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Warning re B of A
The facts in Bernard are:
On February 15, 1991, the Sheaffers served notice on Bernard that the
Sheaffers would apply for a temporary protective order in Los Angeles
Superior Court. On February 22, the Bernards withdrew $44,010.61 from Alan's
money market account; on March 8, Linda cashed a check for $20,000 on an
account of Alan Bernard Sound (collectively, the early 1991 withdrawalsOn March 13, the Superior Court granted a temporary protective order
instructing Alan Bernard to make no transfers from any deposit accounts or
any other assets other than in the ordinary course of business for fair
consideration. On March 27, the Superior Court issued an order giving the
Sheaffers the right to attach Alan Bernard's property in the amount of
$47,873.13. On July 17, the Sheaffers levied on a Bernard account, attaching
$1,308. On September 10, 1991, the court granted the Sheaffers a $83,574.98
judgment.
The Bernards filed for Chapter 7 on October 7, 1991. The Sheaffers began an
adversary proceeding in which they objected to discharge.
The distinguishing facts are specific knowledge of the creditors intention
to collect the money. Owing money to a creditor is different from knowing a
creditor is about to levy on something and moving it to avoid that. That is
how I would attempt to distinguish it.
The case fits the rule that jilted lovers and jilted business partners will
go to great lengths to get the money/revenge.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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And I can not believe that a debtor would lose his discharge for moving exempt funds from one bank to another, or for that matter, non-exempt funds, as long as they were scheduled and turned over to the Trustee.
James R. Selth
Weintraub & Selth, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF THE TRANSMISSION AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN-E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION
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Dennis makes an excellent point, but remember that you are NOT advising them
to move it to hinder, delay or defraud a creditor. You are advising them to
move it to avoid a potentially devastating administrative freeze on exempt
property.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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Actually in Bernard they moved the money from the bank to a safe in the home and the court said that's a transfer and denied the discharge. It was not clear what happened to money after it was moved to the safe and I think the court believed the debtor was just hiding it. I have seen cases where the debtor closed the account, got a cashier's check and carried it around in her purse and the court denied the discharge. Almost always (read always) there are more bad facts than just the transfer but I have always been shocked at how casual the courts are about denying the discharge for prepetition games.
>
> Was it Bernard v. Sheaffer. where the debtor moved money from account a in bank ato protect the money from a creditorand the 9th Circuit said this was an attempt to hinder, delay, and defraud and denied the debtor's discharge under 727?
>
> Answer: Yes, see cite below. This was $46k, but keep in mind when you advise people to move money to keep it from being attached, you may be advising fraud. Better to hold up the bk, have the client spend the money in the ordinary course (food, mortgage, rent) and open a new account for new deposits at a bank with no offsets.
>
> dennis
>
>
> 96 F.3d 1279
>
>
> 65 USLW 2255, 36 Collier Bankr.Cas.2d 1585,
> 96 Cal. Daily Op. Serv. 7157,
> 96 Daily Journal D.A.R. 11,749
>
>
> In re Alan BERNARD, Linda Bernard, Debtors.
> Alan BERNARD, Linda Bernard, Appellants,
> v.
> Clement SHEAFFER, Mary Sheaffer, Appellees.
>
>
> No. 94-56504.
>
>
> United States Court of Appeals,
> Ninth Circuit.
>
>
> ---
>
The post was migrated from Yahoo.
Was it Bernard v. Sheaffer. where the debtor moved money from account a in bank ato protect the money from a creditorand the 9th Circuit said this was an attempt to hinder, delay, and defraud and denied the debtor's discharge under 727?
Answer: Yes, see cite below. This was $46k, but keep in mind when you advise people to move money to keep it from being attached, you may be advising fraud. Better to hold up the bk, have the client spend the money in the ordinary course (food, mortgage, rent) and open a new account for new deposits at a bank with no offsets.
dennis
96 F.3d 1279
65 USLW 2255, 36 Collier Bankr.Cas.2d 1585,
96 Cal. Daily Op. Serv. 7157,
96 Daily Journal D.A.R. 11,749
In re Alan BERNARD, Linda Bernard, Debtors.
Alan BERNARD, Linda Bernard, Appellants,
v.
Clement SHEAFFER, Mary Sheaffer, Appellees.
No. 94-56504.
United States Court of Appeals,
Ninth Circuit.
Was it Bernard v. Sheaffer. where the debtor moved money from account a in bank a to protect the money from a creditor and the 9th Circuit said this was an attempt to hinder, delay, and defraud and denied the debtor's discharge under 727?
Answer: Yes, see cite below. This was $46k, but keep in mind when you advise people to move money to keep it from being attached, you may be advising fraud. Better to hold up the bk, have the client spend the money in the ordinary course (food, mortgage, rent) and open a new account for new deposits at a bank with no offsets.
dennis
96 F.3d 1279
65 USLW 2255, 36 Collier Bankr.Cas.2d 1585,96 Cal. Daily Op. Serv. 7157,96 Daily Journal D.A.R. 11,749
In re Alan BERNARD, Linda Bernard, Debtors.Alan BERNARD, Linda Bernard, Appellants,v.Clement SHEAFFER, Mary Sheaffer, Appellees.
No. 94-56504.
United States Court of Appeals,Ninth Circuit.
---
The post was migrated from Yahoo.
Wow, thanks for the replies David and Jim in particular. I've been at this over 15 years now and have never had B of A or any other bank do this to one of my clients. Credit Unions, yes. Banks, this is a first. I guess my momma was right when she said you learn something new every day. I count myself and my clients lucky, they had less than $600 in the accounts total.
Jeff Smith
>
> I just got a call from a distressed client who had several open B of A credit lines, both business and personal, totalling about $85K in debt.
>
> The client is about 90 days past due on these accounts and was telling the collections dept to call me to verify an imminent Chapter 7, which is true, and we did verify representation to BofA collectors at least twice in the last 30 days.
>
> B of A just withdrew every dime of my client's money from a business checking account and a personal joint H & W checking account. There is no judgment in favor of B of A as the accounts are not even 120 days past due.
>
> That's new!
>
> I am going to start advising ALL clients to open new bank accounts at a bank that they do not owe money to, NOT Wells Fargo, and NOT Union Bank (based on last week's posts about post-petition freezing) as soon as they are delinquent on any account, or retain me.
>
> Does anyone know what B of A's authority to off-set is? I am guessing its in the credit card or loan docs but since this is a first for my clients, i'd like to know if this is happening to anyone else and warn those who might be unaware.
>
> Jeff Smith
>
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One of the trustees in the Valley, twice in the past two weeks, has been kind enough to fax over letters to WFB asking them to immediately release the funds. This was done within 72 hours of the cases being filed, and within minutes of us becoming aware of the freezes.
Kenneth Jay Schwartz, Esq.
LAW OFFICE OF KENNETH JAY SCHWARTZ
21031 Ventura Boulevard, 12th Floor
Woodland Hills, California 91364-2203
Telephone: (818) 226-1205
Facsimile: (818) 226-1213
THE INFORMATION CONTAINED IN THIS E-MAIL IS INTENDED ONLY FOR THE PERSONAL AND CONFIDENTIAL USE OF THE DESIGNATED RECIPIENT(S) NAMED ABOVE. THIS MESSAGE MAY BE AN ATTORNEY-CLIENT COMMUNICATION, AND, AS SUCH, IS PRIVILEGED AND CONFIDENTIAL. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT OR AN AGENT RESPONSIBLE FOR DELIVERING IT TO THE DESIGNATED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT YOU HAVE RECEIVED THIS E-MAIL IN ERROR, AND THAT ANY REVIEW, DISSEMINATION, DISTRIBUTION OR COPYING OF THIS MESSAGE IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY. THANK YOU.
________________________________
To: cdcbaa@yahoogroups.com
Sent: Monday, March 16, 2009 2:34:01 PM
Subject: Re: [cdcbaa] Freezing accounts
Wells Fargo, Union Bank, Bank Of America & Washington Mutual are freezing all access to the debtor's bank accounts until they "receive either a letter from the Ch7 Trustee or the Bankruptcy Court -- which of course never happens.
Keith Alan Higginbotham
The Law Offices of Keith Alan Higginbotham
255 S. Grand Avenue, Suite #2109
Los Angeles, CA 90012-3045
213.620.0176
213.613.1200 (fax)
HigginbothamLaw@ aol.com
To: cdcbaa@yahoogroups. com
Sent: Mon, 16 Mar 2009 1:45 pm
Subject: RE: [cdcbaa] Freezing accounts
Or longer, if the Trustee continues the meeting to request documents. Am I correct that these "freezing" banks will unfreeze the account upon being shown (by a copy of the docket, I suppose) that the Trustee has filed a No Asset Report? And what about deposits made after the b
ankruptcy is filed? Are Wells Fargo and Union Bank allowing access to those funds, and just freezing the amount in the account on the date of the bankruptcy filing?
James R. Selth
Weintraub & Selth, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENT OF THE TRANSMISSION AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN-E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION
From:cdcbaa@yahoogroups. com [mailto:cdcbaa@ yahoogroups. com] On Behalf Of Hale Andrew Antico
Sent: Monday, March 16, 2009 1:31 PM
To: cdcbaa@yahoogroups. com
Subject: FW: [cdcbaa] Warning re B of A
Practice tip: It's good to remember this freezing business when doing an emergency and incomplete (B/C) petition and Wells Fargo may be the bank of record. It's a long wait to the 341(a).
________________________________
From:cdcbaa@yahoogroups. com [mailto:cdcbaa@ yahoogroups. com] On Behalf Of David A. Tilem
Sent: Monday, March 16, 2009 1:22 PM
To: cdcbaa@yahoogroups. com
Subject: RE: [cdcbaa] Warning re B of A
Freezing is not the same as offsets.
Right now the only banks freezing are WFB and UBOC
All banks offset
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
f vicki temkin
Sent: Monday, March 16, 2009 1:08 PM
To: cdcbaa@yahoogroups. com
Subject: RE: [cdcbaa] Warning re B of A
Awhile back someone on this listserve said not to use credit unions. Specifically, besides, WaMu, Wells Fargo, Union, BofA, and credit unions or any bank debtor owes money to - what other banks are freezing accts that we know of?
Vicki
Vicki L. Temkin
Law Office of Vicki L. Temkin
15030 Ventura Blvd., Ste. 19-780
Sherman Oaks, Ca 91403
Ph: (818) 501-4658 / Fx: (818) 501-0903
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On Oct. 11, 2008, Nick Gebelt wrote about several of them freezing the accts., so that's where my question was coming from - if there were more any of us knew of. Funny, in that email he said Union Bank wasn't freezing accounts - how times have changed.
Vicki L. Temkin Law Office of Vicki L. Temkin 15030 Ventura Blvd., Ste. 19-780 Sherman Oaks, Ca 91403
The post was migrated from Yahoo.
charset="windows-1251"
Freezing is not the same as offsets.
Right now the only banks freezing are WFB and UBOC
All banks offset
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
vicki temkin
Sent: Monday, March 16, 2009 1:08 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Warning re B of A
Awhile back someone on this listserve said not to use credit unions.
Specifically, besides, WaMu, Wells Fargo, Union, BofA, and credit unions or
any bank debtor owes money to - what other banks are freezing accts that we
know of?
Vicki
Vicki L. Temkin
Law Office of Vicki L. Temkin
15030 Ventura Blvd., Ste. 19-780
Sherman Oaks, Ca 91403
Ph: (818) 501-4658 / Fx: (818) 501-0903
The post was migrated from Yahoo.
It is prudent to ask a client if they have a bank account in which they also
owe money to. I make them either close the account, and open a new bank
account (at a bank that does not freeze the account) or both an leave very
little money in the account that they owe money to if they insist on keeping
the account. The banks can set off funds based on the agreement you sign
with them when they issue you credit. This precaution is a must element.
Hank
jbsesq1965
Sent: Monday, March 16, 2009 12:29 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Warning re B of A
I just got a call from a distressed client who had several open B of A
credit lines, both business and personal, totalling about $85K in debt.
The client is about 90 days past due on these accounts and was telling the
collections dept to call me to verify an imminent Chapter 7, which is true,
and we did verify representation to BofA collectors at least twice in the
last 30 days.
B of A just withdrew every dime of my client's money from a business
checking account and a personal joint H & W checking account. There is no
judgment in favor of B of A as the accounts are not even 120 days past due.
That's new!
I am going to start advising ALL clients to open new bank accounts at a bank
that they do not owe money to, NOT Wells Fargo, and NOT Union Bank (based on
last week's posts about post-petition freezing) as soon as they are
delinquent on any account, or retain me.
Does anyone know what B of A's authority to off-set is? I am guessing its
in the credit card or loan docs but since this is a first for my clients,
i'd like to know if this is happening to anyone else and warn those who
might be unaware.
Jeff Smith
Yahoo! Groups Links
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