Friday, April 15th, 2011
The Associated Press reports that former baseball star Lenny "Nails" Dykstra has been charged with bankruptcy fraud by a California based United States Attorney. Dykstra filed for Chapter 7 bankruptcy in 2009, scheduling $31 million in debts and only $50,000 in assets.
In the complaint, prosecutors allege that Dykstra sold or destroyed over $400,000 worth of property. Among the property that Dykstra allegedly sold – presumably to raise case – were sports memorabilia and furnishings from the home he lost in the bankruptcy.
Obviously most of the Chapter 7 cases filed in the Northern District of Georgia, or in most bankruptcy courts do not involve millions of dollars of debts incurred by a high profile debtor. However, there is an important lesson that all bankruptcy filers can learn from the charges levied against Mr. Dykstra.
When you list assets on your bankruptcy petition, you are swearing that this list is accurate under penalty of perjury. If your trustee discovers that items have been omitted, or worse, that they have been secretly sold, the trustee will refer the case to the U.S. Attorney for prosecution.
Sometimes, I overhear conversations in bankruptcy court in which a debtor expresses frustration with the bankruptcy process or anger at an ex-wife, a former business partner or even a former employer. I also hear conversations expressing frustration with the rather stingy dollar limits set out in the Georgia exemption statute. I sense that some bankruptcy filers believe that the circumstances that led to their having to file were unfair and out of their control and as such leaving out inherited jewelry that "no one will ever know about" or selling a few items for cash can be rationalized.
While it is probably true that Chapter 7 trustees generally do not have the resources to thoroughly investigate every Chapter 7 debtor, I caution any bankruptcy filer not to take the risk.
First and foremost, an intentional failure to disclose assets is illegal and constitutes a crime under federal law. No asset is worth your freedom or personal integrity.
Second, you have no way of knowing if the United States trustee will select your case for a random review which can also mean much more intrusive scrutiny.
Third, it is possible that a third party – often an ex-wife or ex-business partner – might anonymously write the U.S. Trustee to report intentional errors on your petition.
Fourth, you might fall victim to "Murphy's law" – your trustee or someone from his office might see you walk into a pawn shop or might see your auction on eBay. Believe it or not, these types of coincidences do happen.
Often, issues associated with assets that you cannot protect can be resolved if you do not have to file right away. While the bankruptcy laws can be unforgiving, they will not punish you if you sell assets to raise money for food, shelter and clothing, as long as those sales are disclosed when applicable. This is why I advise anyone who is even remotely considering bankruptcy to speak with a bankruptcy lawyer at the earliest possible date. In my office, I regularly maintain files in "pre-bankruptcy" status for four, six, eight months or longer. Often the delay arises from my client's need to gain lawful benefit from assets that would be seized if the case was filed early.
Posted in Bankruptcy, Chapter 7 issues, Denial of discharge - Section 727, Fraud, Fraudulent Transfers, General consumer bankruptcy info, Lenny Dykstra, a, allegedly, and, attorney , bankruptcy fraud, baseball, based, california, charged, conversations, dykstra, examples of prosecution for bankruptcy fraud, expressing, filed, frustration, furnishings, hear, lenny, memorabilia, nails, sold, sports, star, states, united | Comments Off
Friday, February 5th, 2010
There are many reasons that bankruptcy filing rates are so high. Clearly an unexpected job loss or reduction in earnings can lead many honest, hardworking people into a bankruptcy lawyer's office. When a job loss is coupled with a divorce, I think that the likelihood of bankruptcy by husband or wife goes up exponentially.
I recently read a column written by attorney John Mayoue, a divorce lawyer here in Atlanta who is known for his representation of celebrities and other high profile clients. John notes that in the domestic relations legal community, Atlanta is known as the "divorce belt." In the bankruptcy lawyer community, Atlanta is known for having one of the highest bankruptcy filing rates per capita. I do not think that this is a coincidence.
Just as an ethical bankruptcy lawyer will advise you to search for alternatives to Chapter 7 or Chapter 13, a thoughtful family law attorney will advise you to search for alternatives to divorce. Bankruptcy or divorce may be inevitable, but when you seek legal counsel, look for a lawyer who does not offer "one size fits all" solutions and recommends alternatives – this would be a good sign that you are talking with a lawyer who has your best interests at heart.
John was gracious enough to give me permission to reprint his thoughtful article about why couples struggling in their marriages ought to consider alternatives to divorce. I recommend that you take his message to heart.
Divorce Lawyer John Mayoue Offers Advice to Couples Contemplating Divorce
The divorce rates in the United States are some of the highest in the world. Increased financial pressure brought on by the current economy is fueling the fire for marriages already in jeopardy, and the rapidly increasing number of homeforeclosures further demonstrates the severe consequences these pressures can produce.
According to Atlanta, Georgia based divorce attorney John C. Mayoue, who has been counseling couples through divorce cases for more than thirty years, the approaching holiday season will cause these numbers to spike further and will also be a busy time for lawyers specializing in divorce cases, as the holiday season often proves to be a breaking point for marriages in crisis.
“During the holidays, people’s pent-up thoughts about relationships and careers and where they are with life become intensified,” Mayoue says. “In December, for example, we have the highest number of suicides, divorce filings and bankruptcies of any month. It's just a very difficult time for people.”
Although our society makes divorce seem to be an easy and acceptable way out for couples who aren’t quite happy in their situation, Mayoue cautions couples not to be too hasty to start the divorce process. Divorces that make it to trial are painful and embarrassing, and the results are often not fair for both parties involved. If you are considering divorce, Mayoue suggest taking the following steps first.
1. Try to work out your differences
Ask yourself why you want a divorce. Are you just responding to life’s pressures? Are you looking for a way out of a stressful situation and not just your marriage? Or do you have legitimate concerns that are truly irreconcilable?
Ask yourself if this is your only option. Have you made every effort to communicate with your spouse and work things out together? Have you tried counseling or outside help?
More importantly, consider all of the consequences of divorce. Are there children involved? How will this affect them? Would the divorce be the best solution for everyone in the family or only the adults involved? Will the family be financially ruined by the process in the forms of home foreclosure, credit crises or worse?
Before you drag your family through a process that can make existing rifts even deeper and harder to overcome, make sure that you really want to go through with this life changing and emotionally taxing process.
2. If you can’t find a resolution, try to settle out of court
If at all possible, try to settle your case outside of court with the help of your attorneys. When you do take your case to trial, you lose control over important aspects of your case to the decision of the judge or jury, depending on your state. This can lead to painful custody rulings, alimony or settlement decisions and more.
Even if you feel like you are right in your claims, in a courtroom, your case is only as solid as the evidence you can produce. Judges tend to have biases and not all states will send divorce cases to a jury trial. Truth may not always win out, and oftentimes these proceedings become incredibly painful and embarrassing.
“I am always going to make every reasonable effort to get a case settled first,” Mayoue says, “because settlement is something that the parties can control. They can basically control things such as custody, visitation and the allocation of assets and debts. And the courtroom is a risky environment for anyone.”
3. Educate yourself before going to trial
Before you do anything, make sure to get educated. Use your attorney’s knowledge to understand the proceedings, possible outcomes and unexpected or painful events that you need to be prepared for.
“Divorce is hell for the vast majority of people,” Mayoue says. “People get angry, people get lost in the process of the courts and they lose everything. This can be avoided if they are calm and are educated about the process.”
Mayoue’s law practice is based in Atlanta, in the heart of the new “divorce belt,” a name which the South has recently earned by having the highest divorce rates in the country. Given the environment in which he operates, he says that his goals as a divorce attorney are to educate people about their options and the process and to help people who have thoroughly thought through their options and have decided divorce is the only answer for them.
“I really do think that we lawyers have an obligation to educate the public,” Mayoue says, “and it seems to me to be not very good consumerism to walk into a lawyer's office knowing absolutely nothing, before paying someone several hundred dollars. I've always found it peculiar that people do not get educated in a legal matter that affects 50-plus percent of all people who get married. Yet if you had an illness, you would certainly read up about it, if you had a business you were interested in getting involved in, you would certainly read about it.”
Posted in Advice, Alternatives To Bankruptcy, Attorney, Avoiding Bankruptcy, Bankruptcy budgets, Divorce, Divorce and bankruptcy issues, John Mayoue, Lawyer, alternatives to divorce, and, atlanta, avoiding divorce, bankruptcy and divorce, based, c, cautions, contemplating, couples, divorce the, earned, embarrassing “i, georgia, heart divorce, highest, incredibly, john, mayoue, message, offers, painful, proceedings, rates, suggest, the | Comments Off
Sunday, January 17th, 2010
A number of stories have recently appeared in bankruptcy and 
consumer rights blogs suggesting that the Atlanta based collection firm Mann, Bracken, LLC has gone out of business. On his Caveat Emptor blog, Minnesota bankruptcy attorney Sam Glover has written several posts about the Mann, Bracken firm including one on December 22, 2009 stating that the calls to the firm's phone number instructs callers to communicate directly with their creditors. I called several numbers listed for Mann, Bracken but the calls were answered by a message that "all circuits are busy, try your call again later."
Although based in Atlanta, Mann, Bracken has a national practice and it has apparently been growing by merging with other law firms. I found a web site called paymbw.com which purports to be a payment gateway for debtors to make electronic check or credit card payments on debts being handled by Mann, Bracken. This site notes that Mann, Bracken is the successor by merger to Wolpoff & Abramson L.L.P., and Eskanos & Adler P.C., two collection law firms well known to debtor's lawyers.
The domain mbllc.com has a "coming soon" page and the registration information for that domain is private. I looked up the contact information for the partners. Douglas Mann's shows him as an inactive lawyer affiliated with Mann, Bracken. Chris Bracken's registration shows a gmail.com email address, a business address at Mann, Bracken's location, but the space for the law firm information is blank. Two other partners – Bill Layng and Steve Knezo – are now affiliated with other law firms.
Atlanta TV station WSB sent a crew to the Mann, Bracken offices and found deserted premises along with handwritten placards stating that the firm has closed down. According to WSB, Mann, Bracken was associated with a large debt collector called Axiant, which is now in Chapter 7.
Based on all the information I can gather, the law firm of Mann, Bracken is no more. However the demise of this firm does not mean that debts owed to clients of Mann, Bracken or Axiant are no longer collectible. Apparently another large debt buyer/collector, NCO, has purchased or is about to purchase Axiant's accounts.
If you had a deal with Mann, Bracken to settle your debt, you may find that the underlying creditor or a subsequent collection agency may not honor your deal – so hold on to any paperwork you may have. As attorney Glover notes on his blog, you should contact your creditor directly if you have previously been dealing with Mann, Bracken.
Posted in Bill Collectors, General consumer bankruptcy info, Georgia Bankruptcy, a, atlanta, axiant, based, bracken, bracken , called, chris, collection, collection law firm, collector, debt, douglas, firm, including, large, mann, mann bracken, partners , the | Comments Off
