Chapter 13

Published on: January 17, 2012

Reaffirmation Agreements In Bankruptcy

If you want to reaffirm a debt after filing for bankruptcy, your must executed a new agreement with your creditor. This reaffirmation agreement must be written and must be signed by both you and the creditor. Should you sign this reaffirmation agreement? Here are some pros and cons.

Pros

First, if you want to keep the property, you must sign the reaffirmation agreement. Also, if you do sign, you will be certain what your payments will be, what your interest rate is, etc. Signing a reaffirmation agreement may also help rebuild your credit, since you are taking responsibility for a pre-filing debt and are making regular payments on a debt.

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Published on: January 11, 2012

Banks Double-Billing Bankrupt Escrow Accounts

By David M. Goldman

Federal Investigators are pouring over bankruptcy filings across the country having found that banks may have been double-billing those in Chapter 13 bankruptcy for escrow fees. This is strangely reminiscent of the 2011 Countrywide scandal where the Federal Trade Commission stepped in and sent half a million homeowners checks for miscalculated fees except in this case, all of the victims are in bankruptcy. The New York Post‘s analysis shows in excess of $150 million in profits just for cases filed in 2011. Several institutions have been implicated in the matter though the original cases involved Wells Fargo and GMAC Mortgage. One attorney stated that up to 75% of her clients were being double billed.
The scam is perpetrated by charging the homeowner the late mortgage payment which already includes escrow and then charging them a secondary “escrow shortage” charge. The shortage charge not making up for any actual shortage, just being extra cash in their pockets.
Whenever I hear the term, “Bank Robber”, a new image comes to mind. One where the bank is stealing the money and the American Homeowner is the victim.

Published on: January 6, 2012

How Anna Nicole Smith Altered Bankruptcy Jurisdiction

By David M. Goldman

Anna Nicole Smith Changes Bankruptcy Jurisdiction
Being married to a billionaire did little to prevent Anna Nicole Smith from filing a Chapter 11 bankruptcy. When she did, her son in law, E. Pierce Marshall, filed a claim in her bankruptcy case for defamation of character. His claim was based on her suing him for tortuous interference with an expectancy interest i.e., unduly convincing his father to disinherit her.
E. Pierce Marshall had originally filed suit in Texas state court but Smith filed bankruptcy in California federal court. Each court made independent decisions of their own and the Supreme Court eventually was required to hear the case to determine which court had jurisdictional authority to hear the cases already decided.
It was found that while the bankruptcy court has statutory authority to hear non-core (weakly related to bankruptcy) cases, they lack the constitutional authority to hear those cases. As such, the bankruptcy court could determine that Anna Nicole Smith had an interest in suing E. Pierce Marshall, but the court lacked jurisdiction to determine the amount of that claim. Resulting from this, Marshall was awarded the inheritance of his late father, but as he himself had also passed away, the property was given to his surviving spouse and children.

Published on: December 30, 2011

How does inheritance relate to a Bankruptcy case?

By David M. Goldman

Inheritance can be an issue in bankruptcy law. One might think that after you receive a discharge in your bankruptcy case, your case is done and the court does not have an interest in your finances. This is not always so.

In a Chapter 7 case, if a loved one dies and leave you an inheritance within 180 days from the date of filing your case, then this money becomes part of your bankruptcy estate. The trustee may want some or all of the inherited funds to distribute to creditors. The important thing to remember is that the date that you become eligible for the inheritance that is the date to use in this 180 day analysis. This is the date of the loved one’s death, not when you actually receive the money or property.

In a Chapter 13 case there is an ongoing obligation to keep the trustee appraised of what property you own. Once they learn of an inheritance, they will likely take those funds for the benefit of your creditors. This can occur any time during the case. Since Chapter 13 cases are often as long as five years, it is important to make arrangements with relatives who may pass on during this time.

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Published on: December 29, 2011

What Kinds Of Questions Will The Trustee Ask At A 341 Meeting Of Creditors?

By David M. Goldman

If you file for Chapter 7 or Chapter 13 bankruptcy, you must attend a 341 Meeting of Creditors at the federal courthouse. This is a hearing with the trustee, and any creditors are invited to attend, though usually they decline to. You will be put under Oath and asked to produce a photo I.D. and social security card. Then the trustee will ask you some questions. Here are some sample questions that a trustee might ask.

1. Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct?

2. Are all of your assets identified on the schedules?

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Published on: December 27, 2011

Common Bankruptcy Myths

By David M. Goldman

As is most legal processes, bankruptcy can be a difficult thing to maneuver. There is a lot of misinformation out there, you need to be careful to get your information from a trusted source. Here are some myths regarding bankruptcy:

Myth 1: If I file for bankruptcy, everyone will know.

Like most legal proceedings, most bankruptcy documents are public record. Since I work at a law firm in the bankruptcy department, I search these records all the time. I even have a special username and password that allows me access online. However, how many times do you think your friends, family, or co-workers search through federal court records? The truth is that while your bankruptcy documents will be public information, it is unlikely that those you know would search to find them.

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Published on: December 26, 2011

The Automatic Stay

By David M. Goldman

Automatic Stay, Bankruptcy Upon filing for bankruptcy protection, an automatic stay is put in place. This means that creditors can not try and collect from you. So a creditor cannot call you to request payment, send bills to you, garnish your wages anymore, or repossess your car without court permission. If there is a foreclosure suit against you, that suit must also stop immediately. If your home is sold and you filed prior to the sale, that sale can be vacated. Obviously, this is a powerful tool bankruptcy. Many people file to stop creditors from taking actions against them or their property.

The automatic stay will remain in effect until one of the following things occurs:

1. A creditor petitions the court for relief from automatic stay and the court enters an order granting it;

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Published on: December 25, 2011

Fannie Mae and Freddie Mac consider zero interest proposal

By David M. Goldman

Zero Interest Rate Bankruptcy Home The Federal Housing Finance Agency is reviewing a proposal that would permit Judges of Chapter 13 cases to give 0.00% interest rates on FHFA loans during the duration of the five year cases. Since about 90% of all U.S. Mortgages are FHFA backed, this would allow nearly all mortgages to have zero interest rates for five years. This comes on the heels of the Federal Housing Finance Agency’s plan to allow Chapter 13 bankrupt to enter modifications and attempt to reduce their principle balances.

The proposal comes with two caveats: 1. The home must be worth less than it’s mortgage (46% of Florida homes are underwater) and 2. whether or not to grant the modified interest rate would be up to the bankruptcy judge.

White House spokeswoman Amy Brundage told the Financial Times that the administration is not considering this particular idea. Fortunately, this bill can become law without approval from the White House. Even if a President were to use their veto power, the bill could still be passed by a 2/3rds majority vote by both houses of Congress.

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Published on: December 23, 2011

Louisiana Debtors Sentenced to 6.5 years for bankruptcy fraud

By David M. Goldman

Bankruptcy Prison, Fraud A Shreveport, Louisiana man was sentenced to 6.5 years in federal prison for concealing over $400,000 in assets in a joint Chapter 7 petition. He also attempted to discharge a debt of $750,000 which was supposed to be held in escrow for a real estate project. He was convicted of concealing assets, making a false statement under penalty of perjury and bankruptcy fraud. As part of his criminal monetary penalty, he is to pay the U.S. Trustee $754,000. According to the National Association of Bankruptcy Trustees, the case was investigated by the FBI and the United States Bankruptcy Trustee’s Office and prosecuted by the Assistant United States Attorney.

Many people forget that bankruptcy relief is a privilege with limitations and that abuse of the system can be severely penalized. Before taking actions could lead to trouble, you should first consult experienced counsel. Contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Published on: December 21, 2011

Jacksonville Bankrupt Seek Rentals

By David M. Goldman

Many people who are considering bankruptcy are concerned that they will be unable to find a place to live if they give up their home. Although I have addressed this concern in the past by calling housing complexes around the city to see if they will rent to those who are bankrupt, there are still people who worry. Of course there is always the thought, “Sure, it someone else who filed for bankruptcy found a place to rent, but it what if it won’t happen for me?”. It’s easy to understand this concern as almost nothing is more important than having shelter, especially if you have children.

According to the Consumer Bankruptcy Project of 2007, 70% of those who who surrender their home in bankruptcy rent thereafter. Others chose to live with relatives, purchased a different house, etc. I still keep a list for my clients of properties around Jacksonville who will rent to those who file bankruptcy. If you would like more information regarding bankruptcy or would like to get your complex added to our list, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.