Michigan Bankruptcy Blog

Showing 3 posts in Did you Know?.

Michigan Bankruptcy Petition Preparer to Serve Jail Time for Criminal Contempt

Section 110 of the United States Bankruptcy Code provides that a non-attorney can assist in the preparation of the bankruptcy petition. However, as an Inkster, Michigan man just learned (the hard way), the Bankruptcy Code places numerous requirements on bankruptcy petition preparers and subjects those who do not comply to substantial penalties.

On Tuesday, February 25, Derrick Hills of Inkster was sentenced by U.S. District Court Judge Sean F. Cox to 46 months in prison after being convicted by a jury in September of five counts of criminal contempt. The contempt proceedings stemmed from repeated violations of orders issued by U.S. Bankruptcy Judge Steven Rhodes from 2007 to 2009. According to a press release issued by the U.S. Attorney's Office following Hills' conviction at trial:

The evidence presented at trial showed that Hills had acted as a bankruptcy petition preparer since 2007, assisting people in filing for bankruptcy. Hills continued to act as a bankruptcy petition preparer despite five bankruptcy court orders issued by Bankruptcy Judge Steven Rhodes, permanently enjoining Hills from doing so for various non-compliance with bankruptcy rules and complications caused by his acting in the capacity of a bankruptcy petition preparer. Hills assisted individuals with consumer debts in preparing and filing their Chapter 7 bankruptcy paperwork. However, his actions went well beyond what was allowed by law and clearly violated Judge Rhodes Orders.

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Categories: Chapter 7, Did you Know?, Eastern District of Michigan

Did You Know? | Debtors and Non-Filing Spouses May Lose Right to Rebut Presumption of Equal Ownership if Debtor Has Equal Rights to Asset

Often in bankruptcy cases involving a debtor with a non-filing spouse, the presumption of equal ownership arises.  Subject to certain exclusions, Section 541 of the Bankruptcy Code provides that all property in which the debtor has a legal or equitable ownership interest becomes property of the estate at the commencement of the case.  This includes property the debtor owns with a non-filing spouse.  In some situations, particularly if the debtor does not have an exemption available, the debtor will try to rebut the presumption of equal ownership. Read More ›

Categories: Did you Know?, Eastern District of Michigan

Did You Know? | Creditors have affirmative duty to release garnishments following bankruptcy filing.

In the "Did You Know?" section of the Michigan Bankruptcy Blog, we feature opinions that are not newly issued but that may be helpful for Michigan bankruptcy practitioners. 

When a person files bankruptcy, most collection actions are automatically stayed.  Subject to certain exceptions, Section 362 of the Bankruptcy Code prohibits the commencement or continuation of an action to recover a pre-petition claim, the enforcement of a pre-petition judgment, and any act to collect a pre-petition claim against the debtor, among other things.  Read More ›

Categories: Chapter 7, Did you Know?, Eastern District of Michigan