Blog Archives for September 2007

« August 2007 | Back to Archives by Date | October 2007 »

September 27, 2007

A Message For Those With Their Head in the Sand

Here’s one for the “believe it or not” list: ostriches do not hide their heads in the sand. I know – you’re thinking “get OUT!” I was as shocked as the next person. Apparently, while they do not bury their head, they will sometimes lie on the ground trying to make themselves look inconspicuous. According to The Phrase Finder:

The story also relies on the supposed stupidity of ostriches, and of birds in general. In fact, there's little to support that either as birds have a significantly larger brain to weight ratio than many other species of animal. The notion is that the supposedly dumb ostrich believes that if it can't see its attacker then the attacker can't see it. This was nicely reformed as a joke on Douglas Adams' 'Hitchhiker's Guide to the Galaxy', in which the 'Ravenous Bugblatter Beast of Traal' was described as 'so mind-bogglingly stupid that it assumes that if you can't see it, then it can't see you.'

Birds are not stupid (at least not all of them), and I find it difficult to believe that a bird that merely lies about hoping not to be avoided (such as one might do at a high school or college reunion) is intellectually deficient. So if ostriches don’t hide their heads in the sand, why do people struggling with high house payments often do just the opposite?

There are many reasons for it. The less one has to look at something uncomfortable, the less likely it will be bothersome. Homeowners might have a list of regrets, but that does not make them “mind-bogglingly stupid.” Hiding one’s head however, does not make the problems go away.

Far too often, I meet with people who are facing a foreclosure auction. Tomorrow. Or the next day. Or perhaps in an hour or two. In some cases, I meet with people where the auction has already taken place, and they are facing eviction. I have even received calls from folks who are telling me there is a tow truck in their drive way.

There’s no way I can assure anyone with their head in the sand that when – or if – they take their head out, we can make things better. No bankruptcy lawyer with any credibility can assure everyone of that; every case presents different facts, different creditors, and different issues.

I can say confidently that having one’s head in the sand will most likely complicate matters. Debtors can expect to spend more in legal fees, can expect more uncertainty and risk in the bankruptcy process (along with the sleepless nights that may accompany it), and ultimately can expect to learn that the only person they hurt is themselves.

Speaking of hurting yourself: to this date, I still hate taking off a band-aid, especially if it covered a nasty cut or scrape or was located on my arm or leg where there’s more hair. My mom always told me to just rip it off. She was a nurse (and you’d think she would recommend something more gentle). Despite this sage advice, I still pull the corners, let it run under water, and hope I can gently lift the adhesive bandage without experiencing the same pain felt by those seeking a body waxing (if anyone has a better idea how to remove it, please let me know). Sometimes it works, but honestly, not too often. Most of the time, after taking it off millimeter by millimeter, I realize the only thing I can do is follow mom’s advice, and just rip the darn thing off. Perhaps I just need to grow up. Perhaps I just need to be buy better quality bandages. Either way, the discomfort I end up feeling is only momentary and I can move on.

Even if ostriches did hide their heads in the sand, they would ultimately have to come up for air or food. I imagine that they would have to lift the head out of the hole they have dug, and let their eyes adjust to the bright sunlight before moving on to find a good meal. The discomfort would be only momentary, but at least they could move on.

September 19, 2007

Massachusetts Attorney General Announces Settlement

Attorney General Martha Coakley announced yesterday that a settlement has been reached with five lenders involved in a foreclosure rescue scheme. The lenders involved are First Horizon Home Loans; Option One Mortgage Corp.; Wells Fargo Bank, N.A.; America Brokers Conduit; and Ocwen Loan Servicing, LLC.

More on the settlment can be found here.

Worcester Foreclosure Rates Way, Way Up

This morning's Worcester Telegram is reporting that from January 1, 2006 through June 30, 2007 a total of 1,370 foreclosure notices were filed by lenders against Worcester homeowners. It also does not appear it will get better anytime soon:

Trouble could continue for the next two years, according to Mr. [Clark Ziegler, executive director of the Massachusetts Housing Partnership]. ARMs on about 200 more Worcester homes are scheduled to reset before the end of this year, he said. About 1,000 more ARMs reset in Worcester next year, followed by 1,000 more in 2009, he said.

Facing foreclosure? Important Information from the IRS

Anyone facing foreclosure, or considering just "walking away" from their home, must read this important announcement from the IRS.

September 18, 2007

Ouch

Bank of America reports that “’unprecedented dislocations’ in credit markets will have a ‘meaningful impact’ on third-quarter results at its corporate and investment bank.” Unprecedented dislocation sounds painful. Perhaps that’s why they recently hiked up their ATM fees.

Source

No Regrets

From CNNMoney.com, a Chapter 13 debtor explains why filing for bankruptcy was the best decision he ever made.

September 13, 2007

A Collector's Dirty Tricks

Over at The Street.com, reporter Cliff Mason shares his experiences with a debt collector. It is a good read, but I have to stress that if you are having problems with a debt collector, contact a local consumer protection attorney to advice.

September 12, 2007

Bankruptcy Court Observations: Bad Lawyering

While my practice is limited to Massachusetts, I understand that people all over the country read this blog. (Of course, they do so with the understanding that it’s not legal advice and that they should confer with a local attorney who can help them.) With that said, my observations this morning in Bankruptcy Court might be helpful to just about anyone facing bankruptcy.

Last week, a Chapter 13 case was filed by a debtor who had a pending Chapter 7 case which had been filed earlier this summer. The judge asked “why do I have two pending bankruptcy cases at the same time?” A good question.

Debtor’s counsel essentially told the Court that they wanted to convert the case to Chapter 13.

“So then instead of filing a Motion to Convert, or a Notice of Conversion, you simply filed another case?” the Court asked.

“Yes, your honor.”

This was stupid move. There are rules in place that allow a Chapter 7 debtor to convert or seek conversion of their case to Chapter 13 without the need of filing a new case (and preparing the paperwork for a new case, and paying a filing fee for a new case). A little research would have gone a long way. This move ended up costing the debtor more, and also taxed the resources of the court, which ultimately affects us all. While I cannot comment on counsel’s overall competence, bankruptcy is clearly not on the list of strong practice areas.

Ultimately, the Court dismissed the “new” case and converted the Chapter 7 to a Chapter 13. However, all of this was done after the new case was filed, was assigned to a judge, and then reassigned to the judge who already presided over the Chapter 7.

My point is this: if you’re filing bankruptcy, not just any attorney is going to be able to help you. Don't get me wrong: no attorney is perfect. We all strive for perfection, but none of us ever really get there. But at least get someone who knows what they are doing…or at least has the wherewithal to quickly learn. It’s fair to you. It’s fair to the court that you hope can help you through a difficult process. And ultimately, it’s fair to us all.

The News Ain't So Good

Today the The Wall Street Journal reports that the bankruptcy of American Home Mortgage Investment Corporation puts thousands of homeowners in “imminent risk” of losing their homes.

From the New York Post: Countrywide reportedly continues its struggle in this mortgage and housing meltdown.

And finally, USA Today reports that there should be no assumptions that the Federal Reserve will cut interest rates.

Dallas Federal Reserve Bank President Richard Fisher said the U.S. economy appears to be weathering troubles in housing and financial markets, but it is uncertain how things will play out.

"Our economy appears to be weathering the storm thus far. The future path of that storm and the appropriate policy course, however, are still to be determined," Fisher said in remarks prepared for delivery to a community forum in Laredo, Texas.

Last summer, I questioned whether we were heading into a Perfect Storm. If you read the news close enough, it would appear that we are. Are you prepared?

September 11, 2007

Top Ten Reasons to Hire an Attorney for Your Chapter 13 Case

When faced with a foreclosure, most people will consider a Chapter 13 filing. But I have been hearing some rumblings here and there that many people seeking protection under Chapter 13 are opting to go it alone, without an attorney. While certainly people have the right to represent themselves, there is no good reason to not hire an attorney for a Chapter 13.. In an effort to drive my point home, I have identified here the Top Ten Reasons Why You Should Not File Chapter 13 Without an Attorney. I’ve also done so while still hoping to leave a smile on your face.

May we hear a drum roll!

Number 10: The Bankruptcy Code is complicated.
Unless you’re reading it virtually every day, and have studied it for years, understanding the code can be daunting. Since the 2005 changes, it’s been even moreso. Here’s an example: Section 1321 is the easiest section of Chapter 13. It reads “The debtor shall file a plan.” It pretty much goes down hill from there. You’re trying to save your home, not learn a new trade. Find an attorney that knows what they are doing.

Number 9: Other relevant laws are complicated.
A few months ago, I was awaiting for a client’s creditor’s meeting to start. The person ahead of us was representing herself. The trustee asked her “do you have your homestead declaration?” Her response: “what’s a homestead declaration?” It was apparent that she had no idea about the requirements. I silently gasped, I saw the trustee’s eyes close, and deep down, I knew this lady was in a heap of trouble. Had she known, she might have been able to protect her home in bankruptcy – but she didn’t know because she didn’t have an attorney.

Number 8: Form 22C
Bankruptcy attorneys are not fans of Form 22C, but most (hopefully) know how to correctly complete it. There are far more important issues to deal with in a Chapter 13 than to be correcting Form 22C, or to deal with the issues arising from a poorly prepared Form 22C. Oh…and the forms are changing December 1. More fun!

Number 7: Cram downs.
If you have property that is worth less than what is owed, you might benefit from a cram down. It sounds nasty, but it actually isn't....although creditors might not agree with that. There is no way I can articular cram downs thoughtfully and completely without going back on my promise to leave a smile on your face. Actually, the only way I could leave a smile on your face and completely explain cram downs is if my web master figured out a way to have a sound byte of Homer Simpson screaming “BOR-ING!” mid-way through. Then again, you'd probably stop reading it at that point. Want to know how or if a cram down may benefit you? See an attorney.

Number 6: You will have to go to court for your case.
Problems will arise, and you are going to have to go to court. This will result in your taking time off of work. You may even lose some sleep the night before. It also means schlepping to Boston or Worcester which can be a problem if you’re not already there. A lawyer can go for you, and in many situations, you may need to be there.

Number 5: Payments
Plan payments need to be made within 30 days of filing. Don’t make payments and you’ll face a motion to dismiss which will likely require you to go to court (as well as make the payments). And don’t forget adequate protection payments too!

Number 4: Credit Counseling
If you check out the archives, you’ll see that I’ve written about the credit counseling requirement. No attorney worth his fees is going to allow you to file bankruptcy without completing that process.

Number 3: The Bankruptcy Court protects all who do not have an attorney. While you can expect Courts to extend more courtesies than might be extended to attorneys, you cannot expect them to tell you what to do and how to do it. You also cannot expect the Court to let you get away with what no attorney could get away with – such as not filing important documents. That’s not the Court's job, and you cannot and should not expect it.

Number 2: You don’t want to get the case dismissed.
You cannot say to yourself – “ok, I’ll try it myself…and then if it goes badly, I’ll get an attorney.” Not such a good idea. Under the new and supposedly improved Bankruptcy Code, debtors who have had a case pending within a year prior to filing are now dubbed “repeat filers.” Being a repeat filer can adversely affect the automatic stay in a later case. That stay protects debtors from creditors – and in the case of real estate, stops a foreclosure right in its tracks. This can mean more work and bigger headaches in a later filing. Make it easy for yourself: avoid being a repeat filer.

And the Number 1 Reason Why You Should Have an Attorney in a Chapter 13: Attorneys fees can be paid through a Chapter 13 plan.
Even if you do not have cash stored up for attorneys fees, you can still hire an attorney. And the fees can get paid through your Chapter 13 plan. Check with your attorney to see if they will wait to get paid by the Chapter 13 Trustee. If they cannot or won’t, find one who will.

Still think you cannot afford a good attorney? Think again.

MORE RESOURCES

Boston Office:
77 Franklin Street
Boston MA 02110
617-542-2956

Cape Cod Office:
923 Route 6A
Yarmouth Port, MA 02675
(by Appointment)

Toll-Free Number
1-86-NEW-START
(1-866-397-8278)


RSS Feed Subscribe - RSS Feed

Subscribe to Email feed

© McLeod Law Offices, P.C.
All rights reserved
PLEASE READ THE TERMS AND CONDITIONS OF THIS SITE

site by david galiel