January 2012 Archives

US Supreme Court Holds That Law Enforcement Need A Warrant Before GPS Tracking Can Be Used

January 24, 2012, by Law Offices of James V. Sansone

Electronic-Discovery-and-the-Fourth-Amendment.jpgIn US vs. Jones, the US Supreme Court was asked to decide whether the attachment of a Global Positioning-System (GPS) tracking device to an individual's vehicle, and subsequent use of that device to monitor the vehicle's movements on public streets, constitutes a search or seizure within the meaning of the Fourth Amendment.

The Fourth Amendment provides in relevant part that "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated."

In a unanimous decision, the Supreme Court ruled that police cannot attach a GPS device to a criminal suspect's car to track their movements without first obtaining a search warrant.

While the Government contended that no "search" occurred, the Court thought differently. It is beyond dispute that a vehicle is an "effect" as that term is used in the Amendment. United States v. Chadwick, 433 U. S. 1, 12 (1977). Based on this, the Court reasoned that the Government's installation of a GPS device on a target's vehicle, and its use of that device to monitor the vehicle's movements, constitutes a "search."

Associate Justice Antonin Scalia said that the government's installation of a GPS device, and its use to monitor a vehicle's movements, constitutes a search, meaning that a warrant is required.

"By attaching the device to the Jeep" that Jones was using, "officers encroached on a protected area," Scalia wrote.

This is probably not the end of these types of cases making their way to the US Supreme Court because the court did not rule on whether the exact search was reasonable, which means even if the Fourth Amendment applies in cases like this, it's possible that the use of GPS devices may be considered acceptable in some circumstances.

Continue reading "US Supreme Court Holds That Law Enforcement Need A Warrant Before GPS Tracking Can Be Used" »

Actual Notice of Bankruptcy Defeats Creditor's Late Filed Claim

January 18, 2012, by Law Offices of James V. Sansone

7106697.pngThe debtor and West Vernon Energy Corporation had been engaged in lengthy litigation. Prior to the debtor's bankruptcy filing, a jury awarded West Vernon a verdict of $178,207. The debtor's bankruptcy included a debt owed to "West Vernon Petroleum" at an address different than West Vernon's address.

Although it appeared that West Vernon's never received notice of the bankruptcy filing from the Clerk of the Bankruptcy Court, the company received actual notice of the filing from the debtor's attorney. This notice was received two months prior to the claims bar date. Despite this opportunity to file a claim before the deadline, West Vernon filed its claim several weeks after the deadline.

West Vernon then asked the court to have its claim deemed timely filed. The court denied the request, and disallowed the claim, stating that since Section 502(b)(9) was added to the Code, bankruptcy courts have almost uniformly ruled that proofs of claim that are untimely filed in a Chapter 13 case may not be deemed timely filed.
As such, the bankruptcy court denied an improperly scheduled creditor's request that its tardily filed claim be deemed timely filed.

If you are a creditor in a pending bankruptcy case there are very quick critical deadlines that must be followed to preserve your rights. The Law Offices of James V. Sansone is located in Santa Rosa, California and serves clients, debtors and creditors, with their bankruptcy needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.

Debtor Discharges Student Loans After 25 Years

January 10, 2012, by Law Offices of James V. Sansone

student loan.jpgBankruptcy courts rely on the "Brunner Test" for determining whether a student loan is dischargeable in bankruptcy based on a claim of undue hardship. This test is based on a U.S. Court of Appeals decision, Brunner v. New York State Higher Education Services Corp, and requires a debtor to prove:

(1) That the debtor cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to pay off student loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.

Four years after a debtor received her Chapter 7 discharge, she moved to reopen her bankruptcy case for the purposes of seeking an undue hardship discharge of her student loans. The case was reopen and the debtor filed an adversary complaint seeking the discharge of $19,726 in student loans.

Continue reading "Debtor Discharges Student Loans After 25 Years" »

Mortgage Cramdown In A Chapter 13 Bankruptcy?

January 4, 2012, by Law Offices of James V. Sansone

Cramdown.jpgIt is well established that the holder of a first mortgage can't modify the terms of the loan if the loan is on his primary residence. However, what if the mortgage is on a rental property which is not the debtor's primary residence, can the terms of the first mortgage be modified? Yes in a Chapter 13 bankruptcy, subject to strict rules.

You can use a Chapter 13 bankruptcy to cramdown the mortgages on your investment properties. Investment property generally means any property other than your principal place of residence such as rental or commercial properties. You cannot use a mortgage cramdown to reduce the balance of your mortgages on your principal residence. However, you may still be able to get rid of your second mortgage on your principal residence in Chapter 13 bankruptcy through a process called lien stripping.

I have advised debtors that, under certain very specific circumstances, to move out of the home, rent it out on a month to month basis, rent an apartment, file a chapter 13 bankruptcy, cramdown their first mortgage, and then move back into their home. (Since the debtor rented their home on a month to month basis, they can terminate the tenancy at any time). Is this bad faith? That can only be answered on a case by case basis.

This brings up the very next question, at what point in time is it determined if the subject piece of property is the debtor's primary residence or rental property not his primary residence?

Continue reading "Mortgage Cramdown In A Chapter 13 Bankruptcy?" »