Back from Vacation – 35W Bridge Concerns

I just got back tonight from a week up north – mostly camping at Grand Marais, right by Lake Superior. It is good for the soul, and I feel refreshed in body and mind.

My wife and I have a 1999 Coleman pop-up camper – the Sun Valley model. In my younger days I was a purist. Camping meant hanging a tiny light-weight tent from my back pack and hiking as far into the woods as I could go. I would spend days out on the trail, and the more isolated it was the better. Now, however, I have gotten used to certain amenities, such as a microwave oven, an air conditioner, a propane heater, cable TV, cell phone service and wireless Internet. I still like to hike, but I don’t think I will ever go back to camping out of a backpack.

Last night after we packed up most of our stuff so we’d be ready to buzz for home this morning, we headed for a restaurant in Grand Marais called “My Sister’s Place.” I highly recommend this place. On our way over there my cell phone rang and it was a good friend, who told me about the collapse of the 35W bridge. Shortly after we got to the restaurant, I noticed that a lot of the people there were receiving cell phone calls. I could overhear a word or two so I knew that most of the calls were about that bridge. A certain subdued mood settled over the place. I imagined that similar scenes might be taking place all over the state, or at least anywhere that people from the Twin Cities might be gathered. Several folks started making calls, obviously to check on family or friends. I made a few of those calls too, but not until after leaving the restaurant.

I have a son in law who works within a few blocks of that bridge, so my daughter – his wife – was the first person I called. He had not yet come home from work, she couldn’t get him one the phone, and she was a bit worried. Eventually he showed up and all was well. Apparently I and the customers of My Sister’s Place were not the only ones making such calls to check on friends and family, and the Twin Cities phone system got really jammed up for a while.

So tomorrow it’s back to the law. I feel that my thinking will be clearer for having taken this trip.

Valuing Assets – and Automobiles – in Bankruptcy

There seems to be a lot of confusion these days about how to put a value on the assets when we list them on a bankruptcy petition. Under the old law it was easier. The value was what you could get for an item if you put it out in the front yard and had to sell it within 24 hours – or at least that was my interpretation of what the law said.

Under the new bankruptcy law the value is what it would cost to replace an item with exactly the same thing, with the same wear and tear and in exactly the same condition. That’s pretty theoretical, since it seems to require that you establish a value by finding the price of an exact duplicate of what you have. When we don’t know what to say for a value, I tell my clients to start looking at Craig’s List or Ebay and see if they can find what they have and at least establish a price range.

One of the most contested areas is the value of cars. It seems that the bankruptcy trustees want to use NADA values, which tend to be aimed at what a dealer should be able to get for a car. If a trustee does use Kelly Blue Book, it’s usually the dealership value. There is nothing in the law, however, that says you have to buy a car from a dealer or use dealership prices. Recently, in the Ramirez case (359 B.R. 794), a bankruptcy judge in Colorado decided that the proper standard for valuing an automobile is the Kelly Blue Book private party value, a number which is always a lot lower than the price that a dealer could get for the same vehicle. I applaud that decision. It seems right to me.

As far as I know, no bankruptcy judge in Minnesota has issued a written decision on the issue. I recently received an email from another attorney, however, stating that two of our judges have stated verbally from the bench that Kelly Blue Book private party value is the one to use.

Read my Answers to Questions at Law Guru

For about a decade now I have been answering legal questions which I receive from LawGuru.com. I just posted a link to those answers at the right here on the blog. Over the years I have answered hundreds of questions on a great variety of topics. You can view the questions at http://www.lawguru.com/cgi/bbs/mesg.cgi?a=kellydav. From there I’m sure you can find a link for posting your own question should you choose to do so.

I usually put a little disclaimer at the end of each answer. A lot of the questions leave out essential information which if I only knew would change my response substantially. I am quite fond of saying that there is no substitute for a face to face meeting with a competent lawyer.

Enhanced DWI Enforcement until July 9th

On my way back from Wisconsin on Sunday, as soon as we crossed the border into Minnesota, we were greeted by an electronic sign over the freeway announcing “Enhanced DWI Enforcement June 29 – July 9.”

This message appeared on all the electronic signs that I saw as I drove on my way home into Minnetonka. I wish I would have had a camera ready so I could ask my wife to get a photo of it to post on my site. We had plenty of cameras with us at the time, being on the way home from my daughter’s wedding, but they were packed away where we couldn’t get at them. If anyone happens to have a photo of that sign that they could email me, I would appreciate it.

It seems these days that the authorities have the enhanced enforcement every time there’s a major holiday. They did the same thing for the New Year’s holiday. Please consider yourself to have been warned. Enhanced enforcement means extra squad cars and officers with an attitude working overtime. They just might be a bit upset that you get to celebrate the holiday and they don’t.

And if the warning happens to have gotten past you or happens to have not been noticed by someone close to you — I’ll be keeping close to my cell phone waiting for your call. The number is 612-735-3797.

More to life than just the law?

After a couple of bankruptcy hearings this morning, I’m heading to Wisconsin for the weekend where I am scheduled to walk my daughter down the aisle at her wedding. I will admit that the prospect of this event is distracting me from my usual preoccupation with solving legal questions. Could it be that there are a few things in life that are more important than my law practice? I guess so, but a lot of days it is hard to keep a healthy perspective.

Yes, DWIs in Wisconsin count in Minnesota

I just answered a question on LawGuru.com concerning whether two DWIs received in Wisconsin would count toward making a DWI in Minnesota the third offense. The question basically was, “would a DWI in Minnesota now after two in Wisconsin be my first offense or third offense?” I guess I shouldn’t be surprised by the question, but I was. Is it a mystery that law enforcement across the country is hooked up with computers and are trading information about nearly everything?

Not only does an offense from another state count, but about a year ago the Minnesota courts decided that even if the prior offense violates Minnesota standards for advising the defendant of his or her right to a lawyer, it will be considered legal here if it was legal in the state where it happened.

So here is the answer I posted on LawGuru:

“It would be considered your third offense in ten years, and the state would seize your car – or the car you were driving at the time even if it is not
yours.

One thing I keep seeing in situations like yours is that the person with two priors always seems to be driving someone else’s car – and that’s the car that gets taken by the state. This is not the way to keep your friends, marriage or girlfriend. It really pisses people off when their car is gone for good and it’s your fault. The state doesn’t care if it’s a beater or a mercedes. It’s gone.

Be careful.”

You can view my other answers at LawGuru by following this link: http://www.lawguru.com/cgi/bbs/attyPages/kellydav.html.

Life Estates: An Idea from Hell

This topic is an example of how it pays to have some knowledge of more than one area of the law, since it crosses several borders from one practice area to another.

It has become a fairly common tactic for elderly people to transfer ownership of their home or farm to their children, and to keep a life estate. In other words, the children are given a deed which gives them ownership but provides that as long as the parents live, they retain possession of the property. People do this because besides avoiding probate, they hope it may help keep the property away from the state in the event that the parents wind up in a nursing home receiving Medicaid.

I cannot state more strongly how in my experience this has almost always turned out to be a bad idea. There is a waiting period of several years before it helps with the Medicaid issue, and most folks never wind up on Medicaid anyhow. Meanwhile, this is a non-exempt asset which any creditor with a judgment may be able to attach. Or in the event that one of the children has a bankruptcy or divorce, this is an asset that gets all tied up in those processes.

Just for good measure, if one of the children has a problem with the IRS or the Department of Revenue, this creates a handy asset for the tax men to grab.

My advice to most older people who may be thinking about this: keep your home ownership, keep your dignity; the problems you are about to create may be much worse than the possible aniticpated problem you are trying to solve.

They got her full tank of gas!!!!

I tell this story with permission from the person to whom it happened. To me it is sad, profound, a sign of the times and just awful – all at once. This sort of thing may have something to do with the fact that I seem to enjoy filing bankruptcies and more or less thumbing my nose at the big banks and credit card companies.

It seems here a few days ago that a woman from Minneapolis, who was behind in her auto loan payments, drove to the gas station and spent over $50 filling her tank with gas. With the prices going up as they have been, this is becoming a more common experience. I know it just happened to me.

Then after going home, and before having a chance to even use that gas, along came some repo guys with a tow truck who hooked up the car and drove away with it. On top of taking the car, they got her full tank of gas!!! How sad. How terrible.

I must admit to having a few unkind thoughts about the repo guys. I can’t help but wonder: by the time the car got to the lender or impound lot or whatever place they were taking it, did it still have the gas in it; or would repo guys be doing a bit of a black market gas business on the side?

Lakes Heavily Patrolled over Memorial Day Weekend

The media are reporting that Twin Cities area lakes will be heavily patrolled by the Sheriff’s Water Patrol. They are giving special attention in particular to Lake Minnetonka. This means that they will be arresting a substantial number of people for power boating while intoxicated. I haven’t heard, but I would expect that this may be going on in other parts of Minnesota as well.

For most purposes, a boat with a motor is considered to be a “motor vehicle” under Minnesota law. There was a time when driving while intoxicated was defined as driving on a “roadway.” Years ago that was amended to “within the state of Minnesota.” This means you can be given a DWI ticket for doing almost anything almost anywhere as long as it involves something with a motor on it.

There is a break given to first time offenders. The first offense in a boat or snowmobile or ATV does not involve taking away one’s license to drive. Any second or subsequent offense, however, is treated as if it was in a car. So I get these phone calls from second or third time offenders who are surprised to learn that because they were drinking and operating a boat, they now have to turn in the plates from their cars or trucks, and they are having their driver licenses suspended for ninety days. I’d like to have your business, but I’d really hate to see this happened to you.

I suggest you pass this warning along to anyone who you know will be out boating this weekend. You can use the utility on this page to email this to your friends.

For more detail about Minnesota law about boating while intoxicated, see my page at http://www.mn-dwi.com/snowmobile-boat-atv-dwi.html.

Despicable Practice by Mortgage Lenders

Here’s a nasty practice by engaged in by many mortgage lenders which is just coming to light.

Background. Most debtors in bankruptcy have certain things they want to continue paying, such as automobile and mortgage payments. The lenders prefer to have these debts reaffirmed by means of a reaffirmation agreement. Reaffirmation agreements reinstate the loan as if the bankruptcy had not taken place; but even without such an agreement the lender continues to have authority to either foreclose or repossess of the loan in question is not paid.

Under the new law, however, a debtor and the debtor’s attorney have to certify that reaffirming the debt will not create a hardship – otherwise the court will not approve the reaffirmation. This is almost never true, so my policy is that I will not sign such certifications. If I sign it and there is difficulty later, I’m in trouble. Without such a certification, the court will probably not approve the agreement. Bottom line is that in most cases, reaffirming is not an option for most debtors.

My advice is don’t reaffirm, but in most cases do keep paying your mortgages and car loans. Most of the time the lender is glad to take the money and will leave you alone.

Despicable Practice. Several of the mortgage lenders are making it a practice that they accept payments and don’t foreclose in cases where there has been no reaffirmation; but they will not report to the credit agencies that they are receiving payments. So people who are making their payments have credit reports that look as if they are not paying anything. They say “you didn’t reaffirm, so we don’t have to report your payments.”

They are in punishing debtors for not reaffirming while still getting all their money. The debtors in most such cases couldn’t get a reaffirmation approved if they wanted to. This is nasty, and I would like to compile a list of lenders who are doing this and publish that list. If this is happening to you, please leave your comments here with the name of the lender.