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).
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.
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 The one payment advice for January 2016 that was received shows gross pay as $717.07. See Exhibit
- 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.