Hearings Never Going Back to the Way They Were

Lawyer wingtip shoes

By Dave Kelly, Minnesota Bankruptcy Lawyer

What Happens at the Meeting of Creditor Hearing

About a month after a personal bankruptcy is filed, whether it’s a Chapter 7 or a Chapter 13, there is a hearing they call the “First Meeting of Creditors.” Most of the time I just call it the “hearing”, although the official name is “First Meeting of Creditors.” I think “hearing” is a more accurate term because for one thing, in the vast majority of cases, the last thing you will ever see at one of these events is a creditor. The creditors are invited to appear, but they know it’s a waste of their time and almost never show up.

“Hearing” is also a good way to describe what happens. The process is presided over by either the bankruptcy Trustee or a lawyer on the staff of the bankruptcy Trustee. This Trustee is not a judge, but from my perspective he or she might was well be. Nobody has more power or influence over how the case goes than the Trustee. The person who filed the bankruptcy is put under oath and asked a series of questions. Depending on the answers, things can expand into even more questions. In a simple case it might only take ten minutes. But I have seen complicated cases where it has taken over an hour; and in those more complicated cases it can easily take more than one sitting.

Traditionally these hearings/Meetings of Creditors always took place at a federal courthouse or some other location like a federal courthouse, depending on the county in which the Debtor lived. I would put on my traditional lawyer outfit, including my lawyer shoes, and head for the designated location. I had it down to a science. I knew where I wanted to park and where I wanted to meet my clients before the hearing. It was usually kind of fun, because I would see my lawyer friends there. This was the norm. It was how things were done.

Covid Hit and Everything Changed

In early 2020 when Covid hit the whole process changed dramatically. The Trustees started conducting these hearings remotely by Zoom or some similar method. Everyone assumed this change was temporary and we’d be back to the courthouses when the virus passed. It never occurred to any of us that the change might become permanent. There may have been jokes about it becoming permanent, but nobody considered it a serious possibility – at first.

But I did start noticing that not going downtown saved time, and grief and parking money. People including the Trustees started to like doing it remotely, so did I. Many of my clients said they didn’t want to go downtown and expressed relief that we were not going to have to. My clients could stay home if they wanted to and do the hearing from there; but it has always been my preference to have them come to my office for the hearing. Even if we are not going down to a courthouse, I still think there is a tremendous benefit to being physically present in the same room with my clients when this hearing takes place. As I have always done, I like to meet early before the hearing with my clients and do preparation. I almost always know approximately what the Trustee will be asking. I want to go over the expected questions with my client and have my client as ready as possible.

When Are We Going Back to In-Person? Never!

Late last year as I usually do I attended the Bankruptcy Institute, a big series of classes and talks put on by Minnesota Continuing Legal Education. I was assuming that one of the things I would learn would be what the plans were for returning to in-person hearings for the Meetings of Creditors. In-person hearings were already taking place before the judges for the more complicated matters such as motions, adversary proceedings and reaffirmation agreements. Instead what I heard was that the switch to remote for the Meetings of Creditors was going to be made permanent. A nationwide protocol for doing it by Zoom on a permanent basis was going to be promulgated some time in 2023.

My Lawyer Shoes Continue to Gather Dust

Usually I manage to avoid those in-person hearings in front of the judges. Those tend to only be required if something has gone wrong with the case. If the case is put together well, we should be able to stay away from the judges. So these days I am only dressing like a lawyer from the waist up. It may be a long time if ever that I again have to wear the pants that come with my suit. The same goes for my lawyer wingtip shoes, which have been gathering dust in the corner of my bedroom. Maybe I’ll just have to wear the pants and the shoes some time for the heck of it.

Call Dave at 952-544-6356

Best Way to Pay for a Bankruptcy is a Tax Refund

By David J. Kelly, Minnesota Bankruptcy Attorney

The Minnesota bankruptcy filing statistics are out for the month of March. Year over year, March of 2019 shows 70 fewer bankruptcy filings than there were in March of 2018. In March of 2018 there were 998 bankruptcy cases filed in Minnesota, but this year in March 2019 it was only 928. March has always been the month in which the greatest number of case are filed – in my opinion that’s because people have tax refund money they can use to pay their lawyers. Why is it down this year? My best guess is it”s those lower tax refunds everyone has been talking about. I see my clients having bigger pay checks because their withholding is less, but they are also having lower tax refunds. Since tax refunds are considered to be an asset, a lower refund can be a good thing once the bankruptcy case is filed.

Moving to New Office

Somewhere around July 10th I will be moving my office down the street west about three blocks. The new address will be 10709 Wayzata Blvd. #205, Minnetonka, MN 55305.

Every commercial building for miles around my present office has had “for rent” signs up for some time. A couple of months ago I decided to look around a bit, and I started to feel like a kid in candy store. It didn’t take long to figure out that I could get more than twice as much space for about half as much money. The new office space will have a soaring vaulted ceiling in a pyramid-shaped building, with a patio door that opens into a grassy back yard. It’s all one level and is fully accessible to the handicapped. There’s already one elderly couple who have made their appointment to come see me after the move to avoid the steps at my old location.

I have been very happy at the old office, having been there for almost 13 years. In general I hate change, and I will admit to having an emotional attachment to the old place. I feel in my bones, however, that now is the time to make a change. The new place will have the space I need and will be quite a bit more efficient, particulary after I get it set up the way I want it. It’s close enough that I would hope to stay in touch with old friends at the old location; and I have already learned that another old friend has an office right down the hall at the new place.

My phone numbers and email address will stay the same. The fax number is changing to 952-525-7924.

Sorry, my web pages were down for a while today …

Godaddy is the server that hosts my web pages. I don’t know what their problem was, but for several hours today all my web pages were down and not accessible. Whatever the problem was, it’s fixed now and everything is back up.

If you were tying to view one of my web pages and could not, it wasn’t something wrong with your computer. It was the company that hosts my sites. My apologies for the inconvenience.

The thing I noticed that sort of surprises me is how much I missed the pages myself. They contain all sorts of charts, tables and reference materials that I use regularly. One of the reasons I have for posting all the material that I have up on my various pages is so that I can find it myself when I need it.

Excused!

Friday morning – yesterday – I was instructed to report to the jury room at the Hennepin County Government Center for jury duty. After listening to a little talk about how things worked, twenty of us were run through security and led up to judge McGunnigle’s courtroom. As soon as I walked in I knew I would not be there very long. At the tables in the front of the courtroom sat two lawyers I knew, Rolph Sponheim for the prosecution and Marsh Halberg for the defense. These were both people I know, particularly Mr. Sponheim. Judge McGunnigle explained that the Defendant had been charged with a DWI. He didn’t say whether it was a misdemeanor, gross misdemeanor or felony. I could tell that it was no misdemeanor, however, since they were obviously looking to set up a jury of twelve, and with a misdemeanor you only get a jury of six.

I was seated as Juror No. 3. The judge started asking questions to the prospective jurors as a group. One question was whether any of us had an experience which would influence our ability to be objective in this type of case – driving while intoxicated. Several hands went up, including mine. One person was employed in the “beverage industry.” One person has a brother who had been arrested for DWI. Another had relatives who were injured in an accident by a drunk driver. I disclosed that I had defended hundreds of this type of case, and it would be hard to say that this would not influence my decision.

The judge went into a little lecture about how experiences of this sort should be set aside and compartmentalized, and he asked if we could do that. All of those who had raised our hands, including me, said that we thought we could. One of the next questions was whether we knew any of the witnesses, whose names were read off for us, and did we know the Defendant or any of the lawyers. Again, I raised my hand. The judge asked me to explain. I said that I knew Mr. Halberg, not well but I did know him. Besides that, the younger lawyer he had brought along to assist him looked familiar, I had surely seen him around, although I did not know him by name. When it came to Mr. Sponheim, I said I thought I knew him well. I had innumerable cases in which he had been the prosecutor. Then Judge McGunnigle asked if knowing these people would keep me from being able to make a decision based only on the evidence which was to be presented. I said that I believed I have a working relationship with Mr. Sponheim, and that I thought that should disqualify me.

At this point the judge called the lawyers up to the bench for a little conference. A moment later I was excused from that case, but I was to report back to the jury room. Back at the jury room the clerk there said that since I had been on call all week, that I would be excused entirely from any further jury duty. My duty was completed. Must say I was a bit surprised but also relieved. I had another feeling, however, which surprised me. During the short time that I had been up in the courtroom, I had started getting interested in the case. I think I would have enjoyed being on that jury. I would have enjoyed watching those lawyers do their stuff, and I would have liked to see how it all came out.

The thought of going downtown to watch the trial just to see what happens next has occurred to me. They are open to the public, and a trial like that ought to take a couple of days at the least. I already feel behind in my work as a result of the distraction from this episode, however, and I know I don’t really have the time to go watch that trial. I should just count myself lucky to have this experience behind me.

Don’t Panic!

Just a word or two of warning. I am seeing lots of people who are in a panic. They are in the process of losing their homes or jobs or both. The daily news offers little or no comfort. All the “bailout” talk doesn’t include any concrete help for individuals that I can see. This state of mind increases the probability of being in a serious accident or incident. Or such is my personal observation.

I mentioned this in passing while meeting with clients recently. The next time they came in they greeted me as “Nostradamus” – comparing me to the Sixteenth Century prophet or wizard. The type of thing I was talking about had happened to one of them. Sorry about being vague as to exactly what happened, but I need to not break confidentiality. I expressed the hope that it had not been the power of suggestion – the result of an idea that had been planted by me. They were sure it was not.

I bring this up here because I really want to say that I believe we all need to keep the events of the past year or two in perspective. The Romans had a saying – THIS TOO SHALL PASS. It’s a universal truth, and I’m convinced that it certainly applies to our present economic climate. Panic and anxiety always just makes any problem worse. The harder and more difficult times are, the more important it is to take care or yourself. One of my favorite slogans – prominent in a lot of the self-help literature – is abbreviated as “HALT” – don’t let yourself get too Hungry, Angry, Lonely or Tired. A good concept to keep in mind when going through a bankruptcy or any other crisis.

On several of my web pages I talk about how easy it is go get ahold of me. I wrote most of that a couple of years ago. It has become untrue over the past few months, for which I apologize. Between the clients and the creditors of clients, my voice mail box often fills up. My goal has always been to return my calls within 24 hours. I have of late been unable to be that prompt. If you need me and don’t get me right away, keep trying please. I am around and I do want to talk with you; it’s just that things are really busy right now. I would say that it’s more busy than it was in 2005 right before the new bankruptcy law went into effect.

Correction: I’ll be back in the office on Thursday September 18th!

How embarrassing!

It has come to my attention that the message on my answering machine at my office says that I will be out of town until “Thursday September 19th.” Obviously that is wrong, because Thursday is the 18th and the 19th is Friday.

It should say that I will be back on “Thursday September 18th.” I’m at Grand Marais for a few days, and I would change that message from here if I could – but it’s not that kind of machine. I can’t change the message without being there.

So just please be advised that I intend to be in the office again starting on Thursday the 18th of September. I suppose I’ll try to call everyone who is on my schedule that day to make sure they are not confused by the message. The names and phone numbers should be here with me on my Palm Pilot.

The fact that I made that error tends to support the proposition that I really needed a couple of days off.

It was a chilly and misty day today at Grand Marais. Not good for outdoor activities. I spent several hours with my wife sipping premium coffee at the Java Moose, and reading an edition of Carl Sandburg’s biography of Abraham Lincoln. I’ve been working on that book off and on for years. It’s slow going, very intense and detail filled. I’m still only about half way through.

This evening the sky began to clear and we were able to watch the full moon rise over the harbor, while having dinner at the Angry Trout. It was very beautiful. Tomorrow is supposed to be warmer and sunny. For tonight we are snug and comfortable in our little pop-up camper.

September 10th and 11th

I’m working late here in the office this September 11th evening. It was a funky day, seven years after the big attack on our country. I was wall to wall all day with appointments, and the phone rang constantly. I finally gave up on the phone. I just could not keep up. I don’t think that’s ever happened before. Strangely, only about one caller in ten actually leaves a message. I have managed to call most of them back, but I really wonder about the others. If it was important enough to call in the first place, then why no message?

I have to share this with you all. While September 11th is a sad anniversary, so is September 10th. On that day in 1897 a taxi driver in London, England, became the first person in the world ever to be arrested for drunk driving — after slamming his vehicle into a building.

If I at all can I would like to get to the north shore for a peek at some fall colors. I might run away and try it this weekend. I’m up to date with most of my work. I can’t keep up with the calls in any event, and staying home would not fix that. These are the most desperate times I have seen in my lifetime; but I’ll be able to help more people if I take care of myself. I keep telling my kids: when the plane loses pressure and the oxygen masks come down, put the mask on yourself first. Then put the mask on your children or others who are in your care. The person who is first to pass out is no longer able to help others.

Consumer Bankruptcy Up 48% in July

A few weeks ago I bookmarked an article posted on Twin Cities Daily Planet which indicated that bankrupty filings in Minnesota are up almost 30% for May and June of 2008 as compared to May and June of 2007. I thought it has seemed to be pretty busy around here, but I still thought the percentage was surprisingly high. Had someone told me in January of 2006, right after the “reform” legislation had gone into effect that this was going to happen, I don’t think I would have believed it. The standard wisdom at that time was that bankruptcy lawyers might be about out of business. In fact, many lawyers quit practicing bankruptcy law at that time. The new law was called BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act). In my opinion, the only abuse that was going on was that perpetrated by the credit industry, and the only protection provided was for them and not consumers.

Earlier this week I received a copy of Consumer Bankruptcy News, one of those old fashioned publications that is still printed on paper. In the lower right corner of page 7 was an item stating that nation-wide bankruptcy filings were up 48% in July 2008 as compared to July 2007. There were 94,124 consumer filings in July and 82,770 in June this year. That would be as if everybody in Bloomington, Minnesota and in Duluth Minnesota combined had filed for bankruptcy in June or July. If that keeps up, I would assume that for August it would be as if everybody in Rochester, Minnesota had filed for bankruptcy.

If you should feel a need to come see me to talk bankruptcy, there’s sure no reason to feel alone.

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