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2 years 7 months ago

Richmond, VA-based Suntrust Mortgage will pay out $21 million to more than 20,000 African-American and Hispanic home loan borrowers to settle a federal government suit charging discriminatory mortgage pricing from 2005 to 2009. The lawsuit charged Suntrust with violating the Fair Housing Act and Equal Credit Opportunity Act.

This settlement comes on the heels of a settlement last December by Countrywide Financial Corp. and subsidiaries for $335 million for similar loans made between 2004 and 2008. Currently under investigation by the Department of Justice is Wells Fargo & Co.

"At the core (of the suit) is a simple story: If you are African-American or Latino, you likely paid more for a SunTrust loan than equally or similarly qualified white borrowers," Thomas E. Perez, assistant U.S. attorney general for the civil rights division, told the Richmond Times-Dispatch in a May 31, 2011conference call. "You paid what amounted to a racial surtax," ranging from hundreds to thousands of dollars per borrower," he told the newspaper.

The problem arose because of the way loan officers and mortgage brokers were incentivized, according to the lawsuit. The discriminatory charges (probably "yield spread premiums") boosted the commission for the loan agent when he or she could obtain an inflated price for a loan. Furthermore, the bank gave the loan officers and brokers free reign to do so by giving them broad discretion on prices beyond what should have been charged based on the customer's credit profile alone.

The investigation took two and half years and involved the review of more than 850,000 residential loans. Under the terms of the settlement, Suntrust will hire an independent administrator to contact the victims. Mailings are expected to begin at the end of this year. Suntrust admitted no wrong-doing.

The payout will average about $1,000 per person. However, in the opinion of this author, that will not nearly compensate the actual loss to many of the victims. Our law office has seen many who had homes with equity, refinanced during the height of the market, and then ended up losing both the equity and the home upon the collapse of the economy.

It's a sad state of affairs.


4 years 3 months ago

frustrated women needing bankruptcy adviceMy Dad has really had his hands full - he’s been an incredible caregiver to my Mom who unfortunately has the dreaded disease Alzheimer’s.  He finally hired Judy to clean once a week for a couple of hours and she has also helped care for Mom with love and kindness. 
Judy, hard working, a single mom, cleaning houses and  waitressing to help support her daughter get through school so she can provide her young twins with a better life.  Along the way, Judy made some financial decisions that didn’t pan out and now she’s in over her head. Judy owes thousands to unsecure creditors.  I received a call from my Dad  explaining how Judy went to a lawyer to dicuss bankruptcy and the lawyer said she didn’t qualify for a Chapter 7 because she owns 2 cars. Judy’s daughter drives the 2nd car so she can get to and from school and take care of her twins.  The legal advice Judy received from a Florida attorney during her free consultation was that she couldn’t file a Chapter 7 which was $1500 plus filing fees but she could file a Chapter 13 pay $400 upfront and then she’d have to pay approximately $300 per month for 36 months to the Chapter 13 Trustee.  The lawyer never mentioned that his fees were to be paid from the $300 per month.  My Dad wasn’t quite sure what was wrong with the advice she received but he wanted to repay Judy for all her kindness so he called me.  I took down the facts and after going over her situation with a qualified bankruptcy attorney (my husband) the advice she received was not in Judy’s best interest.  Judy qualified for a Chapter 7 – the downside of a Chapter 7 is  she must pay for her filing & legal fees upfront – but her overall cost is thousands less than a Chapter 13, in her case $10,800 vs. $1500.  I asked her who she saw and this lawyer also practices family law, personal injury and bankruptcy.  Not the best choice.  So, was the legal advice based on greed or just lack of knowledge?  I went online and found her a qualified bankruptcy attorney. 
The decision to file bankruptcy is serious and so should your choice of attorney.  My free unsolicited advice – any qualified bankruptcy attorney will offer a free initial consultation – so get a second opinion and please consider hiring only an experienced bankruptcy attorney – preferably Board Certified.
No wonder there are so many negative jokes about lawyers. 


4 years 3 months ago

Answer:  YES!!
Bankruptcy is a scary wobankruptcy, fresh start, debt reliefrd to many because: it's something you will never recover from; you'll never buy a home or a car again; you will have to surrender all of your assets and be left with nothing. Good reasons to be afraid, however the above statements could not be more wrong. They are inaccurate and only a part of the stigma that has been created for Bankruptcy.
If you are in jeopardy of losing your home, car, or being sued by a creditor Bankruptcy (Chapter 7 or Chapter 13) is a solution for these problems. The Bankruptcy Code was created to give individuals some  protection from their creditors. If you come into my office with an already low credit score you can expect to see an increase in your credit score within the first year of filing. You will also be able to rebuild your credit and find financing again. The most important thing of all is that you have an immediate solution which will allow you to live comfortably without harassing creditors banging at your door, calling you at home, at work or even calling your friends and relatives. Bankruptcy is not the end of the world; it's the beginning of a new  chapter.  Bankruptcy (Chapter 7 or Chapter 13) coupled with a better understanding of managing your finances can provide you with a fresh start that you had always hoped for. Before you fall for the stigma of Bankruptcy seek the advice of a qualified Bankruptcy Attorney and let them guide you to the happy life you deserve.


4 years 3 months ago

Thanks for taking the time to check out a blog whose topic probably seems boring and depressing to a lot of people. My goal here is to show that bankruptcy can actually be very practical and interesting, and for many people it instills a sense of relief, rather than depression.
Just to make it clear, I am an individual, not a bank. I am also a law student, in the summer before my 3L year at the Catholic University of America's Columbus School of Law in Washington, D.C. Unfortunately, I seem to be among the minority of students who have an interest in the topic of bankruptcy, but I have truly come to enjoy it as an academic and career interest; the other area of law in which I have substantial interest is the often-related field of tax law. 
My goal is to make this blog relatively devoid of legalese, and accessible to those without a knowledge of bankruptcy specifically, or law generally. The blog will not be carefully cited with footnotes throughout. I want to expose people generally to relevant, practical, and current topics having to do with bankruptcy, and show that it is worth the time to read about. Do I expect that many people will read this? Probably not. But at least I can try.
For those who do read this though, please keep in mind what I wrote above: I am a law student. I am not an attorney. Please do not substitute my writings for consultation with an attorney, which is a highly-advised course of action in the often complicated world of bankruptcy. I make no warranties as to the accuracy or completeness of the information provided, and no attorney-client or other relationship is being created, and I do not have the intent to plagiarize any information.  
With that being said, there are some very basic bankruptcy concepts that should be useful as you are reading. With only a few exceptions (such as determining state property law for exemptions from a bankruptcy estate), Bankruptcy Law is federal law. Article I, Section 8 of the Constitution lists the power of Congress to make "uniform Laws on the subject of Bankruptcies throughout the United States," as an enumerated power. The Bankruptcy Code is Title 11 of the United States Code, and contains several different Chapters; people often ask me what the different Chapters mean, often enough in fact that that is probably the most common aspect of bankruptcy law about which I am asked. 
Chapters 1, 3 and 5 are not mentioned in daily conversation as much as some of the latter Chapters, but they contain general information, instructions on case administration, and information on some of the parties to a bankruptcy case: the creditors and the debtor (the bankrupt person). Though it is difficult to pick out only a couple fundamental terms, I should mention that at the moment a debtor files for bankruptcy, all of his or her nonexempt property becomes part of a bankruptcy "estate," and an automatic stay is in place - creditors are instantly prohibited from attempting to collect on their debts. 
Chapter 7 is liquidation. This applies to both individuals and business entities. A business entity may end its operations, or an individual debtor may have the assets in his estate sold off to satisfy part of the debt owed to his or her creditors. It is, by far, the commonest form of bankruptcy.
Chapter 9 is municipal bankruptcy. I must confess that it is an area in which I know little, as it was not heavily discussed in my bankruptcy class, and I have not encountered it in my independent studying.
Chapter 11 is the form of bankruptcy that likely gets the most media attention - reorganization. This is often discussed in conjunction with the bankruptcies of major corporations (General Motors), and lately with several different Roman Catholic Dioceses. It can also be used by individuals, though - Mike Tyson filed for Chapter 11 in 2003. Here, I should mention that some people have come to me with the notion that all people who file for bankruptcy are "poor." This is not necessarily true; it just means that they are insolvent. Basically, this means one of two things: either their liabilities exceed their assets, or they are unable to pay their debts as they come due.
Chapter 12 is a relatively new Chapter which provides for debt adjustments for family farmers and family fisherman. It was made permanent in 2005 by the ultra-important Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). 
Chapter 13 provides for debt adjustment for individuals with regular income. It is not open to business entities. It is meant to be attractive to individuals in that a Chapter 13 debtor will get to keep her assets (her home, in particular), and will pay a portion of the debt off to her creditors over either a three- or five-year period, depending on the circumstances. BAPCPA further provides a "means test," in which debtors with a certain amount of income will be barred from proceeding under Chapter 7, and will instead have to use Chapter 13. The Bankruptcy Code has a preference for Chapter 13.
Chapter 15 is for cross-border cases. This is another area not covered at length in my bankruptcy class, but one I am studying independently at the moment. It is modeled after the United Nations Commission on International Trade Law (UNCITRAL) of 1997.
With the (very) basics out of the way, I plan on adding a new blog entry on a weekly basis. Those entries will, of course, have more specified topics than the current one. Next week I plan on writing about the ability to discharge student loan debt in bankruptcy, in which I hope many will take an interest. I was inspired about that topic because of a recent podcast I listened to from the American Bankruptcy Institute. 
So until next week (or whenever I decide to write again), thanks for reading, and please come back for more insolvency enlightenment!
J.P. Morgan


4 years 3 months ago

Since we practice law in El Paso, Texas, home of Ft. Bliss, one of the largest military bases inbankruptcy & the military the USA, we represent many Officers and Enlisted Soldiers.  We see lots of prospective clients who are currently in the military and have moved to El Paso from all over the world. For many of these soldiers the stress of moving around, being deployed and all the other surprises that life brings has created a financial strain for them.  Several of my clients in the military were afraid to file for fear of getting in trouble with their Chain of Command or losing their security clearance. Actually, we have seen many enlisted soldiers who were sent to us by their commanding officers. It is actually preferred by the military that the soldier’s finances are in order and that they are not in jeopardy of being sued due to defaulting on debts.   In order to get your security clearance it is necessary for your financial situation to be manageable. Bankruptcy (Chapter 7, Chapter 13) is considered taking control of the situation.  If you are in the military and are in fear of the consequences of falling behind on your debts or your debts are unmanageable – Bankruptcy (Chapter 7, Chapter 13) is a viable option for you.  


4 years 3 months ago

When filing for bankruptcy a petition must be filed.  If the debtor has an attorney the attorney generally fills out the petition based on information provided by the client.  The attorney will then meet with the client to have the individual(s) review and sign the petition.  While the attorney does fill this out, the debtor(s) are responsible for the information.  It is very important that the individual is open and honest with the attorney.  It is also very important that the debtor carefully reviews the petition to make sure that all information is accurate and disclosed.  If a debtor is unsure of whether an asset should be disclosed it is always better to discuss the matter with an attorney who can give proper legal advice.  The debtor will also attend a creditors meeting.  The bankruptcy trustee will ask if all information is accurate and all assets and debts have been disclosed.  If there is anything missing this is the debtor's opportunity to disclose the information.  If information is disclosed at the creditors meeting the schedules filed with the bankruptcy petition will likely need to be amended to reflect that information.In the event that a debtor does not disclose all information on the bankruptcy petition a number of things can happen. Failing to disclose information is considered fraud.  Bankruptcy proceedings are federal matters, and are subject to investigation by the United States Trustee and the Federal Bureau of Investigation.  Fraud, or attempted fraud, is punishable by fines and/or incarceration in a federal prison.If a debtor fails to disclose creditors that creditor may not be discharged as they did not receive notice and did not have an opportunity to be heard at the creditors  meeting.  If a debtor realizes that a creditor was omitted the debtor should amend his/her schedules to reflect that information as soon as possible.If a debtor fails to disclose assets a number of things can happen.  Depending on the asset the schedules can be amended.  If a debtor fails to disclose an asset the trustee can object to exemptions being applied.  If the asset is large, or worth any sum of money, the trustee can hold the case open or require the debtor to convert their case.  At this time the debtor may be able to pay the trustee for the property, but if that is not an option, may be required to turn over the property.  Once a Chapter 7 case is determined to have assets the debtor may not be able to voluntarily dismiss the bankruptcy proceeding. If you have questions about this, or would like to schedule a consultation, contact a St. Louis Bankruptcy Attorney Today.


4 years 3 months ago

life after bankruptcy, life after filing bankruptcy, life after ch 7, life after ch13, life after filing ch 7, life after filing ch13I have been working with people who have filed bankruptcy (Chapter 13) for about three years now.  I never really understood the stress and hardship that bankruptcy can put on a family.  It has made me more aware of how to deal with my own finances and to appreciate what I have.
Lifestyle changes can be hard especially when you are used to a particular lifestyle.  When you are faced with having to choose between paying your mortgage vs. tuition for a private school, I‘d like to think paying your mortgage wins every time.  However, time and time again people continue to maintain the lifestyle they had before they filed bankruptcy.  It's sad to say but sometimes you have to reevaluate your priorities.  Changing your lifestyle to live within your means does not make you any less of a person or a bad parent; it simply makes you a responsible person looking to build a bright future for you and your family.  If people continue to live their life as if society cares what material possessions you own then chances are you will be visiting your bankruptcy attorney again for more help. 
Many of our clients have changed their lifestyles once they have filed. I am proud to have helped many through their transition because frankly, I tell them verbatim what I have written.  Many clients have thanked me for my 'tough love advice'. Helping people makes my job rewarding because I have been able to successfully communicate that life after bankruptcy is simply a change in mindset.


4 years 3 months ago

Bankruptcy requires more than just signing papers and you’re headed out the door.  It‘s hardly like that at all. When we present the list of documents required to our clients, I can never stress enough how important these documents are and how important it is to keep thembankruptcy documents, filing bankruptcy updated. We don’t ask for the documents to have them in our archives, these documents are extremely important in the bankruptcy process. Your documents are presented to the Chapter 7 Trustee or the Chapter 13 Trustee to show them the information we have presented is complete and accurate. When bringing in your documents, some may say it’s impossible to get a specific document, but no feat is too big if it’s important.  We have seen people that needed just one paper from an old employer and although some of us may not want to go back to an old employer and/or the situation may get a bit awkward, they have been successful at retrieving the necessary documents. No one can keep you from getting your information and by law they must keep your records for a specific amount of time depending on the document. There is always something we can do to get a document and without them most of the time, the case cannot be completed. If just one paper is missing, believe me, the Chapter 7 Trustee or the Chapter 13 Trustee will ask for it at your 341 meeting (First Meeting of Creditors) and your case will not continue until you bring in those missing documents.
So once again, I’d like to say, I cannot stress enough how important these documents are and how important it is to keep them updated for the data entry part of your case and to ensure the finalization of  your bankruptcy. What’s the simplest part of going through bankruptcy? Answer:  the signing of your paperwork.


4 years 3 months ago

This may seem counter-intuitive, but owing more on your home mortgage can actually be a godsend in wither a Chapter 7 or Chapter 13 bankruptcy.  In a Chapter 7 bankruptcy, the Chapter 7 trustee is an individual appointed by the U.S. Trustee to administer your case.  This is a fancy way of saying this person is in charge of selling your non-exempt assets so he or she can distribute some funds to your unsecured creditors (medical bills, credit cards, etc.).  You see, immediately upon filing your petition, all your property is now property of the newly created bankruptcy estate, except of course for the property you can exempt under Georgia state law.  Exempt property is a dollar amount that you can shield from the grasp of creditors.  For instance, in Georgia, an individual can exempt up to $21,500 in his homestead.  This means that if the trustee were to sell your home for the benefit of your unsecured creditors, you would receive $21,500, if that much equity existed in your property.
So how does owing more to your mortgage lender help you? Because liens survive bankruptcy, and the mortgage lender is deemed to have a lien equal to the amount that you owe.  For example, if you own a house that is worth $200,000 but only owe $100,000 to your mortgage lender, you will have $100,000 in equity.  Because the trustee of the bankruptcy estate is now the new owner of this equity, he or she may sell it to recover the $100,000 to be distributed to your creditors.  In reality, out of the $100,000, you would receive $21,500, and your creditors would receive whatever is left over after costs of sale and the trustee’s administrative fees are tacked on.  If you were to owe $195,000 to your mortage lender, the trustee would not be interested in selling your home since the equity and amount owed to the lender would eat into all the sales proceeds.
In a Chapter 13, you would propose a plan to pay back your creditors over a 3 to 5 year period.  One caveat is that you must pay back your creditors at least as much as they would receive if you had filed a Chapter 7.  Using the above example, if you were to have $100,000 in equity in you home, you would have to pay back at least $70,000 ($100,000 minus $21,500 exemption minus administrative costs) to your unsecured creditors over a 5 year period.  If you did not have any equity in your home, you could get by with only paying back a fraction of that to your creditors.
Posted by Atlanta Bankruptcy Attorney Will B. Geer.


4 years 3 months ago

Selecting a good and competent chapter 13 California bankruptcy attorney is not always easy.   You have to find someone you trust, yet that attorney must also be competent at what he or she does.   One characteristic without the other will not take you very far in terms of the chapter 13 process.
California Chapter 13 Bankruptcies are more involved than chapter 7 cases oftentimes because most clients are subject to Form22C which is the Chapter 13 equivalent of the means test.  Furthermore, in chapter 13 cases, the trustee scrutinizes Form 22C much more so than the chapter 7 trustee in a chapter 7 case.   That’s because a chapter 13 trustee gets paid administative fees based on how much you are paying into the plan, and oftentimes, Form22C comes into play for above median debtors (for example, a household of 1 person who earns more than around $48,000 gross annually will be subject to filling out all sections of Form22C to determine a baseline of disposable income to repay unsecured creditors).
When Form B22C comes into play, calculations of disposable income must be done by an attorney who has the experience, precision, and capabilities to calculate the numbers properly while applying and understanding applicable case law within the district in which your bankruptcy is filed.  However, that is just the beginning of the chapter 13 process.   Getting the plan confirmed requires other steps including having the chapter 13 trustee review and confirm the plan, and overcoming any objections by creditors.   Also, liens on property may need to be stripped in many cases today in which underwater homes are at issue; taxes issues may need to be resolved all before or during the confirmation process to a chapter 13 case.
So ultimately what do you look for in a chapter 13 attorney?  Here is a simple checklist:
1.  Ask how many chapter 13 cases the attorney has filed.
2.  Ask of those cases filed, how many chapter 13 cases were actually confirmed – meaning a plan was confirmed by the chapter 13 trustee.   Understand, this is not the same as asking how many cases received a chapter 13 discharge.   Getting a plan confirmed generally means the attorney did his/her job at least intiially, and got the plan, that the client had asked for, approved by the bankruptcy court.  However, it is then up to the client/debtor to see the plan through by making plan payments.  Failure to do so will result in the chapter 13 case being dismissed by the court for failure to make plan payments and therefore a chapter 13 discharge is never entered due to the client/debtor’s inability to see the plan through.  (Sadly, some attorneys have been known to mislead potential clients about how many cases they confirm vs. the ones they file – thus use your judgment and common sense in picking the attorney.  Trust your gut on this and consult at least 2 different attorneys, assuming you have the time/luxury to do so).
3. Ask the attorney if he has ever had a plan confirmed over the chapter 13 trustee’s objection.  Usually that means the attorney knows how to push issues and understands the laws of chapter 13.   A chapter 13 trustee will object where he/she feels the debtor is not paying out enough in the chapter 13 plan’s proposed monthly plan payments.   When the trustee objects, a bankruptcy judge will hear the case, assuming the debtor’s attorney fights the issue.  Where the attorney overcomes an objection by the trustee, that means legal issues are addressed in court whereby the court makes a ruling that the debtor’s attorney took a proper position in crafting the chapter 13 plan, and that the chapter 13 trustee is not entitled to push for a greater distribution of disposable income.
4.  Ask how much the attorney charges up front - usually when an attorney offers to take your chapter 7 case for little or no money down, that is a good sign you have a chapter 13 case that is not legally complex and devoid of any overwhelming obstacles to confirmation of the chapter 13 plan.   However, even if your case is straight-forward, don’t expect a good bankruptcy attorney to take your case for free if your foreclosure is scheduled for the next day.   That simply will almost never happen.
5.  Ask how much the attorney charges for the total chapter 13 case.   Oftentimes, unless you really know the attorney is good, those who charge significantly less than the no-look fee of $4000.00  may not be fully competent chapter 13 attorneys.   Most good and capable chapter 13 attorneys will not take a chapter 13 case for less or much less than the no-look fee since there is a lot of work to do in chapter 13 cases.    To be clear, I am talking about the TOTAL attorney’s fees, not the upfront fees before filing.   The total fees must be clearly and fully disclosed in the bankruptcy papers so that it is very clear to all parties.  If you are being billed hourly, rather than based on the no-look fee, that should also be clearly disclosed in your bankruptcy paperwork.  If you don’t see it, ask your attorney to show it to you before filing.
7.  Ask the attorney if you ever have to pay them attorney’s fees directly after the filing of the case.   Do not EVER go to an attorney who says you must pay them attorney’s fees directly AFTER the chapter 13 bankruptcy has been filed.  An attorney’s chapter 13 post-petition fees are paid through the plan, meaning the chapter 13 trustee will pay the attorney any balance of chapter 13 fee’s owed.  If you have filed a chapter 13 case and are asked to pay attorney’s fees directly in addition to making plan payments, contact the United States Trustee’s Office and let them know immediately.
 


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