2 weeks 5 days ago

If you owe a debt that is only in your name, you might believe that it is solely your responsibility and not your spouse’s. If your creditor decides to sue you, your wages could be subject to a wage garnishment. However, California is a community property state. Therefore, if a creditor has a judgment against […]
The post Can Creditors Garnish Both Spouses’ Wages in California? appeared first on The Bankruptcy Group, P.C..

2 weeks 5 days ago

The answer to whether or not you are able to keep your furniture when you file for bankruptcy in California is “it depends.” Some of the factors that will influence what happens to your furniture include the chapter of bankruptcy filed, the exemptions you pick, and the value of your furniture. However, in most cases, […]
The post Do I Keep My Furniture if I File for Bankruptcy in California? appeared first on The Bankruptcy Group, P.C..

2 weeks 1 day ago

Having an overwhelming amount of debt is extremely stressful and managing it alone is not easy. Before you consider filing bankruptcy, it is important to understand basic bankruptcy laws, how to file, and how the bankruptcy process works. You should seek help from our Washington & Oregon bankruptcy attorneys to assist you throughout the entire bankruptcy proceeding. 
Bankruptcy is a legal proceeding that enables debtors to repay their debts. Filing bankruptcy gives you options on how to pay your debts to your creditors. There are different types of bankruptcy that you may choose from and your eligibility to file bankruptcy will be based on your monthly income, living expenses, and the types of debts that you owe. You should also pass the bankruptcy means test for you to be qualified to file for bankruptcy.
If you are considering bankruptcy, you should know the types of debt that are dischargeable such as unsecured debts, including credit card bills and medical bills. In contrast, non-dischargeable debts include secured debt, child support, alimony, tax debt, and student loan debt.
Also, you must decide on what bankruptcy option would be best for you. If you want to keep your properties while paying your debt, Chapter 13 bankruptcy could be the best option for you.
Filing for bankruptcy Chapter 13 or reorganization bankruptcy restructures the debt by enabling you to pay back creditors (in part or in full) over three to five years. The repayment plan is overseen by a bankruptcy trustee assigned by the bankruptcy court.
The responsibilities of a trustee in bankruptcy include the following:

  1.         Evaluating the bankruptcy petition as well as the proposed payment plan

The proposed debt repayment plan lays out how you will be making payments to pay back your debts. It is the bankruptcy trustee’s responsibility to ensure that the repayment plan is fair and equitable to the creditors.
The trustee begins by evaluating the official bankruptcy forms at the start of the bankruptcy case and checking the details by comparing the statistics given on the official bankruptcy forms to the documentation that you will provide (right after the bankruptcy filing).
Your wages, monthly expenditures, assets, and debts are all listed on the bankruptcy petition. To validate an individual’s financial records, the bankruptcy trustee can use your tax returns, paycheck, bank statements, and other things you will be asked to provide for your bankruptcy case.

  1.         Organizing the meeting of creditors

Bankruptcy Chapter 13A debtor will be required to attend a creditors’ meeting which is overseen by the trustee around a month after you declare bankruptcy. Debtors will be questioned under oath regarding the facts on their submitted bankruptcy paperwork, schedule, and other related documentation.
You should expect to be questioned about your wages, properties, and any other important details about your bankruptcy petition. The creditors may ask questions as well.
If, for instance, further paperwork is needed, the trustee may postpone the creditors’ meeting to a later date. Otherwise, he or she would call the meeting to a close.

  1.         Take part in the confirmation hearing

If a creditor or the trustee finds a flaw in your proposed debt repayment plan, they may object to its approval. You will have a limited amount of time to resolve the problem or draft a response to their opposition to the proposal. The bankruptcy trustee will be the one to testify at the hearing and inform the judge whether the proposal is realistic and has met all the requirements. The judge will make the final decision whether to validate or deny the proposal.

  1.         Managing the debt repayment plan in bankruptcy filings

You should start making monthly payments to the trustee (following your payment plan) within thirty days of filing bankruptcy under Chapter 13.  The repayment plan stays proposed until the bankruptcy court approves it and the bankruptcy trustee keeps the funds to be distributed to the creditors. Once the court approves the proposed repayment plan, the trustee will start distributing the funds to the creditors in compliance with the terms of the agreement.
The reorganization plan takes up to 3 to 5 years to complete. Until you complete the payment plan, the bankruptcy trustee will continue to receive your payments and distribute them to your creditors. The trustee must assess every proof of claim from creditors and keep track of all the funds collected and how much has been charged to every creditor.

  1.         Objecting to inappropriate creditor claims

Within 70 days of the date of filing, lenders who wish to collect Chapter 13 funds should file a proof of claim with the court. The sum owed to the creditor is stated in the proof of claim, which often contains documents in the form of a contract.
Creditor claims are checked by the bankruptcy trustee, who may object to any claims that are wrongly filed or lack adequate paperwork. Other parties may also raise objections if there are any improper claims.
If you are struggling with debt and financial problems, consulting a trusted bankruptcy attorney is important, especially before you file for bankruptcy. Washington & Oregon bankruptcy attorneys are credible and experienced in handling bankruptcy cases. With their assistance, you may be able to prevent any legal issues during the bankruptcy process. By filing for bankruptcy, you will be allowed to rebuild your financial future.  
Have a fresh start with your finances. Call our Washington & Oregon bankruptcy attorneys at Northwest Debt Relief Law Firm for a free consultation.   
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The post Bankruptcy Chapter 13: What are the responsibilities of a Trustee? appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.

3 weeks 22 hours ago

CFPB Submits 2020 Report  to Congress on the Administration of the Fair Debt Collection Practices Act
Report highlights commitment to protect consumers during the COVID-19 Pandemic
unlawful debt collection practicesThe Consumer Financial Protection Bureau (CFPB) released the 2020 annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA). The report highlights efforts by the CFPB and the Federal Trade Commission (FTC) to protect consumers, particularly those who have suffered profound financial impacts due to the COVID-19 pandemic. The CFPB and the FTC, along with state and federal partners, accomplished much toward stopping unlawful debt collection practices and continuing its vigorous law enforcement, consumer education and public outreach, and policy initiatives.
In 2020, the CFPB engaged in four public enforcement actions, arising from alleged FDCPA violations. The CFPB resolved two of these cases. The two judgments ordered nearly $15.2 million in consumer redress and $80,000 in civil money penalties. Two cases remain in active litigation. Among other highlights, the report notes the following CFPB accomplishments:

  • Identified several issues that raise the risk of consumer harm during the COVID-19 pandemic through its supervisory Prioritized Assessments;
  • Published content to help consumers financially navigate the COVID-19 pandemic, including on debt collection, that has been accessed by users approximately 4.3 million times;
  • Provided consumer debt collection educational materials – In 2020, “Ask CFPB,” an interactive online consumer education tool logged 1.9 million page views and/or downloads in English and 220,000 in Spanish for its debt collection questions;
  • Released a report highlighting service members’ complaint data from 2019;
  • Published information about debt collection activity during the pandemic for student loans; and,
  • Published results of a quantitative online survey of over 8,000 respondents to test several versions of disclosures to support the understanding of time-barred debt and revival that informed the CFPB’s final rules on debt collection.

CFPB & FTC protect consumers from unfair, deceptive, and abusive debt collection practices
The CFPB and the FTC share authority to enforce the FDCPA, and continue to work closely to coordinate efforts to protect consumers from unfair, deceptive, and abusive debt collection practices. The two agencies reauthorized a permanent memorandum of understanding on February 2019 that facilitates consultation in rulemaking, enables coordination in enforcement, sharing of supervisory information and consumer complaints, and collaboration on consumer education.
The report is available here.
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit

.fusion-body .fusion-builder-column-1{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-1 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:The CFPB and FTC are back (in other words, they now have political power to do something given the 2021 change in administration).  Anyone can be caught in a scam (yes – I mean anyone).  We all think it will happen to someone else, but ….. 
We are all just trying to survive, and, hopefully thrive.  Quality education is the way to do both.  Never rely on the Internet for advice – there is more bad advice than good.  Always seek advice from at least two people who are experienced in the area you need help. Once armed with good information, then use your common sense to decide what is best for you.
@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-2{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation
.fusion-body .fusion-builder-column-4{width:25% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-4 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 10px;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 10px;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-4{width:100% !important;order : 0;}.fusion-builder-column-4 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-4{width:100% !important;order : 0;}.fusion-builder-column-4 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}

.fusion-body .fusion-builder-column-5{width:75% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-5 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 15px !important;margin-right : 10px;padding-bottom : 0px !important;padding-left : 15px !important;margin-left : 10px;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}.fusion-body .fusion-flex-container.fusion-builder-row-4{ padding-top : 0px;margin-top : 5;padding-right : 0px;padding-bottom : 0px;margin-bottom : 20px;padding-left : 0px;}
The post Stopping Unlawful Debt Collection Practices, CFPB 2020 Report appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

3 weeks 3 days ago

" Thank you so much. What a journey. It was a pleasure to have you as my attorney!! Thank you thank you thank you.  Best,  Susan"

3 weeks 4 days ago

A Chapter 13 bankruptcy is a reorganization of your debt. The main component of a Chapter 13 bankruptcy is a bankruptcy plan. Your plan will propose what creditors will be paid and how much. One of the first questions anyone filing for Chapter 13 has is, “how much will my monthly plan payment be?” Unfortunately, […]
The post What is the Average Monthly Payment for Chapter 13 in California? appeared first on The Bankruptcy Group, P.C..

3 weeks 4 days ago

Stimulus money is finally being delivered to families in need across the country! You NEED to know the following before utilizing your funds when you are also filing for bankruptcy:
Why Do You Need to Protect Your Stimulus Funds?
Your creditors know you are receiving these funds. It is likely they will expedite collection actions that can get them access to YOUR MONEY as soon as possible.
Why You Shouldn’t Spend Your Stimulus Funds.
Your ability to file your bankruptcy case and discharge your debt may be negatively impacted if you spend your stimulus funds prior to filing your case. In addition, paying family or friends owed debts may delay your filing or cause issues with your bankruptcy trustee which can be avoided through a strategic planning session with Allmand law.
How Can You Protect Your Stimulus Funds?
Contact Us Today so that we can have a strategic planning session and ensure your case gets filed as soon as possible and your stimulus funds are protected.
How Much Will You Get?
If you’re eligible for a third stimulus check (not everyone qualifies for one), the “base amount” for your payment is $1,400. If you’re married and file a joint tax return, the base amount jumps to $2,800. Then, for each dependent in your family, the IRS will tack on an additional $1,400.
Haven’t received your stimulus funds yet?
Check your status with the IRS here:
Are you curious when you will receive your tax refund?
Check here for your Tax Refund Status:
The post Stimulus Funds and Bankruptcy appeared first on Allmand Law Firm, PLLC.

3 weeks 5 days ago

In accordance with a bill recently passed by the House, the Chapter 11, Subchapter V Debt Increase from $2,700,00 to $7,500,000 has been extended for another year to March 27, 2022. It was scheduled to expire on March 27, 2021.
Now, the bill heads to the Senate where it is expected to pass.
If you have any questions regarding Subchapter v please contact Jim Shenwick 212 541 6224

1 week 6 days ago

Congratulations, you received and accepted an offer to sell your house! Before you can collect the proceeds of your sale, you must close the real estate transaction.

A real estate closing is the transfer of property ownership from the seller to the buyer. This complicated process has many steps and procedural formalities that make up the closing timeline. On average, it takes 30-60 days from when an offer is accepted until the transaction is complete.

Thankfully, Wisconsin real estate attorney, Shannon Wynn, created this article to help sellers navigate the complicated real estate closing process. Below is a breakdown of what sellers can expect during the closing process and a helpful real estate closing checklist for sellers. This guide splits the closing timeline into four phases:

  • Offer
  • Contingencies
  • Title Work
  • Closing

Hiring a real estate attorney makes selling real estate significantly smoother. If you are looking for a Wisconsin real estate attorney to help close on the sale of your property, contact Wynn at Law, LLC at 262-725-0175 or send us a message.

homeowners reviewing real estate closing checklistReal Estate Pre-Closing Checklist for Sellers

Below is a checklist of typical steps that sellers should plan for:

  • Acceptance of Offer
  • Provide Condominium Disclosures
  • Prepare for Home Inspection
  • Respond to Inspection Repair Requests
  • Order Septic Test
  • Order Well Water Test
  • Respond to Testing Repair Requests
  • Order Survey
  • Prepare for the Appraisal
  • Order Title Insurance
  • Prepare the Deed or Conveyance Documents
  • Review Transaction Paperwork and Legal Documents
  • Move Out
  • Clean the House
  • Transfer Utilities

There may be additional steps that are specific to your situation. It is highly recommended that sellers contact a real estate attorney to ensure that all legal documents, communications, and closing criteria are lawfully met.

Contingencies – What Problems Could Cause Closing Delays?

A seller needs to meet every contract contingency requirement and deadline or request an extension to the Offer. While some issues may arise that may be out of the seller’s control, it is valuable to understand the most common reasons for closing delays.

Financing Problems – The most common reason for a closing delay is a financing issue on the buyer’s side. In these situations, buyers may have submitted an offer without loan pre-approval or offered a price outside their budget. In other cases, it may not be the buyer’s fault at all, but the lender is simply unable to meet the deadline and needs an extension to finalize the financing. 

Appraisal Problems – Issues during the appraisal process are rare but can occur. One such problem is that the home’s appraisal value is lower than the price in the offer to purchase. Discrepancies in the appraisal value can lead to lender financing issues and may require renegotiating the sale price. Another, more common, issue is that the appraiser is simply unable to finish the appraisal by the contract deadline and requires an extension.

Inspection Problems – An official home inspection may reveal unexpected issues with the property. Depending on the severity of the inspection defects, you may have to hire a licensed contractor to make repairs or discount the sale price.

While these problems can be frustrating and delay the closing process, an attorney can resolve most of these issues. Talk to your real estate attorney to develop a plan if any of these problems arise.

Title Work

Title preparation is an essential part of the real estate closing process for buyers and sellers. A house title is the historical ownership record of a property that shows who currently owns the property, contains the legal description of the property, and shows any liens encumbering the property. Liens against the property prevent a property owner from having a ‘clean’ title. A property owner may need to fix the title before selling the property. A complete title review is a necessary step to ensure that the property is able to be sold to a buyer.

Typically, a title commitment is ordered, and a title search is conducted to review any existing records including deeds, mortgages, municipal assessments, liens, and other public documents that may impact the owner’s ability to sell the property. Once the title search and examination are complete, the title company prepares a title commitment and provides a copy to the buyer, seller and attorney.

Sellers Closing Day Checklist – What to Expect

Once your closing date has arrived, the contact contingencies are met, and the title has been checked, it is finally time to complete the sale. 

The closing is hosted at the title company, and all involved parties will want to be there on time to sign the closing paperwork. If you would prefer, most closing companies allow sellers to pre-sign the closing documents as well.

Sellers should prepare to sign multiple documents for the closing, including:

  • Closing Statement
  • Closing Disclosure
  • Deed
  • Bill of Sale
  • GAP Insurance
  • Disclosure Statement
  • Tenant/Work Affidavit

It’s wise for sellers to have a real estate attorney attend the closing. Attorneys often assist with unanticipated problems that can arise at closing, review documents, provide legal advice, protect your interests, and answer questions.

What Sellers Need to Bring to the Closing:

  • House Keys and Access Codes
  • Personal Checkbook for Minor Incidentals
  • Lien Waivers from Contractors
  • Government-Issued Photo ID for All Sellers Listed on the Contract

Ask your real estate attorney if any additional documents or items are needed, such as property tax statements, utility bills, proof of home warranty, or homeowners insurance documents. 

Closing Costs for Sellers

Sellers are responsible for paying a variety of expenses involved in the closing. In addition to the remaining mortgage balance (if applicable), sellers can expect to pay 5-10% of the home sale price in closing costs. If the sale of the property is less than the total balance due, the remainder is often deposited into an escrow account by the seller prior to the closing. Below are some of the typical closing expenses for sellers:

  • Real Estate Agent Commission
  • State Transfer Taxes
  • Loan Payoff Costs
  • Outstanding Homeowner Association Dues
  • Property Taxes
  • Title Insurance Fees
  • Title Company Closing Fees
  • Real Estate Attorney Fees

homeowners handshaking house closingAfter Closing Checklist

After signing the closing paperwork, the title is transferred and the keys are turned over to the buyer––it is finally time for the seller to receive the remaining balance of the property sale funds.

  • Verify that the proceeds of the sale are correctly deposited into your account.
  • Cancel your homeowner’s insurance policy.
  • Keep your closing paperwork in a safe location.
  • Change your address with the USPS and forward your mail.

Do I Need an Attorney to Close a Real Estate Transaction?

A real estate attorney is not required for closing a Wisconsin real estate transaction, but attorneys often play a crucial role in a successful real estate transaction. A licensed Wisconsin attorney can provide personalized guidance throughout the process while ensuring all legal documents, communications, and closing criteria are met.

When Should Sellers Hire a Wisconsin Real Estate Attorney?

It is beneficial for sellers to contact a real estate attorney at the listing stage, rather than waiting until later in the sales process. This allows your attorney to help with pre-offer tasks such as addressing contract negotiations and reviewing offer contingencies when you have an interested buyer. Once an offer is accepted, your attorney can help you manage the contingencies and closing process. The State Bar of Wisconsin explicitly lays out these six ways that real estate attorneys can help a seller:

  • Write or review the listing agreement with the seller’s real estate agent
  • Review the buyer’s Offer to Purchase
  • Draft or review the seller’s Counteroffer and Amendments
  • Help satisfy contingencies to the Offer
  • Draft the Deed and other legal documents required to close the sale
  • Advise the seller at closing to be sure all closing documents, including financial arrangements are in order

Wynn at Law, LLC Helps Real Estate Sellers Throughout The Closing Process

Selling a home or property is a complex process. By law, only a real estate attorney can provide you with legal advice during the home sale process, not a real estate agent, loan officer, or title company. Sellers need an experienced Wisconsin real estate attorney in their corner who will look out for their interests. Wynn at Law LLC’s real estate attorneys are active members of the Wisconsin Realtors Association and are available to address all of your questions and concerns.

Wynn at Law, LLC represents sellers in residential, commercial and vacant land real estate transactions. If you are interested in selling property, please contact Wynn at Law, LLC by phone at 262-725-0175 or send us a message. Wynn at Law, LLC has offices located in Lake Geneva, Salem, and Delavan, Wisconsin.

Continue Reading: Real Estate Closing Checklist for Buyers

Schedule a Legal Consultation
The post Real Estate Closing Checklist for Sellers appeared first on Wynn at Law, LLC.

3 weeks 6 days ago

This article originally appeared in Jalopnik. A link to the article is below.

A Simple Guide To How NYC Is Screwing Up Giving Debt Forgiveness To Taxi Drivers

Raphael Orlove

The New York City government has set aside $65 million of federal stimulus money to fix the debt crisis among taxi drivers after days, weeks, months of yellow cab protests shutting down bridges and highways. Instead of giving money to the drivers in need, it’s bailing out rich lenders instead, including a big hedge fund in Connecticut.

This is meant to be a simple explainer so I will not attempt to understand or make sense of the city’s decision to bail out lenders not drivers. I can only lay out the dramas involved.

Taxi Drivers Are In Debt, And The City Is Responsible

Here in New York, you don’t just paint your car yellow and start picking people up off the street. You need a special taxi medallion for your car to be a taxi and pick up hails, and the city limits the number of medallions out there. As you can imagine, with limited supply and strong demand, the value of a medallion could rise. As Uber and Lyft have completely reshaped the taxi landscape here in the city, that value plummeted, and yellow cab drivers are now underwater, struggling to pay off loans on medallions now worth a fraction of what they started as.

Over the past two decades, the city not only watched as these prices skyrocketed, but encouraged it. To put some figures on that, medallion prices shot up 455 percent from 2001 to 2014 (the last city auction for medallions), as the New York Times reported, only to quickly drop again. That meant medallions “went from $200,000 in 2002 to over $1 million in 2014, then crashed to less than $200,000 soon after,” as City and State NY put it.

Under both the Bloomberg and De Blasio administrations, the city made $855 million off of those values, as the NY Times reported in 2019. A new NY Times feature lays out how the city helped:

As The New York Times reported in a series of articles, a group of taxi industry leaders had artificially inflated the price of a medallion to more than $1 million from about $200,000. They channeled immigrant drivers into loans they could not afford, creating a buying spree that drove up the price of the permits, and then extracted hundreds of millions of dollars before the bubble burst.

During the bubble, government officials worsened the problems by exempting the industry from regulations. The city also chose to fill budget gaps by selling medallions and running ads promoting the permits as “better than the stock market.”

The city sold those medallions, profited off of them. Now it’s the drivers who are suffering. As NPR put it in 2018, “cities made millions selling taxi medallions, now drivers are paying the price.”

It’s also the city that helped create drivers’ debt, so its job is easy: forgive the debt. What has the city done? Bailed out the lenders instead.

What’s The City’s Plan?

Let drivers borrow $20,000 to pay their medallion debt, and they can borrow another $9,000 for other monthly payments.

What Does This Accomplish?

With some drivers hundreds of thousands of dollars in debt, it doesn’t accomplish a lot! All it does, basically, is funnel a bunch of money to big lenders without helping drivers.

How The City Is Bailing Out Lenders Not Drivers

It’d be hard for me to even think up a plan of debt forgiveness that bails out rich lenders not poor drivers, but that’s exactly what the city is planning. Speaking with news outlet Business of Business, Bhairavi Desai, leader of the profit union New York Taxi Workers Alliance, laid out the way the city is bailing out lenders using the hedge fund Marblegate as an example. Marblegate is based in Greenwich, Connecticut (drivers drove all the way there in protest last year) and is the largest holder of medallion loans, as Business of Business reports.

Here’s how the city bails out lenders not drivers by funneling its relief money right back to them, as Desai explains:

In 2018 [Marblegate] bought about 300 taxi medallions, hedging their bets on the struggling industry; Uber and Lyft (which don’t require medallions) were just flourishing. Since February 2020, Marblegate started to purchase the medallion loans from lenders.

In the proposal that the city just announced, medallion owners can borrow $20,000 from the city at zero interest, but it must be used as leverage to negotiate debt restructuring. So, the city’s plan is to essentially loan owner/drivers $20,000 that they can then turn around and offer to the lender, Marblegate, or banks, or credit unions, with no concessions from the lenders as to what the new balance would be on these loans. 

Not only is the city directing its stimulus through the drivers to the lenders, it is doing it with no guarantee that the loans will be meaningfully paid down.

How Much Debt Are We Talking About Here?

“The city’s plan is not nearly enough to bail out the drivers, who each owe about $500,000 in loans on average,” as the NY Times put it recently.

Why The City Is Bailing Out Lenders Not Drivers

The De Blasio administration is experiencing a lame duck year, with city elections coming November 2021. Current officials will be looking for work, and it doesn’t look like they want to become cabbies. “Many of them come out of finance,” Desai puts it. “They’re making their plans to go back into finance.” Securing a bailout for a big operation like Marblegate doesn’t look bad on that resume.

What The Taxi Drivers Want

What the Taxi Workers Alliance plan entails is for the city to write down the loans to $125,000 and bail out the drivers it has helped send spiraling into debt. The lenders still get paid, but the drivers are in the clear, as Desai explains:

Our proposal has been that the city set up a backstop—if the hedge fund or bank reduced the debt to $125,000, the City of New York would guarantee it, 100% of delinquency. The medallion owners are protected and the banks and hedge fund would be guaranteed $125,000, even if the debt is $300,000 for example.

Marblegate can only collect amounts like $300,000 if people own assets; they’re hedging their bets on enough of the drivers having assets.

Even in the [worst] case scenario, our plan would end up costing the city $75 million over 20 years. Our plan is more fiscally sound and would be life-saving. Their plan costs more and does absolutely nothing, offers no relief.

The City Is Still Under Pressure

This crisis has been going on for years, and it is on the back of protests and direct pressure from other parts of the city government. The protests have not stopped (we are in the seventh day of protests from the Taxi Workers Alliance, with some very good looking food being made in solidarity), and the threat of a lawsuit isn’t cleared, either. New York state attorney general Letitia James threatened to sue the city for $810 million last year, but dropped the suit in late February 2021 in favor of supporting the Taxi Workers Alliance plan. It’s possible that the city is not completely off the hook, though as the New York Times currently reports:

The city could still face a lawsuit from the state attorney general, Letitia James, whose office investigated the crisis in response to the Times series and found the city was chiefly responsible. Ms. James announced last year that unless the city bailed out cabdrivers, she would sue the city for $810 million and give it to drivers. Her office did not respond to a request for comment about whether the mayor’s plan answered her findings.

City comptroller Scott Stringer was also at the protests calling for the Taxi Workers Alliance proposal