In Re Bishop: Death (Complaint) by a Thousand Cuts …

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

You can read all of the parts (and by the time we are done there will be many) at this hub.

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

Some of the issues here are arguably not that large of an issue taken separately. A car was not listed, social security was incorrect, etc.

But they add up, and also to add to these minor problems the major issues of the case adds up to why this lawsuit was filed.

The Debtor was the co-owner with her granddaughter on a vehicle. She might have forgotten to tell her attorney. That’s okay. People forget. I even did a blog on it. I review all paperwork with the Debtors. If they remember the vehicle at signing it is added. Sometimes at the court hearing the Trustee says that an asset search at the Secretary of State’s website reveals a car or truck. “That’s my son’s car, not mine.” “Your name is on the title.” “It is?”

That’s okay, it happens.

But in this case, it happened …  and so did this and so did this…

An adult daughter was not listed in household size. This may or may not be fatal. Does she work? Does she pay her own expenses? I usually do not list anyone living in the house whom the Debtor does not care for or depend on. They might live in your house, but are they part of your household? This might vary from district to district: New York may require anyone living in the house be listed – from your roommates to your meathead son-in-law…

Incomes vary and fluctuate. I usually use the average, although at times I use the maximum, as was done here with Social Security. If at the bottom of Schedule I (income) a note said, “Amount of Social Security varies per month; maximum amount received is shown,” it may never had been an issue.

And in our district we DO have to specify household goods and electronics rather than just a general statement: sofa, loveseats, washer and dryer, TVs include their size and formerly their format (hardly anyone has standard definition anymore…); so if this was filed in my district the lack of specificity would have drawn an objection, too…

***

(the filed Complaint continues…)

iii. Other Errors/Omissions/Lack of Specificity in Ms. Bishop’s Filed Documents

64) Ms. Bishop’s schedules and other bankruptcy documents were incomplete, incorrect, vague and inaccurate in many other aspects such that Ms. Bishop could have faced dischargeability actions.

Missing Car from Schedule A/B

65) At the Meeting of Creditors, the chapter 7 trustee identified several deficiencies, including but not limited to, the omission of a second automobile on Ms. Bishop’s Schedule A/B. Specifically, Schedule A/B listed one vehicle, a 2004 Ford Explorer, but failed to disclose the debtor’s ownership of a 2002 Buick LeSabre titled in her name.

66) Upon questioning at the meeting, Ms. Bishop disclosed her ownership of the LaSabre, which she testified is her granddaughter’s car and in her name for insurance purposes. An amended Schedule A/B was filed months after her § 341 meeting of creditors to add the LaSabre but it incorrectly listed the owner as Ms. Bishop’s daughter, not her granddaughter. Upon questioning by the undersigned, Ms. Bishop testified it was her granddaughter’s car, not her daughter’s, and that she did not know why the amended schedule incorrectly states that it is her daughter’s. Id. at p. 16, lines 15-25; p. 17, lines 1-25; p. 18, lines 1-25; p. 19, lines 1-20. To date, no amended Schedule A/B has been filed to correct the error.

Household Size is Incorrect

67) On questioning at the § 341 meeting of creditors, the trustee learned Ms. Bishop’s adult daughter lives with the Debtor, and had been at the time of filing. Official Form 122A-1, commonly referred to as the Means Test form, however, discloses that Ms. Bishop is a household of 1. Ms. Bishop’s counsel did not file an amended form to reflect her true household size until just days before her Rule 2004 examination. [ECF No. 23]

Income Disclosed on Schedule I and Means Test is not Accurate

 Income from Bethany Nursing Home

68) Schedule I lists monthly gross wages of $746.10 for debtor’s work as an LPN at Bethany Nursing Home & HRF.

69) This would appear to be greatly understated based on the fact that the Means Test lists monthly gross wages of $1,270.63.

70) This understatement of income is further supported by the Statement of Financial Affairs, which lists annual income from wages of $23,570 for 2015, which equates to $1,964 per month.

71) On her “Currently Monthly Income Details for the Debtor” Ms. Bishop disclosed that her actual income from Bethany Nursing Home for the month of January 2016 was $851.60.

72) The debtor’s earning statement, dated February 4, 2016 (for the period ending January 30, 2016), however, shows year to date earnings of $1,568, which time period would only include the month of January 2016.

73) When questioned at the Rule 2004 examination about the difference, Ms. Bishop stated that she did not know why her income for January is listed at such a low amount. Id. at p. 24, lines 10-20.

74) A review of the Debtor’s pay stubs shows that Ms. Bishop’s wages fluctuate based on the number of hours and different shifts she works. Because of this, in order to correctly determine CMI for the Means Test, one needs to review all pay advices for the six month CMI period. Through discovery, the United States Trustee requested pay advices for the time period in question. Several pay advices were missing, specifically, December 20, 2015 through January 16, 2016 and February 1, 2016 through February 13, 2016 (issued, respectively, in January 2016 and on February 18, 2016.)

75) Even with the missing pay advices, certain months are able to be ascertained. For instance, as noted supra, the pay stub for the period ending January 30, 2016 shows the year to date income as $1,568.67 not the amount $851.60 listed.

Social Security Income

76) Schedule I lists that the debtor receives Social Security income of $774.00 per month.

77) On her “Current Monthly Income Details for the Debtor” the debtor disclosed that her actual non-estimated non-CMI income from Social Security was $834 each month. Specifically, she listed the following.

78) Through discovery, Ms. Bishop produced her Benefit & Payment Details from the Social Security Administration for the time period November 2014 through March of 2016. This document revealed that the Debtor’s benefits fluctuated during the CMI period ranging from a low of $729.00 to a high of $834.00. See Exhibit 15. When asked why the document stated that she received $834 each and every month when her actual payments varied, Ms. Bishop said that she did not know. Rule 2004 Examination Transcript at p. 26, lines 11-25; and p. 27, lines 1-8.

79) These differences carry over to the Statement of Financial Affairs where the debtor listed that in 2015 her SSI Benefits totaled $5,794.00 while the debtor’s statement from https://secure.ssa.gov shows that her benefits in 2015 totaled $6,565.00.

80) The substantiating documents provided by Ms. Bishop demonstrate that the information listed on the Schedules and Statement of Financial Affairs with regard to her income is not accurate.

81) No amendments have been filed following the Rule 2004 examination to reflect the actual amounts received or expected to be received on a going forward basis.

Schedules Lack Required Specificity

82) A review of Ms. Bishop’s Schedule A/B, Part 3 reveals that it lacks the specificity necessary to inform parties in interest of what is owned by the debtor without further questioning. For example, in response to Question 6, which asks a debtor to describe their household goods and furnishings, Ms. Bishop lists “[v]arious used household goods and furnishings.” Similarly in response to Question 7, which asks the debtor to describe any electronics owned at the time of filing, with more than a dozen examples provided above the response, Ms. Bishop only lists “[v]arious used household electronics.”

83) It also is unclear from a review of the docket, petition and schedules in Ms. Bishop’s case what law firm actually represents the Debtor and where it is located. Specifically, the docket shows Mr. Racki operates from the Law Office of Jason Racki, located at 10314 Spook Woods Rd, Port Byron, NY 13140. The petition, however, shows he operates out of the law firm Allen Chern, located at 140A Metro Park, Rochester, NY 14623. And a mailing received in the U.S. Trustee’s Office shows a third address for Mr. Racki at P O Box 310, Brutus, NY 13166.

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

[1] The one payment advice for January 2016 that was received shows gross pay as $717.07. See Exhibit

  1. Similarly, payment advices for March show two checks — one with a gross pay of $262.48 and the other for

$586.55 (see Exhibit 14), for a total gross earnings of $849.03 — not the $1,528.43 disclosed by the Debtor supra.

 

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Top attorney in Clay County, IL

I received good news this morning:

I was named the top attorney in Clay County, Illinois by Docketly!

unnamed

There are some wonderful attorneys who practice in Louisville from Flora, Salem and throughout southern Illinois, so this was quite an honor!

I enjoy my time at the courthouse in Louisville where everyone from the bailiffs to the clerks to the judges are professional and courteous. I also love helping the people of Clay County and hope to do so for many more decades to come!

***

About me:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

 

In Re: Bishop – problems with the fee disclosure

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

You can read all of the parts (and by the time we are done there will be many) at this hub.

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

Problems with Upright’s fee arrangements are made clearer – why was the WDNY more draconian than the Northern District of Ohio in its suit for excessive fees?  Look at the exceptions (items that are charged extra) in Paragraph 59. In the District in which I practice, only #s a), e) and f) are allowed extra fees beyond the initial flat fee. And e) only for avoidance of judicial liens. This obviously does not include filing fees for amendments, etc.

If the other items are anticipated (and a good initial or subsequent consultation will reveal whether to expect those items), in our district attorneys are allowed discretion to charge more-than-normal fees. “Why did you charge me $100.00 more than my friend?” “You had 5 Motions to Avoid Liens, 4 more Reaffirmation Agreements, a Motion to Redeem and we anticipated the Objection by the Trustee on those Objections…”

Additionally, in this part of the Complaint some of the problems with the bankruptcy filing become evident: basic and mistake easily avoidable by carefully going through the bankruptcy paperwork with the client.

I usually meet clients at my office. Sometimes I meet them at their homes, local libraries and occasionally at a restaurant, coffee shop or other public place. We huddle together and carefully (and quietly) go through every page. Doing so would have avoided every mistake found by the Trustee below. Every. One.

***

(the filed Complaint continues…)

  1. Documents Filed with the Court
  2. Fees Disclosed vs. Fees Paid

49) The Disclosure of Compensation of Attorney for Debtor(s) filed in this case (“Rule 2016 Disclosure”) and signed by Mr. Racki, stated he, Jason Racki of Allen Chern, 140A Metro Park, Rochester, NY 14623, notices@Uprightlaw.com, Rackiesq@outlook.com, agreed to accept $1,600 in this case and received $1,600 from the debtor. The response to question 16 in the original Statement of Financial Affairs for Individuals Filing for Bankruptcy (“SOFA”), stated within one year before filing, the debtor paid “Allen Chern” located at 79 W. Monroe St., 5th Floor, Chicago, IL 60603 a total of “$1,600.00” in “March 2016” for “Attorney Fees” and an additional “$335.00” for “Filing Fees” for a total amount of payment of “$1,935.00.” Upon information and belief, this response was prepared by Upright Law.

50) Guidance on SOFA question 16 advises to include any fees paid to attorneys, bankruptcy petition preparers or credit counseling agencies for services required in their bankruptcy. Ms. Bishop does not disclose any credit counseling fees in her answer to SOFA question 16.

51) As noted infra at ¶ 32, Mr. Arnold (the panel trustee at Ms. Bishop’s 341 Meeting of Creditors) inquired about the fee, noting that it was above the W.D.N.Y. “presumptively reasonable” fee in chapter 7 cases of without any apparent justification. Following that discussion, Mr. Racki volunteered to refund $300.00 to the Debtor as well as provide documentation to the trustee that the refund was made.

52) In the information provided to Mr. Arnold, it showed that Upright refunded $250.00 to Ms. Bishop on a Visa card on 6/27/16. Mr. Racki also provided the trustee with a computer-generated printout, showing that the Debtor paid Upright for her bankruptcy via credit card payments, and that the attorney fee refund appeared to have been made to her credit card.

53) No explanation for the different amount or method of refund was provided to Mr. Arnold.

54) On September 30, 2016, Mr. Racki informed the undersigned that the information disclosed in his Rule 2016(b) statement and on the Debtor’s Statement of Financial Affairs, question 16 was not correct – Ms. Bishop actually paid $1,550 in legal fees in this case not the $1,600 disclosed. Mr. Racki also stated that the payment was not made on March 2016 as disclosed on the SOFA but rather was made over time between October 19, 2015 and March of 2016. Finally, Mr. Bishop stated that she paid for credit counseling in connection with this case to an organization called Moneysharp.

55) Mr. Racki filed an amended Rule 2016(b) statement disclosing that a total of $1,300 was paid for services in this case; this amount reflected the $250.00 that was returned to the debtor following the chapter 7 trustee questioning the fees at the § 341 meeting of creditors ($1,550 – $250 = $1,300).

56) Subsequent to the United States Trustee’s motion for disgorgement filed on January 6, 2017. Mr. Racki filed an amended SOFA on January 31, 2017, disclosing $1,300 paid for attorney’s fees that still stated the date of the payment was March 2016 and failed to include the fee for credit counseling.

57) Another amendment to the SOFA filed on February 11, 2017, finally discloses the range of dates payments had been made and included the credit counseling, but reflects an attorney fee of $1,550.

  1. ii. Retainer Agreement Does Not Match Disclosure of Compensation

58) Not only does Mr. Racki’s original Disclosure of Compensation (the Rule 2016(b) Statement) conflict with the actual amount paid for services and the dates of those payments but it also conflicts with the terms of the Engagement letter provided to Ms. Bishop. Specifically, Mr. Racki informed the Court that he had agreed to “render legal services for all aspects of the bankruptcy case, …” and that the only services that were excluded were in part 7, which provided “[b]y agreement with the debtor(s), the above-disclosed fee does not include the following services: (a) Representation of the debtors in any dischargeability actions, judicial lien avoidances, relief from stay actions or any other adversary proceeding.”

59) This relatively small number of exclusions appears to be in contrast with the Engagement Letter Upright sent to Ms. Bishop, which under the terms of paragraph 9 exclude from the “base legal services” the following 15 post-petition services:

(a) Discharge proceedings, including those related to student loans, taxes or undue hardships;

(b) Motions for relief from, or continuation, defense or enforcement of the Automatic Stay;

(c) Motions to redeem personal property;

(d) Rule 2004 examinations (hourly);

(e) Motions to avoid liens/judgments ($500.00);

(f) Contested matters or adversary proceedings;

(g) Contested matters regarding Client’s claim of exempt property;

(h) Filing any amendments to the schedules … (hourly);

(i) Motions to continue the 341 meeting of creditors and/or appearing for a continued 341 hearing;

(j) Motions or adversary complaints to abandon/refinance/sell/purchase property;

(k) Assisting in carrying out the Debtor’s Statement of Intentions (hourly);

(l) Monitoring an “asset case” (hourly);

(m) Re-opening a bankruptcy case to submit post-filing proof of pre-discharge counseling ($355)

(n) Issues that arise that are not specifically listed in the Retainer (hourly). The Retainer Agreement also goes on to exclude from “base legal services” reaffirmation agreements. Moreover, the Agreement is internally inconsistent in that the purported “included” services include amendments while the “excluded” services list amendments. This is a violation of 11 U.S.C. § 528 as it makes the Agreement unclear as to what is included and what isn’t.

60) In addition, pursuant to the Retainer Agreement, Ms. Bishop is required to pay administrative costs, defined as “postage, parking, copies, gas limited to a flat fee of $100,” . . . and cost of amended schedules ($176.00). These potential additional fees also are not set forth in Mr. Racki’s disclosure to the Court.

61) To ensure that the above costs are paid, Ms. Bishop signed a document authorizing Law Solutions Chicago, LLC, to charge her account ending in 8718 for any charges incurred pursuant to the Retainer Agreement, which would necessarily include charges for “nonbase legal services” and costs noted above.

62) In light of these provisions contained in the Retainer Agreement signed by Ms. Bishop, Mr. Racki’s Disclosures of Compensation to this Court are false and misleading.

63) The United States Trustee filed a motion to disgorge attorney’s fees, among other things, in this case. After concluding that the Rule 2016(b) Statement the Defendant filed with the original petition when compared to the more recently filed Rule 2016(b) Statement were so radically different, bearing no relationship to the retainer agreement signed by the debtor, as to be misleading and fatally infirm, on April 4, 2017, the Court ordered full disgorgement under 11 U.S.C. § 329 due to the failure to adequately disclose the sum and substance of the engagement contract and ordered that any agreement for further compensation is cancelled.

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

 

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

In Re: Bishop continued – how the Trustee discovered the problems/issues…

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

You can read all of the parts (and by the time we are done there will be many) at this hub.

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

The first problem that appears are the fees charged. Upright has been accused of charging excessive fees in Ohio. Read about that here. They were not so lucky in New York … it is later explained that the fees charged were over the W.D.N.Y. “presumptively reasonable” fees in chapter 7 cases. There were also problems with items excluded from the flat fee in the original retainer agreement.

Frankly, the local affiliate attorney should have pointed out the possibility of an objection to Upright. This could have been avoided.

***

(the filed Complaint continues…)

  1. The § 341 Meeting of Creditors

 40) Mike Arnold, Esquire, who was appointed to serve as the chapter 7 trustee in this case, conducted the Meeting of Creditors in June of 2016. At this meeting, he questioned the debtor regarding, among other things, the fees charged in this case as they were higher than the presumed reasonable fee in the Western District of New York, about a car that was not disclosed on Schedule A/B. Following that discussion, Mr. Racki agreed to refund $300 to Ms. Bishop.

41) The chapter 7 trustee brought the case to the United States Trustee’s attention as a result of the omissions and errors on the schedules, his concerns regarding the fees charged in this case, and the appearance that the fees paid to Upright were made by the debtor using her credit card over several months and not on “March 2016” as stated on the SOFA #16.

The Rule 2004 Examination of the Debtor

 42) After reviewing the information and the docket, the United States Trustee filed a motion to conduct a Rule 2004 Examination of the Debtor along with a request for the production of documents, which was granted by this Court’s oral ruling of September 30, 2016.

43) Three days prior to the Rule 2004 examination, the Debtor filed amended schedules to include the previously undisclosed automobile and to reflect that she paid $1,300 for legal fees in this case.

44) The United States Trustee conducted the Rule 2004 examination of the Debtor on September 30, 2016. At that meeting, the Debtor agreed to provide several additional documents to the United States Trustee because certain pages were missing from the documents produced prior to the 2004 examination. Those documents were received on November 9, 2016.

United States Trustee Motion

45) On January 6, 2017, the United States Trustee filed a motion, pursuant to 11 U.S.C. §§ 105(a); 329; 526-528; Fed R. Bankr. P. 2017 and the court’s inherent authority to examine transactions and fees, seeking disgorgement of attorney fees, cancellation of any agreement for compensation, and imposing sanctions such as civil penalties and enjoining counsel from further violations (the “United States Trustee’s motion”), with an original return date of February 2, 2017.

46) On January 30, 2017, Steven A. Donato, Esq., and Camille W. Hill, Esq., entered Notices of Appearance as counsel for Allen Chern, Allen Chern Law, Law Solutions of Chicago, LLC and Upright Law LLC.

47) On February 6, 2017, responses and objections were filed by Camille Hill, Esq., and Jason Racki, Esq., and a hearing was held on the United States Trustee’s motion on February 16, 2017.

48) Following oral argument, the Court granted the United States Trustee’s request to disgorge all compensation, cancelled any agreement for further compensation and ruled that the request to review transactions and impose sanctions may be refiled as an adversary proceeding complaint. The order was signed on April 4, 2017.

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

 

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

New York’s lawsuit against Upright Law: client hiring allegations

 

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

You can read all of the parts (and by the time we are done there will be many) at this hub.

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

In this part of the Complaint we are shown how the Debtor hired Upright Law…

***

(the filed Complaint continues…)

C.  Timeline with Ms. Bishop

     i.  The Internet Search and First Call with the “Closer”

29) In October of 2015, while contemplating filing a bankruptcy, Ms. Bishop searched the internet for a bankruptcy attorney to assist her with her worries about a possible foreclosure. Ms. Bishop located Upright’s website and made an online inquiry. She then spoke to Upright’s non-attorney agents over the phone. She testified that she does not recall to whom she spoke but she believes the person was not a lawyer.

30) Ms. Bishop said this non-lawyer went over the different types of bankruptcy options, including chapters 7 and 13, discussed payment plans for Upright fees, and quoted her a price for filing a chapter 7. This person also explained how she could make payments over time and stated that he would electronically send her documents to read, sign and return. During that initial call, Ms. Bishop authorized a $5.00 payment to Upright. She believed she had hired Upright during that initial call. She was told that a local New York attorney would be contacted to represent her.

31) An Upright internal Transaction Report provided by Mr. Racki, shows that Ms. Bishop authorized the initial $5.00 payment to Upright on October 19, 2015.

32) Although the debtor had no contact with Mr. Racki on or before October 19, 2015, the Retainer Agreement purportedly was signed electronically by both the debtor and Mr. Racki on October 19, 2015. Other documents bearing the debtor’s and Mr. Racki’s electronic signatures and also dated October 19, 2015 include: Disclosures Regarding Auto-Dialed and Pre-Recording Telemarketing Messages; A Debt Relief Agency, Disclosures to an Assisted Person in Relation to a Bankruptcy Consultation; Important information about Bankruptcy Assistance Services from an Attorney or Bankruptcy Petition Preparer; Client Instructions Pursuant to 11 U.S.C. Section 342(b); Acknowledgement of Receipts Rules for Filing Bankruptcy; Client Instructions Pursuant to 11 U.S.C. Section 527(c) and Automatic Payment Program Application and Authorization for Withdrawals. Although the acknowledgment attached as Exhibit 9 states that an attorney had reviewed with the debtor the documents attached as Exhibits 6-8 and 10, the evidence is expected to show that no attorney reviewed such documents with the debtor on or before October 19, 2015.

     ii.  Second Call

33) About a week after speaking with the first Upright representative, Ms. Bishop said that she spoke by phone with a second Upright representative, who she believes identified herself as Rachel. Ms. Bishop did not believe this person was a lawyer. Like the initial call with the “closer”, during her call with Rachel, Ms. Bishop did not recall reviewing her mortgage foreclosure debt, including the age of that debt, whether the bank took any action following the foreclosure, or the effect New York law might have on that debt as a result of its age or as a result of the bank taking no further action against her following the foreclosure. She also does not believe Rachel asked for any documents during the call or discussed with her the fees, her payment plan or what services were covered by the fee. Similarly, she does not recall Rachel or the initial representative saying she may be charged an additional $100 or other fee if she wanted to meet in person with an attorney or if amended schedules were needed, regardless of who was responsible for the error in schedules. Likewise, Ms. Bishop testified that she did not recall anyone going over the Rules for Filing bankruptcy or Definitions during either of these two calls.

34) While Ms. Bishop’s signature is electronically affixed to various documents prepared by Upright and dated October 19, 2015, Ms. Bishop testified that she did not recall signing the documents the day she first spoke with the Upright “closer” and authorized the $5.00 payment to Upright. She emphatically stated she never would have signed a document allowing telemarketers to call her. She does not recall anyone explaining the paperwork that authorized telemarketer calls, or that by signing the engagement letter, she gave Upright a power of attorney to file other lawsuits on her behalf, despite documents to the contrary.

     iii. Contact with Local “Partner” Mr. Racki

35) Ms. Bishop does not recall exactly when she first spoke with Mr. Racki or his assistant Tracy, but she knew it was some time after she spoke by phone with the two representatives from Upright in Chicago. Therefore, it is clear she did not speak with Mr. Racki on the date the agreement is purportedly signed by Ms. Bishop and Mr. Racki. She believed the point of the initial call with Mr. Racki was for him to verify he would handle the case. She did not recall if he asked any questions or asked her to provide him with information during the initial call. She believes the call lasted about 15 minutes. At no time during that initial call did anyone discuss with her New York mortgage deficiencies and the requirement that they must be pursued within 90 days in order for a mortgagor to be responsible for a deficiency. She also did not recall if Mr. Racki ever discussed New York law and its treatment of stale dated debts. Similarly, she did not recall any lawyer, including Mr. Racki, going over the details of her retainer agreement with her.

36) Ms. Bishop recalled someone from Upright explaining the various options in bankruptcy available to her. She believes when she met with Mr. Racki’s assistant, Tracy, to go over the schedules, Tracy may have gone over the Rules for Filing Bankruptcy, Important Information about Bankruptcy Services, and Client Instructions at that time. Tracy is not an attorney.

37) Despite documents to the contrary, Ms. Bishop does not believe a lawyer ever reviewed with her a copy of the 1) Rules for Filing Bankruptcy; 2) Important Information about Bankruptcy Assistance Services; 3) Definitions and/or 4) the Retainer Agreement.

38) Ms. Bishop stated she met with Mr. Racki in person when she went to sign the petition and schedules, recalling they agreed to meet in Watkins Glen in the bankruptcy courtroom at a time when Mr. Racki was going to be there. The court’s calendar for May 2016 shows hearings conducted on Friday, May 20, 2016.

39) On May 24, 2016, Mr. Racki filed Ms. Bishop’s voluntary petition, schedules etc. The filed documents state that Ms. Bishop signed the document on Tuesday, May 24, 2016, not Friday, May 20, 2016.

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

Paragraph 34 is astounding: as an affiliate with Upright I am unaware of any authorizations to allow telemarketing calls or powers of attorney to bring lawsuits. I am looking forward to see what the Court makes of those authorizations…

The last few lines of Paragraph 35 give us a hint as to the main problem, in my opinion: because of laws protecting debtors in New York (laws that do not apply in Illinois, for example), she may have been immune from collection. She might not have even had to file bankruptcy at all!  More allegations and theories in the Complaint may make that more clear … stay tuned …

But for now the bankruptcy petition has been filed. The next blog will continue the Complaint in which it states other areas where the US Trustee says Upright and its local affiliate made errors …

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

PAC Finds Law Firm Records Are Public Records Under FOIA

In a recent, non-binding request for review, the PAC found that law firms that represent units of local government are performing a “governmental function” such that the law firm’s records are considered “public records” under FOIA (Freedom of Information Act).  2017 PAC 43089

A requester had filed a FOIA request with a school district, seeking all records mentioning and pertaining to an attorney and her law firm. The district responded, but withheld certain records held by its attorneys under Section 7(2) of FOIA, arguing that the records were not “public records.”  The PAC disagreed with the district, finding that the requested records are “public records” if they directly related to a government function that the law firm has contracted to perform for the district. Although the district argued that the law firm was not performing a governmental function, the PAC rejected that argument, finding that the law firm’s litigation services support the district’s education services.  As a result, the PAC ordered the school district to obtain any responsive records from the law firm and disclose them to the requester.

The PAC’s opinion does not address any exemptions that might apply to this request, such as attorney-client privilege. Presumably, the district can still assert those exemptions before turning over any responsive records as ordered by the PAC.

Although this is merely an advisory opinion and binding on any other public bodies, it is a good reminder that public bodies should list all possible arguments and exemptions in their FOIA response letters, as well as their responses for requests for review to the PAC, because we never know when the PAC might try to make “new law” in one of its opinions.

Post Authored by Erin Pell and Julie Tappendorf of Ancel Glink law firm in Chicago

***

Quite an interesting argument, although I doubt a non-binding PAC opinion can pierce attorney-client privilege. Attorneys who work with municipal and other government bodies can couch their communications in such a way as to asset the privilege.

It will be interesting to see what will happen when these two theories collide!

***

Michael Curry of Curry Law Office in Mount Vernon, Illinois (http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

 

 

Riding the Circuit: Wabash County, Illinois

As a Mount Vernon, Illinois attorney, I travel throughout the state practicing law and meeting with clients about topics ranging from bankruptcy to estate law, from divorce to litigation. In my travels, I enjoy seeing the courthouses in our county seats. Occasionally in my blog I will stop to describe these wonderful buildings and the towns and cities in which they set.

***

I will need to change the name of this blog series to 28 and Counting! I have added another county to the list of appearances in my law practice: Mount Carmel in Wabash County!

Odd that it took me so long to visit here (professionally). I have been through the town many times on my way to Indiana and borrowed books from its library through the inter-library loan program, but have never appeared here as an attorney.  In over 20 years of practicing bankruptcy, a client from Wabash County/Mount Carmel was rare.  Still, it is as far from my home as Murphysboro and Charleston – over an hour and a half drive one-way. A long way to go. Fortunately, I was in its neighboring county (Edwards) in the morning and accepted a case in Wabash County sixteen miles away for an afternoon hearing. I couldn’t miss an opportunity to add a new county!

Per Wikipedia: Mount Carmel is the county seat of Wabash County, Illinois, founded in 1815 with a population of 7,284 according to the last census.

Also per Wikipedia: Wabash County was formed in 1824 out of Edwards County, to avert an armed confrontation between the militias of Albion and Mt. Carmel after the county seat was moved from a town near the current city of Mount Carmel to Albion.

The courthouse is tucked into the northeastern corner of Market and Fourth Streets. It is a brick and concrete building – you’d miss it if you were not looking for it. Although there has been a courthouse at this location since 1881, the frontage of the courthouse was built in 1959. It was expanded eastward in 1963.

One could mistake it for a post office (which is one block or so to the north), if not for the flags and veteran’s memorials. A statue commemorating the Grand Army of the Republic dominates the corner, with another obelisk memorializing those killed in action in World Wars 1 & 2, Korea, Viet Nam and Iraq.

There is no grand echo-y lobby; instead direct and utilitarian (not meant in a critical way) hallways and staircases lead you to the offices and the courtroom. The courtroom is medium size and decorated in dark browns and deep blues. Like the building itself, it is larger than it seems from the outside: plenty of room and ample seating, but feels small and intimate without being crowded. A pro se Plaintiff (a person without an attorney) asked where the courtroom was. I had to tell her this was my first time here, too. We found it together. The docket call was quiet and dignified; it did not fill you with the awe of a towering lobby and a majestic bench, but you wanted to give it the respect it deserves.

Market Street (and the numbered streets intersecting it) is a thriving business district with boutiques, craft stores, a jewelry store and an historical museum.

It has a Ben Franklin! That was the go-to dime store of my childhood in those aulden days before Marts Wal and K. The only Ben Franklins I frequented in modern times were in Marion and Belleville. Both stores have since become solely craft/fabric stores; up until 1993 the one in Belleville still sold candy cigarettes! Mt. Carmel’s Ben Franklin is as the others now – a craft/fabric store.

While in Mount Carmel, enjoy some of the non-chain restaurants. I had the Rueben sandwich at Twin Rivers Restaurant with creamy cole slaw (I was in a cabbage-y mood for lunch). Yummy, filling and very well priced!

So I’ve added another county seat in my travels. Thanks for joining me!

***

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois (http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

UST v Upright Law, In re: Bishop, an index of the blog posts on the case

I have prepared a long series of blogs reprinting and reviewing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester). In the case the US Trustee through the Department of Justice is moving to bar the Chicago firm from practicing bankruptcy in its district, which includes the city of Buffalo.

Note that if the hyperlink does not work, that means the blog has not been published yet!

Click Here to Read Part 1.

This includes the Header of the Case and the UST’s introductory statements.

Click Here to Read Part 2.

This includes statements/introductions to the parties involved.

Click Here to Read Part 3.

Where the UST describes Upright Law and how their law practice structure.

Click Here to Read Part 4.

 

Click Here to Read Part 5.

 

Click Here to Read Part 6.

 

Click Here to Read Part 7.

 

Click Here to Read Part 8.

 

Click Here to Read Part 9.

 

Click Here to Read Part 10.

 

Click Here to Read Part 11.

 

I am intrigues by this case, being affiliated with Upright. Obviously I want to keep up-to-date on what happens next!

 

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

In Re: Bishop – how does Upright Law practice law (per the US Trustee)?

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

 

You can read all of the parts (and by the time we are done there will be many) at this hub.

 

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

In this part of the Complaint the US Trustee describes what Upright Law is and how they practice. Remember this is a complaint against them trying to bar them from practice in the Western District of New York; they are not about to shower it with praise…

Note Paragraph 25 & 26: in the Southern District of Illinois the matter is different – the local attorney contacts the client right away – within a day or two – to introduce himself or herself, review the client’s situation, discuss the documents needed, the credit counselling classes required and their costs and answers questions. I encourage Upright clients to call me at any time during the process and even take creditor inquiries.

***

(the filed Complaint continues…)

 

  1. Upright’s Business Model

 

21) Upright solicits both prospective debtor clients and local attorney “partners” over the Internet, using the website “www.uprightlaw.com.” On its current website, it purports to have “Local Attorneys Nationwide” and provides that “all legal services are provided by affiliated and related entities.” The website goes on to provide: “By an Act of Congress and the President of the United States, UL/ACL is a federally designated Debt Relief Agency. Attorneys and/or law firms promoted through this website are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code.” It also contains a link to “Disclosures required under the U.S. Bankruptcy Code.” Finally, the website states that Edmund Scanlan is the “CEO” or “Administrator” of every entity allegedly providing the legal services to prospective debtors. On information and belief, Mr. Scanlan is not a licensed attorney.

 

  1. Solicitation of Debtor Clients

 

22) Upon information and belief, when a prospective debtor reviews the Upright Law website, he or she is asked to provide his or her contact information to learn if they qualify for bankruptcy relief. Thereafter, Upright agents — located in Chicago – call the prospective debtor. These agents, known as “inside sales representatives,” “closers,” “first responders,” or, at other times, “senior class consultants,” are not attorneys. These non-lawyer agents conduct the initial interview, ask the prospective debtor questions about his or her financial situation, and determine if there is an apparent ability to pay for legal services and a desire to “make a life-changing decision” regarding his or her financial circumstances. If the answer is yes, these non-lawyers give the prospective debtor legal advice, including, but not limited to describing the differences between a chapter 7 and chapter 13 proceeding. After advising the prospective debtor of the available options, the “closer” will ask the potential client to “self-select” what chapter is the best fit.

23) Following this “self-selection,” the “closer” will gather basic intake information such as income, sources of income, household members, expenses and assets and enter this data into Upright’s software. Based on this information, the non-lawyer consultant will advise the client whether or not to file bankruptcy and under which chapter, quote a fee to the prospective debtor client, and ask them if they wish to hire the firm.

24) Upon information and belief, if the prospective debtor agrees to hire Upright, the “closer” asks the prospective debtor to provide bank account information, which Upright can use to withdraw bankruptcy-related fees and costs. Generally, if the prospective debtor cannot pay the fee immediately, automatic withdrawals are set up to debit the prospective debtor’s account over time.

25) Upon information and belief, after an opportunity for discovery, the evidence is expected to show that in 2015, Upright did not refer prospective debtors to a local “limited partner” licensed to practice law in the relevant local jurisdiction, such as New York, until the prospective debtors had paid Upright in full. During this process, the prospective debtor is told to contact Upright in Chicago for questions or concerns. Only after the fees are paid in full, which can take several months, depending on the installment plan, and the client’s particular financial situation, is the client “handed off” to the local partner attorney to start collecting documents and preparing the actual petition and completing their due diligence.

26) Representatives from Upright have recently testified before other courts that Upright no longer waits for the client to pay the entire fee, and now cases can be referred to a local partner as early as the day the client first makes a payment to Upright or shortly thereafter so that the partner attorney can set up a “compliance call” with the client. On information and belief, the compliance call averages 15 minutes. During that call or afterwards, the local partner attorney has the discretion to reject the client unilaterally, despite the prospective client not being given any reason to believe they are not represented.

 

  1. Engagement Letters

 

27) Upon information and belief, during this process, Upright electronically provides an engagement agreement to the client to sign via electronic signature. Upon information and belief, Upright does not obtain wet signatures.

28) Pursuant to a partnership agreement with their various local “partners,” the local partner’s signature is affixed to the retainer agreement as well as other documents without the local partner necessarily reviewing the document with the prospective client.

 

 

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

New York’s suit again Upright Law (part 2: the parties involved)

Continuing the Complaint against Upright Law in the case of In Re: Joyce Ellen Bishop, Case Number 16-20593 by the US Trustee in the US Bankruptcy Court for the Western District of New York (in Rochester).

You can read Part 1 here.

Or use this Index Hub. 

In the interest of full disclosure, I am an affiliate with Upright Law – I co-represent their (our) clients in the northern counties of the Eastern Division of the Southern District of Illinois

***

This part of the Complaint tells us what the US Trustee alleges that Upright did that led to this Complaint. Keep in mind the US Trustee is trying to bar Upright Law from practicing in the district, so they will not exactly be showering them with praise.

“I come to bury Caesar, not to praise him.” Shakespeare, Julius Caesar, Act 3, Scene 2

***

(the filed Complaint continues…)

 

III. BACKGROUND

  1. The Parties

 Mr. Racki

7) Defendant Jason Racki is the debtor’s counsel of record. He represented on the petition that his firm name in this case is Allen Chern, operating out of 140A Metro Park, Rochester, New York. His ECF participant registration form and the docket in this case disclose his firm name as the Law Office of Jason Racki, 10314 Spook Woods Rd, Port Byron, New York.

8) Mr. Racki practices before this Court as a sole practitioner and also purports to be a partner in Upright Law LCC by virtue of a limited partnership agreement.

9) During the relevant period of time for this case, Racki also purported to be a partner of Voight Law or VL.

10) Mr. Racki is a “debt relief agency” as defined by 11 U.S.C. § 101(12A) and he provided bankruptcy assistance to Ms. Bishop.

Upright Law, Law Solutions, Allen Chern and affiliates

11) Defendant Law Solutions Chicago LLC is an Illinois limited liability company that does business as Upright Law LLC (“Upright Law” or “Upright”). It filed articles of organization with the Illinois Secretary of State on October 10, 2008. It is authorized to transact business in Illinois under the following assumed names: Jason Allen Law, LLC; Upright Law, LLC; and Allen & Associates, LLC. On its website, Upright Law lists its headquarters at 79 West Monroe, 5th Floor, Chicago, IL 60603 and, at the time Ms. Bishop contacted it, it purported to have “Local Offices Nationwide.” Upon information and belief, Upright Law has an office in Chicago and no local offices nationwide. It has an intake/call center at its Chicago office.

12) Upright’s connection to New York appears to be through services offered by “Allen Chern Law.” Upright incorporated in the State of New York on January 16, 2014 and does business in the State of New York as “Allen Chern Law” but under the umbrella of the national name “Upright Law” and/or “Upright.”

13) Kevin Chern, an owner and manager of Upright, is an attorney licensed by the State of Illinois to practice law. Chern is not licensed to practice law in New York. 14) Jason Royce Allen, an owner and manager of Upright, is an attorney licensed by the State of Illinois to practice law. Allen is not licensed to practice law in New York.

15) According to Upright’s website, Edmund Scanlan is the chief executive officer of “Upright Law,” and a manager of an entity named Upright Litigation, LLC. According to Upright’s website, “all legal services are provided by affiliated and related entities.” The website states that Scanlan is the “CEO” or “Administrator” of every entity allegedly providing the legal services to prospective debtors.

16) On information and belief, when Ms. Bishop contacted Upright, it employed no lawyers licensed in the State of New York at its Chicago call center.

17) Moreover, Allen Chern Law does not have a have a “brick and mortar” location as required in New York.

18) Upright Law is a “debt relief agency” as defined by 11 U.S.C. § 101(12A) and it provided bankruptcy assistance to the debtor, Ms. Bishop.

Ms. Bishop

19) Ms. Bishop is the debtor in this case and is an “assisted person” as defined by 11 U.S.C. § 101(3) because she has primarily consumer debts and the value of her non-exempt property is less than $186,825. Moreover, Upright’s website acknowledges its federal designation as a Debt Relief Agency.[1]

United States Trustee

20) Plaintiff United States Trustee is a Department of Justice official with standing to file this complaint under 11 U.S.C. § 307.

 

(end of section reprinting the Complaint)

***

Filed by Kathleen Dunivin Schmit of the US Trustee’s office (WILLIAM K. HARRINGTON )

United States Trustee for Region Two) on April 28, 2017.

***

In this section we meet the parties involved:

James Racki is the partner or affiliate attorney with Upright, as am I and many attorneys across the country.

Upright Law and Allen Chern are a Chicago-based law firm who practice throughout the country.

Joyce Ellen Bishop is the debtor who hired Upright Law initially, then met with James Racki for local representation.

***

Check my blog’s search engine for more on this Complaint and Upright’s response. Just type “Upright Law” in my search engine for the Upright case law.

 

About the blogger:

Michael Curry of Curry Law Office in Mount Vernon, Illinois http://michaelcurrylawoffice.com/) has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Centralia, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

You can also access my website at http://www.mtvernonbankruptcylawyer.com

 

 

[1] On its website, Upright holds itself out as a “debt relief agency helping people file for bankruptcy under the bankruptcy code.” See https://www.uprightlaw.com/terms-conditions