Thursday, August 7, 2014

Good Idea, Bad Idea - Cosigning a Loan

There are many good reasons why you may want to cosign a loan.  Some typical examples include helping a child obtain their college education by co-signing student loans, or assisting your spouse in purchasing a car. With any good idea, however, a small difference in the situation can make it a very bad idea.

Many people are unaware of the consequences of cosigning a loan, and in many many instances cosigning may be a very bad idea.  Take just the two examples described above:  If your child is unable to find a job after college and therefore unable to pay their student loan, that loan will be your responsibility.  If you and your spouse separate and he or she stops paying their car loan, your credit will be affected as well (even if they still have the car).

In these previous three posts we explored what happens when a cosigner or the primary borrower on a loan declares bankruptcy:

What happens to my Cosigner if I file for Bankruptcy?

I co-signed a loan and the primary borrower has filed for bankruptcy. What should I do to protect myself?

I am the primary borrower on a loan and my cosigner has filed for bankruptcy. What should I do to protect myself?

The short answer is simple: IF YOU SIGN A PROMISSORY NOTE, YOU HAVE A RESPONSIBILITY TO PAY THAT LOAN.  

By the numerous comments and questions we receive on all three of those posts it is obvious that many cosignors don't realize how serious this obligation is when they signed the loan.  Many people feel that it should matter that they don't have access to the collateral (such as a house or car) or that they don't have a relationship with the primary borrower anymore.  These are all the inherent risks in co-signing a loan and it doesn't matter to the lender.  If you cosigned a loan, you agreed to pay the money back if the other person doesn't, regardless of the circumstances.

If it isn't paid on time your credit will be affected.  If it isn't paid at all, the lender can sue you for the funds.  If the primary borrower files for bankruptcy and the debt is discharged so that they no longer owe it, you still do!

Cosigning a loan is not something that should be taken on lightly.  There are often good reasons to do it, but you should also consider all of the reasons why you might not want to.  In short, if you can't pay back the loan yourself, then you'd better be 100% positive that the primary borrower will pay it back.  If the lender was convinced of that, then the primary borrower wouldn't need a co-signor in the first place.


Wednesday, July 23, 2014

Owning an SBR - Part 1: Finding the right SBR for me.

The National Firearms Act of 1934, in conjunction with Title II of the Gun Control Act of 1986 (codified at Title 26 United States Code, Chapter 53, Internal Revenue Code) ("NFA") regulates the ownership of certain firearms, including, Short Barrel Rifles ("SBR"), Short Barrel Shotguns, Machine Guns, Destructive Devices, Suppressors and AOW's (Any Other Weapon).

A Short Barrel Rifle is defined as any rifle having barrel length of under 16 inches, as measured from the face of the closed bolt to the muzzle, and/or having an overall length of under 26 inches.  This is the story of how and why Kelsey & Trask, P.C. Partner and Holdover Consulting, LLC Principal Matthew Trask legally obtained an SBR.  Although this process was specific to the acquisition of an SBR, the process would be similar for any other Title II firearm.

Owning an SBR - Part 1: Finding the right SBR for me.

Ever since I watched Bruce Willis as John McClane dispatching eastern-European terrorists over the side of the Nakatomi Plaza, I’ve had a soft spot for the MP5.  I wanted one.  With the proper licenses, I could even own one in Massachusetts.  Unfortunately, a transferrable, fully-automatic Title II MP5 will cost upward of $22,000.00.

The next best thing was the semi-automatic carbine version of the MP5 produced by Heckler & Koch and imported into the United States from 1982-1991.  A total of 15,633 HK94 carbines came overseas from Oberndorf am Neckar, the last one in 1991.  HK94 prices have risen steadily, and even a semi-automatic version can fetch close to $5,000.00 today.

After HK stopped importing the semi-automatic derivatives of the MP5, a number of small builders and manufacturers sprang up and started producing clones of the HK94 and HK89.  At about the same time, license-built copies produced in other countries were imported to the U.S.

Early models utilized surplus HK parts which were permitted to be imported, but as those supplies dried up, some builders started manufacturing their own components, often with varying amounts of tolerance and degrees of success.   Put another way, there were good clones and bad clones.  Good builders and bad builders.  High volume guys and low volume guys.  It was tough to tell the difference.  If you chose your builder correctly, you could get a near-perfect clone for around half of what a “genuine” HK cost.  If you chose poorly, you could get a two thousand dollar paperweight.

Recently I was discussing these issues with the owner of my local gun shop, who is also a Title II/Class 3 dealer in Natick, MA.  He immediately suggested I consider a DF94, an MP5/HK94 clone build by Dave Getz of DJ Getz Firearms Co. I looked at one of the new DF94’s he had, and had to agree it was a very well-built, built-to-spec HK clone.  The welds were clean, the machining on the bolt and bolt carrier were smooth and the fit and finish were very nice.  As an added benefit, the DF94 shipped with a tungsten filled bolt carrier and other upgrades, making a more than acceptable sear host if I ever (legally!) wanted to down the road.

A day or so after I picked up the rifle, I had a few questions.  I emailed Dave Getz with a few questions over components and parts compatibility.  Not 15 minutes later, Dave himself called me with an answer to my questions.  We chatted about our affinity for Teutonic steel, rapid-acquisition optics and the direction gun laws seem to be heading at a state and federal level.  Dave didn’t have to call me to answer my questions, but he did.  You don’t see that level of customer service anywhere.  That conversation and 600 flawless rounds later, I was a very happy customer.

There was, of course, one problem.  The National Firearms Act requires that a rifle have a barrel length of 16 inches, and an overall length of 26 inches.  The DF94 I was now the proud owner of had a faux suppressor pinned and welded on the end of the muzzle to bring the overall barrel length of the rifle to over 16 inches.  Detective McClean’s MP5 had a barrel of just under 9 inches, so some work would need to be done.  Time for an SBR. 

Part II will discuss the National Firearms Act and the process for legally manufacturing a Short Barrel Rifle.

Part III will discuss Navigating the ATF's E-Forms System.

Part IV will involve dragging the Kelsey & Trask, P.C. team out to the range.

Thursday, June 26, 2014

What are the Restrictions on a Massachusetts Dealer Selling a Handgun?

Before a licensed dealer in Massachusetts can transfer a handgun they have to answer four questions:

1. Is the buyer a Massachusetts resident or a federally licensed dealer in another state?
2. Does the buyer have a License to Carry, Class A, Large Capacity?
3. Did the buyer pass the NICS background check, if required?
4. . Is the handgun “Mass Complaint?” (i.e. listed on the EOPSS Approved Firearms Roster and compliant with the Attorney General's regulations)

If the answer to all of these questions is "yes", then the handgun transfer is legal in Massachusetts.  However, if the answer to any of these questions is "no", read on, because there are some exceptions described further below.  

Question 1: Is the buyer a Massachusetts resident or a licensed dealer in another state?

There is a federal restriction on interstate transfers of handguns.  This means that handguns can only be transferred between license dealers or manufacturers across state lines.  When selling to an individual, dealers can only sell to residents of their state. 18 U.S.C. 922(a)(3) and (5), 922(b)(3), 27 CFR 478.29 and 478.30.

Exceptions:  The only exception is that a dealer may "return[ ] a firearm or replacement firearm of the same kind and type to a person from whom it was received" 18 U.S.C. 922(a)(2), even if the transferee resides in a different state.  Otherwise a violation of this rule is punishable by up to five years in federal prison. 18 U.S.C. 924(a)(1)(d).

Question 2: Does the buyer have a License to Carry, Class A?

An LTC/A in Massachusetts permits the holder to possess and concealed carry a handgun, subject to potential restrictions listed on the license. M.G.L. c. 140 s. 131(a).

Exceptions:  There are also LTC Class B and Permits to Purchase allowable under the licensing statute, but these are rarely granted. M.G.L. c. 140 s. 131(b); M.G.L. c. 140 s. 131A.  An LTC/B would entitle the holder to purchase large capacity rifles and shotguns, as well as non-high capacity handguns only. M.G.L. c. 140 s. 131(b).

Question 3: Did the buyer pass the NICS background check?

The National Instant Criminal Background Check System ("NICS") is operated by the Federal Bureau of Investigation and is used by licensed dealers to instantly determine whether a prospective buyer is federally prohibited under 18 U.S.C. 922(g) and (n) from receiving or possessing a firearm.  The NICS check is mandated by the Brady Handgun Violence Prevention Act (Brady Law) of 1993 See, 18 U.S.C. 922(t), 27 C.F.R. 478.102.

Exceptions: Limited.  Firearm transfers are exempt from the requirement for a NICS check in three situations. These include transfers: (1) to buyers having a State permit that has been recognized by ATF as an alternative to a NICS check; (2) of National Firearms Act weapons approved by ATF; and (3) certified by ATF as exempt because compliance with the NICS check requirement is impracticable.  18 U.S.C. 922(t), 27 CFR 478.102(d) See also, 27 C.F.R. 478.11.  Also, Transfers of curio or relic firearms to federally licensed curio and relic collectors are not subject to the requirements of the Brady law.  See also, 27 C.F.R. 478.124 (Form 4473 and NICS check not required if upon the return of a firearm delivered to a gunsmith for the sole purpose of repair or customizing when such firearm or a replacement firearm is returned to the person from whom received.)

Question 4: Is the handgun Mass Complaint?

Handguns which are currently "Mass Compliant" are those which appear on the Approved Firearms Roster and comply with the Attorney General regulations.  These represent the majority of handgun transfers between Massachusetts dealers and residents.  However, there are some complicated exceptions which allow for transfers of handguns that are not otherwise "Mass Compliant."

Exceptions: There are three primary exceptions to the requirement that a handgun be Mass Compliant:

Exception: Handguns Documented in MA prior to October 21, 1998 - Any Handgun where the owner can show paperwork (such as an FA-10 form) showing that the handgun was lawfully owned or possessed under a Massachusetts license before October 21, 1998, the transfer of that handgun by a Massachusetts licensed dealer is completely exempt from AG and EOPSS regulations.  It should be noted that there is no requirement that the handgun remain or be continuously present in Massachusetts since October 21, 1998; only that the owner can show it was registered in Massachusetts prior to October 21, 1998. M.G.L. c. 140 s. 123, 940 C.M.R. 16.09.  See also M.G.L. c. 93A s. 2(c).

Exception: Handguns on Approved Firearms Roster and Manufactured prior to October 21, 1998 - Handguns can be sold which appear on the Approved Firearms Roster, but are exempt from the Attorney General’s regulations by virtue of having been manufactured before October 21, 1998.  This category pertains mainly to Glock handguns.  Note that there is no requirement here that the handgun be registered in Massachusetts prior to October 21, 1998, only that it was manufactured before that date.  M.G.L. c. 140 s. 123, 940 C.M.R. 16.09.  See also M.G.L. c. 93A s. 2(c).

Exception: Handguns on Approved Firearms Roster sold to Law Enforcement Officers - Handguns which appear on the Approved Firearms Roster when the buyer is a law enforcement officer exempts the dealer from the Attorney General’s restrictions, but not M.G.L. c. 140 s. 123 requirements.  In this case it doesn't matter when the handgun was manufactured, only that the handgun appears on the Massachusetts Approved Firearms Roster. M.G.L. c. 140 s. 123, 940 C.M.R. 16.09.  See also M.G.L. c. 93A s. 2(c).


Tuesday, June 10, 2014

Rumors and Lies: How does a Law Abiding Resident Determine if a Firearm is Legal to Purchase in Massachusetts?

On April 27, 2014, @MassGov, the official Twitter account of the Commonwealth of Massachusetts, posted the following:
“Before purchasing a firearm, make sure it is on the roster of ones approved in #MA. 
[Link is a #PDF] ow.ly/wa78k

This tweet is both a misstatement of the law, and misleading to lawful gun owners in Massachusetts. The link contained in the Twitter post takes you to to the “Commonwealth of Massachusetts Executive Office of Public Safety and Security Approved Firearms Roster”, often referred to as “the EOPSS Roster”.  We’d like to take this opportunity to clear up some myths about this list.

MYTH: Handgun purchasers in Massachusetts must ensure that the handgun they purchase is on the approved roster. 

REALITY: The requirements of M.G.L. c. 140 s. 123 and 940 C.M.R. 16.00 apply only to licensed dealers in Massachusetts, and govern what firearms the dealer may transfer or sell to a Massachusetts resident.  The laws and regulations place no burden on the purchaser of any firearm to ensure that it appears on the Massachusetts Approved Firearms Roster, or is compliant with the Attorney General’s regulations.

MYTH: Anyone selling a handgun in Massachusetts must ensure that the handgun they sell is on the approved roster. 

REALITY: The requirements of M.G.L. c. 140 s. 123 and 940 C.M.R. 16.00 apply only to licensed dealers in Massachusetts, and govern what firearms the dealer may transfer to a Massachusetts resident.  The above laws and regulations do not govern private transactions conducted on an FA-10 or E-FA-10 form. Therefore, it is legal for a private individual to sell a handgun which does not appear on the Approved Firearms Roster or does not meet the Attorney General’s requirements set forth in 940 C.M.R. 16.00.

MYTH: Any handgun which appears on the EOPSS Roster may be sold by a dealer in Massachusetts. 

REALITY: The Approved Firearms Roster is only one-half of the requirements determining what firearms may be sold by a licensed dealer in Massachusetts to a Massachusetts resident.  The transfers of handguns by Massachusetts licensed dealers are also subject to the Attorney General’s Handgun Sales Regulations, 940 CMR 16.00, et seq. Firearms on this Approved Firearms Roster do not necessarily comply with the requirements of the Attorney General’s Handgun Sales Regulations.  Although handguns manufactured by Glock appear on the EOPSS Roster, those same handguns have been refused certification by the Attorney General’s office.

MYTH: Massachusetts Residents may only possess handguns which appear on the EOPSS Roster and/or are AG Complaint. 

REALITY: The requirements of M.G.L. c. 140 s. 123 and 940 C.M.R. 16.00 apply only to licensed dealers in Massachusetts, and govern what firearms may be transferred to a Massachusetts resident.  The above laws and regulations do not restrict the firearms which may be owned or possessed by a resident of Massachusetts.  Therefore, it is completely legal to possess a handgun which does not appear on the Approved Firearms Roster; the only restriction is that a dealer may not transfer an “unapproved” handgun to a Massachusetts resident.

MYTH: A Massachusetts Resident may only purchase a handgun which appears on the EOPSS Roster and is AG Compliant.

REALITY: The requirements of M.G.L. c. 140 s. 123 and 940 C.M.R. 16.00 apply only to licensed dealers in Massachusetts, and govern what firearms the dealer may transfer to a Massachusetts resident.  The laws and regulations do not place any liability on the purchaser of a non-compliant firearm from a Massachusetts dealer, even if the firearm is purchased by a Massachusetts resident.  Therefore, it is not illegal to purchase a handgun which does not appear on the Approved Firearms Roster from a dealer, although the dealer may be violating M.G.L. c. 140 s. 123 or 940 C.M.R. 16.00 by selling it to you.
Additionally, there are many exceptions to the EOPSS Roster and Attorney General regulations.  Those exceptions will be discussed in a future post.

MYTH: The firearms on the Approved Firearm Roster are the only firearms that may be purchased by a Massachusetts Resident. 

REALITY: The M.G.L. c. 140 s. 123 and 940 C.M.R. 16.00 pertain only to the sale of handguns, and not rifles or shotguns which do not fall within the definition of “Firearm” or “Assault Weapon” under M.G.L. c. 140 s. 121.  Rifles and Shotguns which are not “assault weapons” are not regulated under M.G.L. c. 140 s. 123 or 940 C.M.R. 16.00. Handguns which are exempt from the testing requirements of M.G.L. c. 123 and 940 C.M.R. 16.00 nevertheless may not be transferred if the handgun is an “assault weapon” as defined by M.G.L. c. 140 s. 121.

A more accurate version of this tweet might have read:

Dealers: Before selling a handgun, first make sure it is on the roster of ones approved in MA, as well as certified by the Attorney General, if selling to a Massachusetts resident.



Are You on the List? What Makes a Handgun "Mass Compliant?"

There are two lists in Massachusetts that determine whether a handgun is legal to be sold or transferred by a Massachusetts dealer to a Massachusetts resident.  But one of the lists is apparently a secret.

The First List: the EOPPS Roster:

The “Commonwealth of Massachusetts Executive Office of Public Safety and Security Approved Firearms Roster”, often referred to as “the EOPSS Roster” or the “Approved Firearms Roster” is a list of handguns which have met certain statutory criteria governing the manufacture and sale of handguns to be sold in Massachusetts.  The criteria are tested by Massachusetts approved independent testing laboratories to have satisfactorily completed the testing requirements set forth in M.G.L. c. 140, § 123. The reports resulting from those tests are then reviewed by the Massachusetts Gun Control Advisory Board.

In cases where the Gun Control Advisory Board determined that the firearms “passed” the requirements set forth in Section 123,  the tested handgun was subsequently approved by the Secretary of Public Safety and Security as having complied with the statutory handgun testing provisions of M.G.L. c. 140, § 123.

The EOPSS Roster, therefore, is a list of all firearms which have completed and passed the testing requirements set forth in M.G.L. c. 140 s. 123.

The Second (Secret) List: the Attorney General's Roster:

The EOPSS Roster does not take into consideration the similar-but-not-identical requirements set forth in 940 C.M.R. 16.00, often referred to as the “Attorney General Regulations”.

I don’t know anyone who has ever seen the Attorney General “list” of approved firearms, and many (including myself) believe that no list actually exists.  Rather, firearms manufacturers in Massachusetts are required to “certify their own compliance” with the regulations, and are likely at risk for prosecution by the Attorney General’s office under the guise of a consumer protection action if they don't comply.

The EOPSS Roster and the Attorney General’s Regulations have significant implications for Massachusetts licensed firearms dealers and firearms manufactures, as both sets of rules govern (subject to certain exceptions) what handguns may be sold or transferred by a Massachusetts licensed dealer to a Massachusetts resident.

Our next two posts will review this complicated and potentially contradictory regulatory structure in more depth.

Tuesday, April 22, 2014

Bankruptcy Filing Fees Increase on June 1, 2014

The Bankruptcy court currently charges $306 in total fees to file for Chapter 7 Bankruptcy, and $281 in total fees for Chapter 13 Bankruptcy.  These fees include the filing fee, administrative fee and a trustee surcharge. A notice was just sent that the Bankruptcy court filing fees are increasing as of June 1, 2014.

After June 1, 2014, the Bankruptcy Court will charge the following fees to file for Chapter 7 Bankruptcy:

Filing Fee of $335.00, plus
Administrative Fee of $46.00, plus
Trustee Surcharge of $15.00
TOTAL FILING FEE: $396.00

After June 1, 2014, the Bankruptcy Court will charge the following fees to file for Chapter 13 Bankruptcy:

Filing Fee of $310.00, plus
Administrative Fee of $46.00, plus
TOTAL CHAPTER 13 FILING FEE: $356.00

Other fees that will also increase on June 1, 2014 are the filing fees for:

  • Chapter 9: $1717
  • Chapter 11: $1717
  • Chapter 12: $275
  • Chapter 15: $1717
  • Adversary Proceeding: $350

IMPORTANT NOTE: The above fees are in addition to any attorney's fees and/or fees for the preparation of the Bankruptcy Documents, appearance at a Section 341 Creditor's Meeting, or representation in Bankruptcy Court. Any fees for legal services must be agreed to in writing between you and your attorney prior to the commencement of any bankruptcy proceeding.

Wednesday, February 26, 2014

Is a sealed criminal record considered in applying for a firearms license?

A sealed criminal record in Massachusetts does not mean the record is sealed for all purposes.  While a potential employer would not be able to view a sealed record, there are exceptions.  One example of an exception is for a "legitimate law enforcement purpose."

Even if your criminal record is sealed, an application for a firearms license in Massachusetts is deemed to be a "legitimate law enforcement purpose", and the reviewing agency would be able to see that there is a sealed record.

In addition, if the sealed record were a conviction for a disqualifying crime, you would remain ineligible by statute to obtain a license.  In addition, if the conviction is not an automatic disqualifier, the existence of that sealed record (and police records pertaining thereto) may still be used by the issuing department to address the issue of the applicant's suitability for a LTC.


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