HARRISBURG- The man selected to be Harrisburgs next city treasurer is in the midst of a personal bankruptcy, which could prevent him from taking office.

Harrisburg City Council members picked Timothy R. East late last month over five other applicantsto fill a vacancy after the previous city treasurer resigned.

One topic that didnt come up during the interviews of applicants by council members was personal bankruptcy. City Council members didnt ask and East didnt tell.

READ: City Council members reaction here.

East, a certified public accountant who owns East Financial Services, did not return phone calls from PennLive Monday. In addition, no one answered the door at his office Monday.

Easts financial struggles are important because the city treasurer needs to be bonded and insurance companies may not want to take a chance on a treasurer who has already declared personal bankruptcy.

The abrupt departure of former city treasurer John Campbell also meant the city had to get re-bondedno small task in light of the citys near bankruptcy and receivership.

City officials secured a bond for the city, but are waiting to hear back from insurance companies about East.

Easts personal bankruptcy also poses a public relations issue because the city treasurers job entails collecting and safeguarding the citys revenues and reviewing the citys payments.

Joyce Davis, the citys spokeswoman, said she could not comment on Easts bankruptcy filing. But she acknowledged that the city had not yet secured his required bond.

He was on a previously scheduled vacation, so he was unable to complete some of the paperwork until his return, she said.

During his interview Sept. 29, East counted among his skills thathe understood cash management operations, tax collection and proper system controls. He said he thought hismost important leadership quality was the ability to inspire others.

East first filed for Chapter 13 bankruptcy in June 2011, noting among his debts thathe had taken out three mortgages on his home.

East bought the home in 2006, according to his filing, for $156,500, He later took out two additional mortgages, and the IRS tacked on a $15,000 tax lien, bringing the total amount owed for the house to $219,000. The house is now worth about $125,000, according to the bankruptcy paperwork.

East also cited credit card debt of about $15,000 and debt from insurance bills, utility bills and car rentals for about $1,800. In all, he has about 20 creditors.

He listed few assets other than his home in his initial finding.

The chapter 13 filing indicates East wasnt trying to get a judge to discharge his debt, but rather, give him time to pay off a portion of his debts after negotiating with creditors.

Late last year, the federal court dismissed the bankruptcy case, removing any protection for East, after he fell short on his required payments.

But an attorney for East filed additional paperwork, asking for the courts protection again, which was granted in January.

The Debtor has funds sufficient to bring Trustee payments current, Easts attorney, Dorothy Mott, wrote in her filing.

Mott did not return calls for comment Monday.

The city treasurer is a part-time position that pays $20,000 a year. Campbell resigned in August after he was charged with theft in connection with $8,500 that went missing from a charity he oversaw. The Dauphin County District Attorney later filed an additional theft charge in connection with $2,750 that went missing from a political action committee for which he was treasurer.

Campbell reportedly told police he used the money for personal college and medical expenses, according to court records.

Parliament approves new legislation to deal with bankruptcy in Jamaica

CMC – Parliament has given the green light to the Bankruptcy and Insolvency Act, 2014, ensuring that businesses no longer face closure when facing bankruptcy.

The Senate has approved the legislation with 43 additional amendments, following passage in the Lower House with 100 amendments.

Prior to its passage, the Jamaican law on bankruptcy and insolvency was contained in two pieces of legislation – the Bankruptcy Act, which covered personal and individual insolvency, and the Companies Act, which dealt with the winding up of insolvent corporate bodies.

The Bankruptcy legislation dated back to the 1880s and had been the subject of ad hoc amendments over the years. The procedural rules of the Act were not only outdated, but also conflicted with the rules that govern other court proceedings.

The new law deals with bankruptcy, insolvency, receiverships, provisional supervision and winding up. It seeks to accommodate corporate and individual insolvency; and facilitate the rehabilitation of an insolvent debtor.

Additionally, it proposes to repeal the Bankruptcy Act, and matters connected with, or incidental to that Act, including amendment of the Companies Act.

The introduction of the new legislation is expected to make the insolvency process less time-consuming and costly, and will seek to address the stigma of personal bankruptcy or corporate insolvency.

According to the World Banks Doing Business Report 2013, resolving insolvencies in Jamaica takes 1.1 years on average and costs 18 per cent of the debtors estate.

Under the new law, the interests of all stakeholders will be given due consideration. It also makes provisions for rehabilitation or re-organisation of the business affairs of the debtor. In addition, a licensing regime for insolvency practitioners is also to be introduced.

Justice Minister Mark Golding, who piloted the Bill, acknowledged it is a very major piece of legislation, a very complex piece of legislation and some 309 sections long, and it has taken a lot of effort from very many people to get us to this point and I think we have a good Bill.

Opposition Senator, Nigel Clarke agreed that the bill was a monumental piece of legislation which is highly technical and complex, and its probably the longest Bill to be introduced since the Companies Act of 2004.

Taken together with the Secured Interest in Personal Property legislation, this represents a quantum leap in the legal and commercial architecture designed for a modern economy, and I am an enthusiastic supporter of the Bill, as I believe it is of fundamental importance to the emergence of the kind of vibrant economy that we all want, said Clarke, who was a member of the Joint Select Committee of Parliament mandated to review the legislation.

The Joint Select committee met over 20 times over eight months, going through clause by clause of the original Bill, and meeting on Saturdays and Sundays as required, he said.

One of the most notable ads of the local political season in the Tampa Bay area has been the Republican Party of Floridas Pop Quiz attack spot on Judithanne McLauchlan, the USFSP political science professor who is trying to knock off Jeff Brandes in the State Senate District 22 race that encompasses much of the Pinellas coastline and parts of South Tampa. The ad has been rated as mostly false by PoliFact Florida,for inferring that the Democrat supports creating a state income tax by saying shes a member of a group (the League of Women Voters) who at one time did support the idea.

But while that income tax claim has been the focus of the ad, it also states that she filed for personal bankruptcy, which McLauchlan has admitted is true. But shes still bitter that such a personal attack was aired in the first place.

As an attempt to attack a woman personally, it really gets to the heart of why I’m running, she told CL on Monday morning. I’m running because I don’t think it should be so hard to send your kids to college, she says, noting how Senator Brandes voted to cut funding for Bright Future scholarships, which she says makes it harder for middle-class families to send their kids to college.

It is a part of who I am and why I’m running, she says. When the ad first ran last month, McLauchlan released a statement explaining that as a graduate student she was experiencing significant health issues, which led to her accumulating debt to contend with those issues. Ultimately everything worked out, but she said that even though she got a job, thedebt from years of living on the margins was too much, leading her to declare bankruptcy in the late 90s.

What happened to me as a young woman 20 years ago does not mean that I cant budget, she says saying. Its a mean-spirited personal attack. She says people ask her why Brandes is attacking her so hard, and responds that he doesnt have anything positive to say about his tenure in Tallahassee. Shes also dismissive of his taking Tallahassee to the woodshed ads that the Republican originally aired during his 2010 victory over Democrat Bill Heller for a House seat, saying that the only people hes been taking to the woodshed are middle-class families.

McLauchlan hasnt been shy in going after Brandes in direct mail ads, but she insists that those attacks are substantive in nature, not personal. Shes been particularly aggressive on Medicaid expansion, noting that the St. Pete Republican was the only member of the Senate in 2013 who could not support Senator Joe Negrons hybrid model thatwould use the federal funds to ultimately bring over 800,000 uninsured Floridians into a state-run program operated by Healthy Kids Florida, which currently offers low-cost health insurance for children who are not eligible for Medicaid. That plan was rejected by the House.

CL contacted Chris Spencer, who is working on Senator Brandes campaign. for a response. He did not respond by the time we posted this report.

Her lawyers had sought a probationary sentence for Rosa, saying she committed the crime out of love for the US and her current husband — an ex-con.

However, Cote sided with prosecutors, who said Rosa, 47, deserved 12 to 18 months in jail.

Cote also wasnt moved by Rosa’s request to surrender after the winter holidays, so she could spend them with her family.

“Request denied,” said Cote sternly, ordering Rosa to report to prison by Nov. 14.

Rosa paid $8,000 in 1996 to a US citizen to engage in the fraudulent nuptials while she maintained a romantic relationship with another man. She claimed the sham marriage was out of “desperation” to not be separated from the man she really loved, Victor Estrella.

The feds say Estrella, a convicted drug dealer and a fellow Dominican native, wasnt a US citizen at that time.

Rosa and Estrella are now married and share a son.

Rosa also pleaded guilty in June to making false statements in a 2009 personal-bankruptcy filing. She failed to include Estrella’s earning and omitted her ownership of a co-op apartment.

The ex-pols sentence includes three years of supervised release after she gets out of prison. She must also pay $19,652 in restitution.

In a bid for leniency, Rosa’s lawyers tried to compare her path to late-19th-century author Horatio Alger, who became famous for his tales of youngsters who rise out of poverty to great success.

Rosa, who once worked as a legislative aide to Assemblyman Herman “Denny” Farrell, became a US citizen in 2005.

Her resignation was part of the plea deal, and she is banned from ever again seeking office in the United States. The feds have said that despite the fraud, they now consider Rosa a US citizen and will not deport her to her native Dominican Republic.

The Democrats contrasted Hogans record with that of Lt. Gov. Anthony G. Brown, saying their partys nominee has worked to strengthen Marylands finances and reduce the deficit, helping to keep the states AAA bond rating.

The attack takes aim at one of Hogans chief selling points: that he is a successful businessman rather than a politician.

That Hogan filed for personal bankruptcy is not in dispute. In May, after Republican blogger Jeff Quinton reported on the court case, his campaign released a statement acknowledging that he filed for Chapter 7 two decades ago. He blamed new federal lending rules, contending that they had forced his real estate business longtime lenders to close or sell out to out-of-state banks. Hogan said the new bankers called in his companys loans, forcing him to liquidate personal assets including his Prince Georges County home.

Hogan called the bankruptcy painful and even humiliating at the time but contended the experience taught him lessons about the challenges of life in the private sector.

Quinton predicted in his article that the bankruptcy issue would be thrown at him by the Democrats, and on Monday that prediction came true. The Democrats said Hogans explanation shows that he still refuses to take responsibility for his own bankruptcy.

Adam Dubitsky, a spokesman for Hogan, responded with an attack on Brown.

The difference between Larry Hogan and Anthony Brown is that Larry leaned from his challenges and went on to create a successful business that created jobs and brought business to Maryland, Dubitsky said.

The Democratic criticism of Hogans campaign omits some key details. While it points out that his campaign was at the time of its last filing $580,000 in debt, it does not specify that $500,000 of that total represents personal funds Hogan lent to the campaign.

The last campaign filing report covered a period ending Aug. 19 and thus was a snapshot in time of the state of the campaigns finances as of that day — not necessarily now. Hogans campaign used a similar tactic when it boasted about a 3-1 advantage in cash on hand over Brown weeks after the close-out date, gliding over the fact that it was an anomaly caused by a one-time payment of $2.6 million from the states public financing fund.

Dubitsky said that since the filing cutoff the campaign has repaid all of its primary debt with the exception of the loans from Hogan.

The Democrats finger-pointing at the Republican Party over its $120,000 in unpaid debt underscores the state GOPs longstanding financial problems. However, the GOPs money issues far predate Hogans June 24 primary victory. Most of the money the Republican Party owes came in the form of $67,662 in loans from BBT Bank, some dating back as far as 2011.

CLARKSBURG, W.Va. Embattled Bridgeport Mayor Mario Blount filed for personal bankruptcy in federal court Friday.

Court documents indicate Blount has more than $1.5 million in liabilities and only has assets valued at $185,000. The largest part of Blounts debt is owed to former partners and business associates.

Blount, 51, is a registered pharmacist who operates Bridgeport’s Best Care pharmacy. He is expected to plead guilty in US District Court next week to charges he illegally dispensed oxycodone and oxymorphone.

Blount claimed in bankruptcy paperwork he is a roofer in Bridgeport and brings home $1,751 a month. He claimed his monthly expenses were $6,503 including a mortgage payment in excess of $2,000.

When individuals fall behind on bills and need protection from creditors, they usually do so using the Chapter 7 form of bankruptcy. The primary advantage of a Chapter 7 filing is that you can essentially wipe your financial slate clean without worrying about “past due” amounts. Once a trustee liquidates your saleable assets and pays your creditors, lenders ordinarily can’t call you in an effort to collect.

However, there’s another avenue struggling borrowers can pursue: Chapter 13 bankruptcy. It’s a form of debt reorganization in which individuals develop a plan to repay as much of their debt as possible over a three-to-five-year period. The bankruptcy court requires them to provide detailed financial statements to show their revenue and expenses; they then make an agreed-upon monthly payment to a trustee, who in turns pays their creditors.

Once a Chapter 13 repayment plan is completed, you are no longer responsible for your previous debts, even if you didn’t pay the entire amount you originally owed. It also stops the interest-rate clock from increasing, for example, the amount you owe on your credit card debt. Just keep in mind that certain types of debt – including student loans, alimony and child support – cannot be discharged under either type of bankruptcy, Chapter 7 or Chapter 13. 

Pros and Cons

Perhaps the most compelling reason to opt for Chapter 13 protection over Chapter 7 is to save your home. If you’re behind on your mortgage, only Chapter 13, also known as a “wage earner’s plan,” allows you to make up missed payments and eventually become current on the loan.

Losing your home isnt inevitable if you file for bankruptcy under Chapter 7. If you’re current on your mortgage and have little or no equity in the property, you’re usually safe. The trustee won’t be able to make much money off the sale of your home to pay other creditors, so there’s no incentive to put it on the market. However, if you exceed the allowable equity, or homestead exemption, in your state, Chapter 13 can start to look more attractive. A qualified bankruptcy attorney will be able to advise you on how your home would be affected by either option.

One of the most poignant features of student debt is that, short of paying it off, its pretty much impossible to get rid of. In 2005, the bankruptcy code was updated to make private loans non-dischargable in a personal bankruptcy, meaning that, unlike other private debts, student loans cant be forgiven or written off.* 

This change put private student loans on the same level as federal or state loans and child support payments: totally, non-negotiably sticking with you forever. What is less well-known are some of the consequences the new rule had on the economics of the loan market.

In a nutshell, student loans are more widely available to low-credit borrowers, theres been an enormous surge in loan volume, and loans have become more expensive. And some of the possible results of these changes could have significant economic consequences for consumers in the decades to come.

Unanticipated market changes 
It wasnt supposed to happen this way. Supporters of the law change argued that it would reduce the cost of borrowing by eliminating strategic borrowers from the market, or those who take on loans with the expectation of discharging them in a bankruptcy (if that notion makes you raise an eyebrow, youre right on the money: Theres no evidence that this was ever actually a problem). Making loans less expensive was supposed to help good borrowers have an easier time paying for college.

In reality, the cost of loans actually rose by 0.35% on average, and, perhaps because lenders had more downside protection due to the new rule, there was an enormous influx of borrowers with lower credit scores. In the years following the change, loan volume has tripled, and researchers Xioling Ang and Dalie Jimenez found that 60% of the rise in lending can be directly attributed to the law change.

The result, in other words, is more — and more expensive — lending. 

The consequences of leverage 
That might not sound like a problem to you until you consider the long-term costs of being highly leveraged. One demonstrable effect of higher student lending rates is a reduction in the number of small businesses, which are a major source of employment in the US Another potential problem is the future of financial security: If borrowers are spending the first third, or half, or even more of their careers trying to pay off student loans, they might be far less likely to put money toward other financial goals — like retirement. 

The rise in private lending also comes with a rise in the risk of widespread financial distress. While federal loans come with myriad programs to help borrowers manage their debt payments, private lenders are under no obligation to do this. In other words, while you cant discharge a federal loan, you can find a way to reduce your payment or even, in some cases, have the loan forgiven. Private loans dont come with either benefit, and the combination of higher leverage and a lack of options could work to the detriment of a whole class of private borrowers later on. 

Either way, the policy change had major unanticipated consequences for the loan market itself, and it could have significant long-term effects not only on borrowers but on the economy. Whatever arises, there is growing evidence that loan burdens are becoming a problem — one researcher refers to current generation of borrowers as the indentured generation — and its almost certain that the costs will be borne out by all of us in the decades to come. 

*There is technically an exception to this, in the form of an undue hardship ruling in a bankruptcy proceeding, but it is so rarely used as to be negligible for the purposes of this discussion. 

While Republican state Sen. Jeff Brandes ran virtually unopposed for the redrawn 22nd district stretching across Tampa Bay in 2012, hes facing a scrappy challenger in Democrat Judithanne McLauchlan this year.

The Republican Party of Florida, acting on Brandes behalf, is attacking McLauchlan, a University of South Florida-St. Petersburg political science professor, on an issue where constituents are liable to pay most attention — their wallets.

In a TV commercial that began running in the Tampa Bay market on Sept. 22, 2014, Brandes implied that McLauchlan wants to break with Florida orthodoxy by supporting a state income tax. A similar claim has been made by fliers being mailed to voters homes.

The ad — which features actors pretending to be students being quizzed by a teacher — says, McLauchlan was part of a group that supports imposing a state income tax on Floridians. It goes on to say, McLauchlan: Personal bankruptcy and a new state income tax.

Accusing an opponent of wanting to raise taxes is Political Campaigning 101, but did McLauchlan really associate with people who wanted to tax Floridians at a state level?

Regressive facts

McLauchlan responded to the commercial the day after it appeared, issuing a press release that called it a repulsive attack that used unsubstantiated falsehoods.

I oppose, will always oppose, and have always opposed a state income tax, she declared.

The ad also mentions her personal bankruptcy, which McLauchlan has blamed on paying for high health insurance premiums and a surgery while she was a graduate student in the 1990s. She said the debt was too much, even after she became employed, so she filed for bankruptcy 16 years ago. She says she has since repaired her credit and is debt-free.

So where did Brandes and the state GOP get the notion about a state income tax? If you look at the fine print, it reads that McLauchlan served on Board of Directors of League of Women Voters. The aduses her campaign site as the source.

The League of Women Voters bills itself as a nonpartisan political organization focused on developing informed policy positions and voter participation. It does not endorse candidates, and members from any political party may join.

McLauchlans spokesman clarified that she is currently a member and was on the board of the St. Petersburg chapter from 2009-11, mostly working on voter registration initiatives. She also moderated candidate forums between 2011 and 2013.

The Florida chapter of the group stated where it stood on the issue in its most recent guide to public policy positions: The LWVF supports the adoption of a state personal income tax as one part of a balanced and equitable tax structure. The booklet notes that the position was revisited most recently in 1991, although as far back as a 1966-67 study it argued that a statewide funding source that would both be equitable and produce sufficient revenue was a personal income tax.

There also is a reference in the guide that says League representatives in 2007 spoke at seven statewide Taxation and Budget Reform Commission public hearings in favor of an equitable tax system based upon ability to pay, which suggests a state income tax.

Saying the group supports imposing the tax isnt accurate, however, because while the League researched the issue and found an income tax a sound alternative, it doesnt lobby for the change or push it as part of a legislative agenda.They give opinions on policy issues, but dont propose processes to change laws.

We asked the Brandes campaign to clarify their argument. Theypointed to a couple member requirements on the St. Pete chapters website: First, that members of a local chapter are also part of the state and national organizations, and that the group is open to anyone who subscribes to the mission, principles, and policies of the League of Women Voters.

Second, the site says that members cant contradict the group. Once League (local, state or national) takes a position on an issue, members may not identify themselves as League members in publicly expressing an opinion that is in opposition to a League position, the site reads.

League of Women Voters of Florida President Deirdre Macnab said that doesnt mean members cant disagree, just that they cant contradict the Leagues positions as a spokesperson for the organization, such as while serving as a board member. If a board member of any chapter decides to run for political office, that person must resign from the board, although they may stay in the League.

There is no requirement that members must subscribe to every position the League takes, Macnab said, suggesting the Brandes campaign is misreading the guidelines they cited. We do have local League presidents who speak on behalf of the League, but we encourage our members to think what they want to think.

Macnab said the tax hasnt been studied since the 1990s. She said she felt most economists would agree a statewide income tax is much more fair than the policies the state has now, relying disproportionately on sales taxes, which are regressive, and property taxes. (One-time gubernatorial hopeful Nan Rich claimed earlier this year that Florida had the third-most regressive tax structure in the country, a claim we rated Mostly True.)

The issue isnt on the table either way, Macnab said, because the state Constitution has provisions preventing the institution of an income tax.

Doris Weatherford, an author, womens historian and League member who met McLauchlan through her campaign, says the group doesnt actively support a state income tax. The League has only taken an informed stance on a policy position, as it does with countless other issues.

In the case of the income tax, the position is that this is the fairest way, but we havent worked to make it happen, Weatherford said. Its been 25 years since that was part of the platform, but even then, it didnt say we would work for it, and still doesnt.

Our ruling

The state GOP said McLauchlan was part of a group that supports imposing a state income tax on Floridians.

Thats a stretch. The group was the League of Women Voters of Florida, which concluded — about a quarter century ago — that a state income tax would be a fairer way to collect revenue for state programs. The group hasnt lobbied for that goal (or even revisited its stance in years) and McLauchlan, as a member of the group, isnt forced to espouse a position on that issue. She denies that she supports it.

The statement contains an element of truth, but ignores critical facts that would give a different impression. We rate it Mostly False.