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Ask Our Lawyer - October 2004


JESSICA FISCUS - Paris, Illinois

Jessica, a recent graduate of Paris High School will be studying Business Administration at Lakeland College. Jessica is the daughter of Dave and Shirley Fiscus. Her father is a charter member of the Heritage Trail Chapter. Dave has held just about every office that you can hold from President all the way down the list, and his wife Shirley, reportedly does at least half the work. Jim Gwyn, a retired teacher from that area, confirms that Jessica is a wonderful student and he predicts big things from her in the future.

EMILY WINSLOW - Indianapolis, Indiana

Emily is a student at IUPUI, studying physical therapy. She and her sister are graduates of the A.B.A.T.E Motorcycle Safety Course and take turns riding their dad's motorcycle. Ed Winslow, you are a wonderful and trusting father according to your daughters, and I say a very proud father.

Q: We suspect that the Treasurer of our local A.B.A.T.E organization is misappropriating funds from our chapter/region. How should we handle this situation?

A: You should handle this case very delicately. I have five simple rules for this situation which if followed, will lead to the best result:

1. Check your By-Laws for the procedures that are required for the removal of an officer.

2. Immediately request the check book of the organization and all accounting records.

3. Call for a meeting to discuss the alleged discrepancies. Take notes and if the By-Laws permit an open recording should be done as usual. Only ask questions and make no accusations.

4. Adjourn the meeting and make a decision only when you have all the facts.

5. If the individual will not provide the records requested, call A.B.A.T.E. LEGAL and we can help. Do not go to the local prosecutor with any allegations, until you have consulted with A.B.A.T.E. LEGAL for guidance.

Good luck - this can be a very trying situation. Don't hesitate to call A.B.A.T.E. LEGAL with any questions you may have.

Q: I live in Ohio and was injured in a motorcycle accident. I have medical insurance at work, which has paid for my medical expense. The insurance company says I have to reimburse them for all the medical expense they have paid on my behalf if I get a recovery from the person who ran over me. That person has low insurance limits and if I pay my health insurance company back, there will be very little money left for me. Do I have to pay my insurance back for the bills they paid on my behalf?

A: Almost certainly your insurance policy has a subrogation provision, which states that you must pay the insurance company back for any medical bills they have paid. If your medical insurance is not through an ERISA plan, [we will talk about that later] Ohio law allows that you be made whole before the insurance company has to be reimbursed. This means that if the insurance limits are adequate to compensate you for your loss, then you may not have to pay back your insurance company. Unfortunately, if your insurance policy is an ERISA plan, that issue becomes much more complicated despite the provisions of Ohio law. Ohio law also has a procurement doctrine which generally means that the individual responsible for obtaining a settlement from the adverse party is able to recoup the cost of obtaining that settlement. This doctrine certainly applies to non-ERISA plans. If you have an ERISA plan, you should call A.B.A.T.E. LEGAL to discuss your options.

Q: I run a motorcycle parts business, and I sell a lot of parts to local repair shops for use in repairing bikes. One of my customers purchased several hundred dollars of engine parts from me, but hasn't paid for them. Yesterday, I got a notice from his attorney stating that he had filed for bankruptcy. How do I get my money from him?

A. The sad fact is that you may never get your money from him. Bankruptcy is designed to allow the debtor to get a fresh start, free of pre-existing debts. As such, bankruptcy procedures allow most debtors to discharge debts, which means those debts will never have to be paid. The rules on discharge and repayment are different, depending on the type of bankruptcy. The different types of bankruptcy are named after the chapter of the bankruptcy code in which the rules are found.
Chapter 7 bankruptcy is of liquidation of assets. When a debtor is so far in debt that the assets of the debtor are substantially outweighed by the debts, the debtor (an individual or a corporation) can file for liquidation under Chapter 7. The trustee, an official appointed by the bankruptcy court, will collect the assets of the debtor, distribute those to the creditors making claims, and then discharge the debtor from any remaining obligations, except for those that the debtor specifically agreed to reaffirm. The creditors who get paid by the debtor are ranked in a list depending of the type of obligation they have - secured debt, where the debt is guaranteed by an interest in property, like a mortgage or car loan, have the highest priority. Unsecured debt, like your engine parts, has the lowest priority. If there are any assets left after the higher priority debts are paid, then the lower priority debtor will split the remaining assets equally, but that does not happen very often.
Chapter 11 bankruptcy (for business debtors) and Chapter 13 bankruptcy (for individual debtors) cover situation where the debtor wishes to consolidate some debts, discharge others, and enter into a payment plan or other agreement to pay some for the remaining debt. Again, most unsecured creditors will end up with very little, if anything. The approved plan will be monitored by the court to verify compliance with the plan.

Ride Safe and Free,
Rod Taylor
A.B.A.T.E. LEGAL Services

If you have any questions you would like to ask the lawyer, please submit them to: ASK OUR LAWYER, P.O. Box 2850, Indianapolis, Indiana 46206-2850, or email rodtaylor@abatelegal.com.