Thursday, October 1, 2009


New Jersey has just come in last place in a list of business friendly states – at least as far as taxes go – according to the Tax Foundation, a nonprofit organization that keeps track of such things. It’s the second year in a row New Jersey has scraped the basement. New Jersey has higher property taxes than anyone else, and comes in just above New York in personal income taxes. This year, New Jersey has added a few new taxes just to make sure we keep the tarnished tin cup for a long time to come. We used to be able to say, “Well, at least we’re not New York.” No more.

Who is most business friendly? South Dakota. There is also Wyoming and Alaska. That’s right. We got our butts beaten, and beaten badly, by Sarah Palin, who is suddenly looking a lot more competent than Governor Corzine.

What to do? For some, the answer is to get out of town. A 2007 Monmouth University/Gannett New Jersey Poll found that 49% of New Jersey residents wanted to move out of state.

Over the last 10 years, New Jersey lost 150,000 manufacturing jobs. When I turn on the television I see ads narrated by Jeff Daniels encouraging businesses to move to Michigan. Michigan really wants our business. Apparently Detroit is doing so badly that they ran out of money to bury their dead. So they really are pushing incentives to move to Michigan. New Jersey doesn't bury its dead either - we just elect them to higher office. South Carolina also advertises on billboards near the airport trying to get our people. Other states are willing to bribe New Jersey businesses to move, awarding 5-year tax breaks, and even paying for the moving trucks. Obviously, many employees will follow these companies to other states, especially closer, more business-friendly states such as Delaware and Pennsylvania.

That’s not counting the businesses that are moving overseas and leaving their employees behind. When I get calls from debt collectors, they are usually from India. When you call up about your phone bill, you often get India. This is not an anti-foreigner rant – I have Indian friends who came here to the U.S. to work and are complaining about their high-paying jobs going to India. Maybe New Jersey should secede from the Union and become an Indian state. After all, the rupee is doing better than the dollar these days.

If New Jersey wants an economic recovery, it needs to be friendlier to businesses. Bruce Springstein and Bon Jovi are not reasons to move a business to New Jersey. Unfortunately, pro-business usually means anti-union. Plus, it would require major health care reform since one-third of employee costs involve health care.

New Jersey needs to be friendlier to people too. New Jersey prohibits out-of-state competition for health insurance. Also, a lot of medical patients leave New Jersey for California in order to obtain legal medical marijuana for their health conditions.

In the current political climate, Corzine is saying nasty things about Christie. Christie is also saying nasty things about Corzine. I fear they are both right, which leaves us with little or no choice.

Hey, maybe Sarah Palin needs a new job.

Mr. Wolf can be contacted through his website at

Wednesday, June 3, 2009

NACBA Convention - The Blues in Chicago

I just got back from the NACBA Convention in Chicago. There were about 1,400 bankruptcy attorneys present. The event sold out very quickly and the organizers had to set up an overflow room.

These are a few of my observations about the convention.

1. More attorneys are going into or returning to the bankruptcy field as other fields of law are drying up. Many business attorneys have lost clients and jobs due to cutbacks and think "Hmm. There are a lot of bankruptcies - I can do that." However, these days, bankruptcy is financial brain surgery - not a field for amateurs.

2. There were more exhibitors. A lot of people want to sell us things because they think we have money. Everybody wants to take on a part of our practice - from web site design to site optimization, running credit reports, doing credit briefings, assisting us in document preparation through software or virtual assistants, providing court notices to us and certificates of service for items we send to creditors. There was even a vendor who would prepare my fee applications for me. If I hired them all, I would barely have to lift a finger, but all my fees would end up going to them. I'd make myself obsolete.

3. Many of the speakers were as confused as I was over certain complex issues. Still, it's nice to know that even the experts don't know all the answers. That's why I'm shocked when I see ads claiming that filing bankruptcy is easy or offering a lowball price. A lot of these issues still have to work their way through the court system.

4. Chicago pizza just isn't the same as New York pizza. Same for the hot dogs. Salad does not belong on top of a hot dog. But Chicago Thai food is excellent - easily on a par with New York and New Jersey, and the prices are significantly cheaper. Star of Siam was wonderful.

5. Hotel catered lunches never quite get the chicken right. Last year, in our Hollywood Convention, we were catered by Wolfgang Puck. My mother-in-law cooks better. Hollywood really is all about hype. Chicago catering was better, but still not exceptional.

6. Television keeps saying this will turn around next year. Television lies. Most of my colleagues and one of my friends who has a doctorate in economics are predicting a depression. I trust my friends more than I trust TV.

7. President Obama really betrayed us on the mortgage modification bill. During the election, he was all for it but his support in the Senate was so lukewarm, he almost guaranteed its failure. I realize he wants to do it his own way, with voluntary programs. He seems not to get it - banks are greedy and never volunteer. It's all cosmetics - lipstick on a pig. I believe we will revisit the legislation again later on, after his HAMP program fails.

8. Letting servicers modify mortgages may not even work, since they often don't have the authority in their pooling and service agreements to modify them. They are doing it anyway, which may create a really unholy mess on top of the mess we are already in.

I never really get to see much of a town during conventions because of the heavy load of seminars. I can't stay away too long because I can't ignore my client base. I always come back having learned something new, but I can't say I learned that much more about Chicago. However, I can tell you a lot about Marriott hotels. Such is my life.

Tuesday, January 27, 2009


A fellow NACBA member has found out something very useful I would like to share with you.

If you want to get out of your cell phone contact with Sprint, you have a short opportunity to do so without paying an early termination fee (ETF).

The way it works is this – when a wireless carrier makes changes to the language in their “Terms of Service” agreement, you have a right to reject it and drop the carrier without an early termination fee. Sprint has just raised their internal administrative fees again - to 0.99¢ per month, from their original fee hike of 0.75¢ in December. The December fee hike opened a window until early January, and the second hike in January opened up a new window until January 31. As a result of this administrative fee increase, anyone who is currently under contract with Sprint can leave the carrier early without paying termination fees. There are only two catches to this deal:

First, you can only cancel the service without getting hammered with an Early Termination Fee if you do it by January 31, 2009 AND, second, VERY IMPORTANT, you need to call Sprint and ask specifically about the rate hike first.

In short, ask about the rate hike first, and then use the rate hike as your reason for canceling service. Make sure you follow Sprint’s instructions on how to cancel properly and follow up in writing to make sure they have done it.

Since it’s only a few days until the end of the month, you've got only a few days left before the window of opportunity closes.

Why the hike? Money problems. Sprint just cut 8,000 jobs, about 15% of its workforce, trying to reduce its costs by $1.2 billion, so they need that extra fifteen cents.

What if you already canceled and got hit with an ETF? Do not despair. Sprint just settled a class action regarding these. If you had a wireless contract with Sprint from July 1999 and December 2008 that contained a time based ETF fee clause and can prove that you were charged an ETF fee, you could get back up to $90. Even if you didn’t cancel, you could get a $35 settlement fee just because you kept the contract for fear of getting hit with an ETF. There are a lot of hoops to jump through, and there are some exceptions and reductions in payouts, but you can start by going to and registering.

Of course, keep in mind that changing carriers can be like going from the frying pan into the fire and there is no guarantee the replacement carrier will be much better.

Also, I’ve read that since Palm will soon be debuting a new web-based operating system exclusively using Sprint (for a time), canceling now could open up an opportunity to re-sign with Sprint later on in exchange for a free or low cost Palm Pre device.

So, whatever you decide to do, don’t dawdle. Sprint.

Bankruptcy is Hot Again

In the past few weeks, I've received calls from several lawyers looking to get into the bankruptcy practice. Many lawyers left the field when the new law passed in 2005 because there was more work involved in filing cases and because the number of new cases had dropped off - clients thought bankruptcy was dead. However, because of the bad economy, there has been a small uptick in business for bankruptcy lawyers just as other fields of law have seen a decrease. Therefore, lawyers are suddenly getting interested in filing bankruptcies again.

I was interviewed on January 5, 2009 by a reporter from Lawyers USA on this very topic. The article appears on the web at and I pointed out that bankruptcy law has become more complex and is really not a field for amateurs or those who wish to only occasionally file a bankruptcy case to supplement their practice. I especially referred to Chapter 13 bankruptcies as "financial brain surgery." I have gotten cases from clients who were told by their previous lawyers that they flunked the means test only to find that the attorneys had only done part one of the means test - the median income test. The test has four parts which gives several chances to file a chapter 7 instead of a chapter 13 case if you know what you are doing. However, some lawyers just look at the median income tables and say, "You're above the median income, you can't file a chapter 7," which is not always true.

I'll be going to Washington, D.C. in February to talk to my senators about supporting the new bankruptcy bill. I'm not really happy that President Obama has chosen to separate the bill from his first financial stimulus package. This hurts the chances of the bill's adoption. I'm not really happy about how the stimulus has been weakened by giving in to Republican interests. I think they prefer President Obama fails even if it cripples the country - that's politics for you. I thought the Democrats won the election - I guess I was wrong. More on that later.

Citigroup has chosen, for now, to back the bankruptcy bill. This could change, just as they changed their mind about buying that new $50 million corporate jet with your bailout money. Maybe the Citi never sleeps, but they sure know how to spend, and charge. They just raised the interest rate on my attorney friend's credit card to between 20% and 29.9%, even though he pays in full each month. Paying in full must make him a bad credit risk.

Moral: Cash is king.