that the new Facebook could easily track where you go, and share it on its site, even when you are logged off on Facebook! Facebook puts tracking cookies on your site that can be accessed by other web sites that have those ubiquitous Facebook "Like" buttons that are used for link sharing. If you click on the button voluntarily, that is one thing. But Facebook's "Open Graph" apps can report where you are going on the Net in real time! Short of using a separate browser just for Facebook, there may not be a lot you can do, but more info should come to light once this feature launches.

Many people do not participate in Facebook because of privacy concerns. Others, like me, participate, but are very careful what we post. However, there are many users out there, especially the younger set who grew up with this technology, that share indiscriminately with no real appreciation of the consequences down the road. This can be an issue for parents in monitoring their children's online activityas well as for the older set. Be careful what you post. It's dangerous out there!

Major Update to Newsletter Just Released

Mon, 19 Sep 2011 08:00:00 EST

If you are on my mailing list, you know that I have been sending out an informative newsletter at least once a month for the past year. However recently, I released a newer version with more features that provides a much better user experience. Called "Lawyer House Calls," it provides interesting legal news and tips on a regular basis. The first issue was sent out last Thursday, September 15.

People on the mailing list are there because they are current or former clients, or they contacted my office for information. However, that is not the only way to subscribe now. If you would like to receive my e-mail newsletter, just fill out my subscription form.

Will the Jersey Devils End Up in Bankruptcy?

Mon, 12 Sep 2011 08:00:00 EST

Fox Sports reports today that the financial difficulties of the New Jersey Devils hockey team could end up with it being forced into bankruptcy, with them having missed a September 1 loan payment. The Devils' past-due payment of roughly $100 million is owed to a CIT-led lending group. Devils Arena Entertainment (the team-owned company that operates the arena and guarantees the teams' loans) owes $180 million. Although they are three-time NHL champions, the article describes them as "attendance-challenged." This situation is then complicated by two things:

The principal owners, Jeff Vanderbeek and Ray Chambers, who each own 47 percent of the team, are on the way out. Chambers has been trying to sell his non-controlling stake for a year.
Vanderbeek's relationship with the lenders is "as frosty as the rink surface," with a bank group that wants nothing to do with him. This does not help, with the team technically in default on financing.

The problem is that the Devils owe 15% more in debt than the team is worth (according to Forbes). This makes it even more difficult to sell. However, if they are declared bankrupt, lenders cannot seize the team and force a sale for at least 180 days. With the season about to kick off with a game against the NY Rangers on September 21, this could not have come at a much worse time.

Is New Jersey's Anti-Bullying Law Just Another Over-Reaction?

Fri, 02 Sep 2011 08:00:00 EST

As I reported yesterday, New Jersey's Anti-Bullying Law has gone into effect. Many people are saying "about time," while others are saying it is an over-reaction by lawmakers. It arose out of a public outcry over the suicide of a Rutgers University freshman, Tyler Clementi, nearly a year ago, by jumping off the George Washington Bridge. His roommate, Dharun Ravi, stands charged with invasion of privacy and bias intimidation. He faces up to 10 years in jail if convicted. When I read stories about this "Bill of Rights," I can't help but get a sense of déjà vu about the proposal of Caylee's Laws in states across the country. In a July post I questioned the need for a Caylee's Law and whether it was just another legislative case of closing the barn door after the horse has escaped.

The difference here is where Caylee's Laws came out of a fully adjudicated criminal case where facts were known, the anti-bullying law was inspired by an ongoing prosecution where the facts are anything but clear. This was pointed out by Philadelphia Inquirer journalist Michael Smirconish in his column today. He states that the widely circulated version of the story is that Ravi and a female student, maliciously and on more than one occasion, used a webcam to spy on Clementi while he was in an intimate encounter with another man. Supposedly, Clementi was so embarrassed by all this that he committed suicide. Ravi stands accused of exposing Clementi's sexual orientation to humiliate and intimidate him.

However, those facts are not all that certain. The defense is stating that:

there was no sexual encounter, nor any recording of a sexual encounter;
Clementi may have been depressed before he arrived at Rutgers, in part because of his own mother's reaction to his sexual identity; and
Ravi had said in one online exchange that he really didn't care about Clementi's orientation ("I'm not really angry or sad . . .").

I agree that bullying is bad and needs to be dealt with more pro-actively by schools and school districts. But the solution to the problem should not be a political response to a tragic incident, especially one where the facts are far from clear! Voting on my Facebook page is trending towards an opinion that the law will either be ineffectual, or not effectual enough. What do you think? Do we need this law? Will it be effective? Does it go too far (or not far enough)? Leave your opinions in a comment below or vote on my Facebook page.

NJ Anti-Bullying Bill of Rights Goes Into Effect Today

Thu, 01 Sep 2011 08:00:00 EST

What is considered to be the toughest legislation against bullying in the nation, New Jersey's "Anti-Bullying Bill of Rights" goes into effect today, just in time for the new school year, reports the NY Times. As in many laws passed by states, such as the move for many jurisdictions (including NJ) to have a Caylee's Law, this one arose out of a public outcry over the suicide of Rutgers University freshman, Tyler Clementi, nearly a year ago. This new law requires that all public schools:

adopt comprehensive antibullying policies
increase staff training
adhere to tight deadlines for reporting episodes, and
designate an antibullying specialist to investigate complaints.

In addition, each district must have an anti-bullying coordinator. As for oversight, the State Education Department will evaluate every effort and post "grades" on its web site. Superintendents have said that educators who failed to comply could lose their licenses.

The problem with the law, some have observed, is its scope and the burden it puts on the ever more limited resources of schools and school districts. This is because bullying occurs not only in classrooms and playgrounds, but online as well. Richard G. Bozza, executive director of the New Jersey Association of School Administrators, observed in the article: "Now we have to police the community 24 hours a day. Where are the people and the resources to do this?" The terms of the law have promped many to say that it goes too far.

How effective this law is in reducing incidents of bullying remains to be seen, as well as how practical its requirements are in implementation. Only time will tell.

You Should Consider Consulting with a Bankruptcy Attorney as Part of Your Divorce Strategy

Tue, 16 Aug 2011 08:00:00 EST

There was an excellent article in Forbes last month in which a "divorce financial strategist" offered six important tips to women facing divorce that I found to be very compelling, especially for women that are at a disadvantage economically and financially with their husbands. In brief, those tips were as follows:

Take inventory of all financial documents and records. These documents play an important role in a divorce proceeding, so it is good to make a copy of everything and keep them in a secure location (not in your home or in a place accessible by your husband).
Start getting the money together to cover the fees and costs of the divorce. A common tactic is to cut off funds from the other spouse to put them at an economic disadvantage in litigating the divorce. Be proactive and get the funds into a separate account only you control.
Open new accounts only in your name. This goes with the previous tip and is very important. Use a different bank and make sure only you have access to the money.
Get a copy of your credit report. Have a clear idea of the debts of the marriage and actively monitor what is going on. Is your husband dissipating assets or spending money on his new girlfriend?
Open a post office box. You want to be sure you are communicating securely with your divorce team, and not have your husband reading your mail.
Change your will, living will, etc. New Jersey does not allow you to disinherit your spouse, so your husband will get something if you die prior to the divorce going through, but why let him get everything? This also includes changing beneficiaries on life insurance policies, IRAs, etc. The living will is also important, as you may well not want your spouse making treatment decisions for you.

These are good points, but I would add a seventh: Consult with a bankruptcy attorney. Many divorces come about because of financial problems, and a colleague of mine once flippantly commented that every divorce is good for two bankruptcies. The issue of how to resolve marital debt is often a sticky one in divorce. Many times one spouse will get the marital home in return for the other paying off the marital debt. Unfortunately, I cannot tell you how many people have come to me because creditors are suing them due to the ex-spouse's failure to pay (or filing bankruptcy themselves). You still owe the money to the creditor, no matter what a divorce judge says.

If you have a large amount of debt, you should discuss a possible bankruptcy filing with your divorce attorney as a part of your overall strategy and contact me for a free consultation. No one wants to file bankruptcy, but it might make for a cleaner break from your spouse in a divorce.

Congress Doesn't Practice What It Preaches on Debt Management

Tue, 09 Aug 2011 08:00:00 EST

Personally, I am appalled at the hypocrisy of our Congress on the topic of debt management. Of course, considering all that has happened over the past few decades, I do not know why I should be so surprised, but I am. In 2005, they passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which amounted to sweeping changes in how bankruptcies are handled and who can file for a chapter 7 fresh start. Lawmakers allowed themselves to be convinced by the credit card lobby that Americans were using credit irresponsibly (those pesky credit cards) and then using the bankruptcy system to get out of paying. Personally, I think there was more bankruptcy "abuse" prevention than any consumer protection in that bill, but maybe that's just me.

Then, in the past few weeks we have seen our country locked in a political struggle by its lawmakers over the debt ceiling. Tea Partiers clashed with Democrats over how much spending should be cut and whether the debt ceiling should be raised. One interesting fact that came out of all of this was: the country's debt to income ratio was way out of whack, and resulted in Standard and Poor's downgrading our country's credit rating from AAA to AA+ (and then again to AA if things don't shape up un the next two years).

Huh?? This is the same Congress that six years ago wagged its finger at a significant portion of its electorate, chiding them for living beyond their means and spending more than they had! Instead of criticizing, they should have been giving "how-to lessons," as they themselves have been doing it on a much grander scale! How about it, Congress? Times are tough, and we are all trying to do more with less. How about rolling back the Draconian requirements of BAPCPA and give struggling Americans a break. If you aren't going to practice what you preach, you should get the heck out of the pulpit!

U.S. Has Credit Rating Dropped by Standard & Poor's

Mon, 08 Aug 2011 08:00:00 EST

Bloomberg Business Week reported on August 6, that Standard and Poor's had downgraded the United States' credit rating from AAA, lowering it one level to AA+ while keeping the outlook at "negative." This is the first time that this has happened and came with criticism that Congress did not do enough to cut spending or raise revenue sufficiently to reduce the budget deficit. Even worse, this rating could go down to AA within 2 years if:

spending cuts aren't made as agreed;
interest rates go up; or
new fiscal pressures create higher debt

The issue of the nation's debt ceiling had been in the news for weeks, with lawmakers at loggerheads over how to resolve the country's rising debt and record budget deficits. Fears of America defaulting on its obligations finally led to an eleventh hour compromise deal, but it now looks like that was not enough. The article quoted an S&P spokesman as saying,

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."

At the same time, Moody's Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day the President signed the bill ending the debt-ceiling impasse. In reactions around the world Japan saw no trust problems with U.S. securities, while Russia said that the S&P downgrade "can be ignored." China, however, said through its official Xinhua News Agency that the U.S. must cure its "addiction" to borrowing. It remains to be seen what this will do to the U.S. economy and interest rates on loans tied to interest rates paid on treasuries.

Could Not Raising the Debt Ceiling Actually Raise Our Taxes?

Tue, 26 Jul 2011 08:00:00 EST

Hey, I'm a bankruptcy attorney, not an economist, but all this talk of the impasse in Washington over raising the debt ceiling by August 2 has me a bit worried and confused. I do understand that the Republicans are trying to reduce the size of government by reducing spending, which, supposedly, will reduce taxes, and that the Democrats are trying to preserve essential services and entitlements, especially to those who are most needy. But unless I'm missing something, won't not raising the debt ceiling actually raise our taxes, if not immediately, but down the road?

As I said, I am a bankruptcy attorney. I see my clients default on their debt all the time and have their interest rates go to 29.99%, while their credit scores go way down. Those with lower credit scores then pay more for money on loans because of the higher interest rate they are charged. That said, what happens when a country defaults on its debt? Even if there aren't immediate consequences because our loans may not have default interest rates like credit cards, there may well be down the road when (not if) we have to borrow money again. Plus, inability to make a payment on a loan leads to unpaid interest mounting up, thus increasing the debt and increasing the payments to bring it back down again. Increased payments must in turn lead either to increased income to pay them (higher taxes) or reduced spending (even deeper budget cuts).

So, am I missing something here or could not raising the debt ceiling actually raise our taxes? I am sure there is some macro- (or is it micro-) economic point I am overlooking, or perhaps I am oversimplifying things. Just trying to apply some common sense and 20 years as a bankruptcy attorney. What are your thoughts? Is not raising it as bad as everyone is saying or is it just political posturing by some politicians in order to allow them to spend more money? Leave your comments below and let me know!

New Jersey Reacts to Casey Anthony Case By Proposing Its Own Caylee's Law

Fri, 22 Jul 2011 08:00:00 EST

Just about everyone has heard about the Casey Anthony case in Florida and her acquittal on all charges except lying to investigators. This has sparked a movement across the country to propose stronger legislation regarding reporting missing or dead children, commonly referred to as "Caylee's Law." At least 16 states have done so. Here in New Jersey, State Assemblyman Domenick DiCicco (along with John Amodeo and Vince Polistina) has proposed such a law. A bill was also introduced in the Senate by Sen. Nicholas Sacco on July 11, 2011.

According to DiCicco, this law would require "a parent or guardian to report a young child missing within 24 hours. Failure to do so would be a third-degree crime carrying a three to five-year sentence with a mandatory three years served. Purposefully concealing a death would be considered a second-degree crime punishable by five to 10 years imprisonment."

The current New Jersey law addressing this classifies it as a disorderly person's offense (NJ's version of a misdemeanor) with a presumption against incarceration, and does not set forth a time frame for reporting the child missing. The bill's sponsors believe that there should be a defined time period and more significant consequences. Amid this wave for change, there are those who question whether we need a new law or whether the current laws on the books (such as child abuse) would suffice. Others staunchly support it. It will be interesting to see how this plays out through the legislature in the next few months and whether, in the long run, it does help protect our children.

Do We Need a Caylee's Law in New Jersey?

Fri, 22 Jul 2011 08:00:00 EST

I posted earlier today about a proposed "Caylee's Law" in New Jersey that would specify when a parent must report a child missing and increase significantly the penalties for failing to do so. This is not the first time, however, that our state has reacted to a tragedy involving children by enacting legislation to try and prevent it from happening again. Megan's Law led a national trend for a sex offender registry following the murder of 7-year-old Megan Kanka. But the question then becomes, in this case, do we really need this law or do the current laws suffice?

One of the bill's proposers in the Assembly, Domenick DiCicco, answers these questions "yes" and "no." We need it, he says, because the current law does not specify a time frame for the reporting, and does not carry significant enough penalties. The question becomes though, if that is the case, how long was our current law on the books and why does it take a tragedy like this to call our attention to it?

An editorial in the Gloucester County Times on July 14, 2011, questions the need for the law. It asks why the parent or responsible adult could not be charged with child neglect or abuse. It goes on to say that,

"Outrage at a sensational trial verdict in another state is not a good reason to enact a law. A good reason, in this case, would be unbiased assessments from police and child- protection agencies stating that Caylee's Law would aid in prompt searches for missing children. In the first hours and days after a child's disappearance, that always must be the first priority."

This seems to be a sensible and measured response to the situation. Although NJ may have felt that its current law was sufficient prior to the Casey Anthony case, current events would sensibly dictate a need for its review and input from experts. However, this should really be done prior to enacting new laws with significant penalties. If that review reveals the need for new laws, then fine. But if they do not . . .

What do you think? Does New Jersey need a Caylee's Law in light of what is already on the books? Should a calm and reasoned investigation be conducted first before rushing to create new laws? Please add your opinion by posting a comment below.

The Importance of Cutting Costs and Expenses to Live Within Your Means

Tue, 05 Jul 2011 08:00:00 EST

I tell all of my bankruptcy clients that the fresh start they get from filing is more than just the wiping out of their debt; it is the development of a new focus on their living expenses and an increased effort to live within their means (i.e. income). Without making sure that each month you spend no more than you bring in, that fresh start will not last very long as you spend yourself into another hole.

To that end, one of the things I do in every case is examine how much it costs my clients to live, and look for ways to cut back on those expenses to eliminate any deficit spending or create an income surplus or cushion against unexpected expenses. Most costs are fixed, or beyond your control, but others are not. This gave me the idea one day to write a series of articles on different expenses and how you can work to reduce them. This is handy information to have, not only if you are considering bankruptcy, but also if you are looking to avoid filing it.

To start, I wrote a post on cell phone bills and how you can cut them back to save money. In the coming weeks I will add more articles covering such topics as your cable bill, insurance premiums, and utilities. Check back often or follow me on Twitter to see when things are added. Better yet, share any of your own cost-cutting ideas with us by posting a comment below. I'm sure everyone will appreciate it!

New Jersey Might Be Heading for a Flood of New Foreclosures

Mon, 27 Jun 2011 08:00:00 EST

As reported today in the Star Ledger, New Jersey may be headed for a flood of foreclosure suits brought by banks, once the key players have gotten their acts together. On December 20, 2010, New Jersey Chief Justice Stuart Rabner announced an initiative to clean up the "robo-signing" problem of many mortgage companies, including Bank of America, JP Morgan Chase, GMAC Mortgage, CitiBank, OneWest Bank and Wells Fargo.

In fact, as of June 9 of this month, foreclosure paperwork for pending and future cases must include an affidavit certifying that either an employee of the lender or an employee of the lender's servicer has personally reviewed the case and confirmed its accuracy. A court-appointed special master is reviewing the material and will report on whether the banks have satisfied a number of changes. As a result, foreclosure filings are down 86% so far this year as compared to last year.

All of these changes have slowed foreclosures already commenced, and the time to complete a foreclosure from start to finish is now estimated at three (3) years! People are certainly using that time to get some relief by seeking modifications. But this is also creating quite a backlog. According to the article,

"[l]enders are waiting to file an estimated 28,500 foreclosures, and another 55,000 mortgage loans are currently more than 90 days delinquent, according to LPS Applied Analytics, a real estate data firm that tracks mortgage performance. At the current rate, it would take 49 years for banks to clear the logjam of mortgage loans that are currently in the foreclosure process or are more than 90 days delinquent, LPS found."

Not only is this influx going to bog down the courts, it is also going to have a significant negative impact on housing values. Certainly many mortgage companies have not been following proper procedures, and some have been out-and-out predatory on some of their loans. However, when the foreclosure ship finally rights itself, it is going to be anything but smooth sailing.

Do Recent Decisions on Joint Bankruptcies by Same-Sex Couples Really Create Equality?

Mon, 20 Jun 2011 08:00:00 EST

In the last two months, there have been three bankruptcy rulings that same-sex couples can file joint bankruptcies. I reported on one from California, but there is another, In re Somers and Caggiano, in New York that recognized an out-of-state (Vermont) same-sex marriage under New York law. These courts are looking to create equality under the law by allowing same-sex couples married under their state's law to have the same rights as heterosexual couples. The question is, has that been accomplished by those rulings? Before you answer, here are a couple of points to consider.

First, these rulings only allow for joint filings in states that have legalized same-sex marriage (Connecticut, Iowa, Massachusetts, New Hampshire, Washington DC and Vermont) or recognize those that are legal in other jurisdictions (New York, Rhode Island and Maryland). Thus this is only an issue in 8 of the 50 states plus DC (16% of the states). Joint filing is still denied in all other federal districts. Since there is no same-sex marriage under federal law (in fact there is federal law to the contrary under the Defense of Marriage Act or DOMA) there is no consistency across the nation. Some gay couples can file jointly, and others cannot.

Second, same sex couples actually get an advantage over heterosexual couples in means testing. Married couples must disclose joint income, even though only one of them is filing. This is not true of the gay couple residing in a state without same-sex marriage. The filing debtor need only disclose his/her income, which can make it much easier to file a chapter 7 if the combined income is over that state's median.

So what do you think? Do these rulings accomplish what they set out to do? Or have they simply created more efficiency in the administering of one bankruptcy instead of two? Post your comments below.

Gay Couple Ruled Allowed to File a Joint Bankruptcy in California

Fri, 17 Jun 2011 08:00:00 EST

Individuals can file a bankruptcy singly, or jointly with a spouse, paying the same filing fee, and usually the same attorney fee, as if they had filed singly. The question becomes, with same-sex marriage being such a hot topic, can gay couples file joint bankruptcies? The definition of the word "spouse" in the bankruptcy code comes from the Federal Defense of Marriage Act (DOMA), which states that it is "a person of the opposite sex who is a husband or a wife." 1 U.S.C. § 7. Therefore, one would think that the answer is "no."

However, according to 20 bankruptcy judges in the Central District of California, the answer is "yes." In the case of In re Balas and Morales, the U.S. Trustee moved to dismiss the joint chapter 13 filing of Gene Balas and Carlos Morales because neither met the definition of "spouse" under DOMA, and as such, the cases had to be either dismissed or severed and administered as separate cases. The matter was heard, and on June 13, 2011, the court held that DOMA was unconstitutional in its definition of the word "spouse" and deferred to state law on the issue. The court stated that the debtors had been legally married under California law, which should be controlling, and as such, the bankruptcy filing could proceed as is.

This ruling is by no means authoritative in other federal districts, but if the logic is followed, it would still not spread very far. As of this writing, there are 5 states (Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont) plus Washington DC, and many foreign jurisdictions, where same-sex couples can legally marry. In addition, there are 3 more states (New York, Rhode Island and Maryland) that recognize same-sex marriages validly performed elsewhere. Thus, ironically, the ability to file a joint petition in bankruptcy would be determined by state, and not federal, law.

Here's the New Logo for My Law Firm

Wed, 15 Jun 2011 08:00:00 EST

Last month I asked you to help me with something. I had decided to have a logo designed for my law firm, but after getting 80 submissions from the artists, I couldn't make up my mind! As a result, I sent out a distress call asking you to vote for the one you thought was best and why. Two weeks and dozens of votes later, I made the decision! Here it is!

Thanks! I couldn't have done it without you!

Failure to Give Sufficient Breath Sample in DUI Case Ruled a Refusal in NJ

Fri, 03 Jun 2011 08:00:00 EST

In New Jersey, all drivers are required to give two breath samples to a breathalyzer if the police have probable cause that he or she is driving drunk. You do not have the right to refuse to do so. Upon being taken to the station, a standardized statement is read to the driver (commonly referred to as paragraph 36), basically explaining that they are required to give breath samples. If an "ambiguous or conditional" answer is given, then a supplemental paragraph is read. If you do not then agree to give the sample, you are charged with a refusal.

But what if you agree to give the sample when the first part of Paragraph 36 is read? You say "Yes" loud and clear. Are you safe from a refusal charge? Not necessarily, says the New Jersey Supreme Court. In the case of State v. Schmidt, the court held that a driver can still be charged if he is unwilling or unable to give a sufficient breath sample to the machine; no further warnings are necessary from the police (such as reading the second part of Paragraph 36).

For the Alcotest breathalyzer machine to get an accurate reading, the driver must blow for at least 4.5 seconds and yied a volume of 1.5 liters of air. In this case, the driver gave a short, one second blow of air, and then one lasting 4.9 seconds. When instructed that he had to give two samples for at least 4.5 seconds, or be charged with a refusal, he again gave a short, one-second blast of air. The police then charged him with refusal, and the conviction was upheld by the Supreme Court. The question is left open as to whether, if a medical reason is given for failure to give a sufficient sample (like COPD), a refusal charge would still stick.

The court clearly was concerned with people trying to get out of a DWI conviction by gaming the system. They do not want drivers agreeing to take a breath test and then refusing to give enough of a sample for the machine to get an accurate reading. So, if you are stopped for drunk driving, say yes to the test, take a deep breath (twice), and blow! If, as a result, you are charged with DUI, contact my office right away for a free consultation!

Help Me Choose a Logo for My Law Firm

Sat, 28 May 2011 08:00:00 EST

I recently decided to get a logo for my firm to use in marketing. However, although I am a good attorney and have helped a lot of people in my career, I am not an artist. Therefore, I hired a design firm, 99Designs, to help me. In seven days, 26 independent graphic artists submitted 80 ideas. Wow! Talk about information overload! On top of that, they only gave me two weeks to decide, just 14 days to make up my mind!

I've managed to narrow it down to the top 8, but I need your help! Please! Go to this site by clicking on the link below by June 7, 2011, ranking the designs by assigning 1 to 5 stars and leaving your comments. This will help me to decide which one to use. I will then post the chosen logo on this blog. Thanks!

http://99designs.com/logo-design/vote-xwq6dj

Another Court Rules that an Employer Can Refuse to Hire Based on a Bankruptcy Filing

Mon, 23 May 2011 08:00:00 EST

New Jerseyans have already found out that private employers can refuse to hire you because you filed bankruptcy, due to the federal Third Circuit court's decision in Rea v. Federated Investors, 627 F.3d 937 (3d Cir. 2010). This was actually the first ruling on this issue, and was followed by the Fifth Circuit in In re Burnett, in March of this year. Now, the 11th Circuit, which includes North Carolina where the case originated, has supported this growing trend in Myers v. TooJay's Management Corp., decided just this past Tuesday, May 17, 2011.

In that case, the debtor, while employed by Starbucks, interviewed with TooJay's and went through a two day on-the-job evaluation. Two days after his evaluation period, he gave notice to Starbucks, only to be told by TooJay's that he would not get the job because he had filed bankruptcy. Although he was able to go back to his old job, it was at reduced hours. The court, in making its ruling, noted that it was following the precedent of the other circuits in the Rea and Burnett cases.

The importance of this court ruling is that it shows a trend in the law as it spreads throughout the federal circuit courts of appeal. It amounts to a clear warning to debtors that only their current job is secure should they file bankruptcy. Any new employer (unless it is public employment, which cannot discriminate on this basis) can just "round file" your resume upon doing a credit check. Although this is very discouraging for people facing bankruptcy because they have already lost their jobs, it is also a warning for those looking to change jobs. You might want to get that new position and be secure in it before you file.

Be Reasonable, Do It My Way: Why I Use Standard Procedures to Help Clients File Bankruptcy

Thu, 19 May 2011 08:00:00 EST

Sometimes my clients will get frustrated with me because of the particular way I ask them to submit the information necessary to prepare their bankruptcy petition. They provide photocopies of bills instead of the originals, give me handwritten lists or spreadsheets showing all of their debts, give me several copies of the same bill instead of one, or they give me bank statements showing the direct deposit of their net pay rather than a paystub showing the gross wages. Although it may seem like I am being inflexible in my requirements, I am actually trying to help them.

First, I am striving to prepare a complete and accurate bankruptcy petition for filing. How does this help the client? Well, I have been doing this for a long time (20 years), and I know how problems can arise if things are not done meticulously and thoroughly. Assets might not be disclosed, thus putting a client at risk of not getting their fresh start or even going to jail! A creditor might not be listed, or a correct address might not be used, thus possibly leading to a debt not being discharged (especially in a chapter 13) because the creditor did not get proper notice. If income and cash flow calculations are not done correctly (especially means testing), a client's case could face dismissal for bad faith filing.

Second, I am trying to save the client time and money. Attorneys usually charge a flat fee for bankruptcies. They are able to do this because they have developed a procedure that allows them to do the work as efficiently as possible, in as little time as possible. Thus the attorney makes money, and the client gets his or her bankruptcy filed as quickly as possible. If these procedures are not followed, at the very least the client's petition is held up, and at they very worst, they end up paying more money to have it done!

So, although it may seem like I am inflexible or set in my ways: making people fill out the MyCaseInfo questionnaire completely, then gathering all of the documents together, and then insisting on meeting with them to go over everything in my office rather than just having them drop it off. But I am really trying to make sure that their bankruptcy goes through without a hitch and that they get the fresh financial start that they need, and came to me to be sure that they receive. In short, there is a method to my madness, so please bear with me and understand: I care about you and your case, I do not want you to have problems, and I want to give you a better quality of life through a fresh start. Please help me to help you!

NJ Court Rules That Public Employee Loses His Job for Destroying Evidence

Sun, 08 May 2011 08:00:00 EST

Under New Jersey law, anyone holding public office or employment must forfeit same if he or she is convicted of an "offense involving dishonesty." (N.J.S.A. 2C:51-2) There are very few cases in our courts involving this law, but last week, in the case of State v. Kennedy, the New Jersey Appellate Division ruled that the criminal offense of tampering with physical evidence is a crime involving dishonesty. As a result, the defendant, an employee with the Department of Public Works, was required to forfeit his public employment.

In this particular case, the defendant was convicted of tampering with evidence (he swallowed heroin that was found in his possession). What is of note here is that although the criminal misconduct did not relate to his public employment, nor was it a serious enough crime to meet the statute's threshold (it was a fourth degree crime, and the statute requires it be third degree or above), the Court still ruled that forfeiture is mandatory because tampering with physical evidence is, as a matter of law, an offense involving dishonesty.

What is also important to note here is that this is only the second time that the Appellate Division has had the occasion to rule on whether the violation a particular statute constitutes an offense involving dishonesty (State v. Musto, 188 NJ Super. 106 (App. Div. 1983)). All of the other cases under this statute relate to the concept of "touching on the public office."

Does New Jersey's New Law Really Help the Unemployed?

Sun, 08 May 2011 08:00:00 EST

I recently posted an article talking about a new law being enacted in New Jersey that prevents an employer from posting an ad or job listing that includes:

Any provision stating that the qualifications for a job include current employment;
Any provision stating that the employer or employer's agent, representative, or designee will not consider or review an application for employment submitted by any job applicant currently unemployed; or
Any provision stating that the employer or employer's agent, representative, or designee will only consider or review applications for employment submitted by job applicants who are currently employed.

Since doing so, I have been giving it a lot of thought, and am wondering whether this law will have any particular effect, as a practical matter. After all, the law only prevents employers from saying in job postings that "the unemployed need not apply." So what? So the employers will just delete this type of language from ads and postings, while still carrying out this policy "under the radar."

In a recent discussion thread on LinkedIn, this law has been called "feel-good legislation," meant to be a "look what I did for you" talking point for politicians running for re-election, and merely a Band-Aid on the problem. I think the law needs to go further, as the proposed federal legislation mentioned in my post does. The unemployed need to be a "protected class" under discrimination laws. What do you think? Does this law help or not go far enough? Please leave your thoughts in the Comments.

NJ Law Bans Discrimination Against the Unemployed

Wed, 27 Apr 2011 08:00:00 EST

As the Great Recession drags on, and the unemployment rate stays high, a job can be very hard to come by. This has been aggravated for quite some time in New Jersey by employers overtly putting in their job listings that the unemployed need not apply. Thus, you could only get a job if you already have one. As can be expected, this practice has not exactly helped matters.

Well, New Jersey is fighting back with a new bill signed into law by Governor Christie recently that bans overt discrimination against the unemployed in print or online. This is the first legislation of its kind in the United States. Penalties run from $1,000 for the first offense to $5,000 for subsequent offenses. This will help, but it remains to be seen how much. Employers can still have that policy, they just won't put it in their job listings. This will only make this type of discrimination harder to prove and punish. At the very least, it will hopefully send them a message that this practice must end.

As reported in The Huffington Post, this effort is also being exerted at the federal level. Even more encouraging is that this law prohibits the discrimination outright, not just in job listings. The article states that,

"Rep. Hank Johnson (D-Ga.) introduced similar legislation on a federal level in March that would amend the Civil Rights Act to include unemployed people as a protected group. The Fair Employment Act of 2011 -- a bill which is still in committee -- would make it illegal for employers to refuse to hire or to lower compensation based on employment status."

With one of the highest unemployment rates in this country, this type of legislation is much needed and long overdo. The jobless rate will never drop if the unemployed are not given jobs. Perhaps this will send a sufficient message to employers that unemployed job candidates have just as much to offer as the employed ones.

Something's Gotta Give: Should Student Loans Be Dischargeable in Bankruptcy?

Mon, 25 Apr 2011 08:00:00 EST

I have been reading more and more about the "Boomerang Generation," as the economy makes it tougher and tougher to find a job. This is especially true of young people graduating colleges and universities without any prosopects of employment. They end up moving back in with Mom and Dad. Unfortunately, their student loan debt ends up moving in with them. Young people are spending more and more money on higher education, including post-graduate degrees, and racking up more and more debt before they enter the job market.

I have written here before about how student loan debt is extremely difficult to discharge in bankruptcy. The requirements are stringent, although some have succeeded, but all in all it is very discouraging. Originally, student loans that were guaranteed by the government and more than seven years old could be discharged without showing real hardship. Then in the nineties the seven year minimum was eliminated, and all Guaranteed Student Loans (GSLs) could only be discharged if "real hardship" was shown. Finally, in 2005, the bankruptcy code was changed again to make all educational loans, from any lender, nondischargeable absent said showing.

Massachusetts bankruptcy attorney Nicholas Ortiz, on his blog Student Loan Laws, posits in a recent post that "We've witnessed a lot of debt crisis lately: the mortgage meltdown, government bailouts, rising credit card defaults, and skyrocketing medical debt are a few examples. I am convinced that student loans are the next shoe to drop." Hmmm.... I know, as any lawyer does, that there are very few jobs out there today for the newly minted lawyer. However, that does not stop law schools from continuing to recruit and grind them out. I am also sure that this is true in many career areas.

With all of this happening, I personally think that something has to give. Either banks have to be stricter about lending money for education if the degree (such as the law) is not one reasonably anticipated to result in employment that will generate income sufficient to pay it back, or the student should be able to discharge the debt if the job market does not live up to the hype of the educational institution. What do you think? Let me know in the Comments to this post or go to my Facebook page and vote in the poll: Should student loans be dischargeable (Yes, no, or only if not backed by the government)?

U.S. Regulators Hit Mortgage Banks with Penalties

Sat, 23 Apr 2011 08:00:00 EST

The Wall Street Journal reported recently that U.S. regulators have hit the nation's largest banks with the first round of penalties for improper home-foreclosure practices. Those hit were Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc. Also receiving orders were Ally Financial Inc., HSBC Holdings PLC, MetLife Inc., PNC Financial Services Group Inc., SunTrust Banks Inc., U.S. Bancorp, Aurora Bank, EverBank, OneWest Bank and Sovereign Bank.

They also issued detailed orders to revise the way the banks deal with troubled borrowers. Under the orders, these banks have 60 days to establish plans to clean up their mortgage-servicing processes to prevent documentation errors. In addition, they must

take steps to ensure they have enough staff to handle the flood of foreclosures;
make sure that foreclosures don't happen when a borrower is receiving a loan modification;
ensure that borrowers have a single point of contact throughout the loan-modification and foreclosure process;
hire an independent consultant to conduct a "look back" of all foreclosure proceedings from 2009 and 2010 to evaluate whether they improperly foreclosed on any homeowners; and
require each company to establish its own process to consider whether to compensate borrowers who have been harmed.

These penalties, however, did not include fines. They are coming, it is just a matter of when and how much.

These penalties also came as members of the Obama administration, along with representatives of state attorneys general met with the bank representatives as part of ongoing efforts to reach a broader deal over alleged mortgage-servicing abuses. The question is, will these penalties be a help or a hindrance to the actions being taken by the individual states against these banks. At this point, only time will tell.

New Mexico Regulations Help Bar Collection of Old Debt

Tue, 19 Apr 2011 08:00:00 EST

One of the things that has infuriated me over the years is the creditor practice of selling off old debt to companies called "factors" who then flip them over to unscrupulous collection agencies to collect. On far too many occasions it is on defaulted debt that has passed the applicable statute of limitations. This, in my opinion, violates the Federal Fair Debt Collection Practices Act (FDCPA), as it involves debt collectors making fraudulent misrepresentations of fact to debtors (i.e. that the debt is still collectible in a court of law). Well, I was pleased to see that the State of New Mexico agrees.

On March 15, 2011, regulations promulgated by their attorney general went into effect that require debt collectors to inform people that the debt they are trying to collect was too old to collect in a court proceeding. Imagine that! Collectors forced to say, "Our client bought this debt, but you don't have to pay it." How many agencies do you think are going to comply with that? In a statement on their web site, Attorney General King said,

"If the debt is time-barred, the debt collector must so inform the debtor in both written and telephonic communications. The Rule also requires the debt collector to tell debtors that they would "revive" the debt (start a new enforcement period running) by making a partial payment on the obligation in any amount, or by signing a written admission or new promise to pay."

He also affirmed my position that the failure to do so violates the FDCPA as a material misrepresentation.

"Under the state's Unfair Practices Act, the fact that a debt is so old that a person can not be sued to collect on it is considered material. If it is material, New Mexico law requires that it be disclosed to the debtor. This Rule is intended to ensure that debt collectors provide important information to consumers so that they can make informed decisions when they are confronted with a demand to pay an old unenforceable debt."

Wow! This, hopefully, will provide significantly greater protection for New Mexicans. I just hope that more states get on the bandwagon and enact similar laws and regulations to prevent these abuses, especially in these tough economic times!

Mortgage Foreclosure Scandal Continues: Mortgage Servicer in Big Trouble!

Sun, 17 Apr 2011 08:00:00 EST

For quite some time the news has been full of stories about mortgage companies and their shenanigans in foreclosure actions. "Blind Stamping," the inability to produce key documents, and other tactics, have landed them in hot water. However, this crisis has now spilled over into bankruptcy court, more specifically in Louisiana.

One of the largest mortgage loan servicing companies in the country, LPS (formerly known as Fidelity National Default Solutions), was caught red handed in outright fraud by a New Orleans bankruptcy judge. In an article posted to the Bankruptcy Law Network (BLN), it was reported that a married couple in chapter 13 bankruptcy had had their mortgage company Option One (through LPS) seek relief from the bankruptcy stay to proceed with foreclosure because the debtors were behind on their mortgage payments. Only one problem: they were current!

In the course of the motion for stay relief, the court investigated the facts behind an affidavit of a Ms. Dory Goebel, who was ostensibly an Assistant Secretary for Option One Mortgage Corporation. Come to find out (as reported in BLN's post):

Dory Goebel wasn't an Assistant Secretary for Option One; She was an employee of LPS.
Option One had no control over the debtor's file once in bankruptcy. LPS controlled every aspect.
Bankruptcy payments were sent to Option One and not entered into LPS's system. Option One notified LPS that it had the bankruptcy payments LPS accused the debtors of not paying.
The problems with the debtors' account had occurred because LPS failed to log their bankruptcy into the system.
Option One's lawyers initially did not tell LPS that the debtor's claimed to have made all bankruptcy payments.
Although the affidavit signed by Ms. Goebel referred to attachments, there are never any such attachments, and she never verifies the truthfulness of any affidavit she signs. She merely compares the numbers on a page with numbers on a computer screen. She does not review any information in the loan file, even if it is available.
Ms. Goebel signs dozens of affidavits per day, spending about five minutes on each file.
Even if Ms. Goebel knew the information contained in the affidavit were patently false, she would have signed it anyway because an attorney created it.
Ms. Goebel followed the procedures in place at LPS. In other words, every single affidavit executed within the walls of LPS is just as false as the one filed in the the debtors' case.

Needless to say, the bankruptcy judge was not pleased! These motions are often argued using written affidavits of mortgage company employees to spare them the expense of coming in to court on every single case. As a result, these documents are relied upon to be true and accurate. That will most likely not be the case with LPS for quite awhile!

How Non-Mandatory Union Dues Can Hurt a Debtor in Bankruptcy

Wed, 13 Apr 2011 08:00:00 EST

Butler County Pennsylvania House Republican Daryl Metcalfe is proposing legislation that would end mandatory payment of union dues as a condition of employment in the state. Sounds great, right? You are not required to join a union in order to get a state job. You also do not have to have more money taken out of your paycheck. However, that can cause a problem for you if you do want to be a member of the union, are paying dues, but then have to file bankruptcy.

If you are over the median income in your state for your household size, you have to prove that you do not have significant income left over to pay debts in a means testing analysis. Part of the analysis involves taking the gross pay and taking out payroll deductions to calculate the net. Well, your union dues are a payroll deduction, so that can be deducted from the net, right? Wrong! If the dues are not mandatory (i.e. required for you to keep that job), they cannot be deducted in means testing! When it comes to the proposed legislation, this comes under the heading of "unintended consequences."

On the whole, I am sure that many PA state employees would welcome not having the expense of a union if they do not want to be a member, but those who do would want to protect those moneys from creditors. Perhaps this is another example of "be careful what you wish for."

Epsilon Data Breach Increases Phishing Risk

Thu, 07 Apr 2011 08:00:00 EST

You have probably already received one of these e-mails in your inbox: a notice from Verizon, Bet Buy, Marriott, or some other company where you have an online account, saying that a company called Epsilon Data Management, which handles their commercial e-mailing lists, had a breach in security on their servers, and the hackers got away with certain customer data. But the warning states that the data was limited to your name and e-mail address, nothing else.You may have even said, "Okay, no big deal. No really sensitive data was taken." Unfortunately, it can be a big deal.

The problem is that this data was most likely stolen as part of a "phishing" campaign. This is where bogus e-mails are sent to people in an effort to get them to go to bogus web sites that either launch malware on your computer or ask you for confidential information ("Hey, it sure looked like my bank's web site!") The danger comes in because this data makes these e-mails look even more legitimate because the "Phishers" know you do business with these companies. An article in today's Philadelphia Inquirer offers five basic suggestions for protecting yourself from these "phishing" schemes:

Never click on links in e-mails. Use a link you have for that site in your Favorites, or type it yourself into the browser window.
Display e-mail in plain text format. Many e-mail programs, like Outlook, can display e-mails with fancy graphics and formatting. But this can hide true web addresses in the displayed links or put malicious code in the graphics themselves.
Keep all of your software updated.
Type or paste web addresses.
Use multiple e-mail addresses. If you register particular e-mail addresses at particular sites, "phishing" e-mails will look more out of place if they are just randomly sending to gleaned addresses.

Check out the article itself for more detailed information on the story, and always be vigilant online. It is one of the most important things you can do to avoid identity theft.

What Bankruptcy Can Do to Fix Traffic Court Problems

Sun, 03 Apr 2011 08:00:00 EST

One question I often get when people call my office about bankruptcy is whether it can help with fines and surcharges due to past traffic tickets. In fact, even if they do not bring it up, it is one of the standard things I ask about in an initial interview. This is because having these debts can determine which bankruptcy is right for you: chapter 7 or chapter 13.

My advice to people in these situations, especially if their driver's license is suspended because of it, is to make a payment plan with the traffic court on the fines and file a chapter 13 to make payments on the surcharges. This is because fines are not dischargeable because they are not debts and surcharges can only be discharged in a chapter 13. Bankruptcy can also discharge or restructure other debt (like credit cards) that might be interfering with your ability to pay the fines. Thus this is the best way to get things back on track and get your license restored if it has been suspended.

If you find yourself in a situation like this, contact my office for a free consultation to see if I can help.

Over 1,100 Breathalyzer Results Thrown Out in Philadelphia DUI Cases

Thu, 24 Mar 2011 08:00:00 EST

Philadelphia city officials announced yesterday that four of their eight breathalyzer machines had given false readings in 1,147 instances, taking place from September 2009 through November 2010. Although these machines are supposed to be tested and calibrated on a regular basis, they were not, and they gave readings that were substantially higher than they should have been. Just to give you an idea of the scale this represents, these officials stated that the police had arrested about 8,000 to 10,000 people on DUI charges last year. Thus these erroneous findings would represent 9.2% to 11.5% of those cases, on average.

Police and prosecutors are quick to point out, however, that this does not mean that all of those cases will now be dismissed. They are simply being opened for new trials. According to the article,

"[District Attorney Seth] Williams said he expected a good portion of the convictions to hold up without the results, based on other evidence. . . . Even without results, a prosecutor may call the arresting officer to testify about a driver's 'general impairment' - symptoms such as unsteady gait, slurring of words, or the odor of alcohol on the breath."

Just how much of an impact this will have on convictions remains to be seen, but it does illustrate how much the state relies on these machines to determine impairment of drivers, and how careful all concerned must be in using the results of these tests.

Careful Review of Breathalyzer Results Important in New Jersey DUI Cases

Thu, 24 Mar 2011 08:00:00 EST

I have always told my clients that, despite the expense, they owe it to themselves to hire an attorney to challenge a DUI charge. Although many defenses have been eliminated over the years, the state still has the burden of proof, and the courts are quite clear on what hurdles must be overcome in order to get the results of a breathalyzer test into evidence to prove that you were driving under the influence. The machines must be inspected and calibrated on a regular basis, officers must be properly trained (and re-trained) on how to operate it, all of the instruments used in those calibration tests must also be certified as accurate, and the test results must be in a certain range of tolerance.

Nothing could prove this point more than the story in The Philadelphia Inquirer today about 1,147 breathalyzer test results being thrown out, resulting in all of the cases being reopened. In fact, the problem was brought to the attention of city officals by a DUI defense attorney! In DUI cases, as in life, the devil is in the details, and those details need to be scrutinized. Many a DUI has been amended down to a careless or reckless driving offense because the breathalyzer results were found to be inadmissible.

The moral of this story is that if you have been charged with a DUI, you should contact my office as soon as possible to go over the state's proofs. With the significant penalties that would result from a conviction, it could make all of the difference in the world!

Complications of NJ Traffic Tickets for Out of State Drivers

Wed, 16 Mar 2011 08:00:00 EST

With New Jersey being such a densely populated state, with so many roadways, and being part of the DC to NY corridor, many of the clients I represent in traffic court are not New Jersey residents. This can add an additional layer of complication to the case, as it is not so much what happens to you in New Jersey when you get the ticket; it is what happens when you get back home.

Being located in South Jersey, most of my out-of-state clients are from either PA or Delaware. For that reason, I have become acutely aware of how these states' laws differ in key areas, such as speeding and DUI. Sometimes they fare better than New Jersey residents, and in others, they do not.

One example is speeding. New York, PA, and Delaware each have a different sliding scale on points depending on how fast you were going. PA residents can often plead to a speeding ticket with the stipulation that the were going no more than 5 mph over the limit. In this way, they avoid points altogether. This is helpful, since they cannot use New Jersey's "no point" ticket, Unsafe Operation. Unfortunately, neither can Delaware residents, and they do not have a "no point" speeding ticket like PA.

I do not practice in these other states, so I always advise seeking an opinion from an attorney in your own home state before pleading to anything in a New Jersey traffic court. I can then work with the local prosecutor to come up with plea deal that will minimize the consequences once you get home. Should you get a ticket in New Jersey, please contact my office for a free consultation.

Median Incomes for Bankruptcy Going Up: Should You Wait to File?

Thu, 10 Mar 2011 08:00:00 EST

Means testing in bankruptcy is designed to force more upper income people into a chapter 13 bankruptcy repayment plan. This determination starts with whether a household's gross monthly income is over the state's median income. These median income figures are adjusted periodically and make this bright line a moving target. Well, the line is about to move again on March 15, 2011. The last two times this happened, the figures went down. Fortunately, this time they are going up. Here are the changes in the gross monthly incomes:

Household of 1: $58,107 to $59,060 (Increase of $953)
Household of 2: $69,539 to $70,680 (Increase of $1,141)
Household of 3: $84,192 to $85,573 (Increase of $1,381)
Household of 4: $99,474 to $101,106 (Increase of $1,632)

This upward trend of median incomes should encourage anyone thinking about filing a chapter 7 bankruptcy to contact an attorney right away. If you are a New Jerseyan thinking about taking this step, please call my office for a free consultation.

Will the Federal Government Shut Down on March 4?

Mon, 28 Feb 2011 08:00:00 EST

The fiscal year for the federal government starts on October 1. It is now February 28, 2011, and no budget has been approved for fiscal year 2010-2011. It has been operating under continuing resolutions, but that could end at the end of this week if no budget is approved or continuing resolution is passed. What can that mean to you?

If you are filing bankruptcy, your case could be affected. In the last shutdown, more than 3,500 cases were delayed. In addition, as reported online by CNN yesterday,

"Dring the last major shutdown . . . 200,000 passport applications went unprocessed, and toxic waste cleanup work at 609 sites stopped. The National Institutes of Health stopped accepting new clinical research patients, and services for veterans, including health care, were curtailed."

If you are waiting for your tax refund, you might have to wait longer, as the furlough may delay checks from being cut. On the other hand, essential services will still be maintained.

"Federal workers who provide medical care on the job would be kept on, as well as employees who handle hazardous waste, inspect food, patrol the borders, protect federal property, guard inmates or work in power distribution. Workers who protect essential elements of the money and banking system would also report to work."

The mail will still be delivered, as the postal service is self-funded. As for Social Security benefits, the article stated: "During the last major shutdown, the Social Security Administration mailed checks throughout the crisis, and a close reading of established law makes clear the agency has the legal authority to do so again."

For further information on a possible federal furlough, and an interesting FAQ on the topic, click on the link below to the CNN article.

Bankruptcy Filings in 2010 Reached Their Highest Level in 5 Years

Fri, 25 Feb 2011 08:00:00 EST

The American Bankruptcy Institute (ABI) has reported that in 2010 filings for personal bankruptcy reached their highest level in five years and that they are expected to continue to rise this year. These bankruptcies reached roughly 1.53 million for the 2010 calendar year and represent a 9% increase from 2009, when approximately 1.41 million consumer filings were recorded. New Jersey had the 8th highest increase in filings (15.3%), exceeded by Hawaii (28.9%), California (25%), Utah (24.4%), Arizona (23.9%), Colorado (17.4%), Wyoming (17.3%), and Florida (16.5%).

The Bankruptcy Code underwent a major revision on October 17, 2005, in a move by banks and the credit industry to make it harder for people to file bankruptcies (or at least harder to wipe them out in a chapter 7, rather than a chapter 13 repayment plan). Despite this, says the ABI, chapter 13 bankruptcies represented only 30% of the filings last December. ABI’s Executive Director Samuel J. Gerdano observed in a Jan. 3 statement that “The steady climb of consumer filings notwithstanding the 2005 bankruptcy law restrictions demonstrate the families continue to turn to bankruptcy as a result of high debt burdens and stagnant income growth.”

In 2005, bankruptcy filings reached tsunami level as people rushed to court prior to the changes taking effect. This resulted in a dramatic drop in filings the following year. However, this continued increase since the change would tend to indicate that the 2005 revisions may well not have had the effect intended. The bad economic times are clearly contributing to it, so we will have to see how this trend reacts once we enter an economic recovery.

Use That Tax Refund to Get a Fresh Start in Bankruptcy | NJ Bankruptcy Attorney

Sat, 19 Feb 2011 08:00:00 EST

As the Great Recession drags on, more and more people in New Jersey are turning to bankruptcy to get out from under their debt. The problem is, many of these people are in such a financial bind that they cannot even afford to hire an attorney to file it for them! This puts them in a holding pattern that only results in matters getting worse. However, at this time of year, there is a solution.

It's tax time. You are probably gathering your W-2s, 1099s, and other documents and heading to H & R Block to get your return done. Are you expecting a refund? If so, you are probably trying to figure out how to spend it. It's been a rough year, and you certainly deserve to treat yourself to something, but might I suggest that you use some of it to purchase a fresh start in life? Spending some of your refund to file bankruptcy may not seem like much of a "treat," but don't you deserve to be free of the constant phone calls from creditors, sleepless nights, and the stress from worrying about your future?

Bankruptcy is a big step; you should certainly give it a lot of thought before you go through with it. You should research it, get your questions answered, and feel comfortable with the decision. If after doing that, you want to get that fresh start, get your paperwork together and contact me for a consultation. I would be happy to help you!

Payday and Title Loans Not the Solution in a Bad Economy

Wed, 16 Feb 2011 08:00:00 EST

The Great Recession has a lot of people out of work and desperate for cash to get them through a short term cash crunch. Even those that have jobs are facing a loss of overtime income (with no reduction in living expenses) or paycuts that stave off layoffs. Under these circumstances, and combined with a low credit score, people are turning to solutions that, while promising a short term fix, result in a long term problem.

I have written recently about two of these traps, "payday loans" and "car title loans." Both of these carry usurious interest rates under New Jersey law and should be avoided at all costs. These companies would not be charging such high interest if they did not think there were enough people out there desperate enough to pay them. If you have a car that you own free and clear, go to your bank and see how much they would be willing to lend you with the car as collateral. It may not be much, and the interest rate will be high (a credit score in the 500s may have you paying over 18% interest), but it is better than the hole you would dig with a title loan.

If you find yourself in a situation like this where you need money fast to get by, or are trying to stave off bankruptcy, consider your options very carefully and do not automatically assume that you cannot go the route of a more traditional loan. Getting a loan with an insanely high interest rate or raiding your pension/IRA for money will just make matters worse.

Forgetting Your Driver's License May Cost Less in New Jersey

Tue, 08 Feb 2011 08:00:00 EST

It happens all the time; you walk out of the house, get in your car, and drive off to work, realizing later that you forgot your wallet. On top of that, you get pulled over by the police for some infraction. The law says that all motorists must produce their driver's license, registration, and proof of insurance, upon request by a police officer. If you don't, it can get expensive.

Well, maybe not anymore. Yesterday, a bill proposed by Senator Christopher Bateman (R - Somerset) and unanimously passed the State Transportation Committee, seeks to lower the fine. Currently $150 plus court costs, the bill would allow the judge to set the fine for an amount not to exceed $100. He or she also has the discretion to dismiss the charge entirely if the correct documents are produced in court. As quoted on NorthJersey.com, Senator Bateman observed: "'If you're a soccer mom and you're running to your kid's game and you forgot your license, it shouldn't cost you $180,' said Bateman, who noted someone missing all three would have to pay almost $500."

This is a very welcome recognition of how much motorists pay in New Jersey for violating its motor vehicle laws. Although some people do go to court on these tickets, many more just mail in a check for the amount of the fine printed on the back of the summons. If this bill passes, motorists have the opportunity to ask for dismissal of the charges if they go to court and produce the documents. At worst, the cost of the convenience of staying at home would be no more than $100. Now that's good news!

Prior Refusal Convictions in NJ No Longer Enhance Sentencing on DWI Cases

Mon, 24 Jan 2011 08:00:00 EST

In a previous article on this site, I had written that the New Jersey Appellate Division had ruled that a person convicted of a first time DUI could be convicted as a second offender if he had a prior conviction for refusal to submit to a breathalyzer. This decision had a potentially devastating effect on people's rights. as they could be subject to the much stiffer penalties of a second offense without actually being convicted of a first offense! An object lesson on this was described in this post. On May 20, of last year, I had reported that the New Jersey Supreme Court had agreed to hear an appeal of this decision.

Well, I am pleased to report that on January 19, 2011, in a unanimous decision, the Court ruled that a prior conviction for refusing to submit to a breath test does not enhance a subsequent conviction for drunk driving. The Court's opinion, written by Judge Stern, restores the law to the way it was under State v. Disomma prior to the Appellate Division's decision in this case. Wow! Crisis averted! Drunk driving laws are stiff in New Jersey, as they should be, but this decision by the Appellate Division was just a manifest injustice that had the potential of punishing people for something they did not do. Let's hope we see more decisions like this out of this court in the future!

Bankruptcy Debtors Dealt a Means Testing Blow by the US Supreme Court

Mon, 17 Jan 2011 08:00:00 EST

On January 11, 2011, the U.S. Supreme Court, in an 8-1 decision in the case of Ransome v. FIA Card Services, dealt a significant blow to many people who are considering filing bankruptcy. Under the changes to the bankruptcy laws in 2005, Congress added a "Means Testing" component requiring people in upper income brackets to go through a standardized and complicated analysis of their cash flow (income less expenses) to see if they have an amount of money left over that could make a significant enough payment towards their debt in a chapter 13 repayment plan. If there is too much left over, they can be prevented from filing a chapter 7 bankruptcy.

Two of the standardized deductions for living expenses in this analysis have to do with a debtor's car. He or she can deduct for the expense of its operation (items like gas, tolls, parking and repairs) and ownership. Prior to this ruling in Ransome, the courts in this country were split over whether a debtor could use the Cost of Ownership deduction if he or she did not have a car loan or lease payment for the vehicle. Now, the answer is clear: no loan/lease payment = no Cost of Ownership deduction. Unfortunately, this lack of a deduction may result in the means testing calculation showing more disposable income available to creditors than the debtor might otherwise, realistically, have.

What this means is that people without a car loan or lease payment who are considering filing for a chapter 7 bankruptcy to wipe out debt and get a fresh start may have more difficulty doing so, and those that have a car that will be paid off in the near future, should consider filing as soon as possible. Most South Jerseyans do not earn enough income to qualify for full means testing (a household must earn above the NJ median income for its size), but those that do should consult with a lawyer to see whether this ruling creates an issue as to whether they will be able to file a chapter 7. It could make a very big difference in their case.

Are We As a Society Getting Too Litigious?

Tue, 11 Jan 2011 08:00:00 EST

Hey, I'm a lawyer; I like a good lawsuit as much as the next attorney. A colleague of mine, who is now a judge, once said that, "If people got along with each other more, I would be driving a truck." To some extent, lawyers earn a living based on conflict. However, I have started to ask myself whether we as a society have been going too far in this regard? Is anything even an "accident" anymore where someone isn't at fault? I'm beginning to doubt it.

In every issue of the ABA Journal there is a section called Obiter Dicta, in which the writer talks about humorous incidents in the law from around the country. Well, the story in the January, 2011, issue, "Torts for Tots," was more chilling than funny. We all know of the RIAA (Recording Industry Association of America) and its aggressive stance on illegal music downloads by teenagers, but that was just the beginning. In 2007, in Pennsylvania, a man sued a 7-year-old boy for negligence after the youngster collided with him on the ski slopes in Colorado. He sued for $75,000; he settled for $25,000!! A 4-year-old girl, riding her bike (with training wheels no less!) on a New York City sidewalk struck an 87-year-old woman. She was sued, and the judge ruled that she was old enough to be held liable!

Is there no such thing as an accident anymore? Can't people just say "oops" without putting their insurance company on notice? Perhaps not. But what makes this particularly egregious is that it does not appear that we can tolerate accidents or mistakes even when they involve children. Parents can be held responsible, but sometimes despite their best efforts, "stuff" happens, and they can't be everywhere. In my career I have talked to hundreds of people who come in with what I call "hurt feelings" cases. This is where there is no physical injury (like with the skiing or cycling youngsters) or economic loss (as with the RIAA), but simply embarassment or humiliation that the potential client has built up in his or her mind as being "severe emotional distress." Their way of dealing with it, unfortunately, is to seek monetary damages (assuming those could even be quantified by a judge or a jury). However, this does not change the fact that we are still just dealing with "hurt feelings," which are a part of life and should be dealt with outside the courtroom (and by that I mean dealing with it and moving on, not shooting out the other guy's porch light).

There are many matters that do need to be resolved in court, no question. However I also believe that we need to "suck it up" more and realize that sometimes bad things happen and they aren't necessarily anyone's fault. Court dockets are clogged enough as it is, with cases taking years to get to trial, and these types of cases do not help the situation. We need to become more forgiving of other people. I think that if we do, we will all be better off in the long run.

UPDATE (2-16-11): Ben Glass, a Virginia attorney, posted this great video on a woman's lawsuit against McDonald's out in California. This just helps to make my point about how "sue-happy" we have become in this country.

Make a Deal to Pay Taxes or Face a Lien

Thu, 06 Jan 2011 08:00:00 EST

One of the effects of a bad economy is people finding it harder to pay their taxes, whether real estate or income. For the feds, pressured to get revenue to cover ever increasing spending, this has meant a more aggressive stance in the IRS' collection efforts that should put delinquent taxpayers on notice that they have to address their debt or face more serious consequences. In an article today in The Huffington Post it was reported that "the IRS filed nearly 1.1 million liens in the budget year that ended in September, a 14% jump over the previous year."

These liens can really make it difficult for someone to get back on his or her feet when the economy recovers. At the same time, filing the lien now rarely results in any recovery at all. In defense of its actions, the IRS has stated that "liens are not filed until taxpayers are given numerous opportunities to pay their tax bills, or sign up for payment plans." They go on to say that "the agency has taken steps to help taxpayers facing financial problems, including increased flexibility in installment agreements and other collection efforts."

What does this mean for you if you owe taxes? Get in touch with the IRS as soon as possible to try and work something out. Running from the problem will only make matters worse. Although there is no guarantee that you will be successful in brokering an affordable deal with the tax man, the "head in the sand" approach is becoming more and more the wrong choice.

After Christmas Bankruptcies Still a Bad Idea | NJ Bankruptcy Attorney

Wed, 15 Dec 2010 08:00:00 EST

Well, here we are ten days before Christmas, and I'll bet I can guess what many New Jerseyans are thinking: one more Christmas, and then we'll start off the new year right by calling a bankruptcy lawyer in January. One last hurrah before we crash our credit scores. If you are thinking that, I can say unequivocally and without hesitation: stop!! A year ago today, I posted an article on why it is a bad idea to plan an "after Christmas Bankruptcy," and since it 'tis the season, I thought I would send out a reminder: Don't do it! Here's why.

You are actually putting off an important step that needs to be taken in your life ASAP, which is forcing yourself to live within your means and on a budget. The filing of a bankruptcy puts the kaibosh on the credit cards, and using debit cards limits your spending to your bank balance. This is something you need to do anyway, so why not start now? Here are some tips on how to do that.
Big purchases for Christmas gifts could raise a big red flag with the credit card bank if you file a month later. They could then accuse you of purposely running up debt you knew you were going to wipe out in a bankruptcy, which is considered fraud, and could result in the debt not being wiped out after all!
Putting off filing is never a good idea, no matter what the time of year because the rules of the bankruptcy game have a tendency to change, and not always in your favor. A rule change, could in fact, make it harder for you to file bankruptcy. This happened this past November 1, when the median incomes in New Jersey dropped, thus forcing more people to jump through more hoops to qualify for a chapter 7 bankruptcy.

I know filing bankruptcy is going to throw a big wet blanket on your holiday plans and doesn't exactly put you in the holiday mood, but it is something that should be done sooner, rather than later. Consult with an attorney right away if you are considering bankruptcy.

New NJ Appeals Case May Get You Out of a Speeding Ticket

Tue, 14 Dec 2010 08:00:00 EST

Usually, when you are stopped for speeding, the cop has you dead to rights. You were driving a bit lead-footed, and you set off the radar unit in the patrol car. However, there may be some cases in which you can fight it. Last month, in the case of State v. Green, a case arising out of Middlesex County, the New Jersey Appellate Court ruled that the laser speed-measuring device known as the "Stalker Lidar" has not been proven to be scientifically reliable in New Jersey. The Court noted that although laser devices are generally accepted in the scientific community, in this case, there was no evidence as to the internal workings of the device. The court observed:

"We do not know whether the accuracy of the Stalker Lidar device has been established through independent testing. In short, the device has not been established as scientifically reliable in New Jersey. As a consequence, it may not be used in the trial courts as proof of speed until its accuracy has been established."

This is, of course, not the end of the story, as the appellate judges merely sent the case back to the lower court on the accuracy of the laser.

“The determination of the scientific reliability of the Stalker Lidar shall be determined by the Law Division on remand. If the device is determined to be accurate and reliable, the matter shall be remanded to the municipal court for a new trial on the municipal charge of speeding, which shall be conducted in accordance with this opinion.”

Should, at some point, the “Stalker Lidar” laser be proven to be scientifically accurate, then it will join the ranks of the K-55 Radar Unit as a generally accepted reliable piece of technology that can nail you for speeding. However, in the meantime, if you are stopped for speeding, and the ticket says that a “Speed Measurement Device” was used, it would be a good idea to contact my office for a free consultation and find out if it was radar or laser. It could make a big difference in your case.

Banks Told To Stop Foreclosures During Mortgage Modification

Thu, 02 Dec 2010 08:00:00 EST

It is certainly no secret that homeowners in this tough economy are scrambling to afford their mortgage payments, either due to a job loss, reduction in income, or the increase in their monthly payment due to the terms of an ARM or so-called "pick-a-pay" mortgage. I consult regularly with people facing a mortgage company on a steady march towards foreclosure sale, while at the same time trying to complete a mortgage modification. My caution to them, as I have previously posted on this site, is to make sure you get it in writing from the mortgage company's attorney that the foreclosure is on hold while the modification process moves forward. Otherwise, you could end up on the eve of a sheriff's sale while still submitting documents to their loss mitigation department.

This problem was highlighted in a Wall Street Journal article yesterday, which reported that the Acting Comptroller of the Currency John Walsh has directed banks to halt foreclosure proceedings if borrowers are starting loan-assistance programs, "if legally possible." The article observed that "the so-called dual-track system in which banks proceed with foreclosures while evaluating borrowers for loan assistance has gained attention in recent weeks. At a Senate Banking Committee hearing Wednesday, Walsh called the system 'unnecessarily confusing for distressed homeowners.'”

Although it is nice that government officials are expressing concern about a problem that has existed for years, it is not clear whether Mr. Walsh's directive will have any practical effect (the qualifier "if legally possible" is a big one), and not everyone is in agreement that there is a problem. The article states that "Edward DeMarco, acting director of the Federal Housing Finance Agency, said simultaneous actions are necessary at times. That’s because foreclosures can take an extended period of time and because borrowers don’t always respond to offers for help, he said."

The article itself was also met by skepticism. One commenter stated that "Mr. Walsh and his organization are ineffective at protecting consumers. Language in his testimony is biased in favor of the NA Banks and against consumers." A fellow New Jerseyan observed that maybe Mr. Walsh's words need to be enforced by state laws. "Perhaps if they had to wait to institute foreclosure proceedings until after assistance avenues are exhausted they would be more timely and forthcoming with the loan modification process."

In my opinion, what Mr. Walsh is doing is not enough. The states need to adopt stronger laws when it comes to foreclosure proceedings where homeowners clearly qualify for mortgage modification programs like HAMP. In New Jersey, where there is mandatory mediation, perhaps there should be a requirement that the courts must sign off on a mortgage company's efforts to complete the modification process in good faith before the foreclosure process can go further. Until that happens, I would urge New Jersey residents to apply for a modification before they get behind on payments, or at the very least before formal foreclosure proceedings are commenced. The earlier they start the process, the more likely it is that it will be completed one way or the other before foreclosure sale. Ultimately, they should consult with me about a possible chapter 13, as it is always good to have a backup plan.

Background Checks for Jobs on Rise

Thu, 02 Dec 2010 08:00:00 EST

Jobs in today's economy are scarce and even harder to get as employers scrutinize the backgrounds of potential employees before making job offers. I have written about how HR people search social networks and credit histories to determine whether someone would be trustworthy and dependable, especially where the job involves high professional standards (like teaching) or financial security issues (like banking and investments). However, as can be seen in an article in yesterday's New York Times, these background checks are becoming more prevalent (they are not limited to large businesses, as smaller concerns start to use them) and easy to get, as businesses specializing in conducting these checks are springing up.

The article talks about a start-up business that provides scanning services to companies looking to go paperless. To address concerns raised by potential clients that private, confidential records are being handled and scanned by trustworthy employees, the owner looked into background checks for hires. These checks included:

Address and Social Security Number
Criminal background checks in federal and county databases
Driving records
Credit checks

As to driving records, the article observed: "This check is crucial because employers can be liable for accidents that happen on company time. In addition . . . the data can [also] offer insights, flagging those who flout the law or abuse drugs or alcohol." The credit checks are important because "employees might be handling sensitive financial information. A low credit score can indicate that an employee is financially strained and might be tempted to steal." Social networks also play a part. One business owner, commenting on the article, observed: “I would recommend that [a potential employer] also do online searches. Checking sites like Facebook, Google and MySpace is free and doesn’t take very long. You can find out a lot about people that way.”

The lesson here is that people looking for a job in today's world need to be proactive in how they live their lives. This includes:

Being careful what they post anwhere online and, if possible, delete anything from these sites that might raise a potential employer's eyebrow.
Maintaining a good credit history and correcting any mistakes.
Being responsible in one's life when it comes to driving and recreational drug use. If people run into trouble in this area, they should work on "damage control" by hiring an attorney to handle any traffic tickets or minor drug charges.

The time to do this is now, and not after the interview process, or even after you lose a job and are forced to look for another one. This is a life lesson that stresses the journey and not the destination. In an electronic age, people can more easily find out things about you that would heretofore have been private, so follow your mom's advice, "keep your nose clean," and you will be more likely to avoid regrets when that life comes under scrutiny.

How Debt Collectors Try to Violate Your Rights | NJ Bankruptcy Attorney

Mon, 29 Nov 2010 08:00:00 EST

In an effort to inform New Jerseyans of their rights against creditor harassment and the laws that protect them, I recently wrote an article on the Federal Fair Debt Collection Practices Act and explained some of its provisions. People being called constantly by collection agencies need to know what they can do to fight back. The sad thing is that, despite the fact that this law has been in effect for decades, debt collectors still flaunt it!

This was illustrated in a post I read this morning on the Total Bankruptcy blog that talked about how these companies routinely pay lip service at best to these regulations. The article highlights some of these tactics and is definitely worth a read. The post draws information from another article, one on the WalletPop blog that discusses an interview with a journalist who worked in a collection agency in order to gain information for a book. Some of the interesting points made were:

Debt collectors are constantly making calls, because it may well take as many as 100 calls to get one payment of money, so don't expect them to let up.
Collectors routinely make threats to debtors to elicit a payment, such as accusing them of credit card fraud by posing as a fraud investigator, implying that you have committed a criminal act.
Compliance departments of collection agencies are often nothing more than facades that turn a blind eye to abuses committed by employees.
The end of the month is the best time to make a payment deal, as the collectors are often scrambling to make their bonuses.
Telling the collector that you are recording the conversation (and actually doing it) can be the best way to get the collector to behave himself.

This article makes it clear that one cannot assume that collection agencies are going to play by the rules, or even care about them. Know your rights and stick by them. If you are being constantly harassed by a debt collector, contact me as soon as possible.

Useful Information on Debtor's Rights in Collection Law

Wed, 17 Nov 2010 08:00:00 EST

On November 10, 2010, I taped an episode of Peoples Law Forum, a program produced by the Gloucester County Bar Association for the local access channel of Comcast. This one was on collection law and what people could do to protect themselves. It is currently scheduled to air on January 17th and 20th, 2011, at 11:30am and 7:30pm. Among the topics of discussion were what you can do to protect yourself from creditor harassment, how collection lawsuits work and what creditors can do to collect a judgment, and how to deal with medical bills. After the session I realized that, although I had written articles on how to fight claims on old debt, wage executions and bank levies, I had not talked about the other topics on the web site.

As a result, I have just posted an article on how the Federal Fair Debt Collection Practices Act can help shield you from harassment by debt collectors, and will soon post another one on dealing with medical bills. People looking to avoid bankruptcy need to know how to deal with these issues, and I hope to provide some assistance with this with postings in the next few weeks. Please feel free to subscribe to my feed or follow me on Twitter to keep up to date with new content on this site. If you want further information, please contact my office.

Mortgage Modifications Still HAMPered by Banks

Fri, 05 Nov 2010 08:00:00 EST

       The economy is bad, the housing market has crashed, and home values languish at levels way below their mortgage balances. People are struggling to make the payments due to job loss. You would think that mortgage banks like Bank of America and GMAC would be working to keep the boats afloat, as it were, striving to keep the inbound cash flow coming on all the distressed residential real estate mortgages in their portfolios.

        The Obama administration even implemented the Home Affordable Modification Program (HAMP) to give qualifying homeowners "permanent" five-year modifications that drastically reduce their monthly payments if they first complete a three-month trial period. Simple, right? Gives lots of people a chance to get back on their feet while continuing to pay the mortgage company. At the same time, the banks are getting cash flow, while avoiding having foreclosed homes in their inventory that have no chance of selling for the amount owed. During those five years, hopefully, the market will turn around, and values will rise to exceed the mortgage balances. Everyone wins. Well, in reality, not so much, and that may be in the way the HAMP program is structured.

        A recent article in The Huffington Post discusses the failure of this program with many banks. The article observed that,

"More often than not . . . borrowers put into trials are kicked out of the program. A federal auditor reported last week that HAMP makes some borrowers worse off, and in some cases actually causes the foreclosures it's supposed to prevent. (Treasury denied that HAMP puts borrowers into default, despite numerous accounts that it sometimes does.)"

Part of this problem may be with homeowners not successfully proving their income as part of the application process. As the article observed,

"The biggest change in the HAMP guidelines so far has been the requirement that as of June applicants must prove their income to qualify for the program, which has resulted in a drastic reduction in the number trial modifications started. According to data released last week by Treasury, there are 466,708 active permanent modifications, compared with more than 700,000 modifications canceled."

On the other hand, Casey Mulligan of the New York Times observed in an article the same day that it may be the bad economics of the HAMP program to begin with that is dooming it to failure. He states,

"Because of its destructive economics, the modification program was proposing changes that were only marginally beneficial to borrowers and massively costly for banks. Assuming that banks understood this, I predicted that banks would pursue their own interest by randomly and arbitrarily refusing to modify most of their mortgages according to the program formula."

Looks like he may have been right. I have talked to many people who have expressed frustration with HAMP and the apparent refusal of banks to work with them. There are very few occasions where the client has been successful in getting the modification; in some cases, it has made things worse, putting them further behind on their payments. The bottom line is: people need help. Unfortunately, it doesn't seem to be coming from HAMP.

Mortgage Foreclosure Crisis Might Help Homeowners, But Hurt the Recovery

Thu, 28 Oct 2010 08:00:00 EST

The foreclosure crisis has been in the news a lot lately as the problems with some of America's biggest mortgage banks continues to unravel. Clerks have been "blind stamping" and robo-signing off on foreclosures without really looking into whether that is an appropriate remedy, which has sparked investigation by several states' attorneys general into what is going on. This has sparked litigation by homeowners across the nation as they contest foreclosures on any one of three major flaws:

The foreclosure action itself was "robo-signed," thus forcing the mortgage conmpany "back to the drawing board to cure the problem before proceeding (this is, at best, a temporary measure, unless the investigation reveals one or both of the two other problems);
The bank is missing certain documents that would ordinarily be used to prove its case. In the past, an affidavit would be signed saying that they had the documents at one time, but now they were either lost or destroyed, but now these affidavits are being challenged; and/or
The mortgage itself was packaged as an investment, and the issue of who is the actual owner of the note cannot be readily determined.

As to the first challenge, Bank of America and GMAC are claiming that these problems are behind them and are looking to start up their foreclosures again. However, the other two may continue to haunt them.

In fact, as reported in the New York Times yesterday, this may have an overall detrimental effect on the housing market and the economy. As stated in Flaw #3, many of these notes are mortgage-backed securities. When combined with Flaw #2, it can get worse. As the article states, "If investors lose confidence in the ability of banks to document their ownership of mortgages, the financial industry could suffer staggering losses." The article goes on to state:

"Katherine M. Porter, a law professor at the University of Iowa and an authority on mortgage servicers, said it was likely that "a very large number - perhaps virtually all - securitized loans made in the boom period in the mid-2000s," contained serious paperwork flaws, did not meet underwriting standards or have not been serviced properly in foreclosure proceedings. "Mortgage servicing is a high-volume industry. . . Its personnel have relatively little training, weak supervision and are under pressure to cut costs and boost profits."

This can also affect the housing market. As the article stated, distressed properties make up one quarter of all home sales, and as a result of Flaw #1, potential buyers are becoming highly skeptical of whether the banks have good title to the home they are trying to sell.

The bottom line here is that homeowners need to look to how to get themselves out of their own economic crisis of being behind on their payments and/or unable to afford their current payments without a modification. The flaws discussed here can well create a temporary reprieve from foreclosure, as well as motivate mortgage comnpanies to be more reasonable about modifications, but the long term effects of the mortgage crisis prevent this from being a long term solution. If you need help, you should contact an attorney to discuss your options.

Bank of America and GMAC Start Up Foreclosures Again

Mon, 25 Oct 2010 08:00:00 EST

As you have probably been reading in the news, several national mortgage banks have been in hot water over "robo-signers," document review people that are signing off on foreclosures without reading the underlying documents to see if that step was appropriate. This practice was called "blind stamping" and forced these banks to stop foreclosures in 23 states, including New Jersey. It was hoped that this hiatus would give homeowners some time to either modify their loans or arrange a short sale. Well, unfortunately, it may appear that time is up.

The New York Times reported yesterday that GMAC and Bank of America have started up the process again. This will result in many a homeowner scrambling for cover with less time to find a solution than they may have thought they had. On top of that, banks, particularly Bank of America, continue to be resistent to short sales. This appears to be for several reasons, according to the article:

Fear of fraud by the homeowner, i.e. their "hoodwinking" the bank into thinking that their financial situation, or the value of the home v. the amount owed, are much worse than they really are.
Fear that the sale is really a sham sale to a friend or relative, that will just sell the property back to them later
Availability of personal mortgage insurance (PMI) that could pay a claim for the shortfall should the property not bring enough at foreclosure sale
The thinking that if you foreclose on the property and hold it for a few months, the price will rebound sufficiently to cover the note.
If they lose money in a foreclosure sale, the bank does not have to write off the loss until the sale itself; if it goes to short sale, it must be written off immediately.

Options can well be limited, and anyone facing this situation has to realize that they need to focus on a solution and soon!

Filing Chapter 7 Bankruptcy May Be Harder After November 1, 2010

Fri, 15 Oct 2010 08:00:00 EST

Earlier this year, I posted that median incomes for New Jersey families were going down, and that that could affect whether some New Jerseyans could file a chapter 7 bankruptcy. This is because of Means Testing, a provision added to bankruptcy law in 2005, that compares a debtor's gross income to the median income for that state for the debtor's family size. If your income exceeds this median income, then a further analysis is done to see whether you have sufficient money left over to pay to creditors over time, after deducting some standard and non-standard living expenses. These figures are adjusted periodically, and with unemployment and the bad economy, they have actually been going down. They will be adjusted again as of November 1, 2010, so those people close to the median may find themselves in some difficulty with a chapter 7 filing.

Household of 1: $59,812 to $58,107 (Drop of $1,705.44)
Household of 2: $71,744 to $69,539 (Drop of $2,204.84)
Household of 3: $85,764 to $84,192 (Drop of $1,571.78)
Household of 4: $102,894 to $99,474 (Drop of $3,419.62)

This downward trend of median incomes should encourage anyone thinking about filing a chapter 7 bankruptcy to contact an attorney right away. If you are a New Jerseyan thinking about taking this step, please call my office for a free consultation.

"Blind Stamping" Scandal in Foreclosure May Give New Jersey Homeowners Some Breathing Room

Sat, 09 Oct 2010 08:00:00 EST

There has been quite a bit in the news lately about several banks engaging in what has been called "blind stamping" in an effort to deal with the flood of foreclosures in this bad economy. Ally Mortgage, JPMorgan Chase, and Bank of America have owned up to the fact that the people in their foreclosure processing departments have been blindly signing off on foreclosures without reviewing the underlying documents to see if there is just cause to proceed. This has led to foreclosures being halted by these banks in 23 states, including New Jersey, and Congress calling for a federal investigation.

What this means for homeowners, in the short run, is breathing room. Banks could use the time to look at possible loan modifications to slow the tide, while borrowers could try to get current. What should be stressed, though, is that both sides should make the best use of the time, since it won't last forever. The foreclosure train will get back onto the track and run you over if you aren't careful. In a recent article in The Philadelphia Inquirer, economist Rick Sharga stated that "the snafus will probably delay foreclosures for the next 60 to 90 days. Servicers will review the documents in question and implement internal procedures to comply with regulators. 'Once that is done, we'll probably see an escalation of foreclosure activity.'" This "blind stamping" is merely another symptom of the bad economy, as banks struggle to keep up with the paperwork and regulation involved in the foreclosure process.

So what, ultimately, can you do?

These times, and troubles, however, have brought with them possible defenses for homeowners. For example, mortgage companies in New Jersey must bring a foreclosure lawsuit to take your home. To do that, they must establish that they own the debt, i.e. that it is owed to them. However, a large number of home loans were packaged together into investment securities during the real estate boom. Thus a particular mortgage may be owned by many different people and institutions, rather than the lender looking to foreclose. Some foreclosing banks have been stopped dead in their tracks when challenged on this, because they could not produce this proof.

If your home is facing sheriff sale, or has been sold at auction, you might also be able to challenge the foreclosure judgment or the sale if it was based on faulty paperwork. This, though, will only buy you time, as the paperwork may well be corrected, resubmitted, and result in a proper judgment upon which to base a sale. But if you need to file a chapter 13, and the sale has already taken place, voiding that sale may give you the opportunity to do that.

The bottom line here is that if you are a New Jersey homeowner facing the loss of your home to foreclosure, and you have one of these mortgage companies, you should do the following:

Work to bring the mortgage current, as the bank may well accept partial payments during the stalled foreclosure.
Talk to an attorney about a chapter 13 bankruptcy to save your home.
Gather information about your mortgage to find out who the true owner of the loan is, so that you will have that ammunition should you need it.

If the foreclosure recommences, you should be proactive in asking for foreclosure mediation to try and reach an agreement with your lender. It may not be too late!

Possible Relief in Sight for New Jerseyans Holding "Pick-a-Pay" ARMs

Thu, 07 Oct 2010 08:00:00 EST

During the real estate boom, many New Jersey residents, in an effort to get more house for their money, went for a special type of adjustable rate mortgage (ARM) offered by Wachovia Bank and others, called a "pick-a-pay" plan. These types of ARMS offer borrowers the ability to make payments that total less than the accrued interest for that month. Unfortunately, this interest accrued over time and was added to principal, until said principal exceeded 125% of the original loan amount. At that time, the borrower would have to make a traditional payment including all of the interest and some principal. In far too many cases, this payment was unaffordable, and the homeowner was stuck. Well, now there may be some relief in sight.

Wells Fargo and Company, which bought out Wachovia, has agreed to provide about $67 million in mortgage relief to up to 900 New Jersey homeowners who have these plans, reported The Philadelphia Inquirer today. Said agreement also requires them to pay New Jersey $3.98 million to settle allegations that Wachovia did not properly warn borrowers of the significant downside of these plans. So far, they have forgiven $3.4 billion in principal owed on these loans. In addition, they must provide "across the board forgiveness of accrued interest and late fees for eligible delinquent borrowers who live in the homes" purchased by these mortgages.

I have at least one client with this type of mortgage, and they ended up in a chapter 13 bankruptcy trying to straighten things out! Therefore, New Jersey holding banks like this accountable is a good thing, and anyone holding this type of mortgage should look into this program to see if they can get some relief. However, this plan will not necessarily help everyone. As the article pointed out, a Philadelphia consumer expert has observed that the likelihood is good that only a small percentage of those that need the help will get it. Irv Ackelsberg of Langer Grogan & Diver, PC, said, "The people who are going to get relief here are people whose mortgage payments are really high relative to their income."

This is not to say that, if you have this type of mortgage, you should not try to benefit from this. You should contact the New Jersey Division of Consumer Affairs or call Wells Fargo at 888-565-1422. It could make staying in your home more affordable and reduce the risk of foreclosure in the future.

Another Sign That Student Loans May Become Easier to Discharge

Mon, 04 Oct 2010 08:00:00 EST

There is no question that student loans are one of the most difficult debts to get rid of in bankruptcy, and with the changes made to the bankruptcy code in 1994 and 2005, it has gotten even harder. However, recent cases and proposed changes to the Code have indicated that the tide may be turning back in favor of debtors to make these oft-times onerous debts easier to get rid of.

Since 1987, debtors have been struggling to meet the dischargeability test formulated in the Federal Second Circuit Court of Appeals case of Brunner v. New York State Higher Education Services Corp. which set out a three-part "Brunner" test for dischargeability. In it, a debtor must show:

inability, at his current level of income and expenses, to maintain a "minimal" standard of living;
the likelihood that this inability will persist for a significant portion of the repayment period; and
the existence of good faith efforts to repay the student loans.

Not an easy test to meet, and many have failed it. Not making enough money just isn't enough. But last week the First Circuit Court of Appeals Bankruptcy Appellate Panel in the case of In re Bronsdon rejected the Brunner test, instead deciding to follow the standard used by the Eleventh Circuit Court of Appeals, which is a "totality of circumstances" test. This they summarized as: "Can the debtor now, and in the foreseeable future, maintain a reasonable, minimal standard of living for the debtor and the debtor's dependents and still afford to make payments on the debtor's student loans?" In effect, the third prong of Brunner was rejected.

The court here adopted a "kinder, gentler" standard that, in essence, states that the bankruptcy court should examine the debtor's circumstances and determine whether repayment would cause the debtor, or the debtor's dependents, undue hardship. Simple. Hopefully, this is another sign that the pendulum is swinging back in the other direction to help debtors who are truly suffering in these hard economic times.

Court Ruling Clarifies When You Can Keep Your Home in Bankruptcy

Wed, 29 Sep 2010 08:00:00 EST

People contemplating a bankruptcy are often concerned with whether they risk losing their home to the trustee. Will he or she sell it? The answer I have given is that it starts with a "liquidation analysis" to demonstrate to the trustee that, after costs of sale, payment to the mortgage company(ies), and payment of exempted equity to the debtor, there would be nothing left to pay creditors. However, this is not where it ends.

The Ninth Circuit Federal Court of Appeals observed in a ruling recently that exemptions alone are not enough to take a home out of a bankrupt estate. In the consolidated cases of In re: Chappell and In re: Gebhart the chapter 7 trustee waited three years (Gebhart) and and two years (Chappell) after discharge to proceed with sale of the property, after it had appreciated significantly in value! The court held that the failure of the trustee to object to the homestead exemption against equity and the issuance of the discharge wiping out the debtor's debt, do not alone take the home away from the trustee. "A Chapter 7 debtor will not be certain about the status of a homestead property until the case is closed (something that may not happen for several years after bankruptcy filing) or the trustee abandons the property."

In Southern New Jersey, trustees have generally been prompt in filing abandonments of property with the court, and the court, in turn, has promptly closed cases following discharge. However, it is important to bear in mind that if you get your discharge in bankruptcy without the trustee abandoning his interest in your home, it is still at risk until the case is closed. Should you find yourself in this situation, you should contact me immediately, so as to be proactive in dealing with this issue.

New Series of Articles on Credit and Credit Scores

Mon, 27 Sep 2010 08:00:00 EST

In this bad economic climate, banks are more and more reluctant to lend people money. This has certainly not helped the real estate market, as people often want to buy a new home (assuming they aren't worried about the stability of their employment) but they can't get approved for a mortgage. The best thing you can do to keep this from happening to you is to be proactive with your credit history and your credit scores. This means understanding how credit works, how you can improve yours, and how you can keep from making it worse.

To that end, I have started a series of articles on this subject that will be posted to this site over the next couple of months. Each one will deal with a particular aspect of consumer credit. The first one has just been posted, and answers the basic question: "What is my credit score and how is it calculated?" From there, I will get into other topics, such as how certain events (e.g. bankruptcy) can affect your score to busting myths about all the disinformation out there. Check back here regularly for new content and comment here about any questions you may have on the subject that you would like to have answered. Remember, when it comes to credit, fortune favors the prepared!

Creditor Uses Facebook to Harass Debtor

Tue, 21 Sep 2010 08:00:00 EST

I have written here before about the dangers to privacy that social networks can pose, but that is usually because the users share way too much information on the sites. Friends and family can get way too much information, and employers or potential employers can know more about you that you would like. But what about your creditors? What if they start digging around?

It is not that far fetched. In a recent story in the Orlando media, a woman in central Florida was, in effect, stalked on Facebook by the bank that held her car loan. She had fallen behind on her payments and was working to straighten it out when a representative of the bank not only contacted her on Facebook, but her cousin and her sister as well! A representative of the bank claimed that they only use Facebook when there is no other way to reach a client. He cited financial hardships that have forced people to give up their phone service. Problem is, at the time this happened, collectors from the bank had been in regular phone contact with her, had left voice mails and text messages on her phone, and had called up to 20 times in one day! No surprise, she is suing the bank!

This is yet again another cautionary tale about being careful on social networks. The article warns, "anyone concerned about financial collectors using social networking websites is urged to change their privacy settings and use whatever tools available to block strangers from being your 'friends.'" Sound advice. Take this opportunity to check your privacy settings. With Facebook changing those features every day, that is always a good idea.

Certain Student Loans May Become Dischargeable in Bankruptcy

Thu, 16 Sep 2010 08:00:00 EST

I have written here before on how student loans are non-dischargeable in bankruptcy, absent financial hardship, as well as ways one could possibly prove said hardship. Over the years, these loans have been tougher and tougher to get rid of, the latest stroke being the 2005 changes to the bankruptcy laws that included non-guaranteed student loans in the "nondischargeable" category. However, today I can report that there is some hope for those owing student loans not guaranteed/backed by the government.

Yesterday, the House Judiciary Subcommittee on Commercial and Administrative Law approved on a 6-3 party line vote the Private Student Loan Bankruptcy Fairness Act (H.R. 5043). Hopefully, if passed, this bill will restore fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt. Under the bill, privately issued student loans will once again be dischargeable in bankruptcy.

From here the bill goes before the full Judiciary Committee. Hopefully, action will be taken by this Committee before the end of the year. A similar bill has been introduced in the Senate (S. 3219) by Senators Durbin (D, IL), Whitehouse (D, RI) and Franken (D, MN). The sea change that was the enactment of BAPCPA (Bankruptcy Abuse Protection and Consumer Protection Act) in 2005 happened before we entered this "Great Recession" when times were good and legislators were able to convince themselves that a significant number of people were abusing the bankruptcy laws in unfairness to creditors. Hopefully, this bill is a sign that Congress may now realize that people are really hurting, and that the harsher provisions of BAPCPA need to be repealed in order to give people the relief, and fresh start, that they need. Let's hope that happens!

Limits Set on NJ Civil Reservations Motions

Tue, 31 Aug 2010 08:00:00 EST

I have advocated on this site the importance of a civil reservations motion as part of a traffic court plea to "contain the damage" that might flow into civil court from doing so. This motion is based on a court rule which states that "[f]or good cause shown,the court may, in accepting a plea of guilty, order that such plea not be evidential in any civil proceeding." The question is, what is the scope of that order? How well can it contain the damage? Well, now we have some guidance.

On August 27, 2010, in the case of State v. Lacey, the New Jersey Appellate Division ruled that the protections afforded by a civil reservation are limited to those civil actions where the plaintiff seeks to recover money damages. It does not apply to other collateral, civil actions where, for example, the State or other governmental entity is the plaintiff.

Here, the defendant pled guilty to fourth degree abuse of a minor (he slapped his girlfriend's four year old child leaving "red marks" on his face), but argued that the plea should not be used against him by DYFS with respect to visitation or other proceedings that were pending at the time. The court disagreed for two reasons.

First, the judges held that "[a]n action commenced by DYFS is an action by the State against a parent or guardian designed to protect the best interests of the child; it is not an action for money damages or other traditional relief in a 'civil proceeding.'" Thus the reservation would apply if a civil suit was brought by the child's parent for damages arising out of the assault.

Second, when making the civil reservations motion, the defendant has the burden to show a "reason sufficient to warrant the granting of his application." Here the defendant simply made the motion as part of the plea without a basis for barring it in a DYFS proceeding. In addition, the court felt that the "best interest of the child" trumped any rights claimed by the defendant

The thing to remember here is that, although a civil reservation is an important step to take in many a traffic (or criminal) court proceeding, it is not a guarantee that the plea will not come back to haunt you in the future outside a civil proceeding.

Ignoring Creditors is Not a Good Idea

Thu, 26 Aug 2010 08:00:00 EST

People that are in debt get lots of mail, from creditors, collection agencies, and finally lawyers. After a while, they stop opening it, knowing that it is going to be bad news. They stick their heads in the sand. Unfortunately, ignoring a problem never makes it go away, and what you don't know can hurt you a lot. Eventually, creditors will bring suit, get a judgment, and then look to collect on it in the form of a bank levy or a wage execution. Although it is possible to resolve debt problems that have gotten this far, it is much easier to do it the earlier it is in the process. This is because:

Creditors might well take less in a lump sum if they don't have to share it with the collection agency or the lawyer to pay their fees (or those fees won't be added to what you owe if the agreement with the creditor makes you responsible for collection costs).
They might be more willing to take a monthly payment that is lower than the wage execution rate if such an execution (and the establishment of cash flow for same) is months away. In other words, less per month starting now is better than more per month starting later.
You can avoid the major disruption to your life that a wage execution or bank levy can cause.

These days, whether it is credit card debt or medical bills from an unexpected illness or injury, when the dogs start barking, they all bark at once. If you are in a situation like this, the sooner you contact me the better. I have helped many people deal with mounting debt, and working towards a solution is the best cure for the stress that overwhelming debt can cause.

Increase in Hardship Withdrawals from Pensions Points to a Major Problem

Sat, 21 Aug 2010 08:00:00 EST

As we continue further into the Great Recession, people are getting more and more desperate for money to pay for necessary expenses. Unfortunately, according to this article on the Huffington Post, this means getting hardship withdrawals from their 401(k) pensions, and the trend is on the rise in a big way! They need money for medical expenses, payments to prevent eviction or foreclosure on a primary home, or for the repair of damage to a primary home. The problem is that this is not a loan. If the person is younger than 59 1/2, the or she will end up paying a 10% penalty for early withdrawal in addition to taxes! On top of all that, the average age of the people taking these withdrawals is between 35 and 55, their peak earning years. This makes these withdrawals a bad idea for three reasons:

They result in a tax liability;
They can have a devastating effect on the person's retirement future due to the lost growth potential on that money; and
In many cases, there is a better way.

What do I mean by a better way? Bankruptcy. These withdrawals are often used as a way to avoid filing, but only end up making things worse. They take an asset (401k money) that would never be part of an asset estate (i.e reachable by creditors) and use it to pay debts that could either be discharged (wiped out) in a chapter 7 or paid over time in a chapter 13. Just look at the uses for the money approved by the IRS for hardship withdrawal: medical expenses can be discharged if already incurred, or future treatment might be affordable if other prior debts (such as credit cards) are wiped out; the same is true of expenses for home repair; and payments to prevent foreclosure or eviction can be done through a chapter 13 plan.

I cannot stress enough that anyone considering pension loans or hardship withdrawals should contact me first to weigh their options. Bankruptcy may be distasteful, but it may also be the best choice for your future!

New Ruling on Search and Seizure of Items "In Plain View"

Thu, 19 Aug 2010 08:00:00 EST

Police officers can, in certain circumstances, seize evidence that is in "plain view." This is an exception to the requirement that the police prove probable cause to a judge in advance and obtain a search warrant. However, this exception is not allowed in every case, and must meet certain parameters On August 4, the New Jersey Supreme Court discussed those very circumstances in the case of State v. Mann. The justices set forth a three-part test:

1. The police officer must be lawfully in the viewing area.

2. The officer has to discover the evidence ‘inadvertently,' meaning that he did not know in advance where evidence was located nor intend beforehand to seize it.

3. The officer has probable cause to associate the item with a violation of the law.

Seizures of plain view evidence that do not mee this test are subject to suppression. What is significant about this ruling is that recent decisions by the US Supreme Court have questioned whether the "inadvertent" requirement is necessary under the Constitution. With this ruling the court makes it clear that the three-step analysis is still required under New Jersey law.

Consumers now have help to use debit cards responsibly

Thu, 19 Aug 2010 08:00:00 EST

People in financial difficulty who can no longer use their credit cards, or those emerging from bankruptcy who do not have the cards to use, have been turning to debit cards as an alternative. However, when not used responsibly, debit cards can get you into financial trouble just like credit cards. This is because of "overdraft protection" programs offered by the banks that allow you to use the card even when such purchase would leave your bank account overdrawn. Why? Because the banks can charge fees for it! That fee, which can be up to $35 every time the card is used, can result in a much higher cost for the purchase than was originally intended, thus digging you further into a hole.

However, as reported in the Huffington Post, that has come to an end. Prior to August 15, 2010, banks could automatically enroll their customers in the service. Now, unless a consumer chooses to opt-in for overdraft protection, their ATM and debit purchases will be declined if an account has insufficient funds. Potentially embarassing, yes, but better than the financial problems it could cause. This is the second step in an effort to curb banks who have been profiting from careless use of these cards. Starting July 1, 2010, they were prohibited from automatically adding new customers to overdraft protection programs. This latest Federal Reserve rule takes it a step further by dropping the service for existing customers who never asked for it. This rule may make the use of debit cards more effort, but it is certainly worth it in the long run.

Insufficent Payroll Deductions from Wages Can Mess Up a Chapter 13 Plan

Mon, 16 Aug 2010 08:00:00 EST

Chapter 13 repayment plans in bankruptcy can be very helpful in getting you back on your feet. However, most plans never make it to completion because over three to five years, "stuff happens." Sometimes it is a job loss, cut in pay, or the birth of a new child that can interfere with your ability to make the payments. Oftentimes there are ways to address this through a plan modification, but some problems can be avoided in advance through proper planning.

One thing you should never mess with are tax withholdings from your pay. When you are in a chapter 13 plan, your paycheck deductions need to be as close to your actual tax liability as possible, if not a little over (a refund in the spring is better than a bill). This is to prevent you from getting a big tax bill from Uncle Sam that is not addressed by the bankruptcy and that can interfere with your making your plan payment. There is a very good article on this at the Bankruptcy Law Network that is worth a read. If you are contemplating a chapter 13 bankruptcy, be sure to consult with a tax professional to see if you need to file a new W4. This "ounce of prevention" is worth the effort and can help to insure the best possible outcome for your plan.

How Much Trouble Are You In If You Break NJ Traffic Laws on Purpose?

Thu, 22 Jul 2010 08:00:00 EST

I have written before about why it is a bad idea to break the traffic code "willfully" (such as to drive with full knowledge that your license is suspended or that you have no insurance), by discussing the ruling of the New Jersey appellate court in the case of State v. Moran . Basically, it is because you could have your license suspended for doing so.

Well, on July 13, 2010, the New Jersey Supreme Court issued a ruling on the appeal of that case. The Justices set forth standards that judges are to use when deciding whether (and how long) to suspend someone's driving privileges. The relevant law authorizes this punishment for any "willful" violation of the state's motor vehicle laws. In addition to ruling that this law applies to situations involving enhanced recklessness, the justices required that sentencing judges weigh, evaluate and note on the court record a number of factors before imposing a license suspension, including:

the nature and circumstances of the defendant's conduct, including whether the conduct posed a high risk of danger to the public or caused physical harm or property damage;
the defendant's driving record, including the defendant's age and length of time as a licensed driver, and the number, seriousness, and frequency of prior infractions;
whether the defendant was infraction-free for a substantial period before the most recent violation or whether the nature and extent of the defendant's driving record indicates that there is a substantial risk that he or she will commit another violation;
whether the character and attitude of the defendant indicates that he or she is likely or unlikely to commit another violation;
whether the defendant's conduct was the result of circumstances unlikely to recur;
whether a license suspension would cause excessive hardship to the defendant and/or dependents; and
the need for personal deterrence.

These are in addition to any other factors that the court may deem relevant.

In addition to these factors, the Court stated that comparisons to motor vehicle statutes that impose mandatory license suspensions also may be a useful guide in some cases. It is also not necessarily the number of the above considerations that apply, but the weight to be attributed to one or more of them.

My caution in my previous post still applies: don't think you are safe from license suspension because the traffic statute you break does not include that as a penalty; if the court deems your violation to be "willful," you could still lose your license. The ability to drive in New Jersey is a privilege, not a right!

What Happens If You Are Not a Big Enough Blowhard For The Breathalyzer in NJ

Mon, 19 Jul 2010 08:00:00 EST

The title of this post sounds funny, but it can cause problems for people that are arrested for drunk driving in New Jersey. The breathalyzer used here is the Alcotest 7110, and it is a rather sophisticated machine. After being given two (2) breath samples, it spits out a report that sets forth your Blood Alcohol Content (BAC). Score over .08%, and you are presumably impaired by alcohol (i.e. guilty of drunk driving). For the machine to work, you have to blow a minimum volume of air into the tube (1.5 liters) over a minimum period of time (4.5 seconds), and yield a "minimum flow rate" of 2.5 liters per minute. The machine itself offers up to eleven (11) attempts to collect two acceptable breath samples. After that, the police have the option of either terminating the process and resetting the machine for eleven (11) more tries, or charge you with refusal, which is a separate offense that carries essentially the same penalties as drunk driving!

When someone is arrested for drunk driving and taken to the police station, they are read the first part of a standard statement saying that they do not have the right to refuse the breathalyzer either on the grounds of wanting an attorney present or their right against self-incrimination. If the person does not respond, invokes their right to an attorney or against self-incrimination, or if the response is ambiguous, the police must read the second section of the statement, which reiterates that those rights do not apply, and that a clear answer must be given in the affirmative to avoid a charge of refusal. But what if the person agrees unequivocally to give breath samples after being read the first section, but then is unable to give a sufficient sample, what happens then?

Well, fortunately New Jersey's Appellate Court gave us the answer at the beginning of this month in the case of State v. Schmidt . It ruled that before charging a person with refusal, the police should read the second part of the DWI standard statement in those circumstances where the defendant gives an initial, unqualified consent to submitting a breath sample and thereafter is unable or unwilling to provide an adequate sample for analysis. Sometimes people try to "game the system" and look like they are cooperating and giving samples, but in reality are just trying to make it look like there is something wrong with the machine.

This does add an additional layer of protection by requiring the police to say, in effect, "stop fooling around or we will charge you with refusal," but it is not the end of the story. If you find yourself in that situation, bear two things in mind: 1) don't try to be cute, they can still get you; and 2) if you have asthma, COPD, or some other disorder that may well interfere with your ability to give a proper sample, speak up! Let the police know that no matter what you do, it just isn't going to work. They can always try taking a blood sample, but at least you can try to avoid a refusal charge, which is never good. As I have said many times on this site: the law does provide certain protections, but that does not mean you should not speak up for yourself and provide protections of your own.

Non-English Speakers Get a Break In NJ Refusal Cases

Thu, 15 Jul 2010 08:00:00 EST

I had written in a previous post that when it came to getting a driver to understand that he or she is obligated to give breath samples when arrested for DWI, with no right to counsel or protection from self-incrimination, non-English speakers were out of luck. The police had no duty to make sure that the driver understood the instruction. Those that did not understand that they could not refuse, and refused, were charged. This was based on a New Jersey appeals court decision in the case of State v. Marquez. Fortunately, this miscarriage of justice has been corrected.

The decision of the appellate court was appealed, and on July 12, 2010, the New Jersey Supreme Court ruled that a person who has been arrested for drunk driving has the right to be informed of the obligation to submit to a breath test in the language he or she speaks. As a practical matter, the Attorney General and the Motor Vehicle Commission will be tasked with providing a means of having the warning language available in a wide variety of foreign languages spoken in New Jersey. It only took a year, but at least justice was finally served.

The key thing to bear in mind is that if your English is not that strong, and you do not understand the often convoluted text of the standard warning police are required to read to those arrested for DWI, speak up. They are now under a duty to make sure you understand. Tell them what your native language is and wait until they are able to provide you with either some one who can translate it for you verbally, or give you the text written in that language. It's the law!

Maximum for Jail Time Set for NJ Traffic Court Convictions

Mon, 12 Jul 2010 08:00:00 EST

It is fairly rare for jail time (incarceration) to be meted out as part of a traffic court sentence, but it does happen. What is even rarer is where there is an accumulation of jail time for various offenses that adds up to a rather long stay. How much time can you rack up? Well, a recent decision by New Jersey's Appellate Court answers that question.

In the case of State v. Federico the judges held that jail terms imposed as a result of multiple traffic ticket convictions arising out of a single incident may not exceed 180 days. The case here involved someone who was convicted of a third offense DWI, along with driving on the revoked list as a result of a prior DWI conviction. Each of these offenses requires a jail term, and the total time exceeded 180 days.

In arriving at this decision, the Court noted that federal constitutional law would permit a sentence exceeding 180 days following the conviction for a variety of petty offenses stemming from the same incident. However, as a matter of long-standing policy, in the absence of the offer of a jury trial, 180 days of incarceration is the maximum permitted in our state for convictions of multiple petty offenses arising from the same incident.

One should bear in mind, however, that this is for traffic court offenses, not criminal matters such as shoplifting, assault, and the like. These are considered disorderly, or petty disorderly conduct, charges, as opposed to traffic tickets. Even so, it does give someone an idea of the maximum time he or she may face as a result of these types of violations.

How Far is Too Far When Frisking a Suspect?

Thu, 08 Jul 2010 08:00:00 EST

Police officers frisking a suspect as part of an arrest is something with which we are all familiar. There is even a famous picture of former New Jersey Governor Christie Whitman frisking someone. This is for the purpose of determining whether the suspect is armed, before taking him or her into custody, and it is also referred to as a "pat down" search or a "search incident to arrest." However, on June 30, 2010, the New Jersey Supreme Court handed down a ruling that dealt with how far a police officer can go in a search such as this. In effect, they said that it is called a "pat-down" search for a reason.

The court held, in the case of State v. Privott , that the fact that the police have a legitimate basis to frisk a criminal suspect for weapons does not provide the officers with the right to go further than patting him down. In this case, they lifted the suspect's clothing for the purpose of recovering evidence. The court observed that,

"In assessing the scope of the search by the officer, the evidence is clear that defendant was cooperative at all times. When stopped, defendant placed his hands against a fence as instructed by the officer. A reasonable search, as well as the least intrusive maneuver needed to protect the safety of the officer against a possible weapon, would have been the traditional pat-down search of defendant's outer clothing. That did not occur. Rather, the police officer lifted defendant's tee-shirt to expose defendant's stomach, and in doing so, observed a plastic bag with suspected drugs in the waistband of defendant's pants. That maneuver exceeded the scope of the patdown search needed to protect the officer against defendant having a weapon and was akin to a generalized cursory search of defendant that is not condoned."

In saying this, the court recognized that this kind of search is done for the safety of the officers, and not as an excuse to look for any other evidence. So I guess when it comes to pat-down searched in New Jersey, it's touch but don't look!

Be Careful About Trying to Discharge Your Divorce Attorney's Fees

Tue, 06 Jul 2010 08:00:00 EST

It is not unusual for people getting divorced to be in financial straits; many times that is the basis for the fights that led to the "irreconcilable differences" that led to the divorce in the first place! In addition, filing bankruptcy as part of a divorce strategy can also make it much easier to resolve issues of marital debt in family court. However, if not paying your own attorney's fees is part of the plan, tread carefully!

An article on the Bankruptcy Law Network brings to light an interesting case from a Georgia Bankruptcy Court where the wife planned to file bankruptcy from the very beginning, telling her attorney that she would pay him from 401(k) pension funds obtained in the divorce. After she filed, seeking discharge of over $35,000 in fees, the attorney filed an objection to discharge, claiming that the debt was incurred by the debtor through "false pretenses, false representation or actual fraud" under section 523(a)(2)(A) of the bankruptcy code. After a trial, the court agreed, and the fees were still due and owing.

However, it is your objective ability to pay the debt at the time it is incurred, not your subjective intent, that rules here. If this sounds like you, be sure to discuss it with your attorney as part of the bankruptcy preparation process, because if you incurred a debt that you simply could not afford, it might be denied a discharge under the section mentioned above, even absent the bad intent of the woman in that case.

Be Careful About Trying to Discharge Your Divorce Attorney's Fees in Bankruptcy

Tue, 06 Jul 2010 08:00:00 EST

This brings up the general admonition to be careful about what debt you incur once you realize that you are insolvent. Creditors and bankruptcy trustees scrutinize the activities of debtors in the months leading up to the filing of the petition. Was there a lot of credit card use? What was purchased? What is worse, bankruptcy law interprets fraud from an objective, rather than subjective, standard. In other words, you may not have any intent to defraud creditors. You might have every intention to pay once you get a job, get that bonus, or get that raise. However, it is your objective ability to pay the debt at the time it is incurred, not your subjective intent, that rules here.

If this sounds like you, be sure to discuss it with your attorney as part of the bankruptcy preparation process, because if you incurred a debt that you simply could not afford, it might be denied a discharge under the section mentioned above, even absent the bad intent of the woman in that case.

Now Is the Time to Pay Those NJ Motor Vehicle Surcharges

Fri, 18 Jun 2010 08:00:00 EST

In this economy, it is bad enough if you do not have a job. What is worse is if you can get one, but can't drive to it because your license was suspended for failure to pay surcharges! However, if you find yourself in that situation in New Jersey, there is some good news: The Motor Vehicle Commission (MVC) has announced the creation of the MVC Surcharge Payment Incentive Program, which will run June 15 through July 30 2010. It is designed to help those MVC customers who have had judgments entered against them by the state pay their balance. The goal, as stated by Acting Chief Administrator Raymond P. Martinez, "is to give these particular customers a chance to either wipe the slate clean or arrange more affordable payments that will allow the restoration of their driving privileges."

The seven-week incentive program will offer many people who have outstanding surcharge balances a chance to clear all their debt or make payment arrangements that will help get them driving again. Eligible drivers include those who have been placed in judgment for failing to make surcharge payments or those in judgment who arranged a payment plan but are finding it difficult to make payments.

According to the MVC, approximately 273,000 drivers are eligible for the incentive program, and the average surcharge debt owed is $2,400. Examples of the incentives to be offered are extended, 48-month payment plans, and interest waivers for drivers paying off principal and costs. Most eligible drivers will be directly notified by mail of this opportunity to address their surcharge issues. Drivers need to contact the specific collection firm noted on the personalized letter they received to discuss available options.

If you are in this situation and want more information about the MVC Surcharge Incentive Program, you can contact the specific collection firm noted on your Surcharge Payment Incentive Program letter or visit www.njmvc.gov/surcharge. Please note, however, that drivers with outstanding surcharges related to Driving Under the Influence (DUI) convictions are not eligible for the incentive program.

Many people end up filing a chapter 13 bankruptcy to get out of a surcharge problem and have their license restored. Here is an opportunity for many New Jersey drivers to do that without taking that drastic step. New Jersey is making the offer; you should take them up on it. It could be the best decision you make this summer!

Sometimes Student Loans Can Be Discharged

Mon, 14 Jun 2010 08:00:00 EST

Student loans, although not automatically nondischargeable (i.e. not wiped out in bankruptcy), have been notoriously difficult to get rid of. This is because, in order to succeed, a debtor must show "undue hardship." But with everyone in bankruptcy suffering from financial hardship, what does this really mean? I discussed this issue in a post a few years ago, but a recent case in a Minnesota Bankruptcy court shows that this hardship can be proven, and sometimes under circumstances you would not expect.

A recent post on the Bankruptcy Law Network talks about a debtor that discharged $300,000 in student loans even though her husband had recently spent $30,000 from a second mortgage loan to put a new screened-in deck on their home and had also purchased a $40,000 luxury SUV. What is even more interesting is, all of this happened years after she obtained her bankruptcy discharge. The discharge was obtained in 2004, but the action to determine the loan dischargeable was not brought until 2007. The court held that is could consider a student loan dischargability case even years after the underlying bankruptcy was discharged and closed. In addition, and perhaps more importantly, it determined that it was the financial circumstance in 2007, not 2004, that would determine whether there was "undue hardship."

In determining whether the debtor met this standard, the court considered of importance the following:

the debtor's household net income was$4,355.48, while her household living expenses were $5,913.00. As such, there was no way she could make meaningful payments toward the student loans, nor could she afford to pay the student loans under an Income Contingent Repayment Plan.
This situation would have been true even if the deck and SUV had not been purchased.
the debtor's inability to work, due to family considerations and having to care for her autistic children. This involved her attendance at 27 to 37 hours per week of therapy for the children provided by the school district.
it was not actually the debtor's income that was used for the luxury purchases.

What is also interesting is what the court did not consider to be of importance. The lender's argument that the fact that the debtor was making payments on the deck and SUV proved that "the money was coming from somewhere," and thus the debtor could pay on the student loans, was rejected.

Two important points should be gleaned from this decision. First, the debtor's stream of inome and ability to work is considered key to the determination, not what a non-debtor spouse earns. Second, and perhaps more importantly, "undue hardship" can come about under circumstances that did not exist at the time the bankruptcy was filed, but at some time in the future. Thus people with student loans that file bankruptcy should, at the very least, consult with their bankruptcy attorney should their post-discharge financial situation change for the worse.

There is one caveat to all of this: the court ruling discussed here was not made in the District of New Jersey, nor in the Third Appellate Circuit in which New Jersey is located. It was an 8th Circuit Federal Bankruptcy Appellate Panel ruling on a Minnesota bankruptcy court order of discharge. Thus New Jerseyans should not assume that they would prevail on this point here. and should contact my office to discuss their situation Nevertheless, it is an encouraging ruling on this issue.

Those Seat Belts in the Back Seat Have to be Bucked Too

Thu, 03 Jun 2010 08:00:00 EST

New Jersey motorists have known for years that they have to buckle up or face the consequences. Signs that say "Click It or Ticket" are now quite familiar. However, the New Jersey Legislature has recently amended the provisions of the seatbelt law to require that all occupants of a passenger automobile, including adults who are seated in the rear, use a seatbelt. Under the prior law, adults seated in the rear of a passenger automobile were not required to do so. There are some exceptions, however. The law does not apply to a driver or front seat passenger of:

A passenger automobile manufactured before July 1, 1966;
A passenger automobile in which the driver or passenger possesses a written verification from a licensed physician that the driver or passenger is unable to wear a safety seat belt system for physical or medical reasons;
A passenger automobile which is not required to be equipped with a safety seat belt system under federal law;
A passenger automobile operated by a rural letter carrier of the United States Postal Service while performing the duties of a rural letter carrier; or
A passenger automobile which was originally constructed with fewer safety seat belt systems than are necessary to allow the passenger to be buckled.:

The good news is that, as far as enforcement goes, these seatbelt violations as secondary offenses, meaning that police must stop the vehicle for a different violation before issuing a summons and complaint for this offense. The driver also does not pay. Each rear seat passenger 18 years of age or older shall be responsible for any fine imposed. The law takes effect immediately, so be sure to check everyone in your car to be sure they bucked up before you turn the ignition key; you will be doing them a favor if you are later stopped.

U.S. Supreme Court Lightens Police Burden Under Miranda

Wed, 02 Jun 2010 08:00:00 EST

Yesterday's decision by the US Supreme Court in Berghuis v. Thompkins has been in the news quite a bit, as it will have quite an impact on 5th amendment cases in the future and will certainly, as dissenting Justice Sotomayor observed, "turn Miranda upside down." I have talked about Miranda in other posts , but this case really puts everyone on notice of what they have to do to protect their rights against self-incrimination. To the point: Don't be shy, speak up. Tell them you want a lawyer!

Prior to this case, the burden was on the police to show a "knowing and intelligent" waiver of Miranda. Many police departments were told not to start questioning a suspect until that person signed a waiver form. Now, as Justice Kennedy observed in his opinion for the court, a waiver form is not required before police start questioning a suspect.

In this case, the defendant was arrested in connection with a shooting outside a mall in Southfield, Michigan. The police read him his rights, and Thompkins indicated that he understood those rights. He just didn't sign the form. He was then questioned for almost three hours, whereupon when asked if he prayed to God to forgive him for the shooting, he said "Yes." He did not sign a confession nor say anything else, but the damage had been done; he was convicted.

Although the conviction was overturned by the US Court of Appeals, the Supreme Court upheld the conviction setting forth this standard: Someone who wants to invoke his rights under Miranda must make an "unambiguous" statement to that effect. Had Thompkins said he wanted to remain silent, he would have been protected. In the dissent, Justice Sotomayor said that this rule would be confusing in practice. She said, "Criminal suspects must now unambiguously invoke their right to remain silent - which, counterintuitively, requires them to speak."

On the one hand, the 5th Amendment right, as protected under Miranda, has been enforced strictly for decades. It is a very basic right that we hold dear. On the other hand, the question becomes, who carries the burden to protect it? What are the police, those charged with investigating crimes and finding the perpetrators, expected to do? What about the defendant? Where is his obligation to speak up? The real issue here is one of proofs, though, not who has the burden. Written waivers of Miranda are more unequivocal than a verbal invocation of the right. What happens in the absence of a writing, or a videotape of the interrogation, when a defendant says he told the police that he didn't want to answer questions, and wanted a lawyer, and the police say he didn't? Having clear rules on what needs to be said when is good for both sides, but how do you prove that the rules were followed under this recent decision?

Was the court right on easing the burden on the police and expecting suspects to speak up? Or should they have continued the practice to date of throwing that responsibility upon the police? What do you think? Leave your comments below.

Relief Now Available from Fines for Failure to Pay Surcharges

Thu, 27 May 2010 08:00:00 EST

Prior to January 16, 2010, if you owed motor vehicle surcharges for a conviction like drunk driving, failed to pay them, and as a result had your driver's license suspended, you would be assessed an additional $3,000 fine. Even worse, this liability for the fine would be automatically reduced to a judgment against you until you paid it in full. What's worse, judgments like these can also act as liens against real estate. However, the New Jersey legislature has repealed this law, thus freeing drivers from an additional, rather onerous, burden to getting their licenses restored. If you have been assessed this fine since January 16th, you should talk to an attorney and move for a sentence reconsideration.

This change in the law is also very important to people who are filing a chapter 13 bankruptcy in order to pay surcharges and get their licenses restored. Fines are treated differently under the law than surcharges, and can be more difficult to address. Thus this repeal makes that process much easier. If you are contemplating filing for bankruptcy to get your license restored, contact my office about this; it can make a big difference.

Warrantless Search by Police Limited on "Reasonable Suspicion."

Mon, 24 May 2010 08:00:00 EST

On May 21, 2010, the New Jersey Appellate Division ruled that police cannot enter and search a private residence with only a "reasonable suspicion" of criminal activity (the standard under Terry v. Ohio , a 1968 U.S. Supreme Court case). In the case of State v. Jefferson , police officers were investigating drug dealing and possible gun-play, which led them to a private residence where they saw the defendant inside. Although they remained outside, the police quickly developed sufficient suspicion to detain the defendant for questioning, and made a warrantless entry into his home. While this was going on, the defendant resisted the police, was arrested and searched. During this search, the police found drugs. However, after securing the defendant, the police re-entered the residence without a warrant and discovered additional criminal evidence.

The Court ruled that although the initially discovered drugs were admissible, because they were found during a search incident to a lawful arrest, it suppressed the evidence later discovered in the home. This line of distinction drawn by the court is not an unusual one. Police have long been able to search suspects placed under arrest for such reasons as to be sure that they are not carrying weapons. In a traffic stop, the search can go beyond the person of the defendant to the car, if certain areas of the vehicle were within his or her reach. Also, if the car is impounded, many times an inventory of its contents by the police will reveal criminal evidence. However, in this case the police had no constitutional justification to enter the defendant's residence without a warrant after the arrest. At the very least, they could have taken the defendant into custody, then come back later with a warrant, if they had sufficient probable cause. They did not. Thus the evidence was suppressed.

NJ Supreme Court to Consider Whether Refusal = DUI

Thu, 20 May 2010 08:00:00 EST

In a February post, I reported on an Appellate Division ruling that a conviction for refusal to submit to a breath test equates to a prior DUI for sentencing purposes if that person is subsequently convicted of drunk driving. In other words, if someone is convicted of drunk driving for the first time, but had a prior conviction for refusal, he would be sentenced as a second offender on the DUI! Well, it looks like the State Supreme Court is going to weigh in on this. On May 7, the court decided to hear the matter of State v. Ciancaglini. A docket number has been assigned, but there is no date yet for oral argument. Let's hope that the court sees reason in this and reverses this unjust finding.

Jail for Driving While Suspended in NJ Not Always a SLAP on the Wrist

Wed, 05 May 2010 08:00:00 EST

In New Jersey, as in other states, drunk driving is taken very seriously. If your license is suspended for a DWI, and you drive anyway, to say that you are in big trouble is an understatement. The normal penalties for driving while suspended are enhanced under N.J.S.A. 39:3-40(f), and include:

An additional fine of $500 (base fine ranges from $500 to $1000)
An additional license suspension of 1 to 2 years (the base suspension is 0-180 days)
10-90 days in jail.

It is this last one, obviously, that causes the most concern. Many sections of the New Jersey Motor Vehicle Code call for jail time, but most municipal judges are loathe to throw a driver into the county jail for some of them. Many times they are amenable to work release, time served on weekends only, or a special program called the Sheriff's Labor Assistance Program (more commonly knows as SLAP). This is a program allowable by statute (N.J.S.A. 2B:19-5) that can be set up in a county by its sheriff's department. It is defined in that statute as being "a work program,established by the county under the direction of the sheriff or other authorized county officer, which rigorously supervises offenders providing physical labor as an alternative to incarceration." However, a recent ruling by a municipal court judge may reflect a change in this attitude.

At the end of last month, a decision from the Municipal Court of Byram Township (Sussex County) was approved for publication by the Committee on Opinion. In the case of State v. White Judge Richard Bowe, ruled that the SLAP program is not available to a defendant who has been sentenced to jail time for driving on the revoked list when the underlying reason for the suspension was for a drunk driving conviction. Rather, only a jail term is permissible under the revoked-list statute. Although it is extremely rare for a municipal court opinion to be approved for publication, this one was, which makes it of some note. In addition, the holding in White marks the second time that an opinion written by Judge Bowe has been approved for publication.

Although the decision of this judge is not binding on any other traffic court judge, the fact that the ruling was considered significant enough to publish could indicate how courts in the future may view applications to SLAP as a jail alternative in these types of cases. This is yet another reason for drivers in New Jersey not to drive if they are under an active suspension for DWI: the judge may sentence you to jail, and he'll mean it.

When Can Police Error Lead to the Suppression of Evidence?

Wed, 14 Apr 2010 08:00:00 EST

In a previous post I had talked about a court's refusal to suppress evidence obtained from a search incident to arrest, where the arrest warrant was stale. In that case, the police were executing a warrant issued by another county but, due to a glitch, the database was not properly updated, and the police arrested the defendant. As improperly seized evidence is primarily suppressed by the court to deter bad conduct by law enforcement, the court did not see deterrence as a substantial enough issue to outweigh the injustice to the public. The police would have been punished for making an honest mistake. But what if the police are acting on bad information from their own department?

That is the case in a ruling by the New Jersey Appellate court on April 12, State v. Handy . There, the police had lawfully detained a suspect and called in for a warrant check. The dispatcher reported an active warrant but did not advise the officers that the information the officers had provided on the arrestee did not properly match up against police records. On the basis of the bad information provided by the dispatcher, the police arrested the suspect and found illegal drugs in a subsequent search. To make matters worse, it was later discovered that there was no active warrant for the person the police had arrested, and that the purported warrant was most likely for another person!

The Court ruled that negligence by a police dispatcher in not properly advising arresting officers required the suppression of evidence. The judges cited the need under our State Constitution to deter negligent actions by police and those working for them that result in illegal arrests and unreasonable searches. A person's Fourth Amendment rights against illegal search and seizure are very important, but the courts do weigh the suppression of evidence with punishing the guilty and protecting the public on one side of the scales, and the need to deter bad conduct by law enforcement on the other. Depending on the circumstances, one side outweighs the other, as can be seen in these two cases.

More Protection for Debtor Assets in Bankruptcy

Thu, 01 Apr 2010 08:00:00 EST

Someone filing bankruptcy does not necessarily lose everything they own and, contrary to popular myth, you do not automatically lose your house because you filed. This is because of a feature of the bankruptcy code called "exemptions." These are protections against the liquidation of assets by creditors that exist in both federal and state law. Here in New Jersey, folks filing bankruptcy use the federal exemptions under section 522 of the bankruptcy code.

Exemptions protect your assets up to a certain value (although some have no limit), and the amounts are adjusted every three years (starting in 1998) on the first of April. Thus the numbers have changed as of today to extend more protection, in keeping with inflation on the cost of replacement value. The adjustments are as follows:

Home Equity $20,200 to $21,625

Motor vehicles $3,225 to $3,450

Household goods and furnishings $10,775 to $11,525

Jewelry $1,350 to $1,450

Wildcard (Useable for Any Asset) $1075 to $1,150

(Unused home equity wildcard) $10,125 to $10,825

Tools of trade $2,025 to $2,175

Life insurance cash surrender value $10,775 to $11,525

Personal injury recovery $20,200 to $21,625

Bear in mind that these exemptions are per debtor. Therefore, assets held jointly by a married couple filing bankruptcy are protected by double these numbers! In this economy, with bankruptcy filings on the rise, this is a welcome change that allows people to keep important assets that might otherwise be lost. Although the adjustments are not huge, they can make a difference in some cases.

If You Don't Move Over, You'll Be Pulled Over in NJ

Tue, 23 Mar 2010 08:00:00 EST

New Jersey is one of 48 states that has adopted a "Move Over" law. This is a law that protects police and other emergency services vehicles on the shoulder of the road either rendering aid or enforcing the traffic laws. On the books in other states for many years, it wasn't until 2009 that New Jersey got with the program. However, it is also a law that most New Jerseyans know nothing about, and can come with some stiff consequences. Basically, if you are driving and approaching a "stationary authorized emergency vehicle" or "stationary tow truck" you must:

Make a lane change into a lane not adjacent to the vehicle, if possible in the existing safety and traffic conditions; or
If such a lane change would be impossible, prohibited by law or unsafe, you must reduce your speed to one that is "reasonable and proper . . . for the existing road and traffic conditions," which speed shall be less than the posted speed limit, and be prepared to stop.

If you fail to do so, you face a fine of $100 to $500 plus court costs. The New Jersey Attorney General's Office offers this informative information about the law . Be aware on our highways and help keep safe those who are keeping us safe!

An Invocation of Miranda Rights Can Expire

Mon, 08 Mar 2010 08:00:00 EST

The Miranda warning has become a familiar concept by anyone who has watched television over the past 40 years. "You have the right to remain silent . . . " Once you become a suspect, the police must give you this warning before continuing with questioning. If you ask for a lawyer, they must stop the interrogation. In fact, if the police try to question the suspect at a later date, and he then waives Miranda, the U.S. Supreme Court case of Edwards v. Arizona creates a presumption that the waiver was involuntary, and any subsequent statements can be suppressed. This law is in place to prevent the police from bullying someone into waiving his rights. We've all seen this on cop shows: the suspect invokes Miranda, and the police release him because they "do not have enough to hold him." Then the investigation reveals new evidence that implicates this suspect, and they bring him in again. The suspect then cracks, waives his rights, and talks. The question becomes, does this presumption ever end? Can an invocation of Miranda ever "expire" through a waiver?

The answer is: it depends. On February 24, the US Supreme Court ruled in the case of Maryland v. Shatzer , that a Miranda invocation has an expiration date. In their opinion, a break of at least 14 days provides a sufficient time period for the police to wait before attempting to re-question a suspect who has previously asserted his right to remain silent under Miranda. If Miranda rights are given and waived, that waiver will be good and any incriminating statements made will be admissible. However, the 14-day waiting period is based on the facts that the suspect will be at liberty, or at least not in police custody, during that period. This even applies to a prisoner who is in general population during that time. This is an important fact to bear in mind. Just because you asked for a lawyer once, doesn't mean you do not have to "renew" it at a subsequent interrogation. Be sure to speak up and be pro-active. Say to the officers at the very first question: "I continue to stand on my rights under Miranda, and I want a lawyer."

Imminent "Gotcha" for Bankruptcy Filers

Mon, 22 Feb 2010 08:00:00 EST

One of the requirements put into the bankruptcy code in 2005 was something called "means testing." It was meant as a way to force upper income debtors into chapter 13 repayment plans. In a nutshell, it involves taking your total gross income for the six months prior to your bankruptcy filing, doubling it, and then comparing that to the median annual income for your state for your family size. If your income exceeds this threshold, then a further analysis is done to see whether you have sufficient money left over to pay to creditors over time, after deducting some standard and non-standard living expenses. This median income is taken from census data, then adjusted annually for inflation. Well, we are due for an adjustment this year as of March 15, 2010.

The problem is, for New Jersey, the amounts are going down from their current numbers and not up. This could result in a debtor being above the median on the 15th, and below the median on the 14th. Just take a look at the changes:

Household of 1: $60,026 to $59,812
Household of 2: $72,000 to $71,744
Household of 3: $86,070 to $85,764
Household of 4: $103,261 to $102,894

To most people, this would be minor; but for some that are on the borderline, it can be the difference between a simple case and a more involved one. Also, if you are over the median now and were thinking you could wait until the numbers adjust up, think again. In any event, if you are preparing to file a bankruptcy in New Jersey, you should consult with my office on how these changes may affect your case.

Refusals are Now DWIs in New Jersey

Tue, 02 Feb 2010 08:00:00 EST

Under New Jersey law, if a police officer has probable cause to believe that you were operating a motor vehicle while under the influence of drugs or alcohol, he has the right to arrest you and require you to submit two breath samples to an Alcotest breathalyzer machine to determine your blood alcohol content. You must do this. You have no fifth amendment right to refuse nor a 6th amendment right to have an attorney present. Should you persist in refusing to do so, you can be charged with a separate offense of Refusal, in addition to drunk driving (DWI). Both charges carry the same penalties in terms of fines and license suspension. Basically, there is no upside to refusal, as the penalties are the same. In fact, there is a downside if you are a first offender. If you take the breathalyzer and get a reading of .08 to .1, the license suspension is three (3) months, while if it is .1 or above, it is seven (7) to twelve (12) months. With a refusal, it is a flat seven (7) to twelve (12), as there is no breathalyzer reading to grade the offense.

On January 7, 2010, the consequences became even more serious. New Jersey's Appellate Division reversed a long-standing precedent, ruling that a prior conviction for refusal will now count as a prior DWI conviction for purposes of sentence enhancement. Under New Jersey law, a second offense carries a two (2) year license suspension, while a third offense carries a ten (10) year suspension and mandatory jail time. This ruling becomes important in cases where, because of a lack of evidence as to impairment, the DWI is dismissed, but the refusal still stands. I had this happen to a client a few months ago, where the field sobriety test was not enough to prove impairment, but was enough to show probable cause to arrest and obtain a breath sample. The DWI was dismissed, but he plead to the refusal.

There is another impact to the ruling as well. Under New Jersey law, if there is more than a ten (10) year period between a first and a second offense DWI, the second is treated like a first for sentencing purposes. In the case before the Court, the defendant had a 1979 DWI conviction and a 2006 Refusal Conviction. The defendant argued that she should be considered a first offender since the only prior DWI case was more than 10-years old and the refusal does not enhance the DWI sentence. The Appellate Division ruled that she should be treated as a third offender as the refusal conviction must now be regarded as a DWI conviction for sentencing purposes. Ouch! All of this simply reinforces what I tell my clients: blow into the tube and take your chances. Maybe your reading will be too low (below .08), the machine won't be working properly that day, or the police may not follow proper procedures or be properly trained. In other words, if you comply, you have possible defenses and a fighting chance; if you refuse, you are dead in the water, absent an issue of probable cause to arrest.

Verizon's Increased FiOS EFT May Violate Basic Contract Law

Thu, 07 Jan 2010 08:00:00 EST

The Philadelphia Inquirer reported yesterday on Verizon's plans to double the early termination fees (ETFs) to $360 on their TV and Internet services. This fee diminishes by $15 for every month that the customer stays with Verizon. As noted in the article:

"Verizon has seen Comcast Corp. and other cable companies stealing back FiOS TV and Internet customers with steep discounts and offers to rebate the termination fee. . . . The sharply higher fee . . . would make the rebate payments more painful for competing cable companies."

Naturally, consumers enter into a contract with Verizon and agree to use their service for two years. In return, Verizon offers them discounts and deals for sticking with them. Any early termination by the customer would then be seen as a breach of that contract, thus entitling Verizon to any damages that they may suffer as a result of that breach. The contract itself can even set forth what those damages are in what is called a "liquidated damages clause." However, as any first year law student knows, those liquidated damages must reasonably reflect the anticipated actual damages suffered by the non-breaching party. Otherwise, it could simply be seen as a breach penalty and not be enforceable by the courts.

As with volume discounts, incentives for a long term commitment may well include a discounted monthly fee. This is not uncommon; the fee may be $x if you go month-to-month, but if you commit to two years, it is $y. Under that analysis, shouldn't the penalty go up and not down as time passes? If you get the discounted rate for three months then jump ship, shouldn't you just be liable for the difference for those months? This then begs the question of what damages does the ETF reflect?

The thext question is, does Verizon need to double its ETF to cover its actual breach damages or are they just creating a poison pill for Comcast and others to swallow as a disincentive for them to try and steal customers away? If customers deserve choice, or are dissatisfied with Verizon's service, then they should be able to leave. If Verizon's competitors are paying the ETF, then Verizon is being made whole, so where is the problem? Have their actual damages upon early termination actually doubled, or are they just feeling the pinch of a competitive marketplace? The FCC may well look into this (they are already scrutinizing a doubling of the ETF in Verizon's wireless division), but in the meantime, as Ricky Ricardo would say, I think Verizon has some 'splainin' to do.

She's Your "Girlfriend" Even If You Pay For It

Mon, 14 Dec 2009 08:00:00 EST

Every once in a while, the law has a very good sense of irony, and a ruling recently by the New Jersey Appellate Division is certainly a good example. New Jersey's Prevention of Domestic Violence Act creates a separate cause of action for assault when it occurs between two people in a "dating relationship." For example, it permits the entry of restraining orders in favor of victims of domestic violence. The Act defines a "victim of domestic violence" as including, among others, "any person who has been subjected to domestic violence by a person with whom the victim has had a dating relationship." (N.J.S.A. 2C:25-19d.) It does not, however, define what is meant by "a dating relationship." That is left up to the courts figuring that, like pornography, the judges will "know it when they see it."

On December 10, the court held in the case of J.S. vs. J.F. that the broad interpretation of "dating relationship" as used in the statute could extend to relationships based upon the payment of consideration from one party to another. In this case, the defendant contended that his misconduct did not constitute domestic violence because the basis of the social relationship was money he paid to her for professional escort services. The Court rejected this argument and stated that "the fact that a person receives a monetary benefit from engaging in a relationship does not automatically disqualify that person from the Act's benefits." This was backed by evidence introduced at trial that there were many occasions where the parties went out socially where there was no clear indication of monetary compensation.

What is clear here is the obvious legislative intent of the Act to protect women. The court stated that,

"Because the Act is remedial in nature, it has been liberally construed for the protection of victims of domestic violence. Indeed, the Act itself announces that its purpose is ‘to assure the victims of domestic violence the maximum protection from abuse the law can provide.' N.J.S.A. 2C:25-18. These principles would not be served by a cramped interpretation of what constitutes a dating relationship."

The judges go on to observe that, "Considering the Act's intended broad scope, we reject the contention that a relationship which includes a payment of consideration for the other's time precludes the finding of a dating relationship." I personally believe that the judges were repelled by the denigrating nature of the defendant's argument: that this woman was not entitled to the protections of this law because she received money for "dating" him. Ultimately, there may be irony here, but there is also justice.

U.S. Supreme Court Clarifies Issue of Warrantless Entry of Home

Tue, 08 Dec 2009 08:00:00 EST

One of the basic freedoms and civil rights we enjoy is the right to privacy in our own homes. Law enforcement must have some probable cause, or exigent (i.e. emergency) circumstances to enter a citizen's home without a warrant. There is a whole body of court opinions in our jurisprudence that talk about what those circumstances are. Yesterday, in the case of Michigan v. Fisher, the U.S. Supreme Court provided further clarification.

In this case, the court observed that:

"Police officers responded to a complaint of a [residential] disturbance . . . [The police officer] later testified that, as he and his partner approached the area, a couple directed them to a residence where a man was "going crazy." . . . Upon their arrival, the officers found a household in considerable chaos: a pickup truck in the driveway with its front smashed, damaged fenceposts along the side of the property, and three broken house windows, the glass still on the ground outside. The officers also noticed blood on the hood of the pickup and on clothes inside of it, as well as on one of the doors to the house. . . . Through a window, the officers could see [the Defendant] inside the house, screaming and throwing things. The back door was locked, and a couch had been placed to block the front door.

The officers knocked, but Fisher refused to answer. They saw that Fisher had a cut on his hand, and they asked him whether he needed medical attention. Fisher ignored these questions and demanded . . . that the officers go to get a search warrant. [The] officer . . . then pushed the front door partway open and ventured into the house. Through the window of the open door he saw Fisher pointing a long gun at him. . . . Fisher was charged under Michigan law with assault with a dangerous weapon and possession of a firearm during the commission of a felony."

Based on these facts, the court ruled that a warrantless entry into a residence, based upon a police desire to render emergency aid, need not involve a serious emergency or even obvious injury. Rather, the test is whether the police had "an objectively reasonable basis" to believe that medical assistance might be needed or that people may be in danger.

The court went on to say that police officers do not need iron-clad proof of a serious, life-threatening emergency to make a warrantless home entry under this exception to the warrant requirement. The Justices noted that the role of the police officer includes preventing violence and restoring order, not simply rendering first aid to casualties. The Court's opinion in Fisher emphasizes previous holdings by the court that the police may effect a warrantless home entry to prevent potential injury and need not wait until someone is actually injured.

Reasonable Suspicion for a Bicycle Stop

Tue, 24 Nov 2009 08:00:00 EST

We have all seen it on the TV police dramas. The police say to the suspect: "If you didn't do anything, why did you run?" Well, despite the world of prime time crime drama, running is not enough for the police to stop you and search you. Yesterday, the New Jersey Appellate Division ruled in the case of State v. Williams , that evidence recovered from a defendant following an illegal bike chase had to be suppressed. The defendant, seeing police in his neighborhood, quickly road away from the officers while reaching his hand into his pocket. Without any level of suspicion, other than his flight, the police chased him on foot and apprehended him. The key issue becomes whether the police had the requisite "reasonable suspicion" that Williams was engaging in criminal activity to justify stopping him at that point. During the chase, the defendant discarded a small container from his pocket that was later determined to contain cocaine. Williams was subsequently arrested and charged.

Williams moved to suppress the cocaine evidence. Although trial court ruled that the defendant's behavior of riding away and reaching his hand into his pocket did not constitute "reasonable suspicion," it denied the motion because the defendant's failure to stop when commanded to by the officers constituted "obstruction." Upon appeal, the court did not find "reasonable suspicion" for the stop. It observed:

"Even if defendant's conduct in pedaling away from the officers could be viewed as flight once they ordered him to stop, as previously stated, "flight alone does not create [the] reasonable suspicion [required] for a stop[.]" Dangerfield , supra, 171 N.J. at 457.

The fact that defendant also put his hand in his pocket did not provide any additional foundation for an objectively reasonable suspicion that defendant had engaged or was about to engage in criminal activity. Putting a hand in a pocket is fairly common human conduct that does not generally involve the commission of a crime."

The court ultimately determined that the chase was illegal and held that evidence obtained during said chase and arrest may only be admissible if its recovery is substantially separated from the police illegal conduct. For example, if after stopping the defendant, said defendant assaulted an officer in an attempt to escape, and the cocaine was found as a result of a search incident to arrest, then it would have been admissible. The Court went on to conclude that in this case there was no such separation and ordered the evidence suppressed.

The bottom line here is that the police do not have enough reason to stop, detain, and question you simply because you fled the area upon seeing them; there must be something more to it.

"Gotcha" Removed from New Jersey's No-Point Ticket

Wed, 11 Nov 2009 08:00:00 EST

In a June 11, 2009, post, I talked about a "gotcha" that existed in a New Jersey statute used to avoid points on certain traffic violations. The law itself said that motorists could plea to "Unsafe Operation" two times in a five year period and avoid the assessment of points against their license by the New Jersey Motor Vehicle Commission (in return for the payment of a $250 surcharge over and above fines and costs). Should it be used a third time in that period, four points would be assessed. Then, as I said in that post,

"[the] New Jersey Appellate Division held, in the case of Patel v. New Jersey Motor Vehicle Commission, that the five years started to run only after there had been a third offense and the assessment of points! This effectively says that you only have two lifetime opportunities to avoid points. After your third offense (and 4 points) you can then "reset the clock" if you go five years without using the plea."

As a result, I advised readers that this plea should only be used after careful consideration, consultation with a lawyer, and in situations where the assessment of any points could result in adverse consequences. Then, there was a ray of hope. As I reported in my September 13 post, the New Jersey Supreme Court was hearing an appeal of the Patel decision. Maybe the court would see the folly of the position taken by the Appellate Division, and reverse the decision.

Well, I am happy to report that yesterday the court reversed the previous court ruling! They held that the provisions of NJSA 39:4-97.2 (Unsafe Operation) permit a driver to avoid points on a third or subsequent offense provided that five-years have passed since the prior offense. This would include a third offense that occurs more than 5-years after a second offense. Thus drivers need not take a four point hit just to "reset the clock." This plea should only be entered into on the advice of an attorney, but it is good to see that the option is now more available!

Keep Your Car Snow Free This Winter or Get a Ticket in NJ

Fri, 30 Oct 2009 08:00:00 EST

Better make sure that your car has its snow brush, scraper, and de-icing spray ready to go this winter! On October 20, Governor Corzine signed into law some amendments to New Jersey's Motor Vehicle Code that will create a new offense of operating a motor vehicle with accumulated snow or ice . This includes all areas of the vehicle, such as hood, trunk, windows and windshield. Police are now able to stop vehicles with accumulated snow and ice that are being operated on a street or highway when the officer feels that the vehicle poses a danger to persons or property. We have all seen situations while driving in winter where cars piled with snow have had chunks break off and fly through the air, so this law is definitely aimed at a serious hazard. Although it doesn't carry any points, there is a daily fine of between $25 and $75. Drive safely!

A Glimmer of Hope for New Jersey's "No Point Ticket."

Sun, 13 Sep 2009 08:00:00 EST

As I mentioned in a previous post, those seeking to avoid motor vehicle points against their New Jersey licenses by pleading to the "Unsafe Operation" statute (N.J.S.A. 39:4-97.2) could find themselves trapped by an Appellate Court interpretation of it under State v. Patel. That is because that ruling mandated the assessment of four points for a third or subsequent offense no matter how much time had passed after the second. Fortunately, that interpretation is now being challenged in front of New Jersey's Supreme Court this Tuesday when that court hears oral argument. It will be interesting to see what the court's ruling will be, as it will most likely be the final word on the subject, unless the Legislature acts to clarify the issue.

Additional Miranda Protection for Juveniles

Tue, 18 Aug 2009 08:00:00 EST

Children get into trouble; it is often the way of the world. If they get into trouble with their parents, that is one thing. But what happens when the get into trouble in a BIG way, like getting arrested? How do parents deal with this and protect their children's rights? Fortunately, the law does allow certain protections for minors, especially when it comes to the Miranda warnings and Fifth Amendment rights.

For example: State v. Sanchez (once he is indicted, a defendant may not waive the right to counsel without the approval of counsel; State v. Presha (where a child is under 14, the absence of a parent renders the child's statement inadmissible as a matter of law, unless the parent or legal guardian is truly unavailable; where the child is 14 to 17, the absence of a parent or legal guardian from the interrogation area is a "highly significant fact" in determining whether a juvenile's waiver of rights was knowing, intelligent and voluntary); and State v. Reed (a knowing waiver of Miranda rights cannot be made if police withhold the fact that an attorney has been retained to represent them - such as one retained by parents when they hear of a child's arrest).

At the end of July, the New Jersey Supreme Court, in State in the Interest of P.M.P., created new, more restrictive rules that police must follow when attempting to obtain a waiver of the right to remain silent for a juvenile suspect. In effect, following the filing of a juvenile petition and the issuance of an arrest warrant, a child mat not waive his right to remain silent and give a statement in the absence of counsel. This is a continuation of the Sanchez ruling in a juvenile context.

This was followed by a ruling on August 12, 2009, that expanded upon the Presha rule about the presence of a parent or guardian during questioning. In State in the Interest of A.S. , the police were called upon to investigate an aggravated sexual assault perpetrated by a 14 year-old female upon her 4 year-old nephew. During the police interview, the 14 year-old suspect was accompanied by an adult advisor, her mother . The problem was that her mother was also the grandmother of the victim. During questioning, the child's mother showed an obvious conflict of interest in favor of the 4-year old victim and took aggressive, affirmative steps to have her daughter waive her right to remain silent, her right to counsel, and to confess. To make matters worse, the police even permitted the child's mother to read her the Miranda rights form! In suppressing the confession, the court advised police and prosecutors that where the adult advisor is known to have a close family relationship to both the victim and the alleged perpetrator, the police must require the presence of an attorney capable of advising the child with respect to his or her rights and potential culpability.

Should your child be arrested, these points are important to remember. A child under 14 cannot be questioned outside the presence of a parent or legal guardian (if you are reachable), and waiver of Miranda is highly suspect if the child is 14 to 17, that parent or legal guardian must be "neutral" or an attorney must be present, and a child cannot waive Miranda outside presence of an attorney if there has been a filing of a juvenile petition and the issuance of an arrest warrant for said child. Should you find out your child has been arrested and have retained an attorney, be sure to inform the police and instruct them to cease all questioning until that attorney (or you) arrives. All we can do for our children is the best we can do; these court rulings should help if they get into serious trouble.

Attorney-Client Privilege in the Workplace

Wed, 22 Jul 2009 08:00:00 EST

On April 21, 2009, I posted an article about an unpublished New Jersey trial court opinion in the case of Stengart v. Loving Care Agency, Inc., in which the judge held that the attorney-client privilege can be waived not only for emails sent using the employer's email program and computers, but also for emails sent through a web-based email program while using the employer's computer. Apparently the employee had been using a personal webmail account with Yahoo! to send emails to her lawyer using her company laptop to discuss her hostile work environment claim, which she filed following her departure from the company. The advice I gave at that time was that if you need to communicate with your lawyer during the work day, you should either bring your own computer to work or have a separate mobile device/cell phone for personal e-mail.

Fortunately, the Appellate Court has weighed in and reversed the trial court ruling. In effect, they say that the attorney client privilege and the employee's right to privacy trump an employer's computer usage policy. It said, for example:

"a computer in this setting constitutes little more than a file cabinet for personal communications. Property rights are no less offended when an employer examines documents stored on a computer as when an employer rifles through a folder containing an employee's private papers or reaches in and examines the contents of an employee's pockets; indeed, even when a legitimate business purpose could support such a search, we can envision no valid precept of property law that would convert the employer's interest in determining what is in those locations with a right to own the contents of the employee's folder of private papers or the contents of his pocket. As a result, we conclude a breach of a company policy with regard to the use of its computers does not justify the company's claim of ownership to personal communications and information accessible therefrom or contained therein."

Great stuff! Certainly a caution to employers that policy memos and employee handbooks cannot create rights for them that unduly invade the privacy of their employees, let alone violate the privileged communications they may have with their lawyers. As for the employer's lawyers in this case, they did not escape unscathed. The court took them to task under New Jersey ethics rules as to whether they should have read any of the information provided to them by their client. Wow!

My advice, however, remains the same. Employees should continue to be circumspect regarding personal use of company equipment during the work day and on company property. If this case has shown us anything, it is that the law is changeable, and who knows what the state Supreme Court would say if they took an appeal of this decision. However, it is a refreshing ruling from our courts.

Protect, Serve, Search, and Seize

Mon, 20 Jul 2009 08:00:00 EST

Many of us have noted on the sides of police patrol vehicles the words, "To Protect and To Serve," but we do not always fully understand or appreciate their meaning. This month, however, the New Jersey Courts have focused on this in two decisions having to do with the Fourth Amendment right to protection against illegal search and seizure. These cases show how the efforts of police officers to protect and serve the people can be the basis for allowing for unwarranted searches and seizures of evidence.

On July 2, 2009, in the case of State v. O'Donnell , the New Jersey Appellate Division held that when the police make an emergency entry into a residence, they may seize any evidence they find in plain sight in the course of rendering aid. Here, the police were responding to a 911 call saying that a six-year-old child had stopped breathing. They located the child who appeared to have died, and while doing so, noted in plain view near the child's body several items that looked to be evidence of a crime. Rather than seize these items immediately, the police arrested the defendant, removed her to the police station, secured the crime scene and awaited the arrival of homicide investigators from the prosecutor's office. The homicide investigators arrived 40 minutes later, entered the residence without a search warrant and seized the evidence. The Court held that the police were lawfully in a position to see the items in plain view. Not only that, but the subsequent arrival of the homicide investigators and entry without a search warrant was reasonable, because this second entry was nothing more than a continuation of the initial entry into the residence by the police.

On July 7, 2009, in the case of State v. Bogan , the New Jersey Supreme Court dealt with a case involving the "community caretaking" exception to the warrant requirement for searches. This exception, as explained by our Supreme Court in the case of State v. Diloreto (quoting State v. Cassidy ,), is "[t]hat doctrine [that] applies when the ‘police are engaged in functions, [which are] totally divorced from the detection, investigation, or acquisition of evidence relating to the violation of a criminal statute.'" Basically, pursuing their mission "to protect and to serve." Here, the police were investigating the sexual molestation of a 14-year-old girl, who was able to identify her attacker as a family friend. When the police went to the accused's residence, the door was answered by a young boy who appeared to be by himself and not subject to any adult supervision. While talking to the boy, he retreated into the apartment to answer a phone call from his father. The police entered with him to speak to the father on the phone in order to inquire as to the child's care and welfare. After they got inside, the police noticed a man who matched the description of the subject of the sexual assault investigation in plain view in another room. When the police confirmed the name of the man with the child's father, the officers immediately arrested the defendant and, following a waiver of Miranda rights, obtained incriminating statements from him. The Supreme Court held that the police entry into the apartment without a warrant was entirely reasonable in light of their community caretaking obligations toward the unattended child they had encountered at the apartment, and their inquiring of a parent why a child was home alone on a school day in an apartment where a suspected crime had occurred.

When the police investigate crimes, they must follow the rules and preserve peoples' constitutional rights. We want them to. However, these cases recognize that the duties of a police officer go way beyond investigating crimes; they include a mandate "to protect and to serve." Therefore, when they are in the course of doing so, and discovery evidence of a crime in plain view, they are allowed to investigate and thus seize same. To do otherwise would be to force them to ignore said evidence and said crime, which we would certainly not want them to do.

Miranda Rights Sometimes Need to be Reinvoked.

Fri, 17 Jul 2009 08:00:00 EST

The Miranda warning is something we are all familiar with from watching police dramas. Once the suspect is "Mirandized" and says he or she wishes to have an attorney present, questioning must cease. However, on July 9, the New Jersey Appellate Court held that the police may resume questioning of a suspect who has invoked Miranda under certain circumstances.

In State v. Wessells , the defendant was arrested on a traffic warrant and was questioned by the police about a multiple homicide. At some point in the interview, the defendant invoked his right to counsel and the questioning ceased. He later posted bail on the traffic warrant and was released. Within days, the police obtained additional evidence that linked the defendant to the murders. As a result, nine days after his release, the defendant was again arrested and charged with murder. Despite his prior invocation of his right to counsel, the police attempted to question the defendant once again. This time, the defendant waived that right and provided incriminating admissions to the police. The defendant later tried to have the statements suppressed, stating that questioning should not have continued after he invoked his right to remain silent.

Not this time, said the court. Someone who has asserted the right to counsel during a police custodial interrogation and is later released may be interrogated again if the gap in time between the arrests afforded a reasonable opportunity to consult an attorney. Although in this case they stated that there was a reasonable opportunity, they did not set forth a hard and fast rule on the amount of time in future cases. The facts must be looked at on a case-by-case basis under a "totality of the circumstances," they say.

The Fifth Amendment right against self-incrimination is very important, and the Miranda warning does a lot to protect it, but the courts have been ruling in such a way as to create some traps for the unwary. In a previous post I talked about how the Miranda warning does not have to be "renewed." There a witness was brought in for questioning and given Miranda at the beginning of the interview. Later during the questioning he became a suspect and confessed. His argument that the warning should have been given again after he went from witness to suspect fell on deaf ears. Here, a suspect must reassert his rights without a new Miranda warning. In light of rulings such as this, I advise people to keep their rights foremost in their minds when dealing with law enforcement, and not make any assumptions. Otherwise, they could be in for some nasty surprises.

Non-English Speakers in NJ Dealt a Blow in DWI Refusal Cases

Mon, 06 Jul 2009 08:00:00 EST

UPDATE (7-15-10): The case that this post discusses was reversed by the New Jersey Supreme Court.

On July 1, the New Jersey Appellate Court issued one of the most amazing opinions I have ever seen! For those of you who don't know, a person arrested for DWI does not have a 6th amendment right to an attorney before giving a breath sample, nor does the breath sample itself constitute self-incriminating testimony under the 5th amendment. However, the police are required to read a standardized statement explaining this to the defendant, so that he knows that he does not have the right to refuse the breathalyzer. If he then refuses, he can be charged not only with DWI, but with refusal as well.

In the case of State v. Marquez, in an opinion approved for publication (in other words, it can be cited with authority in future cases), the New Jersey Appellate Division held that proof that a defendant understands the warnings is not an element of the refusal offense. Moreover, the administrative burden placed upon law enforcement to translate the warning into a wide array of foreign languages would be unreasonable, especially given the time-sensitive nature of obtaining drunk driving blood-alcohol evidence. What? A defendant is informed that he does not have certain constitutional rights, and it is not important that he understands this? When suspects are read the Miranda warning advising of the existence of these same two rights, the defendant's understanding is paramount. In fact, the warning ends with, "Do you understand these rights as I have explained them to you?" What happened here?

In this case, Mr. Marquez was arrested for drunk driving after a motor vehicle accident and brought back to the police station for breath-testing. He spoke no English and had been able to communicate with the arresting officer in Spanish. The officer who investigated the accident, an Officer Lugo, "speaking in English, . . . requested defendant's driving credentials. After it became apparent that defendant did not understand him, Officer Lugo repeated his request in Spanish. Defendant then produced a valid New Jersey driver's license, a vehicle registration and an insurance card." At the police station, the defendant was read the required implied consent warnings in English. At trial, the defendant testified through an interpreter that he did not understand the warning that had been read to him by the police, a fact that was conceded by the State. Defendant was convicted drunk driving, careless driving and refusal to submit to a breath-test. The court observed:

"The elements of a refusal offense do not include proof that the driver actually comprehended the police officer's instruction. To the contrary, the Supreme Court . . . ‘emphasize[d] that a defendant's subjective intent is irrelevant in determining whether the defendant's responses to the officer constitute a refusal to take the test.' If the law were otherwise, some motorists might illicitly feign such lack of comprehension to evade liability for a refusal."

However, that was not the case here. All the evidence indicated that the defendant did not speak English or understand the statement read to him. He was not faking. When the arresting officer at the scene asked him, in Spanish, for his license, registration, and proof of insurance, the defendant complied. Two other points were also made by the court. First, when someone obtains a driver's license (which is a privilege, not a right), and operates a vehicle on New Jersey roadways, he or she gives implied consent to breath testing. Second, "because [the] defendant . . . did not allow the police to administer the Alcotest to him, the police's obligation . . . to inform ‘the person tested' of his rights is not on point." In other words, the nonverbal refusal of Mr. Marquez to take the test is enough, even if he was ignorant of his lack of a right to do so.

Admittedly, the court here was following precedent, as this was not the first time this issue had come before them.

"The question of whether the standard statement must be translated into a foreign language for non-English-speaking drivers has been previously the subject of published judicial and administrative decisions. As the municipal judge here noted, the court rejected a defendant's argument to require such a translation in [State v.] Nunez, supra, 139 N.J. Super. at 28."

I realize that drunk driving is a serious problem in our society and must be dealt with in order to keep us safe on the roadways, but where is the justice here? Courts must follow a rule of law and often must protect the needs of society over those of individuals, but sometimes justice is needed on a case by case basis. Here, although DWI cases are time-sensitive when it comes to taking a breath sample, and one cannot always find a translator at a moment's notice, the police officer spoke Spanish. He might have been able to get Mr. Marquez to understand the statement with a little effort, yet in a footnote, the court observed that "The extent of Officer Lugo's fluency in Spanish is not disclosed in the record." Well, shouldn't it have been? Wasn't that important?

The court at trial was able to convict Mr. Marquez of drunk driving and careless driving based on the officer's observations at the scene, along with the occurrence of an accident. He was punished accordingly. The needs of society were met. With that in mind, was it really necessary to pile on a separate punishment for the refusal? Perhaps. Sometimes the breathalyzer result is the only evidence of impairment in a DWI case, and a message needs to be sent to the driving public. On the other hand, shouldn't punishment for refusal in these circumstances be used only when said "uninformed refusal" impedes the state's ability to keep drunk drivers off the road? Shouldn't our municipal court judges have some discretion in this? The one ray of sunshine here is that the court did "recommend that, as an administrative matter, the Motor Vehicle Commission prospectively consider having the standard statement translated into Spanish and perhaps other prevalent foreign languages." Whether that will be enough remains to be see. Something to think about.

Constitutional Rights are Not Always Transferable

Fri, 26 Jun 2009 08:00:00 EST

The Bill of Rights to the Constitution provides many protections to citizens regarding their person, property, and privacy. Most famous are the Fifth Amendment Right Against Self Incrimination and the Fourth Amendment Rights Against Unlawful Search and Seizure. However, many people do not realize how limited these rights can be to that person; another person cannot necessarily "coat-tail" onto someone else's rights and protections.

A recent New Jersey Supreme Court opinion in the case of State v. Baum illustrates this point rather well. In that case, the police pulled over a car and questioned the driver at the scene over a prolonged period of time. During the questioning, the driver made statements that resulted in the recovery of cocaine and marijuana inside the car. A passenger in the vehicle, who was also arrested and charged with drug possession, filed a motion to suppress, arguing that the police obtained the information about the drugs illegally by violating the driver's Miranda rights and conducting a warrantless search of the car.

The Supreme Court rejected the Fifth Amendment argument and ruled that both federally and in New Jersey, that privilege is purely personal with the defendant that makes the incriminating statement and does not extend to protect third parties. In other words, the driver could not be forced to incriminate herself, but she could incriminate others all she wanted. As to the claim of unlawful search and seizure, however, the court did hold that the passenger could claim that, based on an expectation of privacy. However, they found that there was sufficient probable cause to conduct the search under the overall circumstances of the stop and the evidence gathered afterwards.

Fourth Amendment rights can be limited to the person, however. For example, say the police search someone's home without a warrant and find a weapon in a closet that is subsequently tied by ballistics to a recent armed robbery, and fingerprints on the handle lead them to a suspect who does not live in the home searched. If no probable cause for the search is found, the police may not be able to use it to charge the homeowner, but they may well be able to go after the armed robber, whose privacy rights have not been violated.

Major US Supreme Court Decision for Drug & DWI Cases

Fri, 26 Jun 2009 08:00:00 EST

Yesterday, the U.S. Supreme Court in Melendez-Diaz v. Massachusetts ruled in a close, 5-4, decision that laboratory reports related to the testing of drugs at a police laboratory are to be considered as testimonial evidence within the meaning of the Sixth Amendment. In effect, this means that a criminal defendant has the right at trial to confront personally the maker of the laboratory report on confrontation clause grounds. New Jersey has held this to be the case for many years, as in State v. Berezansky (Lab results of a DWI Blood test), State v. Renshaw , (Requiring testimony of person who drew blood sample from intoxicated defendant) and State v. Kent , (Requiring the defendant to put the state on notice that the lab tech will be required to appear to testify in court).

What does this mean? Potentially, quite a bit. If the state's case against a defendant for drunk driving is based on blood drawn at the hospital, or a drug possession case on a lab test of that "brown vegetative substance," that lab report becomes critical. Without it, they lose! Thus the prosecutor has to be sure that the lab technician that conducted the test and wrote the report is subpoenae'd and ready to testify at trial in order for the results of the test to be accepted into evidence. Remember, just because the police suspect that that white powder is cocaine, doesn't mean that it is and more importantly, cannot be proven to be such without that lab test. Not long ago I was able to plead a drunk driving case down to careless driving because the lab report had come in a day or two before a date certain for trial, and the prosecutor could not produce the nurse that drew and tested my client's blood.

The upshot of all of this is that people charged with drug offenses and drunk driving need to be aware of this right to confront state witnesses, and should consult with an attorney to make sure those rights are protected. Remember, it is the state's burden to prove that you were drunk, high, or in possession of drugs; nothing is presumed based solely on non-expert testimony.

Additional Protection from Creditor Harassment

Mon, 15 Jun 2009 08:00:00 EST

On June 4, 2009, a committee of the New Jersey State Assembly approved a bill called the New Jersey Fair Debt Collection Practices Act, which aims to protect New Jerseyans from creditor harassment. The Senate has a similar bill . On the one hand, it is great that our legislature is looking out for us, but on the other, the bills as presented mostly echo the federal Act with some changes in damages.

One interesting difference between the two versions of the bill is that the Senate includes the creditor itself as a "debt collector" regulated under the law, while the Assembly version does not (and neither does the federal Act). I would propose that if the New Jersey legislature really wants to provide protection from creditor harassment to its citizens, they should adopt the Senate version of the bill (at least insomuch as it broadens the scope of a "debt collector.")

I am currently calling upon Assemblyman Burzichelli and his co-sponsors to consider including creditors in the scope of their bill; otherwise, creditors would still free to harass our citizens unchecked. Let's hope they listen.

New Jersey's "No Point Ticket" Can Be a Speed Trap

Thu, 11 Jun 2009 08:00:00 EST

In New Jersey, points assigned against your license can cause problems, like increased auto insurance premiums or the suspension of your license if you get too many of them. That is why people try to avoid them. Prior to 2000, drivers given traffic tickets that could result in the assessment of points, speeding, for example, were usually able to avoid them when represented by an attorney by downgrading it to an innocuous charge that did not carry points. However, the State then enacted a statute under the Motor Vehicle Code for "Unsafe Operation of a Motor Vehicle" under N.J.S.A. 39:4-97.2 (commonly referred to as a "97-2″). This allowed for the avoidance of points, in exchange for a fine and a $250 surcharge, twice within five years. In other words, if you used it a third time within that period, you would be assessed four points!

This changed several months ago when the New Jersey Appellate Division held, in the case of Patel v. New Jersey Motor Vehicle Commission, that the five years started to run only after there had been a third offense and the assessment of points! This effectively says that you only have two lifetime opportunities to avoid points. After your third offense (and 4 points) you can then "reset the clock" if you go five years without using the plea. For this reason, this plea should only be used after careful consideration, consultation with a lawyer, and in situations where the assessment of any points could result in adverse consequences, such as the ones stated above.

Another consideration is the dilemma of the out of state driver ticketed in New Jersey. Traffic penalties in one state are usually "reciprocated" in another, but not always for exactly the same thing. For example, in Pennsylvania or Delaware, "unsafe operation" is equivalent to "careless driving" and carries points! As you can see, a 97-2 is not an option in that instance, and only serves to emphasize the importance of out of state drivers consulting with an attorney before entering into any plea in our traffic courts.

UPDATE: This situation has changed, as the NJ Supreme Court reversed the Appellate Division in Patel. See the more recent post here.

Finally! Relief for Credit Card Users!

Fri, 22 May 2009 08:00:00 EST

You have probably read, heard, or seen on the news about the U.S. Senate passing legislation to protect credit card holders from the predatory practices of banks. For years consumers have had to deal with high interest rates, changes in rates with no reason or warning, universal default on all cards if you are late with paying one, high fees, etc. Now, Congress is listening.

On May 19, 2009, the Senate passed a bill 95-5 to curtail this activity, and the House is expected to follow suit. President Obama is also expected to sign it into law if it is brought to his desk. If it does become law, however, it would not give immediate relief, as it gives credit-card companies nine months to change their ways. What would this mean for you? Several things , including:

credit-card companies will need to notify you 45 days in advance before increasing your interest rate.
card companies will no longer be able to penalize you immediately for being late through a higher interest rate. Card holders will have a 60-day grace period before the lender can retroactively apply a higher rate to existing balances.
even if this were to happen, you can get back on track. Card companies will have to restore the previous, lower rate once you have made your minimum payment on time for six consecutive months.
those under 21 who want to open a credit-card account to first prove that they can repay the money - or that a parent is willing to be on the hook for their child's debt.
No more universal default.

This is a good start, although credit card companies, being adaptable, will probably create new tactics to get around the rules. At least Congress is starting to listen to their individual constituents, rather than the bank lobby (which gave us a more onerous bankruptcy code in 2005). We will have to see how all of this plays out.

20 Minute Observation in NJ DWI Case Enforced

Thu, 30 Apr 2009 08:00:00 EST

In New Jersey, individuals stopped for drunk driving have their blood alcohol level tested by an Alcotest Breathalyzer. One of the key prerequisites the courts have imposed on the acceptance of these test results as proof of intoxication is that the police officer must observe the driver for at least 20 uninterrupted minutes prior to administering the test. This requirement became key in an appeal of a conviction to the Superior Court, Mercer County in the case of State v. Filson.

In its ruling on April 16, 2009, in an opinion not approved for publication (and thus not available to be cited as authority, or as a ruling binding on other judges), the court acquitted the driver because the officer who operated the Alcotest did not continuously observe the driver for the required 20-minutes before administering the breath test. The break in observation occurred when the officer left the room to remove a cell-phone that had been in possession of the driver.

Although not a published opinion, it was based on an in-depth analysis of the 20-minute observation requirement along with how this issue is handled in other states. Hopefully, other judges, when given the opportunity, will follow this judge's lead on this issue. Therefore, anyone charged with drunk driving should be sure to address this in their case.

Decals for New Driving Permit Holders in NJ

Mon, 27 Apr 2009 08:00:00 EST

On April 16, Governor Corzine signed "Kyleigh's Law" (a series of amendments to N.J.S.A. 39:3-13.2a, 39:3-13 and 39:3-13.4, named after a 16-year-old girl who was killed in a car accident involving a teen driver) which will require holder's of special learner's permits to display decals on their cars, so that police officers may identify them as such. New Jersey is the first state in the union to have such a law, and a violation can result in a $106 fine and $33 court costs. Special permit holders cannot drive a car unless these decals are displayed.

However, decals are not the only thing that will be required of these permit holders. Another law that will be put into effect at the same time. Drivers younger than 21 without "full privilege licenses":

Cannot drive between 11pm and 5am (changing the curfew from midnight)
Can only have one passenger unless a parent/guardian is also in the vehicle.
Cannot use cell phones or other communication devices, even if they are "hands free."

This law is being put into effect with the intention of trying to keep our children safe. According to a Teen Driver Study Commission report, cited in an April 16, 2009, story in The Philadelphia Inquirer, motor vehicle crashes are the top cause of teen deaths, and in New Jersey teen drivers are in accidents every nine minutes! The laws go into effect in May of 2010.

Parents need to be aware of these new laws as they go into effect and be sure to obtain the decals once they become available. Law enforcement will surely be ready to enforce it, and traffic citations that early in a driver's career are never a good thing!

Major Advances in Search and Seizure Law

Fri, 24 Apr 2009 08:00:00 EST

Much has happened in the last week regarding the laws surrounding searches and seizures by police officers, one in which federal law followed the lead of established New Jersey decisions regarding searches of motor vehicles, and one in which state law changed to follow a federal standard (the continuation of the execution of a search warrant after it had been halted).

The 1981 U.S. Supreme Court case of New York v. Belton had established that police could automatically undertake a search of a motor vehicle for weapons and evidence every time a recent occupant had been arrested. Since then, there had been much criticism of this decision, especially here in New Jersey, where we finally departed from that rule in a 2006 State Supreme Court case, State v. Eckel . Finally, on April 21, 2009, in Arizona v. Gant that police may search a motor vehicle following the arrest of a recent occupant only if the arrestee is unsecured and within reaching distance of the passenger compartment at the time of the search. In other words, is there an issue of the safety of the police officer(s) because the arrestee could reach for a weapon.

In addition, a search of the vehicle following an arrest will only be considered valid when it is reasonable for the police to believe that evidence related to the offense triggering the arrest might be found within the vehicle. This part of the ruling is best understood in the context of the facts of the case. The driver was stopped by the police and arrested for driving on the revoked list. They then conducted a search of the vehicle incident to the arrest and located drugs. The court found that the search was unnecessary because there was no evidence in the vehicle that could be found pursuant to a search that would help to prove that the driver's license had been revoked.

Again, this ruling does not change New Jersey law as it has existed over the last three years, but people driving in New Jersey should still be aware that if they are pulled over by the police, arrested, handcuffed, and removed from their car, any subsequent search of that car may be subject to challenge in court later. Thus it is important to consult with an attorney to review the case.

Then, on April 22, 2009, in the case of State v. Finesmith the New Jersey appeals court adopted a "reasonable continuation doctrine" that has been in federal law for quite some time. This doctrine permits the police to suspend temporarily the search of a home conducted pursuant to a search warrant, and then later return to the scene, re-enter the home, and continue the search. In order to do this, however, the police must establish that the second search was a continuation of the original search and that the subsequent decision to resume it was reasonable "under the totality of the circumstances." In this particular case, the police were looking for evidence contained on a laptop computer. They suspended the initial search when they could not find it. After they later developed additional information as to where the laptop was located, the police returned to the home two hours later, re-entered, and found the laptop.

Maintaining E-mail Privacy When Talking to Your Attorney

Tue, 21 Apr 2009 08:00:00 EST

E-mail has been a staple of communication in America for years, especially with households now having at least one computer which, chances are, is a laptop. It is quick, convenient, and extremely useful. However, those that use it should be aware of the privacy issues. Many people do not think about it, and when they do, they tend to consider it like regular snail mail in a sealed envelope only to be opened by the recipient; this is not the case.

First of all, if your e-mail is not encrypted, do not send any message that you would not write on a postcard. This is because your e-mail can conceivably be read by everyone along the route it will take, including snoops that may be monitoring your wireless connection (if that is not encrypted either). You should also double check the address before you click "Send" in order to avoid sending it to the wrong person (which can be quite embarrassing or downright harmful to your career).

Second of all, be mindful when using a work e-mail account for personal correspondence. The courts in many states have held that there is no expectation of privacy for work e-mail accounts or work computers. This is one reason why I do not correspond with my clients by sending e-mails to their work address; the potential for loss of attorney-client confidentiality is too great. If you are represented by an attorney, you should also not use your work e-mail to send him or her any messages, for just the same reason.

Those of us in New Jersey also have another concern, and that is the use of personal e-mail accounts on work desktop or laptop PCs. In the case of Stengart v. Loving Care Agency, Inc., the court wrote in an unpublished opinion that the attorney-client privilege can be waived not only for emails sent using the employer's email program and computers, but also for emails sent through a web-based email program while using the employer's computer. Here the employee had been using a personal webmail account with Yahoo! to send emails to her lawyer using her company laptop to discuss her hostile work environment claim, which she filed following her departure from the company. In the course of the litigation, the attorneys for the former employer, using computer forensic experts, found temporary internet files on her company laptop reflecting these emails. Her attorneys tried to get the e-mails suppressed due to privilege and have the attorneys withdraw from the case (since they could not "unsee" the privileged information). Unfortunately, the employer had stated quite clearly in an employee handbook, which Ms. Stengart helped to create and disseminate, that all electronic communications using company equipment was not to be considered private. As a result, the court held that:

"when an employee has knowledge of the employer's electronic communication policy which adequately warns that any and all internet use and communication conducted on the employer's computer is not private to the employee and warns that E-mail and voice mail messages, internet use and communication and computer files are considered part of the company's business and client records, such communications are not protected by such attorney client privilege and are then not to be considered private or personal to any individual employee."

Thus, the employer was able to use this information in the litigation.

One should bear in mind that this was the ruling of one trial court, in an unpublished (i.e. unofficial) opinion, but if other courts in New Jersey (and perhaps throughout the country) follow suit, e-mail privacy in the workplace will erode further. In addition, attorneys could find themselves quite limited in their ability to communicate with clients during the work day (if they can at all). Theoretically, this would mean that an employee could not use a company computer, smartphone/BlackBerry, or other mobile Interned device for this type of communication. The best advice I can give is that if you need to communicate with your lawyer during the work day, you should either bring your own computer to work or have a separate mobile device/cell phone for personal e-mail.

Miranda Warnings Don't Have to be Renewed

Fri, 06 Feb 2009 08:00:00 EST

The New Jersey Supreme Court ruled recently in a child molestation case on an issue involving Miranda warnings. We are all familiar with the Miranda language from police and court dramas on TV, and many of us can even recite them as well as a police officer. If you are arrested, or are just brought in for questioning as a suspect, law enforcement must give you that warning. They must also give it at the point where you become a suspect during questioning.

In the case of State v. Nyhammer , the defendant was brought in for questioning not as a suspect, but as a witness in the investigation of his uncle for the molestation of a child. Prior to the interview, he was given a Miranda warning. During the interview, the detective mentioned that the victim had implicated Nyhammer, and Nyhammer confessed. After his conviction, he appealed, stating that his Miranda warnings should have been renewed at the point where he went from being witness to suspect. The appeals court reversed the conviction, but the Supreme Court affirmed it, stating "generally . . . once a defendant has been apprised of his constitutional rights, no repetition of these rights is required."

What is more interesting about this opinion is how it will play out in the future. Police officers could potentially Mirandize everyone they interview in a crime investigation "just to be on the safe side," so that if the questioning of that witness leads to them being a suspect, they are covered. The problem with that is that investigations can turn into interrogations with little or no warning. Witnesses can become targets of the investigation without realizing it or without knowing that now would be a good time to ask for a lawyer. The courts seem to be saying here, "You knew you were entitled to a lawyer when they Mirandized you an hour and a half ago," but in the meantime the defendant may have said something incriminating without knowing it, and by then it is too late. On the other hand, police may not "Mirandize on spec" because that can have a tendency to make a witness skittish and "lawyer up," thus hampering or delaying the investigation. Like any court opinion, though, it is subject to further examination and "tweaking" under the facts of any particular case brought before the court. Like many trends in the law, this one bears watching.

Search Incident to Arrest Warrant Good Even When Warrant Stale

Tue, 20 Jan 2009 08:00:00 EST

Under the Fourth Amendment to the U.S. Constitution, citizens are protected from unreasonable searches and seizures of their "persons, papers, houses and effects." Reasonableness is considered to exist only when there is "probable cause." Should law enforcement violate this right, the evidence found can be subject to suppression, i.e. not admissible in evidence against you. This is called the "exclusionary rule." However, what many people do not realize is that this rule is not an individual right; it applies only where, under the circumstances of the case, the court finds that the exclusion of the evidence must be used to deter future violations by law enforcement. This need for deterrence must also outweigh the substantial cost of letting the guilty go free.

This legal point came up in the recent U.S. Supreme Court case of Herring v. United States, in which the defendant was arrested based on a warrant issued by another county. Unbeknownst to the police that were executing the warrant, it had been recalled months before, but the status was never updated in that county's database. A search incident to that arrest resulted in the discovery of guns and drugs, which were the basis of new charges against the defendant. Herring tried to suppress the evidence because it arose out of an improper and warrantless arrest.

The efforts to suppress were denied by the trial court and affirmed on appeal. When it reached the U.S. Supreme Court, the denial was upheld. In its opinion, the court said,

"To trigger the exclusionary rule, police conduct must be sufficiently deliberate that exclusion can meaningfully deter it, and sufficiently culpable that such deterrence is worth the price paid by the justice system. The pertinent analysis is objective, not an inquiry into the arresting officers' subjective awareness."

Here, law enforcement acted in good faith on what they thought was a valid and current arrest warrant. Under these circumstances, the court did not see deterrence as a substantial enough issue to outweigh the injustice to the public. Law enforcement would have been punished for making an honest mistake.

What the average citizen should take away from this case is that, although the Fourth Amendment protects them, exclusion of evidence based on the lack of probable cause is not an automatic thing. This part of the Bill of Rights protects Americans from unreasonable attempts by the government to violate their privacy, and suppression of evidence only takes place in the face of that unreasonableness. Where law enforcement acts in good faith based on facts that, if true, would give rise to reasonable searches and seizures, evidence is not excluded.

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