Nebraska Debt and Bankruptcy Blog

Nebraska Debt and Bankruptcy Blog

Has Wells Fargo Committed Bankruptcy Fraud?

Posted in Bankruptcy Fraud, Chapter 13, Chapter 7, Credit Cards


Wells Fargo Bank has admitted to opening millions of customer accounts and credit card accounts without customer authorization since 2005.  Stories have emerged of a bank gone wild where employees working in an intense sales culture felt pressured to open new accounts to meet sales quotas.

Wells Fargo has agreed to pay $185 million in fines to the Consumer Financial Protection Bureau.

So what happens when customers file bankruptcy on credit card accounts fraudulently opened without any authorization?  Naturally, Wells Fargo filed bankruptcy Proof of Claims with the court itemizing the amounts not legally owed.  And that reality leads to the next logical question:  Has Wells Fargo committed bankruptcy fraud for filing false proof of claims?

False Claims—18 U.S.C. § 152(4):

A person who…knowingly and fraudulently presents any false claim for proof against the estate of a debtor, or uses

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Time to Tax Carpetbagger Debt Buyers?

Posted in Credit Cards, Default Judgment, Garnishment, Junk Debt


Junk debt buyers are the modern version of a post Civil War carpetbagger as they suck money out of every county in the State of Nebraska without contributing anything in return.  I cannot think of a single positive thing these debt collectors contribute to our state.

Junk debt buyers typically purchase defaulted credit card accounts for about 3 to 7 cents on the dollar.  Common debt buyers include Midland Funding, Portfolio Recovery Associates, Calvary Portfolio Recovery, Cach LLC, Asset Acceptance LLC, and many others.

Debt buyers clog our courts with collection lawsuits.  In a sense, the debt buyer is in a race to recover its investment before the debtor is garnished by another creditor or files bankruptcy, so they are quick to file lawsuits after acquiring the debt.

Most junk debt buyers are located outside the State of Nebraska.  Consider the damage they do to our state:

  • Nebraska courts are

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Dave Ramsey’s Debt Snowball

Posted in Budgeting, Chapter 7, Credit Cards, Credit Counseling, Uncategorized

Dave Ramsey

The most famous name in the getting out of debt industry is Dave Ramsey.  As a young man Dave himself was in a pile of debt and wound up filing bankruptcy. The pain of that experience lead him on a quest to learn about personal finance and he began a career in advising others how to get out of debt.

I’m a talk radio/podcast junkie.  I don’t care what the topic is as long as it is interesting.  Dave Ramsey is the host of a nationwide talk show and it played on the radio as I was driving home.  So, as I counseled clients every day about how to file bankruptcy, I would listen to Dave on the way home explaining how to avoid it.  Gosh, was I doing my clients wrong by not teaching them the tough road out of debt that Dave advocated?

The hallmark

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Riding Through the Chapter 7 Backdoor: A Story of Car Loans in Bankruptcy

Posted in Chapter 7, Reaffirmation Agreement


There is a lot of chatter going on among Nebraska bankruptcy attorneys about reports of court hearings where debtors are being told they can keep a car even if they choose not to reaffirm the car loan as long as payments are kept current.

That’s news to me and many of my colleagues.  The Bankruptcy Reform Act of 2005 was supposed to end the Ride-Through option.  A “ride-through” is where a lender cannot legally repossess a vehicle even if the debtor does not sign a formal Reaffirmation Agreement as long as the loan was paid current.

A reaffirmation agreement is an agreement to pay a debt (typically a home or auto loan) listed in a bankruptcy case.  Reaffirmations basically pull a debt out of the bankruptcy and makes a debtor liable again for the payment.  Secured debts tend to be reaffirmed in Chapter 7 and unsecured debts almost never.  Clients

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Bankruptcy Attorney Sanctioned for Using DocuSign

Posted in Uncategorized


A bankruptcy judge for the Eastern District of California sanctioned attorney Pauldeep Bains for filing a bankruptcy petition signed with digital signatures.  (See In re Mayfield, Case #16-22134).

The attorney sent completed bankruptcy documents to the debtor to sign via a digital signature service called  DocuSign.  Bankruptcy judge Robert Bardwil imposed sanctions for violations of bankruptcy rule 9004-1(c)(1)C) & (D).  Those rules state the following:

(C) The Use of “/s/ Name” or a Software Generated-Electronic Signature.  The use of “/s/ Name” or a software-generated electronic signature on documents constitutes the registered user’s representation that an originally signed copy of the document exists and is in the registered user’s possession at the time of filing.

(D) Retention Requirements When “/s/ Name” or a Software-Generated Electronic Signature Is Used.  When “/s/ Name” or a software-generated electronic signature is used in an electronically filed document

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Digital Signatures in Bankruptcy Cases

Posted in Chapter 13, Chapter 7


Nebraska is the 16th biggest state in the USA, but we rank 43rd in population density.  In fact, Nebraska has more cows than people by a ratio of 3 to 1.

Bankruptcy is a specialized area of laws these days, especially after enactment of the Bankruptcy Reform Act of 2005.  Attorneys in sparsely populated areas of the state generally do not handle bankruptcy cases, so our firm is routinely hired by clients throughout our big state.  (This is actually a wonderful aspect of practicing bankruptcy law since we get to know folks in every square inch of the state and learn about their communities.)

One challenge we face in a state that stretches 430 miles across is getting documents signed and returned in a timely fashion.  This is especially critical in bankruptcy cases since we must provide the court with a precise “snapshot” of a debtor’s financial situation on the

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Discrimination Claim Lost when Bankruptcy Schedules Not Amended

Posted in Chapter 13, Chapter 7, Exempt Property

A few weeks ago I wrote an article to warn plaintiff attorneys to be careful to ensure that their clients who have previously filed bankruptcy to ensure that all claims they have against third parties are reported on the bankruptcy schedules.  (Plaintiff’s Attorneys Beware: Your Client’s Bankruptcy Case is About to Sock You Right Between the Eyes)  Well,  . . .  it just happened to a lady in Minnesota. (See Cover v J.C. Penny Corporation, Civ No 15-515, District of Minnesota).

The significant aspect of this case is that the debtor, April Cover, failed to report a discrimination claim on her bankruptcy schedules but she did verbally tell the bankruptcy trustee about the claim.

Not good enough says the Minnesota court.  Actual verbal notice of a claim is not enough.  Audio recordings of the court meeting between the trustee and the debtor disclose that the discrimination claim was reported to the trustee.  There

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Am I Responsible for the Debts of my Spouse?

Posted in Divorce, Exempt Property, Garnishment, Medical Bankruptcy


As a general rule, you are not responsible for the debts of your spouse. Also, if you marry someone you do not become obligated to pay the debts they incurred prior to the marriage.

But there is one major exception to these rules. You are liable for medical debts of your spouse under a legal theory called the Doctrine of Necessities. The necessities rule is not limited to medical bills. It could apply to utilities, rent, food, clothing and any other necessities, but the most common lawsuit utilizing this legal concept is in the collection of medical debts.

In Nebraska, when you marry someone you also marry their future medical debts.

If your spouse incurs medical debts during the marriage, you are liable for the debt.  Even if the bills only come in the name of your spouse.  Even if you did not sign

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Plaintiff’s Attorneys Beware: Your Client’s Bankruptcy Case is About to Sock You Right Between the Eyes

Posted in Chapter 13, Chapter 7, Exempt Property


The more I think about the disastrous  consequences of two recent 8th Circuit Court of Appeals decisions regarding Judicial Estoppel the more alarmed I become.

This is a time bomb waiting to go off.  The 8th Circuit has ruled that debtors who fail to amend bankruptcy schedules to report claims against third parties that occur after the bankruptcy case was filed will not be able to recover damages in their future litigation.

Following the entry of a bankruptcy discharge, litigation related to unreported post-petition claims shall be subject to Summary Judgment dismissal under the legal theory of Judicial Estoppel.

Judicial estoppel is an equitable doctrine which “prevents a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding.” New Hampshire v. Maine, 532 U.S. 742, 749 (2001).

The 8th Circuit has ruled that a debtor’s failure

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Chapter 13 Debtors Lose Right to Recover On Unreported Claims

Posted in Chapter 13, Exempt Property

Bird on Fence

In two recent cases the 8th Circuit Court of Appeals has sustained summary judgments against debtors who failed to report claims against third parties that arose after the bankruptcy case was filed.

In the case of Jones v. Bob Evans Farms Inc., the debtor failed to disclose an employment discrimination claim that occurred 3 years after the bankruptcy case was filed.  The bankruptcy case was filed in 2009 and in 2012 the debtor quit his job and filed a discrimination case with the Missouri Equal Opportunity Commission.  The employer filed a motion for Summary Judgment claiming that the debtor was judicially estopped from pursuing his claim because he failed to report the claim in his bankruptcy schedules.

The 8th Circuit court agreed with the employer and declared that a debtor who intentionally hides a post-petition claim by failing to amend

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