Food for thought!!
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To: <[EMAIL PROTECTED]>
Sent: Wednesday, November 17, 2004 6:49 AM
Subject: [NNEHousing_BaltimoreCity] NEWS: Hamm defends filing for insolvency
NOTE: There is NOTHING wrong with filing for bankruptcy. However, when you do it, make sure you comply with the law.
Is the O'Malley Administration capable of thinking of these things BEFORE it selects another police commissioner?
Here's a helpful checklist that I developed in 2 minutes over my morning coffee - it's yours for free!
Things To Do When Investigating a Potential Police Commissioner
1. Check criminal record; 2. Check arrest record; 3. Check civil filings; 4. Check domestic violence protective order filings; 5. Google; 6. Check property ownership and residency in Baltimore City; 7. Check voter registration; 8. Interview candidate; 9. Read job application completed by applicant; 10. Check references; 11. Ask references for references; 12. Check candidate for visible deficiencies (i.e. does he make racist, sexist, anti-gay, or other inappropriate remarks during interview?); 13. Inquire if candidate has a history of public drunkeness or other inappropriate behavior; 14. Have an adult not in awe of the candidate's ability to handle a gun and make the police car's lights flash and siren blare interview candidate again; 15. Check records of red-light tickets, parking tickets and other citation-type infractions; 16. Check bankruptcy filings.
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Hamm defends filing for insolvency 1997 bankruptcy process did not note pay increase
By Ryan Davis and Stephanie Hanes Sun Staff
November 17, 2004
Acting Police Commissioner Leonard D. Hamm filed for bankruptcy in 1997, just days after the city school board approved the promotion that made him permanent school police chief and more than doubled his salary.
But on the forms he filed in federal court, Hamm listed his salary as the annual equivalent of $27,936, not the $64,260 he was set to receive. He also indicated he was not expecting a noteworthy change in salary.
Throughout the three-month bankruptcy process, Hamm never told anyone about his raise, and in December 1997 he was relieved of $21,300 in debt.
Many local bankruptcy lawyers said that if Hamm knew about his pending raise when he entered his court filings, he abused the federal bankruptcy system.
Hamm and city lawyers say there is nothing wrong with what he did.
The acting commissioner says that despite the school board's approval of his promotion, which was made during a public meeting along with at least two dozen other personnel moves, he was unaware of the coming raise when his bankruptcy was filed.
"I never knew anything about getting a raise until I actually saw my paycheck," he said last night. "I never went to any school board meeting, and no one ever notified me."
City lawyers say Hamm's filings properly reflect his status at the time he filed them -- the only time that is important, they say.
"The question is whether they're correct at the date of filing," said City Solicitor Ralph S. Tyler. "What I know is that the form was accurate. It accurately reflects his salary and pension."
The revelation comes days after Hamm's predecessor, Kevin P. Clark, was fired by Mayor Martin O'Malley amid questions about past domestic abuse allegations. An investigation of a dispute in May between Clark and his fiancee did not substantiate any allegations, though it turned up other alleged -- though unproven -- domestic disputes from Clark's past in New York. That disclosure raised questions about the background check O'Malley performed before hiring Clark.
Upon firing Clark last week, O'Malley named Hamm acting police commissioner. Hamm had been the city's No. 2 police officer since September. The mayor's spokesman, Steve Kearney, declined to say yesterday whether O'Malley was aware of the bankruptcy before being asked about it Monday by The Sun.
"We've looked at this matter carefully, and there is nothing here that causes concern," Kearney said. "Commissioner Hamm has a long, distinguished career in the Baltimore Police Department. We are conducting a very thorough background check. And we anticipate that Commissioner Hamm will be nominated and confirmed as Police Commissioner."
Most police agencies, including Baltimore's, perform credit checks on their applicants. In 2000, O'Malley hired former Police Commissioner Edward T. Norris, who had previously filed for bankruptcy.
Chapter 7 bankruptcy is commonly described as a way for an honest debtor to be relieved of burdens that he or she cannot repay.
In a Chapter 7 filing, a debtor has to show that his disposable income exceeds his expenses by only a negligible amount, if at all. If, however, he has enough money left over to pay even a portion of his debts, lawyers say, he should file for Chapter 13 bankruptcy, which requires repayment to creditors.
"In a Chapter 7 case, what you're saying to the court is, 'I don't have the ability to make payment on my debt,'" said Marc Kivitz, a Baltimore bankruptcy lawyer. "Not even 'payment in full,' but 'payment at all.'"
Hamm listed nine creditors to which he owed the $21,300. Those included Harbor Bank, financial corporations, Circuit City and Home Depot. The amount did not include the mortgage on his West Baltimore home or his car loan, on which he continued to make payments. The successful bankruptcy filing excused him only from the $21,300 in debts.
Hamm, 55, declined to say yesterday what led him into debt. "It's personal," he said.
The popular commander retired in 1996 as a major in the city police force. He had served 22 years and was earning $64,000 a year when he retired, according to his bankruptcy filing.
He then worked about 1 1/2 years for the security division of the Downtown Partnership, a business advocacy group. For that, he was paid $43,000 annually, plus his police pension, according to his bankruptcy filing.
Hamm left that job to work for the schools on April 1, 1997, according to his resume. He signed a one-year contract stating that his annual salary would not exceed $30,273. He said yesterday that he took the job, despite the pay cut, because he wanted the challenge of working with children.
Hamm said yesterday that he retained attorney Sharon King on July 11, 1997, and gave her his paperwork to file for Chapter 7 bankruptcy. "I left everything in the hands of my attorney," he said.
In a public meeting, the school board promoted Hamm from consultant to a director position on Aug. 26 that year.
The next day, Hamm signed his bankruptcy forms.
On Sept. 2, the forms were filed. They indicated that including his salary and pension -- from which loan payments were being deducted -- Hamm was bringing home $2,760 a month. He claimed monthly expenses of $2,839, apparently making it impossible for him to gather enough money to repay his debts.
By Sept. 8, school records reflect, Hamm was being paid at a rate of $64,260 per year.
On Oct. 7, Hamm attended a creditors meeting -- a session in which trustees typically ask debtors and their lawyers whether any information in the bankruptcy filings has changed. The trustee in Hamm's case, attorney Monique D. Almy, noted in the official record of the meeting that Hamm had changed employers.
In response to whether the financial information in his initial filing was correct, she checked "yes." She wrote that no amendments were necessary.
"If your question is, 'Is that kosher?' I would say, 'Absolutely not,'" said Alan Grochal, a local bankruptcy lawyer. "If I were the trustee in the case, I would be troubled."
According to Hamm, no one ever asked if his pay had changed and he never told anyone his pay had changed.
On Dec. 12, 1997, Hamm's debts were expunged.
A salary increase, some said, does not necessarily mean a filing was inappropriate.
"The fact that his salary went up a few days later, even if he knew about it, doesn't necessarily indicate he filed in bad faith," said Thomas Dame, a Baltimore bankruptcy attorney.
Both the city solicitor and police legal counsel Kim Y. Johnson, a bankruptcy attorney, indicated yesterday that they didn't believe Hamm's raise would have prevented him from having his debts expunged.
"I'm strongly suggesting to you that it's unlikely it would have mattered," Tyler, the city solicitor, said.
Would Hamm do anything differently if he filed for bankruptcy today? "Absolutely not," the acting commissioner said.
Sun staff writers Matthew Dolan and Liz Bowie and Sun researcher Jean Packard contributed to this article.
http://www.baltimoresun.com/news/bal-te.md.hamm17nov17,0,7174369.story?coll=�l-home-headlines
Copyright � 2004, The Baltimore Sun
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