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Does a drop in bankruptcy filings mean the economy is getting better? Here are the numbers: Bankruptcies down 12 percent
Adam Brown is a bankruptcy attorney for Dexter & Dexter, a debt relief agency helping people file for bankruptcy.
(305) 891-4055 - 25 Years of Experience, Over 8,000 Cases Filed - Free Initial Consultation - 1221 Brickell Ave., Miami, Florida - Chapter 13 and 7 Bankruptcy - Miami Bankruptcy Lawyer - www.bublicklaw.com
There is a new option for Miami (also Broward and Palm Beach Counties) homeowners who are facing foreclosure of the mortgages on their home and certain investment property. On April 1, 2013, the Bankruptcy Court in Miami added a new program for people filing for chapter 13 bankruptcy - "Loss Mitigation Mediation" (LMM) program for Mortgage Modification. This program allows for a formal process of mediation between the property owner and the mortgage lender.
This mediation program has been successful in about 80% of the cases in the bankruptcy courts in other parts of Florida which previously started this program. It appears that it will have a similar rate of success in the Miami Bankruptcy Court. This is a program to designed help the homeowners and investment property owners reach a mortgage modification agreement with his mortgage lender. One advantage of this program is that it provides for better communication with the mortgage lender in the process of negotiating a mortgage modification. A mediator is appointed by the Bankruptcy Court to help the parties negotiate an agreement.
As part of this process, an order is issued by the Bankruptcy Court requiring your mortgage lender to register with the internet portal and negotiate with you for a mortgage modification. The documents that are needed to be submitted to the mortgage lender for a mortgage modification are prepared on a special online program that streamlines the process. These documents are uploaded to a portal on the internet that is shared between the homeowner, mortgage company, and the mediator that is appointed by the Bankruptcy Court.
After the Bankruptcy Court enters its order requiring mediation, there are communications between the homeowner and mediator via the internet portal. Shortly thereafter, a meeting of the parties in person or over the telephone is set up with the mediator in attendance.
A brief outline of the procedures is as follows:
I. Pursuant to Administrative Order 13-01, the Bankruptcy Court for the Southern District of Florida has implemented a "Loss Mitigation Mediation" (LMM) program. The goal of LMM is to "facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a fesible and beneficial agreement with the assistance and supervision of the United State Bankruptcy Court."
II. The LMM is generally effective for individual cases filed or reopened or converted to an eligible chapter on or after April 1, 2013. The Court has implemented LMM Program Procedures and Local Forms.
In chapter 7 an individual debtor may request LMM to surrender real propery and in chapter 13 an individual debtor may request LMM to modify a mortgage or surrender real property.
III. Participation in the LMM program will require use of a secure online LMM Portal and Document Preparation Software that facilitates the preparation of the loan modification package. All communication between the parties is to be sent through the LMM Portal
IV. To participate in LMM, an eligible debtor must file within 45 days from the petition date a local form "Attorney-Represented Debtor's Verified Motion for Referral to Loss Mitigation Mediation" and an attached form order, Order of Referral to LMM. Prior to the filing of this motion the debtor's information must be submitted and processed through the Document Preparation Software and Debtor's initial loan modification forms are to be ready for signature and submission.
The debtor or the lender may seek LMM.
Co-obligors and co-borrowers must participate in the LMM process if requested. The "Consent to Attend and Participate in Loss Mitigation Mediation" is prepared.
Within 7 days after entry of the Order of Referral to LMM the Lender will confirmation that the
"Lender's Initial Package" is availabe on the LMM Portal.
V. Filing a request out of time
VI. Additional parties such as co-obligors and co-borrowers must particiate in the LMM.
VII. Order of referral to LMM
VIII. All parties are required to attend the LMM conference and be authorized to settle all matters requested in the Verified Motion. The parties attending the LMM conference shall be ready, wiling and able to sign a binding settlement agreement at the LMM conference.
The initial LMM conference is not to exceed one hour. The second LMM conference if required shall also not exceed one hour.
IX. The automatic stay is to be modified to the extent necessary to faciliate LMM. Pending motions for stay relief with respect to the property shal be continued until such time as the LMM has been concluded.
X. If the parties reach a final resolution or if no agreement has been reached the Mediator shall report the results on the LMM Portal and file the "Final Report of Loss Mitigation Mediator" with the Court. If a resolution is reached at the LMM conference, the local form "Motion to Approve Loss Mitigation Agreement with Lender" is to be filed.
XI. Certain wording is to be included in a chapter 13 plan where mortgage modification is sought as part of LMM in a chapter 13 case. The plan language provides that while the LMM is pending and until an agreement is reached, the debtor is required to include a post-petition plan payment of no less than 31% of the debtor's gross monthly income as adequate protection. Objection to lender's proof of claim are to be held in abeyance. If a settlement is reached an approved by the Bankruptcy Court, the debtor is to amend or modify the chapter 13 plan to reflect the settlement. If there is a failure to reach a settlement, the debtor is to modify the plan to conform to the Lender's proof of claiim or provide for a surrender of the property.
XII. The Mediator is to be slected from the Clerk's Register of Mediators. The debtor and the lender are to each pay the Mediator $300.00. Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
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Last week, a former client called and tried to refer me a new Chapter 13 client who was facing foreclosure. While I appreciated the referral, I could not take the case because the potential client was calling from out of town at 5pm on the Monday before his house was schedule to be sold at a foreclosure sale on the courthouse steps. The potential client did not have a credit counseling certificate and because he had filed before twice, the automatic stay would not go into effect even if he did file.During our conversation, the potential client told me that he had been negotiating with his mortgage company and that until that Friday, he was led to believe that a modification and restructuring of his loan was likely.I hear the same story from vehicle owners who have fallen behind by two or more payments but who are talking to the customer service reps at their lenders. I remember one case involving a woman who had never had any credit problems before but was struggling to pay her car note because of a job layoff.She explained that while she was talking to the customer service agent, her conversations were friendly and the agent assured her that the lender wanted to work with her. Two days later, after the car was picked up, the agent’s tone became much more hostile and my client was told that she would need to pay the entire balance 1 or her vehicle would be sold at auction. We ended up filing a Chapter 13 and used a Complaint for Turnover to get the vehicle back.My point is this: if you have led a respectable middle class lifestyle, there is a good chance that you have had minimal contact with loss prevention personnel employed by vehicle lenders or mortgage companies. You tend to believe that most people – especially employees of major corporations – are going to tell you the truth.It may not have occurred to you to think that a mortgage company representative would lie to you about a modification to prevent you from taking action (i.e., Chapter 13) to stop a foreclosure or that a vehicle lender would lie to you about a payment plan so that your vehicle would be easy to find by the repo man.Unfortunately when you are facing debt, especially on big ticket items like houses or cars, the company representatives will out and out lie to you and there is not much you can do about it.Yes, we can stop, but not “undo” a foreclosure. We can get your car back after repossession if you act quickly. But you are much better off acting proactively than reactively.So if you are like a lot of my clients – someone who has always paid his bills and has never had to deal with late payment or collection phone calls – do not allow yourself to be victimized by company representatives who stretch the truth (lie) about your payment options. Instead, call a bankruptcy lawyer like me to gain perspective about what you are really facing. I am happy to help you – my number is 770-393-4985 or you can reach me by email as well.
- This is what is known as an acceleration clause in the contract. ↩
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