The Louisiana (Baton Rouge) Chapter 7 Trustee apparently thinks so.

Here’s the backstory on Derrick Todd Lee, aka “The Baton Rouge Serial Killer” (I guess the acronymic and descriptive monikers well was running dry?).

On one of the bankruptcy law listservs I subscribe, one of our Louisiana colleagues mentioned that the convicted killer’s chapter 7 trustee this week filed what we call an “AP” — an “adversarial proceeding”– to revoke Lee’s discharge, and another AP claiming rights to the “story” of how the killer committed the crimes.

I think this is overreaching. We may morally and philosophically abhor allowing a convicted murderer to profit from his story — and frankly, I do (that’s the reasoning behind so-called “Son of Sam” laws that prohibit such activities and/or turn the profits over to victim restitution funds or other interests). But no story’s been written — so any funds from the sale of such a story have to be postpetition. If that’s the case, then they’re not part of the bankruptcy estate. And if that’s true, then the trustee has no right to those funds.

All that said, I haven’t read the complaints yet — so this is based purely on secondhand information and my own idle musings on a Tuesday morning. Still, one can’t deny that it’s a fascinating issue and that doesn’t always happen in Bankruptcy Law-land!

Sheryl told you about Governor Mark Sanford’s veto of a new exemption bill, which determines how much property can be protected from creditors. The South Carolina statutory amounts hadn’t been changed since 1979. The good news is that lawmakers in Columbia voted overwhelmingly to override the governor’s veto, and the new measure has become law.

“We needed it to be more in line with modern times,” said George Cauthen, a bankruptcy attorney who primarily represents lenders. “The whole idea behind exemptions is to leave every individual … to leave them with a little dignity and the basics of getting by in life.

The new law applies in bankruptcy, to protect a certain amount of property from a bankruptcy trustee. But it also applies outside of bankruptcy, to protect property from judgment creditors. It increases the exemption in cash (in lieu of a homestead exemption) from $1,000 to $5,000, in a vehicle from $1,200 to $5,000, in household goods from $2,500 to $4,000, and in tools of a trade from $750 to $1,500. The new statute also adds a $5,000 “wildcard” exemption, which can protect assets not otherwise exempt, if you don’t use all of your other exemptions. Continue Reading »

More than 400 real estate managers and workers have been indicted in a broad-spectrum federal investigation of mortgage fraud. The FBI reported that the losses to homeowners resulting from the criminal conduct is over $1 billion. (That’s “billion.” With a “B.”)

From MSNBC.com’s article on the sweep:

Since March 1, 406 people have been arrested in the sting dubbed “Operation Malicious Mortgage” that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

In a separate sweep, two former Bear Stearns managers in New York were indicted and taken into custody Thursday on criminal charges related to the collapse of the subprime mortgage market. Matthew Tannin was taken into custody outside his New Jersey home and Ralph Cioffi was arrested at his New York City home, the FBI said.

An indictment unsealed in federal court charged both men with securities and wire fraud, and Cioffi with insider trading.

In a separate complaint filed Thursday, the Securities and Exchange Commission alleges that in the first five months of 2007, Tannin and Cioffi “deceived their own investors, as well as the fund’s institutional counterparts, by fraudulently concealing from them the full extent of the fund’s deepening troubles.”

According to a new study that will be released formally today to a Congressional committee, senior citizens are filing for bankruptcy protection at “sharply faster rates” than other segments of the population. (See the full article on the study at USAToday.com.)

This should surprise no one. The elderly among us are often a bellwether of sorts for financial issues, as they are frequently recipients of fixed income and therefore changes in their financial position come from external forces. Health care costs, in particular, are much greater problems for seniors, who typically must take medication for health problems associated with aging and have many more physician visits than most of us as a result.

Our senior citizens shouldn’t have to file for bankruptcy just to be able to afford their medications, but I’m glad that they at least have the option to alleviate some of the terrible toll that financial distress exacts.

The following announcement just popped into my email inbox, courtesy of the state bar association:

The S.C. Department of Consumer Affairs along with the S.C. Attorney General’s Office announced a new mortgage hotline on Monday. The hotline is expected to reduce mortgage fraud of all types. Anyone who suspects mortgage fraud or simply wants more information can call the Stop Mortgage Fraud hotline at (800) 553-7723 between 8:30 a.m. and 5 p.m. weekdays.

Passing the word along!

According to some analysts, the foreclosure crisis is spreading to other sectors of the credit industry and will continue to “drag down” the economy into ‘09 and later:

When financial analyst Meredith Whitney wrote in a report last October that the nation’s largest bank, Citigroup, lacked sufficient capital for the risks it had assumed, she was considered a heretic.

However, Whitney was proved correct: Citigroup pushed out its CEO, sought foreign investors and slashed its dividend. Her comments now carry added weight on Wall Street, and she has a new warning for ordinary Americans: The crisis in credit markets is far from over, and it increasingly will affect consumers.

“In fact, we believe that what lies ahead will be worse than what is behind us,” Whitney and colleagues at Oppenheimer & Co. wrote in a lengthy report last month about threats faced by big national banks, including Bank of America, Wachovia and others.

That’s pretty blunt language for a profession not known for its clarity. What this means for consumers:

• Continued tightening of lending standards, and increasing difficulty in getting credit, even for high-scoring consumers
• Less flexibility in working out loss mitigation plans with creditors for those who are falling behind
• Probably new kinds of fees, and higher established fees, from banks and other lending institutions striving to shore up the shrinking bottom line

In the next several weeks, posting is going to be light (as if it weren’t already) while my colleague, Dana Wilkinson, and I prepare a brand new, made-over, bulging-at-the-seams-with-new-content South Carolina Bankruptcy & Consumer Blog.

This site will get a visual makeover with a new theme, as well as some new features and resources that help further the site’s mission of helping South Carolina’s consumers and working families when they need it most.

That’s exciting. It’s also a lot of work, so we’ll be focusing our efforts on getting the new blog ready. It’ll still be available here, at the same URL — we’re not moving, so much as we’re redecorating and expanding in a massive remodeling effort.

Dana and I both appreciate your continued support over this blog’s first 18 months of “life.” The readers of this blog, the comments we get, the emails — this is why we do it. So, do please let us know if there’s anything you’d like us to focus on, or anything specific you’d like to see us include here on the made-over blog! You can use this comment form, or just drop a comment below.

Governor Mark Sanford inexplicably vetoed the exemption bill that I discussed here, that received wide and bipartisan support in both houses of the General Assembly.

Call your representatives today, please, and express your support for this law, asking them to override the governor’s veto. This is urgent.

And remember this, when you make your decision about who should next hold the governor’s position.

Here’s a great piece on how to save some money on your family’s weekly grocery bills.

With rising prices and supply issues — prompting food warehouse stores like Costco to ration rice purchases per customer — people need to do whatever they can to keep food costs down. This article follows a Conway woman (Horry County, SC) in her grocery shopping excursion. The bottom line for this mother of nine (yes, nine!) children? Seventy-two bucks and change.

And that’s twelve dollars more than she usually spends!

Some suggestions from the article and from my own personal experience:

• Never go without a list.
• Go one step beyond a list: prepare a menu plan and buy only what’s going to go on the table.
• Don’t get a full-sized cart if you need only a few items — get one of the hand carts.
• Don’t go shopping while you’re hungry!
• Be wary of bulk items. Some stores have raised their prices on bulk purchases. Make sure you check the unit price first, before making a decision.
• Here I differ with the experts: Don’t bother with coupons. Typically, they’re for higher priced items and you can get the same item for less by shopping the lower-cost brands or generic versions. I find they’re not worth the time it takes to clip them, and I can generally save more by shopping carefully. Your mileage may vary.
• Ignore the processed foods, which are almost always more expensive (and of questionable nutritional value to boot). Get potatoes, instead of pre-cut french fries. You definitely pay more for convenience.
• Don’t use the grocery store for non-grocery purchases. Get your toiletries (toothpaste, toilet paper, shampoo, etc.) at a deep-discount chain/pharmacy.

Check the article for the full list!

It’s do or die time.

That’s what it looks like at the SC General Assembly this week, as the payday industry gears up for a Thursday hearing before a House subcommittee on a Senate bill that would come very close to putting a stop to the payday industry’s free ride thus far.

The bill (which, in my opinion, fails only in the fact that it stopped short of banning this industry) would limit the number of loans a South Carolinian could have outstanding at one time, put the onus on the lender to enforce that rule, and requires a seven-day “cooling off” period between loans.

As my law school buddy and co-teaching assistant (Professor Haggard’s ‘95-’96 Legal Writing class shout-out!) Senator Vincent Sheheen (D-Kershaw) recognized last year when he and Senator John Hawkins filed a class action suit against Advance America, these lenders know full well that their products are insidiously addictive. That’s why they aim those loans at low-income and minority citizens. They set up shop, not in the tony shopping centers that cater to nearby gated communities, but in the traditionally low-income portions of our nation’s cities and towns.

They wormed their way into utility offices, offering easy money to those who were desperate to keep the power on in their homes, and next to cable companies and grocery stores for similar reasons: everyone uses them, and usually it’s the low-income, lower middle class neighbors who struggle with these basic bills (a fact which may, interestingly, be changing rapidly in this day and age of $3.99 gas and rice rationing at the local Sam’s club).

When customers predictably can’t keep up with the crushing avalanche of bank drafts, they let loose collection tactics that include threats of imminent arrest and criminal prosecution, disclosure of the customer’s “status” as a “deadbeat” to his or her employers, family, and friends, and other clearly unlawful activity.

Side note: In South Carolina, such tactics are and remain unlawful thanks to a provision in the state’s Consumer Protection Code which extends similar protections to those offered in the federal FDCPA legislation, which only applies to third party collectors, to original creditors as well. But many states don’t have that kind of protection. And even though we do have the benefit of that rule, it doesn’t stop the overreaching and the harassment — it just gives citizens a means of recourse. However, most citizens who are impacted by this kind of behavior will never seek redress.

So what’s the solution? Senator Sheheen and his colleagues in the Senate have proffered a decent first step. The industry must not be allowed to intimidate the House committee members now with accusations of “conflict of interest.” There is no conflict of interest; the allegations are misleading and play to the public’s general misunderstanding of the role of a lawyer in a legal action — the lawyer is NOT a party to the suit he brings, though some would like to blame the legal profession for the fact that cases get brought. It’s a little like blaming the doctor who treats the patient for the fact of the car accident that brought the patient to the ER in the first place.

Contact your House representatives to express your support for this bill, which you can read in full here.

To get more information on how to contact your reps (and to find out who they are), visit this page from the General Assembly’s website.