This was first posted in March 2008. More than two years later, the housing market is still in the pits, and more folks are opting to simply walk away from real estate they can no longer afford. Little has changed. And I dare say, it’s getting worse (although those seeking relection this year might want to disagree). If you own a condo or are in a homeowners association, the 2005 changes to the Bankruptcy Code force you to take some new issues into consideration.
Posts Tagged ‘BAPCPA’
Cheap Becomes Expensive
Tuesday, May 18th, 2010
Like many attorneys, I get calls from prospective clients asking me what my fee is for a bankruptcy filing. It’s not a particularly difficult question to answer – in theory. But at the same time, it is. Generally, I know that if their concern is price, then who they retain as their attorney is not all that important to them. But I also get calls from prospective clients who have or had another (and less expensive) attorney who now is not performing at what they believe is an acceptable level. Perhaps they aren’t returning calls. Perhaps they are not giving straight answers to honest questions. Or perhaps better said, the cheap attorney doesn’t know what the hell they are doing. The desire to go cheap has now turned into something expensive. (more…)
It Was 5 Years Ago Today
Tuesday, April 20th, 2010
Five years ago today – at approximately 2:42pm in the afternoon, I was using a elliptical machine at the gym. The news showed then President George W. Bush about to sign into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, or what we commonly refer to as BAPCPA or “the 2005 Act.”
He then gave these remarks (which I read on the closed captioning):
A Headache on a Friday Afternoon
Friday, March 12th, 2010
Yesterday, I was discussing a “Debt Relief Agency” as it is defined in the Bankruptcy Code. Part of the angst I have with the whole debt relief agency provisions is that I am – by definition – only a debt relief agencies to “assisted persons.” Debt relief agencies have certain specific obligations… but only to “assisted persons.” Before I continue writing, I’m going to take some aspirin; this analysis made my head hurt.
The Peculiar Parallel of Debt Relief Agencies and Madonna
Thursday, March 11th, 2010
In yesterday’s blog, I suggested that some attorneys – namely on Craigslist – were not complying with the BAPCPA imposed requirement that they disclose that they are a “debt relief agency.” That might not have been completely fair.
Certainly, when an attorney fits into the definition of a “debt relief agency”, they must disclose that fact and are obligated to comply with additional disclosure requirements. But, if an attorney does not fit into the definition of a “debt relief agency”, may they still represent individuals in consumer bankruptcy matters? The answer is yes… and that raises some interesting questions.
“We Are A Debt Relief Agency…”
Monday, March 8th, 2010
Have you see advertisements for bankruptcy attorneys and seen this phrase?
Has a bankruptcy attorney ever said to you “sorry, we cannot advise you to incur debt because you’re seeking bankruptcy protection”?
Ever wonder why? Well, wonder no more. This morning, the Supreme Court of the United States issued its decision in the case of Milvatez, Gallop & Milavetz, P.A., et al. v. United States. The high court has held that (1) attorneys who give bankruptcy assistance (as defined in the Bankruptcy Code) are debt relief agencies; (2) attorneys cannot advise clients to incur debt because they are filing bankruptcy. The decision is 35 pages, and I’ll be reading through it this week.
I Was Wrong About BAPCPA
Tuesday, October 6th, 2009
Five years ago Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act – and at that time, I couldn’t understand what “abuse” Congress was trying to prevent. As a matter of fact, I penned an op-ed in the Boston Globe expressing my hope that Congress would not pass the legislation because, among other things, I thought the “abuse” was really coming from lenders, not consumers. After representing many honest debtors who deserve the relief that our laws afford, and have gotten the relief they deserve, I met someone yesterday who sought from me the unthinkable: they wanted me to help them lie. And even though I know that lenders and credit card companies have caused a huge economic mess in our country, this person is precisely why BAPCPA was enacted.
NACBA Study Shows New Bankruptcy Law is not Working
Thursday, February 23rd, 2006
I have written about the “ticket” into bankruptcy – as well as the “ticket out.” The “ticket in” is a certificate from a US Trustee approved agency that must provide mandatory credit counseling to any debtor seeking bankruptcy protection. Under the new law, a bankruptcy debtor cannot be a “bankruptcy debtor” without that ticket.
According to the National Association of Consumer Bankruptcy Attorneys, the new law just is not working. The credit counseling requirement, which is an extra cost to be borne by people seeking debt relief, is a “waste of money” and does little to weed out people who were trying to abuse the bankruptcy process.
You can read more about the study in the February 22 online edition of USA Today.
And you’ll find NACBA’s study, “Bankruptcy Reform’s Impact: Where are all the Deadbeats?” here.
“Congress Must Surely Be Pleased”
Thursday, January 26th, 2006
In my October 17 blog entry I discussed how thrilled I am about the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. And recently I addressed one of the requirements of the Act: the need to obtain a “ticket” into bankruptcy, by obtaining mandatory credit counseling prior to filing and providing certification to the court.
On December 22, 2005, the Bankruptcy Court for the Western District of Texas at Austin was forced to dismiss a joint Chapter 13 case because one of the debtors had not obtained the mandatory credit counseling. The Debtors told the court that they were “working with the mortgage company to determine the exact amount that was owed but [the mortgage company] had refused to accept payment at the last moment…”. The Debtors filed their case in an effort to stave off a foreclosure of their home. While the court’s hands were tied, the court was not happy about dismissing the case.
No Ticket? No Discharge: The Ticket Out of Bankruptcy
Monday, January 23rd, 2006
If one picks up the MBTA Red Line at Downtown Crossing, less than a block from my office, one must pay $1.25 to board. If the rider takes the T to Quincy Adams or Braintree, another $1.25 must be paid to exit the station. While it’s never happened to me personally, I can only imagine that if one does not have the $1.25 to exit, they are left to board the train again and head back into the direction they came in. Under the new bankruptcy law, debtors need a ticket to file, a topic that I discussed on December 30. There is also the new requirement to obtain a ticket out of bankruptcy: Debtor Education.
Section 727 of the Bankruptcy Code was amended to provide that a debtor cannot receive a discharge if the debtor has “failed to complete an instructional course concerning personal financial management.” Once completed, a certificate of completion is filed with the Bankruptcy Court. Thus, in addition to credit counseling, bankrupt debtors must complete a post-filing course in financial management.
