Statement of Jurisdiction - Review Sheet | THE 200, Exams of World Religions

Download Statement of Jurisdiction - Review Sheet | THE 200 and more Exams World Religions in PDF only on Docsity! No. CR-06-628 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 2006 IN THE MATTER OF MEGHAN CANNELLA, Debtor PAUL HAGE, Petitioner, v. MEGHAN CANNELLA, Respondent. On Writ of Certiorari to the United States Court of Appeals For the Thirteenth Circuit Case No. 06-4080 BRIEF FOR RESPONDENT Team Number R-48 Counsel for Respondent R-48 i QUESTIONS PRESENTED 1. WHETHER THE RESTRICTION ON ATTORNEYS THROUGH SECTION 526(4) IS NARROW AND NECESSARY, UNDER THE GENTILE STANDARD, TO UPOHLD THE LEGITIMATE GOVERNMENT INTEREST OF PROTECTING THE INTEGRITY AND FAIRNESS OF THE BANKRUPTCY SYSTEM. 2. WHETHER, UNDER A PRE-PETITION CONTRACT, AN ATTORNEY VIOLATES THE SECTION 362 AUTOMATIC STAY BY COLLECTING FEES VIA POST-DATED CHECKS AFTER THE BANKRUPTCY PETITION HAS BEEN FILED. R-48 iv TABLE OF AUTHORITIES UNITED STATES SUPREME COURT CASES Badaracco v. Comm’r of Internal Revenue, 464 U.S. 386 (1984)...........................................................................................................30 Baker v. Carr, 369 U.S. 186 (1962)...........................................................................................................18 Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002).....................................................................................................29, 30 Broadrick v. Okla., 413 U.S. 601 (1973).....................................................................................................18, 19 Caminetti v. U.S., 242 U.S. 470 (1917)...........................................................................................................26 City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789 (1984)...........................................................................................................19 City Farmers Trust Co. V. McGowan, 323 U.S. 594 (1945)...........................................................................................................13 Gentile v. State Bar of Nev., 501 U.S. 1030 (1991).............................................................................................5, 8, 9, 12 Goldfarb v. Va. State Bar, 421 U.S. 773 (1975).............................................................................................................9 Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999).............................................................................................................5 In re Sawyer, 360 U.S. 622 (1959).............................................................................................................8 Johnson v. Home State Bank, 501 U.S. 78 (1991).......................................................................................................23, 24 Lamie v. U.S. Trustee, 540 U.S. 526 (2004)................................................................................................... passim New York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1 (1988)...............................................................................................................18 R-48 v Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978).......................................................................................................8, 12 Pennsylvania Dep’t. Pub. Welfare v. Davenport, 495 U.S. 552 (1990).....................................................................................................22, 23 Sec’y of State of Md. v. Joseph H. Munson Co., Inc., 467 U.S. 947 (1984)...........................................................................................................18 U.S. v. Playboy Entm't Group, Inc., 529 U.S. 803 (2000)...........................................................................................................15 U.S. v. Raines, 362 U.S. 17 (1960).............................................................................................................18 U.S. v. Ron Pair Enterprises, Inc., 489 U.S. 235 (1989)...........................................................................................................26 UNITED STATES COURT OF APPEALS CASES Bethea v. Robert J Adams & Assocs., 352 F.3d 1125 (7th Cir. 2003), cert. denied, 541 U.S. 1043 (2004) .......................... passim Epstein v. The Official Committee of Unsecured Creditors (In re Piper Aircraft Corp.), 58 F.3d 1573 (11th Cir. 1995) .............................................................................................3 Fed. Deposits Ins. Corp. v. Goldberg, 906 F.2d 1087 (5th Cir. 1990) .....................................................................................13, 14 Fickling v. Flower, Medalie & Markowitz, Esqs. (In re Fickling), 361 F.3d 172 (2nd Cir. 2004).............................................................................................31 Gordon v. Hines (In re Hines), 147 F.3d 1185 (9th Cir. 1998) .....................................................................................24, 31 Indian Mortocycle Associates III Ltd. P’ship v. Massachusetts Hous. Fin. Agency, 66 F.3d 1246 (1st Cir. 1995)..............................................................................................20 In re Biggar, 110 F.3d 685 (9th Cir, 1997) .............................................................................................31 In re Hellums, 772 F.2d 379 (7th Cir. 1985) .............................................................................................28 R-48 vi Kruchowski v. Weyerhaeuser Co., 446 F.3d 1090 (10th Cir. 2006). ..........................................................................................3 Matter of Jartran, Inc., 732 F.2d 584 (7th Cir. 1984) .............................................................................................22 Pension Benefit Guaranty Corp. v. Sunarhauserman, Inc. (In re Sunarhauserman, Inc.), 126 F.3d 811 (6th Cir. 1997) .......................................................................................22, 23 Rittenhouse v. Eisen, 404 F.3d 395 (6th Cir. 2005) .......................................................................................29, 31 Ruan v. Butera, Beausang, Cohen & Brennan, 193F.3d 210 (3d Cir. 1999)................................................................................................20 Wright v. Sec. for Dept. of Corrections, 278 F.3d 1245 (11th Cir. 2002) .........................................................................................30 UNITED STATES BANKRUPTCY COURT CASES Biggar, Hessinger & Associates v. U.S. Trustee (In re Biggar), 185 B.R. 825 (Bankr. N.D. Cal. 1995) ..............................................................................30 Hersh v. U.S., 347 B.R. 19 (Bankr. N.D. Tex. 2006).............................................................5, 6, 7, 12, 13, In re Attorneys at Law and Debt Relief Agencies, 332 B.R. 66 (Bankr. S.D. Ga. 2005) ....................................................................................6 In re Caldor, Inc., 240 B.R. 180 (Bankr. S.D.N.Y. 1999), aff’d, 266 B.R. 575 (Bankr. S.D.N.Y. 2001) ......22 In re Colvin, 2006 WL 2385272 (Bankr.N.D. Ill. 2006).........................................................................32 In re Griffin, 313 B.R.757 (Bankr. E.D. Ill. 2004)..................................................................................22 In re Hessinger & Associates, 192 B.R. 211 (Bankr. N.D. Cal. 1996) ..............................................................................27 In re Jastrem, 224 B.R. 125 (Bankr. E.D. Cal. 1998).........................................................................22, 24 R-48 2 poor condition, for a more reliable car on credit. Id. Petitioner explained to her that the monthly payments on the newly acquired automobile could be deducted from her disposable income, under the means test, and thereby qualify her for chapter 7 relief. Id. Relying on Petitioner’s advice Ms. Cannella purchased a new 2005 Nissan Sentra and fully financed it. (R. at 5). Petitioner has admitted that he would not have given Ms. Cannella the advice to purchase a newer car on credit had she not been planning to file bankruptcy. (R. at 4). Further, Petitioner does not contest the fact that he is subject to the restrictions in section 526 because he is a “debt relief agency.” (R. at 7). Petitioner’s usual fee structure is to charge debtors a $1,000.00 in fees for representation in all aspects of their chapter 7 bankruptcy cases. (R. at 4). As such, Petitoner and Ms. Cannella entered into a retention contract on November 10, 2005, under which Petitioner contracted to represent Ms. Cannella in all aspects of her chapter 7 case, in return for $1,000.00. (R. at 4). Because Ms. Cannella did not have the full $1,000.00 up front, she initially paid $600.00 in cash and wrote four post-dated checks covering the remaining $400.00, with the agreement that they would be cashed after the petition was filed. (R. at 4). Of the four post-dated checks, Petitioner cashed two of them, one on December 1, 2005, and the second on January 1, 2006, after the filling of Ms. Cannella’s chapter 7. II. NATURE OF THE PROCEEDINGS Petitioner filed Ms. Cannella’s chapter 7 petition in November 2005. Shortly after the petition was filed Ms. Cannella obtained new counsel who filed an adversary action against Petitioner seeking recovery of all the fees paid to Petitioner by Ms. Cannella.(R. at 6). Two counts were alleged. The first count sought recovery of all fees paid to Petitioner, plus reasonable attorneys fees and costs for violation of section 526(a)(4). Id. The second count R-48 3 sought recovery of the $200.00 collected by Petitioner’s actions of cashing two post-dated checks pursuant to a pre-petition retention contract, in violation of section 362. Id. Petitioner moved for summary judgment which was granted by the United States Bankruptcy Court for the Northern District of Bliss, on June 12, 2006. (R. at 6). Ms. Cannella appealed to the United States District Court for the Northern District of Bliss, which affirmed the Bankruptcy Court without opinion. Id. Ms. Cannella then appealed to the United States Court of Appeals for the Thirteenth Circuit which reversed the District Court. (R. at 17) STANDARD OF REVIEW Interpretation and application of the Bankruptcy Code is a question of law, to which the court reviews under a de novo standard of review. Epstein v. The Official Committee of Unsecured Creditors (In re Piper Aircraft Corp.), 58 F.3d 1573, 1576 (11th Cir. 1995). In this matter, there are no genuine issues of material fact in dispute; consequently, the court is only charged with the task of determining whether the substantive law was correctly applied by the lower court. Kruchowski v. Weyerhaeuser Co., 446 F.3d 1090, 1092 (10th Cir. 2006). SUMMARY OF THE ARGUMENT The bankruptcy system provides relief to debtors unable to meet their financial burdens by giving them some breathing room to asses their current financial situation upon the filing of a bankruptcy petition. In order to effectuate this purpose, the bankruptcy system provides a very extensive code with rules that regulate the bankruptcy process that judges and attorneys are expected to follow. Two such sections are at issue in this case, section 526(a)(4) and section 362. First, through section 526(a)(4), the code imposes ethical limitations on attorneys from advising a debtor to incur additional debt in order to manipulate the means test. To test the R-48 4 constitutionality of ethical limitations under the First Amendment, this Court has developed a two part test. First, the ethical limitation must serve a legitimate government interest. Second, the limitation must be narrow and necessary to support the legitimate government interest. In this case, Congress specifically enacted the ethical limitation in § 526(a)(4) in order to combat abusive filings by debtors and abusive behavior by attorneys in luring debtors into filing bankruptcy. Protecting the integrity and fairness of the bankruptcy system through an ethical limitation is a legitimate interest. Further, Congress limited the application of the ethical limitation to situations where the filing of a bankruptcy petition was imminent, which prevents attorneys from advising a debtor to incur additional debt if manipulating the means test is the impelling cause of incurring such debt. Because the ethical limitation only prohibits speech that is intended to manipulate the means test, the limitation is sufficiently narrow to support the legitimate government interest. Second, through the plain language of section 362, it is a violation to attempt to collect on any pre-petition claims after the filling of bankruptcy, and attorney’s fees are of no exception. Petitioner and Ms. Cannella entered into one retention contract prior to the filing of her bankruptcy and because Petitioner’s right to payment stems from that pre-petition contract, his actions in cashing two post-dated checks represent an act to collect a claim against Ms. Cannella that arose before the commencement of her chapter 7. Furthermore, there are very few exceptions to the automatic stay and collection of attorneys fees that arise from post-petition services contracted for via a pre-petition retention contract is not one of them. Further any additional exceptions to section 362 must be created by Congress and not the judiciary. R-48 7 interpretation, the court held that “if Congress had wanted attorneys excluded from the term ‘debt relief agency’ (and, as a result, the requirements of BAPCPA at issue here) it surely would have taken this opportunity to exclude them from what otherwise they are so plainly within.” Id. 23. Therefore, because attorneys are not among the excluded parties from the general definition of debt relief agency, they plainly fall within its definition. Like the plain language of the statute, the legislative history provides a strong indication that Congress included attorneys in the definition of “debt relief agency.” Although the court in Olson held that the plain language of the section included attorneys within the definition of “debt relief agency,” the court also examined the legislative history. 350 B.R. at 911. In Olson, an attorney challenged the constitutionality of the restriction found in § 526(a)(4), in a factual situation almost identical to Hersh. Id. Examining the legislative history, the court found BAPCPA’s “consumer protections include provisions strengthening professionalism standards for attorneys and others who assist consumer debtors with their bankruptcy cases” Id. at 912 (internal citations omitted) (citing H.R.Rep. No. 109-31, 109th Cong. 1st Sess. at 4. reprinted in 2005 U.S.C.C.A.N. at 103). Additionally, Senator Feingold proposed amendment No. 93 to Congress which would have excluded attorneys from the definition of debt relief agency. Id. The Senate, however, did not act on Senator Feingold’s amendment. Id. Here, Petitioner is a bankruptcy attorney in the State of Bliss. Like the attorneys in both Hersh and Olson, Petitioner challenges the constitutionality of § 526(a)(4). As both courts note, the plain meaning of § 526(a)(4) indicates the restrictions apply to a “debt relief agency,” which includes attorneys. The definition of “bankruptcy assistance,” includes “providing legal representation.” Petitioner provided legal representation to Ms. Cannella. Furthermore, the definition of “debt relief agency” includes “any person who provides any bankruptcy assistance R-48 8 to an assisted person in return for the payment of money.” Therefore, Petitioner is a “debt relief agency,” and subject to the restrictions in § 526(a)(4). Also, a plain language analysis indicates that attorneys are not listed in any of the exceptions to the general definition of “debt relief agency,” but Congress could have excluded attorneys if they intended. Additionally, in his pleadings Petitioner does not contest the fact that he is subject to § 526 “because he was a ‘debt relief agency.’” (R. at 7). This is a Federal Rules of Evidence 810(d)(2) party opponent admission, and is binding on Petitioner. Fed. R. Evid. 801. B. First Amendment jurisprudence demands that ethical limitations are subjected to a balancing test under intermediate scrutiny. This Court has consistently held that the government may regulate attorney speech, when that speech abuses the trust attorneys hold as agents of the justice system. In re Sawyer, 360 U.S. 622, 646-47 (1959) (Stewart, J. concurring). Because of the role attorneys play within the justice system, their speech can be “extremely circumscribed” inside the courtroom, Gentile, 501 U.S. at 1071, and is subject to the “promulgated rules of ethics” outside the courtroom and during the pendency of a case. Gentile, 501 U.S. at 1073. This court has specifically stated, “[w]e expressly contemplated that the speech of those participating before the courts could be limited.” Id. at 1072 (emphasis in original). The government has a particularly strong interest in maintaining ethical standards among attorneys. Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 460 (1978). In that case, the court upheld an ethical restriction on in-person solicitation by attorneys, when an attorney approached accident victims, uninvited, and solicited representation on a contingent fee basis. Id. Later, the accident victims attempted to terminate the attorney’s employment. Id. at 467. The court reasoned that the government interest is especially great, because “lawyers are essential to the R-48 9 primary governmental function of administering justice, and have historically been 'officers of the courts.' " Id. at 460 (quoting Goldfarb v. Va. State Bar, 421 U.S. 773, 792 (1975)). The court specifically recognized that government has a “legitimate and indeed ‘compelling’ interest in preventing those aspects of solicitation that involve fraud, undue influence, intimidation, overreaching, and other forms of ‘vexatious conduct.’” Id. at 462. Further, the court held that the state has a general interest in protecting consumers. Id. at 461. Government regulation of attorney speech is subject to a more lenient test than strict scrutiny. Gentile, 501 U.S. at 1073. In that case, when evaluating the constitutionality of a gag order issued by a state court, the court applied an intermediate balancing test. Id. The test weighed the state’s interest in the regulation of attorneys against an attorney’s First Amendment interest in the kind of speech at issue. Id. The court held that a constitutional balance is struck when a limitation protects the “integrity and fairness of a State’s judicial system, and it imposes only narrow and necessary limitations on lawyers’ speech.” Id. at 1075. Although the challenged order was found to be void for vagueness, the court held that there is a substantial interest in preventing attorneys from imposing costs on the judicial system. Id. Additionally, the regulation of attorney speech was limited, because it only applied to speech that was substantially likely to impose costs on the judicial system. Id. The Federal government often imposes additional requirements on attorneys who practice in the federal courts, including ethical limitations. For instance, to qualify for admission to the Bar of this Court, attorneys must have been admitted to practice in the highest court of a State for a period of three years immediately before the date of application,2 “must not have been the 2 Attorneys must have been admitted to practice before the highest court of a “State, Commonwealth, Territory or Possession, or the District of Columbia for a period of at least three years before the date of application. Sup. Ct. R. 5. R-48 12 attorneys who appear demonstrate “good moral and professional character,” in adopting the prohibition in § 526(a)(4), Congress decided to prevent attorneys from advising their clients from manipulating the means test, by imposing an ethical limitation. C. The ethical limitation in section 526(a)(4) is narrow and necessary to support the legitimate government interest of protecting the integrity and fairness of the bankruptcy system. The balancing test from Gentile requires a “legitimate interest in regulating the activity in question,” that imposes only “narrow and necessary limitations on lawyers’ speech.” 501 U.S. at 1075. There, the court held that protecting the integrity and fairness of the judicial system is a legitimate interest. Id. Furthermore, when government acts to prevent “fraud, undue influence, intimidation, overreaching, and other forms of ‘vexatious conduct,’” it acts with a compelling interest. Ohralik, 436 U.S. at 467. A restraint on speech is narrowly tailored if the limitation is limited on its face to prohibit only speech that is likely to have a prejudicial effect on the legitimate government interest. Gentile, 501 U.S. at 1076. In that case, the narrowly tailored limitation only applied to extrajudicial attorney speech, or speech occurring outside the courtroom, that would materially prejudice a judicial proceeding. Id. The court in Hersh specifically addressed whether § 526(a)(4) was sufficiently narrow. Although the court held the section was not sufficiently narrow, the court improperly construed the limiting language in § 526(a)(4), “in contemplation of bankruptcy.” 347 B.R. at 24. The court held the section was overinclusive because it prevents attorneys from advising clients to take lawful actions, and prevents advice to take prudent actions. Id. at 25. The court used two examples to illustrate the section’s perceived overinclusivness. Refinancing at a lower rate to reduce payments and forestall bankruptcy, and taking on secured debt in order to secure transportation and continued employment. Id. at 24. R-48 13 The plain meaning of contemplation is “intention” or “expectation.” Websters New International Dictionary 573 (2d ed. 1950). Therefore, § 525(a)(4) only prevents an attorney from advising a debtor to incur debt because he or she intends to file for bankruptcy, it does not prevent an attorney from counseling a debtor when they do not intend to file for bankruptcy. Additionally, the phrase “in contemplation of bankruptcy,” is further defined as “[t]he thought of declaring bankruptcy because of the inability to continue current financial operations, often coupled with action designed to thwart the distribution of assets in a bankruptcy proceeding.” Black’s Law Dictionary 336 (8th ed. 2004). The phrase is also termed “contemplation of insolvency.” Id. This court has previously interpreted the phrase “in contemplation” before in City Farmers Trust Co. V. McGowan. 323 U.S. 594, 599 (1945). There, in interpreting a tax statute, the court held the phrase “in contemplation of death” meant, “the thought of death is the impelling cause of the transfer.” Id. More recently, the Fifth Circuit interpreted the phrase “in contemplation of insolvency.” Fed. Deposits Ins. Corp. v. Goldberg, 906 F.2d 1087, 1091 (5th Cir. 1990). There, the Federal Deposits Insurance Corporation, acting as a receiver for a failed bank, attempted to void a transaction by the bank with a principle shareholder. Id. The transaction could be voided if it was made “in contemplation of insolvency,” pursuant to 12 U.S.C. § 91. Id. at 1988. The court held that a bank is in contemplation of insolvency “when the fact becomes reasonably apparent to its officers that the concern will presently be unable to meet its obligations, and will be obliged to suspend its ordinary operations." Id. (internal citations omitted). Put another way, “if the officers of the bank knew, or ought to have known, that at the time of the transfers the R-48 14 suspension of the regular business of the bank was imminent, the transfers were made in contemplation of insolvency." Id. (internal citations omitted). Congress has a legitimate interest in restricting attorney conduct through § 526(a)(4), in order to protect the integrity and fairness of the bankruptcy system. Congress crafted BAPCPA, including the prohibition in § 526(a)(4), to be a “comprehensive package of reform measures” designed to “improve bankruptcy law and practice by restoring personal responsibility and integrity in the bankruptcy system and ensure that the system is fair for both debtors and creditors.” 2005 U.S.C.C.A.N. 88, 89. During the past decade “the number of bankruptcy filings had nearly doubled to more than 1.6 million cases filed in fiscal year 2004.” H.R. Rep. No 109-31, 109th Cong., 1st Sess. at 4, reprinted in 2005 U.S.C.C.A.N. at 91 (emphasis in original). Congress concluded that this increase in consumer bankruptcy filings has had adverse consequences on our nation’s economy. For example, in 1997 alone more than $44 billion of debt was discharged by debtors in bankruptcy. As a result, Congress determined that the bankruptcy system “ha[d] loopholes and incentives that allow and - sometimes - even encourage[d] opportunistic personal filing and abuse. Id. Further, Congress determined that attorneys sometimes played a role in exploiting the bankruptcy system. Id. More specifically, Congress found that in many cases attorneys in bankruptcy mills were unnecessarily luring consumers into bankruptcy. 151 Cong. Rec. S2472 (March 10, 2005). The two most common complaints of people who had received a bankruptcy discharge were a lack of information, and concern about the practice of their lawyers. The Consumer Bankr. Reform Act: Seeking Fair and Practical Solutions to Consumer Bankr. Crisis, Hearing on S. 1301 before Senate Judiciary Comm., 105th Cong., 2d Sess. 29 (1998). R-48 17 are no longer implicated. The Court of Appeals properly came to this conclusion, when it noted that most of Petitioner’s examples, which were copied from the Hersh court, “depend on a misreading of the statute.” (R. at 11). The first example, advising a debtor to refinance a loan at a lower rate, to either forestall or void bankruptcy is not “in contemplation of bankruptcy,” because bankruptcy is not “imminent,” like the Goldberg case. The second example, advising a debtor to incur secured debt, in order to secure transportation and future employment is also “not in contemplation of bankruptcy.” First, it is unclear in this example if obtaining employment would allow the debtor to avoid bankruptcy. If so, bankruptcy was not imminent at the time of the transaction. Second, even if bankruptcy is imminent, bankruptcy was not the impelling cause of the transfer, like McGowan. Instead, continued employment was the impelling cause of the transfer. In this situation, however, bankruptcy was the impelling cause of the transfer, because Petitioner specifically advised the debtor to incur debt in order to manipulate the means test. (R. at 11). This is illustrative of the type of conduct Congress intended to prohibit by using the phrase “in contemplation of bankruptcy.” Petitioner specifically advised debtor to incur additional debt, because “the monthly payments on the new secured automobile debt could be deducted from her disposable income and would make it possible for her to pass the means test and use chapter 7 instead of chapter 13.” (R. at 5.) Furthermore, he admitted that he would not have advised the debtor to purchase a car on credit if she had not been planning to file bankruptcy. Id. Therefore, Petitioner advised his client to incur additional debt “in contemplation of bankruptcy,” and violated the ethical prohibition in § 526(a)(4). R-48 18 D. The facial overbreadth exception to First Amendment jurisprudence is not applicable to section 526(a)(4), because the section is sufficiently narrow. Failing an as-applied challenge, Petitioner’s only recourse is to make a facial challenge against § 526(a)(4). However, this facial challenge fails, because there is no danger of a chilling effect on speech or self censorship. There are prudential considerations that limit the challenges that courts are willing to hear. Generally, plaintiffs must assert his or her own legal rights or interests, and cannot condition relief on the legal rights or interests of third parties. Sec’y of State of Md. v. Joseph H. Munson Co., Inc., 467 U.S. 947, 955 (1984). This consideration serves two purposes. First, it "frees the Court not only from unnecessary pronouncement on constitutional issues, but also from premature interpretations of statutes in areas where their constitutional application might be cloudy." U.S. v. Raines, 362 U.S. 17, 22 (1960). Second, it assures the court that the issues before it will be concrete and sharply presented. Baker v. Carr, 369 U.S. 186, 204 (1962). With these limitations in mind, Petitioner contends that the restriction on attorneys through § 526(a)(4) is facially invalid for overbreadth. (R. at 9). To prevail on a facial overbreadth attack the Petitioner must demonstrate that even though the challenged law may be validly applied in this case, it nevertheless is so broad that it may inhibit the constitutionally protected speech of third parties. New York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1, 11 (1988). This court has indicated that application of the overbreadth doctrine is "strong medicine" that should be invoked only "as a last resort." Broadrick v. Okla., 413 U.S. 601, 613 (1973). The court reasoned that the application of facial overbreadth is limited, because it is an exception to the traditional First Amendment rules. Id. at 615. In that case, Oklahoma state employees brought a facial overbreadth challenge to a statute that prohibited certain employees from R-48 19 engaging in solicitation for political campaigns, membership in any committee of a political party, and prevented management of the affairs of any political party or in any political campaign. Id. at 605-606. The court held that “the overbreadth of a statute must not only be real, but substantial as well, judged in relation to the statute's plainly legitimate sweep." Broadrick, 413 U.S., at 615 (citation omitted). A statute is not facially overbroad if the statute's very existence does not inhibit free expression. City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 799 (1984). In that case, this court held an ordinance prohibiting posting of signs on public property was not overbroad. Id. at 791. In determining any inhibition on free expression, the court looked for a realistic danger that the statute itself will significantly compromise recognized First Amendment protections of parties not before the Court. Id. at 801. However, the court held that the realistic danger must go beyond merely conceiving of some impermissible applications of a statute. Id. Here, § 526(a)(4) is not so broad that it inhibits the constitutionally protected speech of third parties. The overbreadth in that section is neither real nor substantial. Because the statute is sufficiently narrow, and proscribes speech that advises a debtor to incur debt only “in contemplation of bankruptcy,” meaning that the bankruptcy is imminent, and that bankruptcy is the impelling force behind the addition of debt, the statute is not overbroad. Additionally, even if this court views the statute as overbroad, it is not substantially overbroad, for purposes of a facial overbreadth challenge. Substantial overbreadth requires something beyond conceiving of some impermissible applications of a statute, and Petitioner has done nothing beyond this to demonstrate a real and substantial danger of the section inhibiting the constitutionally protected speech of third parties. Therefore, the section is not substantially overbroad. R-48 22 obligation to pay the fee is conditional, fits within § 101(5)(A). See In re Jastrem, 224 B.R. 125, 129 (Bankr. E.D. Cal. 1998). Further, if such “right to payment” arose prior to the filing of the bankruptcy petition then any attempt to collect is properly stayed by the automatic stay. 11 U.S.C.A. § 362(a)(6) (West 2006). 1. Petitioner’s “right to payment,” and therefore “claim,” for legal services arose pre-petition, at the point that Ms. Cannella entered into a retention contract with Petitioner. As a matter of timing, the filing of the bankruptcy serves as a point of demarcation between claims that arose prior to the bankruptcy, which are subject to the automatic stay, and those that arose after the bankruptcy, which are not generally subject to the stay. See 11 U.S.C.A. § 362(a) (West 2006) et sec. This Court, following the plain meaning rule of statutory construction, has stated that “the plain meaning of a ‘right to payment’ is neither more nor less than an enforceable obligation.” Pennsylvania Dep’t. Pub. Welfare v. Davenport, 495 U.S. 552, 559 (1990). Under the code, contract-based claims arise at the time the contract is entered into rather than upon subsequent events such as termination or performance. In re Griffin, 313 B.R.757, 762 (Bankr. E.D. Ill. 2004), citing to In re Caldor, Inc., 240 B.R. 180, 192 (Bankr. S.D.N.Y. 1999), aff’d, 266 B.R. 575 (Bankr. S.D.N.Y. 2001); see also Matter of Jartran, Inc., 732 F.2d 584, 587 (7th Cir. 1984) (holding that a creditor who performed services after the petition was filed held a pre-petition claim, rather than a post-petition administrative expense claim, because “the agreement among the parties was entered into … before the petition was filed.”); see also Pension Benefit Guaranty Corp. v. Sunarhauserman, Inc. (In re Sunarhauserman, Inc.), 126 F.3d 811, 818-819 (6th Cir. 1997). In that case, the court was faced with an analogous question of whether an attorney can collect unpaid installments under a pre-petition employment agreement, R-48 23 which obligated debtors to pay $1,150.00 for attorney’s fees to be paid in five payments to occur both pre-petition and post-petition. Id. at 759. The court reasoned that because counsel began billing for work done the day after the retention contract was entered but prior to the filing of their bankruptcy, the elements necessary to create a right of payment occurred pre-petition. Id. at 763. The court further held that in order for there to be a post-petition contract there must really be a post-petition contract, meaning the offer, acceptance, and exchange of consideration must in fact occur post-petition to fall outside the scope of the automatic stay. Id. One contract gives rise to one claim, including a “right to payment, whether or not such right is … fixed, contingent, matured [or] unmatured.” Bethea v. Robert J Adams & Assocs., 352 F.3d 1125, 1128-1129 (7th Cir. 2003), cert. denied, 541 U.S. 1043, (2004) (citing to Pennsylvania Dep’t of Public Welfare v. Davenport, 495 U.S. at 559, overruled on other grounds by Johnson v. Home State Bank, 501 U.S. 78, (1991)). In that case, the Seventh Circuit was faced with a situation similar to the case at hand; where three Chapter 7 debtors hired lawyers, via separate pre-petition retention contracts, to fully represent them in their bankruptcy cases. 3 Id. at 1126. Each pre-petition retention contract obligated the debtors to pay a lump sum, inclusive of both pre-petition and post-petition costs, to be paid in installments, some payments being made pre-petition and some to be collected post-petition. Id. After discharge, the debtors commenced proceedings to challenge the bankruptcy attorney’s post-petition collection of the pre-petition contractual installment payments. Id. Recognizing that the code is a complex compromise among debtors and different creditors, the court reasoned that under an attorney retention contract, the “right to payment” arises when the contract is signed, not as portions of 3 Although the Bethea court classifies these agreements as retainer agreements, the court does not view them as typical retainer agreements, specifically noting that they were unlike most retainers because they were to be paid over time both in pre-petition and post-petition installments. See Hines, 352 F.3d at 1126. The name pre-petition retention contract has been substituted, both to avoid any confusion and because the retainers are analogous to the retention contract at dispute in this case R-48 24 the contract are performed, noting that a contrary holding contradicts the plain language of the code. Id. at 1129. In contrast, the Ninth Circuit has determined that a “right to payment” can only arise at the point that an attorney actually renders post-petition services that match up to debtor’s pre- petition promise to pay. Gordon v. Hines (In re Hines), 147 F.3d 1185, 1191 (9th Cir. 1998). Faced with a factual scenario analogous to this case, the court in Hines criticized the code and Congress for failing to deal with the problem of pre-petition attorney fee agreements that cover the payment of post-petition attorney services. Id. at 1190. Relying on a “doctrine of necessity” and only an unsubstantiated assertion of how “it strains the statutory language a good deal to characterize the attorney as having violated the section 362(a)(6) automatic stay by seeking payment once the post-petition services have thereafter been performed,” the court determined that the “right to payment” stemming from post-petition services, regardless of whether contracted for pre-petition, does not arise until services are rendered and thus post-petition. Id. at 1191. However, the Seventh Circuit in Bethea explicitly disagreed with Hines, noting that the Ninth Circuit’s decision in essence shatters each retainer agreement into multiple claims by interpreting the definition of “claim,” for purposes of § 101(5) and § 362. Bethea, 352 F.3d at 1129. The Seventh Circuit noted further that the holding in Hines potentially means that each month, each day, and each hour that a lawyer performs services for the debtor or the debtor’s estate would become a separate claim. See Id. at 1129. This would require the court to involve itself in an accounting of fees charged and services rendered on a case-by-case basis, having to break down fees, which may be typically charged on a flat fee basis, into an hourly rate, in order to prorate flat fees between pre-petition and post-petition work. See In re Jastrem, 224 B.R. at R-48 27 claim is “reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.” 11 U.S.C.A. § 101(5)(A) (West 2006). As discussed above, because Petitioner’s claim arose pre-petition his actions of cashing two post-dated checks are a direct violation of the automatic stay. Negotiating a post-dated check after the bankruptcy petition is filed, but before the entry of discharge, violates the automatic stay. In re Shell, 312 B.R. 431, 436 (Bankr. M.D. Ala 2004). In that case, debtor agreed to pay $900.00 for the services of an attorney, of which debtor did not make any payment prior to the filing of his bankruptcy, but did deliver five post-dated checks for the full $900.00. Id. at 433. The court, following the reasoning of the Seventh Circuit in Bethea, and rejecting the reasoning of the Ninth Circuit in Hines, determined that the practice of taking post-dated checks from clients in payment for attorney’s fees runs afoul the Code. Id. at 435. The purpose of the Code is to give a debtor a “fresh start” and in accomplishing that purpose it is not surprising that the code provides for only very limited exceptions to the automatic stay and discharge provisions, of which attorney’s fees is not one. In re Hessinger & Associates, 192 B.R. 211, 218 (Bankr. N.D. Cal. 1996). In that case, the law firm in question routinely took post-dated checks from clients in connection with pre-petition fee agreements, was found to be a violation of the automatic stay. Id. at 218. The court noted that “the Bankruptcy Code is nothing if not ‘coherent and consistent.’” See Id. Because attorney’s fees do not fall within the exceptions to the automatic stay, the court ordered the law firm to cease and desist attempts to collect on pre-petition fee contracts post-petition. Id. Further, the automatic stay applies to the application of post-petition funds to pay for pre- petition debts of chapter 7 debtors. In re Hellums, 772 F.2d 379, 381 (7th Cir. 1985). In that case, a chapter 7 debtor executed an automatic withdrawal authorization pre-petition, under R-48 28 which funds from his wages were to be transferred to his credit union, a portion of which was for payment of a loan he owed, and the other half going to his savings account. Id. After the filing of debtor’s chapter 7, the credit union continued to apply half of his automatic withdrawals to the outstanding balance on his pre-petition loan. Id. The court noted that post-petition wages are not property of the estate and that debtors can dispose of their post-petition earnings as they choose even voluntary payment of otherwise dischargeable debts. Id. However, the court noted that the automatic stay was intended to broadly prevent attempts in any way to collect a pre-petition debt, including authorizations to withdraw payments post-petition that may have voluntarily given pre- petition. See Id. (emphasis added). Therefore, absent some positive indication that debtor intended to voluntarily assume the pre-petition debt, any attempt to collect on that pre-petition debt violated the automatic stay, regardless of whether the funds being used to pay the debt were pre-petition wages which are property of the estate, or post-petition wages which belong to the debtor. Id. This prohibition applies to post-dated checks in the same way it applies to automatic withdrawals. As discussed in the previous section, Petitioner’s claim arose pre-petition, when the retention contract was signed. As such, under the plain language of the automatic stay, any attempt to collect on that claim is a violation of the automatic stay. Here, Petitioner’s actions of accepting post-dated checks and cashing them post-petition are analogous to post-dated checks taken and cashed post-petition in Shell and run afoul the code. Analogous to the court’s reasoning in Hessinger, the code is coherent and consistent and post-petition collection of pre- petition attorney fee agreements are not excepted by the plain language of the automatic stay. Further, as the Hellums court noted, whether an attorney collects pre-petition funds (property of the estate) or post-petition funds (property of the debtor) is irrelevant if is an attempt R-48 29 to collection on a pre-petition debt. Similarly, in this case, whether Petitioner was collecting pre- petition funds or post-petition funds is irrelevant since Petitioner’s claim arose pre-petition. Similar to the automatic withdrawals that the debtor voluntarily authorized pre-petition in Hellums, collection that the court found to be a violation of the automatic stay, the four post- dated checks that Ms. Cannella voluntarily issued were to be drawn from post-petition funds and Petitioner’s actions of cashing those checks although from her post-petition wages, is likewise a violation of the automatic stay. As the Court of Appeals correctly recognized, Petitioner’s “attempt to collect on his contractual legal right to payment from the debtor’s post-petition assets is a clear violation of the automatic stay.” (R. at 15). B. Public policy is not a legitimate reason for creating a judicial exception to the automatic stay provisions of § 362 to allow for collection of attorney fees earned post- petition, which were contracted for pre-petition. This Court has aptly noted that arguments about what makes for good public policy should be directed to Congress. Under the separation of powers created within our government, the role of the judiciary is to enforce the laws that Congress enacts, not write a different one that judges think superior. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 460-462 (2002); see also Rittenhouse v. Eisen, 404 F.3d 395, 397 (6th Cir. 2005). “Judges are not entitled to override the legislative approach with a lawyer-centric public policy that puts member of their own social class higher in the priority list at the expense of other creditors, or of the debtors themselves.” Bethea, 352 F.3d at 1128. In Lamie v. U.S. Trustee, this Court noted its unwillingness to soften Congress’s chosen words, even if it believes them to be overly harsh or believes them to lead to a harsh outcome, is longstanding. 540 U.S. at 528. While determining whether or not attorneys were intentionally omitted from those professionals entitled to receive compensation from the bankruptcy estate, R-48 32 Colvin, where debtors not only entered into a pre-petition retainer agreement, but then after their bankruptcy filing, signed a post-petition retainer agreement with the same law firm for representation on a motion to redeem. 2006 WL 2385272, 1 (Bankr.N.D. Ill. 2006). The Colvin court noted that a chapter 7 debtor is free to employ an attorney post-petition for their own benefit as long as the attorney is not compensated from estate funds, and as such, upheld the validity of the separate post-petition contract that was entered. See Id. The Court of Appeals correctly noted that they “are not free to legislate from the bench.” (R. at 16). Following this Court’s analysis in Lamie, which looked to the plain language of the code, here it is not the court’s job to rewrite the code where it deems there is a need or a more effective way of handling issues. That is a job for Congress. As illustrated by the alternative method of creating two separate contracts that were discussed in Bethea and upheld in Colvin, alternatives do exist to allow for indigent debtors to retain counsel. Attorney’s are not turning away debtor’s whenever they are unable to pay for all fees up front prior to the commencement of the bankruptcy filings, in fact the payment plan at issue in this case represents an attorney created solution to solve the problem of representing debtors who have insufficient funds to pay all of the attorney’s fees up front. Attorneys and debtors alike are resourceful by nature. A ruling upholding the Court of Appeals in this case will not cause that resourcefulness to cease, only to become more creative. CONCLUSION For the foregoing reasons, Ms. Cannella respectfully requests that this court uphold the ruling of the United States Court of Appeals for the Thirteenth Circuit. R-48 A Appendix “A” 11 U.S.C.A. 101 (West 2006) § 101. Definitions In this title the following definitions shall apply: (4A) The term "bankruptcy assistance" means any goods or services sold or otherwise provided to an assisted person with the express or implied purpose of providing information, advice, counsel, document preparation, or filing, or attendance at a creditors' meeting or appearing in a case or proceeding on behalf of another or providing legal representation with respect to a case or proceeding under this title. (5) The term "claim" means-- (A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. (12A) The term "debt relief agency" means any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer under section 110, but does not include-- (A) any person who is an officer, director, employee, or agent of a person who provides such assistance or of the bankruptcy petition preparer; (B) a nonprofit organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986; (C) a creditor of such assisted person, to the extent that the creditor is assisting such assisted person to restructure any debt owed by such assisted person to the creditor; (D) a depository institution (as defined in section 3 of the Federal Deposit Insurance Act) or any Federal credit union or State credit union (as those terms are defined in section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such depository institution or credit union; or (E) an author, publisher, distributor, or seller of works subject to copyright protection under title 17, when acting in such capacity. R-48 B Appendix B 11 U.S.C.A. 362 § 362. Automatic Stay (a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of-- (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title; (2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title; (3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate; (4) any act to create, perfect, or enforce any lien against property of the estate; (5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title; (6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title; (7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and (8) the commencement or continuation of a proceeding before the United States Tax Court concerning a corporate debtor's tax liability for a taxable period the bankruptcy court may determine or concerning the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief under this title. (b) The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay-- (1) under subsection (a) of this section, of the commencement or continuation of a criminal action or proceeding against the debtor; (2) under subsection (a)-- (A) of the commencement or continuation of a civil action or proceeding-- (i) for the establishment of paternity; (ii) for the establishment or modification of an order for domestic support obligations; (iii) concerning child custody or visitation; (iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property that is property of the estate; or (v) regarding domestic violence; R-48 B (16) under subsection (a) of this section, of any action by a guaranty agency, as defined in section 435(j) of the Higher Education Act of 1965 or the Secretary of Education regarding the eligibility of the debtor to participate in programs authorized under such Act; (17) under subsection (a) of this section, of the exercise by a swap participant or financial participant of any contractual right (as defined in section 560) under any security agreement or arrangement or other credit enhancement forming a part of or related to any swap agreement, or of any contractual right (as defined in section 560) to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more such agreements, including any master agreement for such agreements; (18) under subsection (a) of the creation or perfection of a statutory lien for an ad valorem property tax, or a special tax or special assessment on real property whether or not ad valorem, imposed by a governmental unit, if such tax or assessment comes due after the date of the filing of the petition; (19) under subsection (a), of withholding of income from a debtor's wages and collection of amounts withheld, under the debtor's agreement authorizing that withholding and collection for the benefit of a pension, profit-sharing, stock bonus, or other plan established under section 401, 403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue Code of 1986, that is sponsored by the employer of the debtor, or an affiliate, successor, or predecessor of such employer-- (A) to the extent that the amounts withheld and collected are used solely for payments relating to a loan from a plan under section 408(b)(1) of the Employee Retirement Income Security Act of 1974 or is subject to section 72(p) of the Internal Revenue Code of 1986; or (B) a loan from a thrift savings plan permitted under subchapter III of chapter 84 of title 5, that satisfies the requirements of section 8433(g) of such title; but nothing in this paragraph may be construed to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title; (20) under subsection (a), of any act to enforce any lien against or security interest in real property following entry of the order under subsection (d)(4) as to such real property in any prior case under this title, for a period of 2 years after the date of the entry of such an order, except that the debtor, in a subsequent case under this title, may move for relief from such order based upon changed circumstances or for other good cause shown, after notice and a hearing; (21) under subsection (a), of any act to enforce any lien against or security interest in real property-- (A) if the debtor is ineligible under section 109(g) to be a debtor in a case under this title; or (B) if the case under this title was filed in violation of a bankruptcy court order in a prior case under this title prohibiting the debtor from being a debtor in another case under this title; R-48 B (22) subject to subsection (l), under subsection (a)(3), of the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained before the date of the filing of the bankruptcy petition, a judgment for possession of such property against the debtor; (23) subject to subsection (m), under subsection (a)(3), of an eviction action that seeks possession of the residential property in which the debtor resides as a tenant under a lease or rental agreement based on endangerment of such property or the illegal use of controlled substances on such property, but only if the lessor files with the court, and serves upon the debtor, a certification under penalty of perjury that such an eviction action has been filed, or that the debtor, during the 30-day period preceding the date of the filing of the certification, has endangered property or illegally used or allowed to be used a controlled substance on the property; (24) under subsection (a), of any transfer that is not avoidable under section 544 and that is not avoidable under section 549; (25) under subsection (a), of-- (A) the commencement or continuation of an investigation or action by a securities self regulatory organization to enforce such organization's regulatory power; (B) the enforcement of an order or decision, other than for monetary sanctions, obtained in an action by such securities self regulatory organization to enforce such organization's regulatory power; or (C) any act taken by such securities self regulatory organization to delist, delete, or refuse to permit quotation of any stock that does not meet applicable regulatory requirements; (26) under subsection (a), of the setoff under applicable nonbankruptcy law of an income tax refund, by a governmental unit, with respect to a taxable period that ended before the date of the order for relief against an income tax liability for a taxable period that also ended before the date of the order for relief, except that in any case in which the setoff of an income tax refund is not permitted under applicable nonbankruptcy law because of a pending action to determine the amount or legality of a tax liability, the governmental unit may hold the refund pending the resolution of the action, unless the court, on the motion of the trustee and after notice and a hearing, grants the taxing authority adequate protection (within the meaning of section 361) for the secured claim of such authority in the setoff under section 506(a); (27) under subsection (a) of this section, of the exercise by a master netting agreement participant of any contractual right (as defined in section 555, 556, 559, or 560) under any security agreement or arrangement or other credit enhancement forming a part of or related to any master netting agreement, or of any contractual right (as defined in section 555, 556, 559, or 560) to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more such master netting agreements to the R-48 B extent that such participant is eligible to exercise such rights under paragraph (6), (7), or (17) for each individual contract covered by the master netting agreement in issue; and (28) under subsection (a), of the exclusion by the Secretary of Health and Human Services of the debtor from participation in the medicare program or any other Federal health care program (as defined in section 1128B(f) of the Social Security Act pursuant to title XI or XVIII of such Act). The provisions of paragraphs (12) and (13) of this subsection shall apply with respect to any such petition filed on or before December 31, 1989. (c) Except as provided in subsections (d), (e), (f), and (h) of this section-- (1) the stay of an act against property of the estate under subsection (a) of this section continues until such property is no longer property of the estate; (2) the stay of any other act under subsection (a) of this section continues until the earliest of-- (A) the time the case is closed; (B) the time the case is dismissed; or (C) if the case is a case under chapter 7 of this title concerning an individual or a case under chapter 9, 11, 12, or 13 of this title, the time a discharge is granted or denied; (3) if a single or joint case is filed by or against debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b)-- (A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case; (B) on the motion of a party in interest for continuation of the automatic stay and upon notice and a hearing, the court may extend the stay in particular cases as to any or all creditors (subject to such conditions or limitations as the court may then impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed; and (C) for purposes of subparagraph (B), a case is presumptively filed not in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary)-- (i) as to all creditors, if-- (I) more than 1 previous case under any of chapters 7, 11, and 13 in which the individual was a debtor was pending within the preceding 1-year period; (II) a previous case under any of chapters 7, 11, and 13 in which the individual was a debtor was dismissed within such 1-year period, after the debtor failed to-- (aa) file or amend the petition or other documents as required by this title or the court without substantial excuse R-48 B (A) transfer of all or part ownership of, or other interest in, such real property without the consent of the secured creditor or court approval; or (B) multiple bankruptcy filings affecting such real property. If recorded in compliance with applicable State laws governing notices of interests or liens in real property, an order entered under paragraph (4) shall be binding in any other case under this title purporting to affect such real property filed not later than 2 years after the date of the entry of such order by the court, except that a debtor in a subsequent case under this title may move for relief from such order based upon changed circumstances or for good cause shown, after notice and a hearing. Any Federal, State, or local governmental unit that accepts notices of interests or liens in real property shall accept any certified copy of an order described in this subsection for indexing and recording. (e) (1) Thirty days after a request under subsection (d) of this section for relief from the stay of any act against property of the estate under subsection (a) of this section, such stay is terminated with respect to the party in interest making such request, unless the court, after notice and a hearing, orders such stay continued in effect pending the conclusion of, or as a result of, a final hearing and determination under subsection (d) of this section. A hearing under this subsection may be a preliminary hearing, or may be consolidated with the final hearing under subsection (d) of this section. The court shall order such stay continued in effect pending the conclusion of the final hearing under subsection (d) of this section if there is a reasonable likelihood that the party opposing relief from such stay will prevail at the conclusion of such final hearing. If the hearing under this subsection is a preliminary hearing, then such final hearing shall be concluded not later than thirty days after the conclusion of such preliminary hearing, unless the 30- day period is extended with the consent of the parties in interest or for a specific time which the court finds is required by compelling circumstances. (2) Notwithstanding paragraph (1), in a case under chapter 7, 11, or 13 in which the debtor is an individual, the stay under subsection (a) shall terminate on the date that is 60 days after a request is made by a party in interest under subsection (d), unless-- (A) a final decision is rendered by the court during the 60-day period beginning on the date of the request; or (B) such 60-day period is extended-- (i) by agreement of all parties in interest; or (ii) by the court for such specific period of time as the court finds is required for good cause, as described in findings made by the court. (f) Upon request of a party in interest, the court, with or without a hearing, shall grant such relief from the stay provided under subsection (a) of this section as is necessary to prevent irreparable damage to the interest of an entity in property, if such interest will suffer such damage before there is an opportunity for notice and a hearing under subsection (d) or (e) of this section. (g) In any hearing under subsection (d) or (e) of this section concerning relief from the stay of any act under subsection (a) of this section-- R-48 B (1) the party requesting such relief has the burden of proof on the issue of the debtor's equity in property; and (2) the party opposing such relief has the burden of proof on all other issues. (h) (1) In a case in which the debtor is an individual, the stay provided by subsection (a) is terminated with respect to personal property of the estate or of the debtor securing in whole or in part a claim, or subject to an unexpired lease, and such personal property shall no longer be property of the estate if the debtor fails within the applicable time set by section 521(a)(2)-- (A) to file timely any statement of intention required under section 521(a)(2) with respect to such personal property or to indicate in such statement that the debtor will either surrender such personal property or retain it and, if retaining such personal property, either redeem such personal property pursuant to section 722, enter into an agreement of the kind specified in section 524(c) applicable to the debt secured by such personal property, or assume such unexpired lease pursuant to section 365(p) if the trustee does not do so, as applicable; and (B) to take timely the action specified in such statement, as it may be amended before expiration of the period for taking action, unless such statement specifies the debtor's intention to reaffirm such debt on the original contract terms and the creditor refuses to agree to the reaffirmation on such terms. (2) Paragraph (1) does not apply if the court determines, on the motion of the trustee filed before the expiration of the applicable time set by section 521(a)(2), after notice and a hearing, that such personal property is of consequential value or benefit to the estate, and orders appropriate adequate protection of the creditor's interest, and orders the debtor to deliver any collateral in the debtor's possession to the trustee. If the court does not so determine, the stay provided by subsection (a) shall terminate upon the conclusion of the hearing on the motion. (i) If a case commenced under chapter 7, 11, or 13 is dismissed due to the creation of a debt repayment plan, for purposes of subsection (c)(3), any subsequent case commenced by the debtor under any such chapter shall not be presumed to be filed not in good faith. (j) On request of a party in interest, the court shall issue an order under subsection (c) confirming that the automatic stay has been terminated. (k) (1) Except as provided in paragraph (2), an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages. (2) If such violation is based on an action taken by an entity in the good faith belief that subsection (h) applies to the debtor, the recovery under paragraph (1) of this subsection against such entity shall be limited to actual damages. R-48 B (l) (1) Except as otherwise provided in this subsection, subsection (b) (22) shall apply on the date that is 30 days after the date on which the bankruptcy petition is filed, if the debtor files with the petition and serves upon the lessor a certification under penalty of perjury that-- (A) under nonbankruptcy law applicable in the jurisdiction, there are circumstances under which the debtor would be permitted to cure the entire monetary default that gave rise to the judgment for possession, after that judgment for possession was entered; and (B) the debtor (or an adult dependent of the debtor) has deposited with the clerk of the court, any rent that would become due during the 30-day period after the filing of the bankruptcy petition. (2) If, within the 30-day period after the filing of the bankruptcy petition, the debtor (or an adult dependent of the debtor) complies with paragraph (1) and files with the court and serves upon the lessor a further certification under penalty of perjury that the debtor (or an adult dependent of the debtor) has cured, under nonbankrupcty [FN1] law applicable in the jurisdiction, the entire monetary default that gave rise to the judgment under which possession is sought by the lessor, subsection (b)(22) shall not apply, unless ordered to apply by the court under paragraph (3). (3) (A) If the lessor files an objection to any certification filed by the debtor under paragraph (1) or (2), and serves such objection upon the debtor, the court shall hold a hearing within 10 days after the filing and service of such objection to determine if the certification filed by the debtor under paragraph (1) or (2) is true. (B) If the court upholds the objection of the lessor filed under subparagraph (A)-- (i) subsection (b)(22) shall apply immediately and relief from the stay provided under subsection (a)(3) shall not be required to enable the lessor to complete the process to recover full possession of the property; and (ii) the clerk of the court shall immediately serve upon the lessor and the debtor a certified copy of the court's order upholding the lessor's objection. (4) If a debtor, in accordance with paragraph (5), indicates on the petition that there was a judgment for possession of the residential rental property in which the debtor resides and does not file a certification under paragraph (1) or (2)-- (A) subsection (b)(22) shall apply immediately upon failure to file such certification, and relief from the stay provided under subsection (a)(3) shall not be required to enable the lessor to complete the process to recover full possession of the property; and (B) the clerk of the court shall immediately serve upon the lessor and the debtor a certified copy of the docket indicating the absence of a filed certification and the applicability of the exception to the stay under subsection (b)(22). (5) (A) Where a judgment for possession of residential property in which the debtor resides as a tenant under a lease or rental agreement has been obtained by the lessor, the debtor shall so indicate on the bankruptcy petition and shall provide the name and address of the lessor that obtained that pre-petition judgment on the petition and on any certification filed under this subsection. (B) The form of certification filed with the petition, as specified in this subsection, shall provide for the debtor to certify, and the debtor shall certify-- R-48 C Appendix “C” 11 U.S.C.A. 526 (West 2006) § 526. Restrictions on debt relief agencies (a) A debt relief agency shall not-- (1) fail to perform any service that such agency informed an assisted person or prospective assisted person it would provide in connection with a case or proceeding under this title; (2) make any statement, or counsel or advise any assisted person or prospective assisted person to make a statement in a document filed in a case or proceeding under this title, that is untrue and misleading, or that upon the exercise of reasonable care, should have been known by such agency to be untrue or misleading; (3) misrepresent to any assisted person or prospective assisted person, directly or indirectly, affirmatively or by material omission, with respect to-- (A) the services that such agency will provide to such person; or (B) the benefits and risks that may result if such person becomes a debtor in a case under this title; or (4) advise an assisted person or prospective assisted person to incur more debt in contemplation of such person filing a case under this title or to pay an attorney or bankruptcy petition preparer fee or charge for services performed as part of preparing for or representing a debtor in a case under this title. (b) Any waiver by any assisted person of any protection or right provided under this section shall not be enforceable against the debtor by any Federal or State court or any other person, but may be enforced against a debt relief agency. (c) (1) Any contract for bankruptcy assistance between a debt relief agency and an assisted person that does not comply with the material requirements of this section, section 527, or section 528 shall be void and may not be enforced by any Federal or State court or by any other person, other than such assisted person. (2) Any debt relief agency shall be liable to an assisted person in the amount of any fees or charges in connection with providing bankruptcy assistance to such person that such debt relief agency has received, for actual damages, and for reasonable attorneys' fees and costs if such agency is found, after notice and a hearing, to have-- (A) intentionally or negligently failed to comply with any provision of this section, section 527, or section 528 with respect to a case or proceeding under this title for such assisted person; (B) provided bankruptcy assistance to an assisted person in a case or proceeding under this title that is dismissed or converted to a case under another chapter of this title because of such agency's intentional or negligent failure to file any required document including those specified in section 521; or R-48 C (C) intentionally or negligently disregarded the material requirements of this title or the Federal Rules of Bankruptcy Procedure applicable to such agency. (3) In addition to such other remedies as are provided under State law, whenever the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this section, the State-- (A) may bring an action to enjoin such violation; (B) may bring an action on behalf of its residents to recover the actual damages of assisted persons arising from such violation, including any liability under paragraph (2); and (C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorneys' fees as determined by the court. (4) The district courts of the United States for districts located in the State shall have concurrent jurisdiction of any action under subparagraph (A) or (B) of paragraph (3). (5) Notwithstanding any other provision of Federal law and in addition to any other remedy provided under Federal or State law, if the court, on its own motion or on the motion of the United States trustee or the debtor, finds that a person intentionally violated this section, or engaged in a clear and consistent pattern or practice of violating this section, the court may-- (A) enjoin the violation of such section; or (B) impose an appropriate civil penalty against such person. (d) No provision of this section, section 527, or section 528 shall-- (1) annul, alter, affect, or exempt any person subject to such sections from complying with any law of any State except to the extent that such law is inconsistent with those sections, and then only to the extent of the inconsistency; or (2) be deemed to limit or curtail the authority or ability-- (A) of a State or subdivision or instrumentality thereof, to determine and enforce qualifications for the practice of law under the laws of that State; or (B) of a Federal court to determine and enforce the qualifications for the practice of law before that court.