Monday, September 19, 2011

Welcome Midwest IEC!

I had the opportunity to speak to the Midwest Independent Electrical Contractors Association late last week.  I want to thank Kevin McNulty and the rest of the Board for the hospitality and the pizza.

Some of the members in attendance that evening had questions about the mechanics lien process.  I directed people to this blog, but there is a lot of information on this site so I wanted to make it easier to find the stuff that you guys were looking for.

HERE is a link to all of the mechanics lien articles I have written on this blog.

HERE is a link to the mechanics lien cheat sheet that I told the members about last week.

HERE is a link to the subcontractor's notice to homeowners that must be sent out within 60 days of your first performing work or delivering materials to the job site.  Again, this notice only applies to subcontractor jobs involving owner occupied, single-family residences.  And remember that I do not practice law in Indiana.  On the form, remember to fill in the date that you first provided services into the middle of the document.

Lastly, always remember that it is generally advisable to speak to a lawyer about your specific situation.  Mechanics liens are very technical and even a minor mistake can defeat the whole process.  

Wednesday, September 14, 2011

The Northern District of Illinois will no longer mail Proof of Claim forms.

Effective Wednesday, September 21, 2011, the U.S. Bankruptcy Court for the Northern District of Illinois, will no longer include a Proof of Claim form with 341 notices or Chapter 7 notices establishing a claims deadline. This is a cost-savings measure following a study that showed less than 5% of the Proof of Claims included with the Court's notices were returned. 

This makes sense to me.  I haven't used the mailed forms the past couple of times that I have filed claims.  As soon as I receive notice of a Chapter 13 filing, I usually print the form myself from the Northern Law Blog's forms archive and have it filed long before the official form arrives in the mail 7-10 days later.  

Visit the Forms Archive on the right for the latest version of the POC form.

Tuesday, September 13, 2011

Condo/Homeowners Assessments in Bankruptcy

Section 523(a)(16) of the BAPCPA provides for an exception to discharge for assessments that come due after the bankruptcy petition is filed.  Associations can, therefore, pursue their members for assessments that accrue after the date of filing, but not those that accrue before the date of filing.

A new opinion issued this week by Judge Squires deals with an interesting situation where the debtors' unit flooded just two days before their bankruptcy filing.  Then, several months after the bankruptcy filing, the association levied a special assessment against all unit owners to cover the cost of the flooding.

The association sent several letters and notices to the debtors without obtaining relief from the stay or otherwise seeking the guidance of the bankruptcy court.  When those notices went unanswered, the association filed suit in state court.  The debtors then moved for sanctions against the association in bankruptcy court for a willful violation of the discharge order.

The issue for the bankruptcy court was whether this special assessment was a pre-petition or post-petition debt.  The court looked to the language of Section 523(a)(16), which excepts from discharge any assessments that "come due and payable" after the petition is filed.  The court did not give much weight to debtors' argument that the special assessment was related to a pre-petition obligation that arose on the date of the flooding.  Rather, the court looked to the date on which the special assessment came due and payable, which was after the petition date. 

HERE is a link to the opinion.

Thursday, September 8, 2011

Protecting Client Confidentiality When Using Work Email Accounts

A recent ABA Ethics Opinion states that lawyers have a duty to warn clients about using an employer’s device, such as a work computer or work email account, to correspond with their lawyers. Clients may not be afforded a ‘reasonable expectation of privacy’ when they use an employer’s computer to send e-mails to their attorneys or receive e-mails from their attorneys. As you know, the attorney-client privilege will be destroyed if the communication is viewed by a third party.

ABA Model Rule of Professional Conduct 1.6 (a) explains that a lawyer must not reveal any information relating to representation of the client without consent, and must competently protect the confidentiality of the client. Considering that employers often have policies reserving a right of access to employees’ communications via the employer’s e-mail account, computers or other devices, such as smart phones and tablet devices, it is essential to warn the client to be careful of what he or she says, especially in an employment case involving the employer.

Tuesday, September 6, 2011

Motions to Dismiss Chapter 13 Bankruptcies

When you get the bankruptcy notice in the mail, the case might not be over.  It may just be getting started.  If the bankruptcy is a Chapter 13, it is subject to dismissal for bad faith.  A finding of bad faith does not require fraudulent intent by the debtor. The bankruptcy judge is not required to have evidence of debtor ill-will directed at creditors, or that the debtor was affirmatively attempting to violate the law.  Inconsistencies and misrepresentations are usually enough to get the case dismissed, even if they are not intentional, if the sloppiness rises to the level of bad faith.  

You will want to analyze the petition for errors, omissions, or inconsistencies based on what you already know about the debtor and what appears on the face of the petition.  For instance, I recently had a case where the debtor only disclosed one checking account, but he had bounced a check to my client from a different account just several days before filing bankruptcy.  That was a major omission, but the smaller things can add up too.  Debtors frequently fail to disclose life insurance polices, but you'll see them deducting the premiums from their gross wages.  Or they will try to affirm debts that have monthly payments higher than their stated income.  

A motion to dismiss a Chapter 13 bankruptcy is filed under Section 1307(c) of the Code.  That section allows the trustee or any creditor to move for dismissal for 11 separate reasons, including failure to make any payment required by the plan, failure to make any domestic support obligation, etc.  Also, pursuant to the case law, bad faith is also a cause for dismissal under Section 1307(c). The bankruptcy court will apply the “totality of the circumstances” test when ruling on a motion to dismiss for bad faith. The test involves the following factors:

  • Whether the debtor misrepresented facts in his petition or plan, unfairly manipulated the Bankruptcy Code, or otherwise filed his Chapter 13 petition or plan in an inequitable manner;
  • The debtor’s history of filings and dismissals;
  • Whether the debtor only intended to defeat state court litigation; and
  • Whether egregious behavior is present.

If fraudulent intent can be inferred from the totality of the circumstances, the debtor’s petition can be dismissed with prejudice pursuant to Section 349(a) of the Code.  Even if the case is not dismissed with prejudice, it is still possible to obtain an order that the case can not be refiled for six months.  That means the automatic stay is not in effect and you can proceed to state court.  You will want to move quickly to accomplish your specific purpose, and the state court may help you do so once it learns the circumstances of the Ch. 13 dismissal.  

Call me with any questions.

Thursday, September 1, 2011

Help Wanted: Assistant City Attorney

Press Release:

The City of Champaign Legal Department seeks an experienced candidate for the position of Assistant City Attorney. In this position, you will join an in-house legal team that works closely with the City Council, the City Manager and all City Departments in a wide variety of legal areas. The City has a Council-Manager form of government. Desirable experience and possible assignments include, but are not limited to: advising City Council, staff and boards and commissions on legal procedures and ramifications of decisions; evaluating, advocating, preparing and trying cases in defense of or on behalf of the City; evaluating and preparing written legal opinions; preparing and reviewing legislation, and other legal documents; prosecuting for violations of City Ordinances; contract development, review and negotiation, including labor negotiation; real estate transactional work. Supervising and directing department staff.

The successful candidate must be licensed to practice law in the State of Illinois. Superior interpersonal, oral and written communication skills are required. Recent comprehensive experience specializing in or with emphasis on municipal law or closely related governmental, civil legal experience or any equivalent combination of experience and training which provides the required knowledge, skills, and abilities is required. Pre-employment drug screening is required.

The starting annual salary range is $72,781-$82,805, depending on qualifications. Applications and supplemental questions must be received online no later than Sunday, September 18, 2011.

The City’s mission is to provide responsive, caring, cost-effective service in partnership with our community. The following values guide our work: Personal Integrity, Responsibility, Respect, Teamwork, Results.

To apply, visit the City’s Online Hiring Center at

The following locations offer free Internet access and assistance: Champaign Public Library, the Illinois Employment and Training Center and the City of Champaign City Building.