The look on his face says it all: the story behind that stray 44-pound cat from New Jersey is actually not so funny any more.
Next stop, Wonderland: who will think about the dogs?
Are we in a recession? Yes, we are. No, we’re not! Yes, we are!
Archive for July, 2008
Storm Preparation: Chapter 13 and DSOs
Wednesday, July 30th, 2008
When BAPCPA was enacted, a new concept in bankruptcy law emerged: “domestic support obligations” or “DSOs”. Child support, alimony and other support obligations received specific consideration in bankruptcy, and in particular, chapter 13. If you are looking at the potential of a bankruptcy filing, there’s something you need to know about how domestic support obligations and chapter 13 work together.
When I meet people who are considering chapter 13, it’s not surprising that they have a lot of debt. And at times, that debt might also include child support or other spousal support payments that have not been made or are delinquent. There are many reasons why: income changed, expenses changed and those obligations fell behind. But without a court order, none of these circumstances relieve a debtor’s liability.
Storm Preparation: Some Thoughts on What We Can Do
Wednesday, July 23rd, 2008
I didn’t sleep well last night. I tuned into the 11 o’clock news and learned about a Taunton homeowner in foreclosure who committed suicide on the day her home was scheduled to be auctioned. Since Wednesday is Storm Preparation day, the news story prompted me to get down to the nitty-gritty of things: reaching out.
I believe that one of the reasons why this situation with the Taunton homeowner strikes me so hard is because in the last several months, I have met several people who have waited a long time to reach out for help. For some, they waited too long and I have been able to help them. For others, I have been able to point them in what I hope was the right direction. And for a few, I have learned that there is nothing I can possibly do.
Tuesday’s News…
Tuesday, July 22nd, 2008
Shocker: BAPCPA put more profits into the pockets of credit card companies says Harvard Law Professor Elizabeth Warren.
Yesterday I blogged about honesty in the bankruptcy. Today, there’s a report out of Wichita of a former debtor who was not so honest. He’ll be taking an involuntary vacation for 33 months for bankruptcy fraud.
Living on the edge: rising gas and food prices may push struggling families into foreclosure.
MSNBC explores the high price of commuting.
Does anyone have a spare $25 billion that they aren’t using?
Despite a new Massachusetts regulation forcing lenders to wait 90 days to foreclosure on homes (it went into effect on May 1), the Boston Business Journal reports that foreclosures continue to climb.
Sign of the times: Commercial bankruptcy filing rates are going up.
Sign of the apocalypse: Batman was arrested. No joke.
A Shakedown Backfires
Monday, July 21st, 2008
This week’s Newsweek has a great article on the abusive tactics debt collectors are increasingly using. The article is called “A New Shakedown” and it’s worth the read – especially in light of the shakedown a creditor recently pulled in a Nebraska bankruptcy case. The collector ended up violating the stay.
The debtors’ chapter 13 bankruptcy case was filed on February 13, 2008 and listed Geneva Roth Companies as a claim in the amount of $170. On May 21, a collector working on behalf of the creditor GRC (Sherman and Roman) called one of the debtors and started “to verbally abuse the debtor and coerced a payment from the debtor threatening criminal sanctions.”
According to a signed statement, despite being informed of the bankruptcy filing and the pending bankruptcy case the collector told the debtor that she “was a key element in an investigation of fraud and bank theft….that they will be forced to have me identified as a felon. [The debtor went on to tell her that [she] was not going to talk to her about this at work and that I would call her back. [It] was then I had to call her back within minutes or my husband and I would be identified at our work by cops if I didn’t and it would be embarrassing.” The debtor was ultimately compelled to use a debit card to pay $300. She was left shaken.
Honesty Goes A Long Way
Monday, July 21st, 2008
Today I received a call from a prospective client who was upset with their current bankruptcy attorney. They claimed that their current attorney was not giving them accurate advice, specifically, that the attorney had informed them that information pertaining to a non-filing spouse’s income and expenses was not needed to prepare a bankruptcy filing. That’s generally not the case, but in this instance, the parties had only been married for a short period. But when I started asking some other basic questions, what I got in return was whole a lot of bull.
The caller told me that the husband and wife resided together for about a year prior to the wedding. I told the caller that based on that, I would be required to consider the non-filing spouse’s income not only for the schedules (income and expenses), but also for the means test (actually, it’s the Bankruptcy Code that requires it). But as soon as the information was disclosed, the caller started back-peddling.
Who’s Happy about this Economy?
Wednesday, July 16th, 2008
Yesterday, I met with a couple where we discussed their need to file bankruptcy. The husband expressed embarrassment at their decision to file and (like many of my clients) expressed concern that their employer or coworkers could learn about it. I did not think it was a possibility, and I told them so. But they told me something I felt the need to share with you.
Apparently, at his place of employment everyone is just happy and feeling fine (according to the client). Everyone has nice cars, nice houses and dresses well. No one there could possibly be considering bankruptcy. When my client looked at me and said “no one at my company is going through this”, I felt I had no choice but to ask him “how the $%@# do you know that?”
IndyMac Update: Foreclosures are halted
Monday, July 14th, 2008
The Federal Deposit Insurance Corp has temporarily halted any foreclosures on the $15 billion of bank-owned mortgage loans found in IndyMac’s portfolio, FDIC Chairman Sheila Bair said on Monday.
Hat tip: Calculated Risk.
Hope Floats (or Sinks)
Monday, July 14th, 2008
We’re hearing a lot about “hope” lately. Recently, I met two people in seemingly hopeless financial situations who are relying on hope to get them through. There is hope. Then there is denial. And sometimes, it can be difficult to see the difference between the two.
These folks had marginal income, high mortgage payments, and both are facing foreclosure. One hoped they could find a job (even though they had been unemployed for almost a year). The other, whose income was not nearly enough, hoped business would pick up and their income would change (they are in real estate). Both clients hoped things will change and they can keep their homes. While I also hope things will change for them, unless they do it simply will not happen. And this is what I told them.
A friend of mine once suggested that I write more about “hope”, and even went further to suggest that I “sell hope.” I will continue to leave the selling of “hope” to politicians like Barak Obama whose campaign website is apparently “Powered by Hope.” The purpose of this website is not to sell “hope.” The people who visit this site tend to be (as they often tell me) looking for honest information. If readers find “hope” on this site, it’s because they found it. They do not need me to sell it to them.
Don’t get me wrong, I think everyone needs hope. Without hope, there is little reason to get out of bed in the morning. Without hope, there is little reason for a sick person to get well. While preparing this blog, I thought of two metaphors: hope is like a good wine: a few glasses is fine. It actually can be quite nice. But a bottle (or two) will get you drunk, and perhaps very sick. Maybe for a day or two. Or we can look at hope like coffee: a little will keep you awake and alert. Too much, and you’re jittery, sweaty, gasping for air, struggling with heart palpitations and otherwise bouncing off the walls.
If you’re facing some financial difficulty, ask yourself, how much of your game plan is based on “hope” and how much of that hope is really based on reality? Will your income improve? Will you be able to pull it together in time to avoid a foreclosure? If your answer to these questions is “I hope so”, then you need to thing about how much of your hope is your not wanting to see what might really be there. Like the real possibility that you will lose your home.
For the two clients I mention above, they both know what they have to do to get where they want to be. Both also know what if they cannot pull it together, they will need to start the process of moving into the next phase of their life, which will not be in the home they currently reside in. Both clients face very difficult realities. They may succeed and they may not. These clients came to me presenting difficult situations and wanting honest answers to their questions. I could have chosen to provide hope. But I believe that they deserved honesty first. I am fairly certain that both are grateful that that is what they got. One even gave me a big hug afterwards and said “thank you.”
Lessons in Loan Modifications
Suze Orman is growing on me. Sort of. She often has sage advice for consumers, and lately she has been making regular appearances on CNN’s Larry King Live. I cannot say I completely agree with everything she says, but lately, she has been telling it like it is and when it comes to financial news and advice, it’s refreshing to see some honestly on TV. I have her suggest to consumers that if they are having problems with their mortgage, they should contact their lender (i.e., the workout or the loss mitigation department). A client recently told me he did just that, after hearing Orman suggest it sometime last year. He was falling behind on his mortgage, and decided to walk into his local bank to talk to them. It did not go quite the way he planned.
At the time, the client was not residing in Massachusetts, and his lender was a local bank. He sat down with the manager and explained his situation. Instead of extending an accommodation, or working with the client to help him keep his home, the manager basically said this: “sorry, but we have a lot of loans going delinquent and we need to cut our losses, so we’re going to start the foreclosure process now.” And so they did. The bank pretty much put the house into an accelerated foreclosure process.
Yikes.
That’s lesson number one: don’t go telling your lender that you’re having problems paying your mortgage unless you have some reasonable expectation as to what the response will be.
(more…)
Tags: American Bankruptcy Institute, Commentary - Legal, Modifications and Workouts, Mortgages and Foreclosures, Suze Orman
Posted in Consumer Rights, Debt Settlement or Consolidation | No Comments »