Blogs
Financial experts bemoan the “crisis” in student loan debt (over $1.2 trillion as of 2015) and the rising rates of credit card debt ($733 billion as of 2015) but no one seems to be talking about yet another debt bubble – the huge rise of auto loan debt.In 2012, total auto loan debt in the United States passed $1 trillion. Currently, the average household owes over $27,000 to vehicle lenders. More problematic, many of these loans extend well beyond 3 or 4 years. According to Edmunds.com, as of 2014, over 60% of auto loans were for terms over 60 months, with nearly 20% of these loans using 72 to 84 month terms.60 months, of course, equals 5 years. 72 months equals 6 years, and 84 months equals 7 years.Why a Long Term Vehicle Loan Means TroubleYou may ask “why should I be concerned about signing a 60 or 72 month car loan if I can afford the payment?” The answer, in a word, is “depreciation.”Cars and trucks are depreciating assets. This means that they go down in value with each day and each mile of wear and tear. When you sign off on a 5 year or longer loan, you won’t be break even on your loan for at least 3 years. All your payments through at least year 3 (and most likely longer) will be applied to interest only. And my experience has been that folks who pursue long term vehicle loans often have less than perfect credit such that their interest rates are 7%, 8% or even higher.This means that if your vehicle breaks down, or if you want to replace your car or truck 3 or 4 years into the loan, you will have to come out of pocket to satisfy the loan. If your vehicle is totaled in a wreck before the break even point, you will have to come out of pocket to pay off the loan because insurance companies pay property damage settlement based on “low retail” value.If the dealership offers to “roll your existing payment” into a new loan, you’ll end up paying even more, because the new loan will include the leftover finance costs from the original loan plus the unfavorable terms from the new loan.In essence, a 5 year or longer car loan equals a long term rental, except that you bear all the risk of loss. In case I am not being clear, a 5 year or longer loan is a toxic loan, and almost never a good idea. Even 4 year loans are less than ideal.How Can You Escape from Long Term Vehicle LoansSo, what can you do if you are stuck in a long term vehicle loan? Some credit unions will consider a refinance that would allow you to reduce the term down to 3 years but that assumes (a) you can handle a higher payment and (b) that your credit score has improved to allow for a lower interest rate.Another option to consider is Chapter 13 bankruptcy. Chapter 13 includes an interesting concept called a “cram down” that applies to car and truck loans. If you took your loan out more than 2 ½ years ago (910 day), we can reduce your loan balance to the value of your vehicle. We may also be able to reduce that high interest rate to a rate closer to the prime rate (which is currently around 3.5%).
- Here’s an example: Tom owns a car worth $15,000, that he bought 3 years ago with a 72 month loan at 8% interest. His current balance is $21,093 and his monthly payment is $440. In Chapter 13, we can cram down the $21,093 balance to $15,000 and reduce the interest rate to 4.5%. Tom will end up paying around $235 per month to the lender within his Chapter 13.
Obviously every case will be different, but if you have a long term vehicle loan at a high interest rate that you signed more than 2 ½ years ago, Chapter 13 can most likely save you thousands of dollars.All Debts Must be Included in Chapter 13Like any other financial tool, Chapter 13 is not a “free lunch.” You should not enter into any form of bankruptcy before educating yourself about both the positives and negatives. You will have to pay a lawyer to analyze your income and expenses, debts and assets and to prepare a Chapter 13 filing.Understand as well that when you file bankruptcy, you have to include (and modify) all of your debts. In many cases Chapter 13 can reduce your monthly expenses and reduce your total debt but Chapter 13 is not the right remedy for every person.If you are stuck in a long term vehicle loan, however, it does make sense to find out whether a Chapter 13 cram down can help you. Susan Blum and I have been representing Atlanta area residents understand how personal bankruptcy works for over 25 years. We are happy to answer your questions – call us at 770-393-4985 or use the form on this page to reach us by email.The post Relief From Your 72 Month Car Loan appeared first on theBKBlog.
http://nwdrlf.com/wp-content/uploads/2016/06/Attorney_Tom_McAvity_June_2016_Interview.mp3
Katherine:
Attorney McAvity? You’re going to help me with your name. We’re going to practice this again. Attorney McAvity.
Tom:
I’ll try. I’ll try.
Katherine:
Is here today to answer questions about bankruptcy. He’s given me a little grace on his last name here. He’s going to spend some of the next several months with us answering all of your questions when it comes to bankruptcy, anything from the terminology and the process and really helping you to be more comfortable with the process and helping you understand that it’s not as scary as it may have felt the moment you had to make the decision about this. We’re going to start with some terms that our listeners have been curious about. I’m glad that you’re here today to help us get some answers on those. Thank you for being here with us on This Needs To Be Said radio.
Tom:
I’m happy to be here.
Katherine:
One of the first times that we came across was a cram down. What is a cram down in terms of bankruptcy?
Tom:
A cram down actually is a wonderful feature of chapter 13 bankruptcy, which most of our clients don’t initially want to file, because they’ve heard that they’re going to have to make payments back and that it’s not going to be as good as a Chapter 7 bankruptcy where they are done in a few months. Then a lot of them hear about the cram down future and that they wanted to file chapter 13. What a cram down is, is it’s a feature that’s only available in Chapter 13. It comes up in a few different situations.
Let’s say you own a car, and you owe $10,000 on it, and it’s worth about 5. For most of us that’s often the case. Cars are rarely worth what you owe on them. You can kind of feel yourself, as I have on numerous occasions and told myself that the car was probably worth what I owed on it, but usually most of us are underwater on our cars. The cars are worth a good deal less than what you owe. In this example if you own a car and it’s worth less than what you owe, what you’re entitled to do is just repay back the amount that the vehicle is worth through the chapter 13. Where in Chapter 7 you might keep your car loan but have to repay $10,000 to your car creditor, in chapter 13 you might repay only 5. It’s a great feature. Often in a 2 car family it can just save a family a ton of money.
It can come up and see whether instances. One where with personal property … One thing I should mention, that I forgot to mention, is that the cram down for cars is available where the car was financed at least 910 days ago. That’s the one condition for doing the cram down. The other instance where it can come up is personal property. Let’s say you financed a refrigerator and now the thing is worth 50 bucks to have someone tow it away, and you still owe $1,000 on it. You’re entitled to just repay the amount that the refrigerator is actually worth. With personal property the only condition is that it has to have been financed over a year ago. Again as you can imagine with TV loans, furniture loans, refrigerator loans usually you owe way more than the stuff is worth. There’s a potential there for a lot of savings.
The final situation, you don’t see it come up much, although it sure would be wonderful if it did, is was investment property. Say you have a rental property. You’re entitled to cram it down to the amount of the property is actually worth. The reason why this doesn’t come up that much is yes, you can cram down that rental property to the actual value of the rental property. The problem is you have to repay the entire amount during the 3 or 5 years chapter 13 plan payment. For most of us that’s just not realistic, so you don’t see that come up a whole lot. The other thing I should mention for all of these is in a lot of cases we are reducing the interest rates as well. Normally it’s somewhere between 4 and 6%. For a lot of us we are paying a whole lot more than that in interest, so once again chapter 13 provides a great opportunity for a family to do some real savings. Sorry to talk your ear off.
Katherine:
No. I’m taking notes as you’re talking.
Tom:
About the cram down.
Katherine:
Not at all. I’m taking notes as you’re talking, because these are things I didn’t even know. When the question came to me, I’m just like “I don’t know, but I know somebody that can answer the question.” This is great information. What about collateral valuation? What does that mean? To me that’s like “blah, blah, blah.” What does it mean?
Tom:
It sure sounds like “blah, blah, blah,” doesn’t it?
Katherine:
Mm-hmm (affirmative).
Tom:
There’s what it means and what it … I’m just going to say what it tends to actually mean. When the court is looking at what this stuff is worth … Let’s take this example where the car is worth 5 and you owe 10. For practical purposes we might want to, our firm and the consumer, we might want to say this car is worth only 5, because let’s say that’s the wholesale value of it. We want to give a real value, whereas the creditor will want to give a retail value, which is really high. I think the reality is, for practical purposes, though there’s a much longer legal definition of it, the judge is going to ask us to meet somewhere in between those two values. Probably a little closer to their creditors value honestly, but in most cases it doesn’t matter. The car or the personal property is so underwater that meeting somewhere between wholesale and retail, maybe a private party value, if you look at that on Kelley Blue Book for cars, our clients do really well just striving for a private party value, which is probably fair. We’re talking about what the property would sell for to a private party, not what it would sell for on a car lot.
Katherine:
What about if someone’s unemployed? Of course when people are unemployed things financially change. Get my tongue together. Is bankruptcy something that they can consider?
Tom:
Absolutely. Particularly for chapter 7. At least in assessing whether the consumer is eligible for bankruptcy, it makes the inquiry really easy, because if you’re unemployed, obviously you should qualify at least on the basis of looking at your income. Even for chapter 13 though, we see a lot of people filing chapter 13 where they’re just receiving unemployment, and they end up making some kind of nominal payment to the bankruptcy court. It’s allowed. The only qualification for chapter 13 is that there’s a regular source of income. Unemployment is a regular source of income. At least we hope. Probably more regular than a lot of sources. The answer is yes. For our firm we make it really easy if you’re unemployed, because we are one of few firms that will actually take some of the attorney fees before filing, but most of them afterwards in monthly installments, which makes it a whole lot easier if you’re unemployed to get a case filed.
Katherine:
What’s the difference between a mortgage modification and bankruptcy?
Tom:
They’re not mutually exclusive. I think a lot of people think … They think of it that they have two options. Let’s say that you’re behind on your mortgage. You think, “I either need to get this mortgage modified or I need to file a chapter 13 bankruptcy.” A chapter 13 bankruptcy will enable you to take the mortgage arrears that you’re behind and repay them over a 5-year period at a 0% interest. You can’t beat it in terms of an interest rate, because you’re paying what you’re behind at 0% interest. It’s almost like someone’s giving you an interest-free loan. They really kind of are over a 5-year period. Maybe you pay that back slowly, or maybe you pay most or all of that back in one lump sum at the end of a 4 or 5-year period. That’s how you can handle mortgage arrears in chapter 13.
In a mortgage modification you are often either increasing the length of the loan or hopefully decreasing the interest rate, at least this is in theory, and taking those mortgage arrears that you’re behind and putting the back in the loan. Where I don’t like the mortgage modification is if you’re taking those arrears and putting them back in the land and you’re not lowering the interest rates, and just the lengthening the term of the loan. You’re adding potentially anyway tens of thousands of dollars to your mortgage obligation, whereas in the chapter 13 you could be repaying that at 0% interest and not accruing more and more interest debt over the course as the years go by.
I would like to point out that they’re not mutually exclusive. You can always file a Chapter 13 to stop a foreclosure to start that process or get a loan out of default, and then pursue a mortgage modification while you’re in chapter 13. In fact what we’ve seen is lenders who were not willing to modify mortgages at all, this is often the case, is you’ll see a lender who is not willing to modify a mortgage prior to the chapter 13, you can’t even reach him on the phone, they come to the table after the chapter 13 has been filed. It can often be an impetus
Katherine:
Why is that?
Tom:
You know what I think it is they don’t want to be repaid the mortgage arrears at 0% interest over 5 years. The modification becomes a little more attractive to them. I think also potentially they see that you’re eliminating all of your other debt, so maybe that is one of the obstacles to getting the modification done. That’s removed or is on its way to being removed after the bankruptcy is filed. It could be that as well.
Katherine:
That definitely sheds a whole lot of light on what I was even thinking. I was like, “Well, wouldn’t it just make sense that one would eliminate the other,” but you’re saying that there’s a possibility that they both could be used together, and that the bank may be more enticed to listen to what you have to say.
Tom:
Absolutely.
Katherine:
This last question I have for you until our next meeting, we’re talking about all sources of income. We have tax season that is just passing is. Maybe some people have still delayed or maybe they’ve gotten an extension. When they think about getting a tax refund they’re concerned that “If I file bankruptcy, will that money be garnished? Will my wages be garnished if I file bankruptcy?”
Tom:
You certainly won’t get garnished after you file bankruptcy at all. Bankruptcy will stop almost all garnishments from taking place. If you’re getting garnished right now, the surest way to stop that garnishment is by filing bankruptcy, because the creditor can’t garnish you afterwards. That’s the solution. Please, if you’re out there and getting garnished, there’s just no need for that going forward. Please contact a bankruptcy attorney immediately to put an end to that. In terms of the tax refund, you usually can protect a tax refund if you live in a state that has the federal exemptions, because it provides enough protection to make sure that you keep that next tax refund. I can’t say that that’s always the case, but it’s almost always the case.
Katherine:
It’s a possibility.
Tom:
There are a lot of states that have large enough exemptions to enable you to do that as well. In chapter 13 sometimes you’re asked to contribute part, and in some states all of your tax refund. I know that where I practice in Oregon and Washington, in the case of Washington you can always keep a large part of the tax refund, and normally in Oregon you can as well. I would say the norm is that you’re going to be asked to contribute some part of your tax refunds.
Katherine:
That would be fair enough. Let everyone know how to pronounce your name, and teach me again how to pronounce your name, and then how can they get in touch with you outside of This Needs To Be Said? I gave it my best try. I did. I thought I had it.
Tom:
No, I thought you were great. I thought you were great. You did better than some of my family. It’s Tom McAvity. I can be reached at our Seattle office at 206-674-4559 or our Portland office at 503-232-5303. Our website is and nwdrlf.com. That’s the acronym for Northwest Debt Relief Law Firm, so nwdrlf.com.
Katherine:
You also have a book on your website that people can get a copy of.
Tom:
The Benefits of Bankruptcy. I wrote it about a year ago, because I just wanted to have material so that if people were wondering what the benefits of bankruptcy were, and either they weren’t ready to come into a lawyer’s office, or they were just a little shy to be asking the questions about it, they’d just be able to consult to consult a book to get some of those answers. I wrote one for readers in Oregon and Washington in mind, so that they could get the information that they needed. Currently anyway I’m giving out the books for free with no obligation whatsoever. If anyone does contact me, I would be more than happy to mail them a copy. Not a coffee. A copy.
Katherine:
I want to copy. Thank you so much, and until next time, Attorney McAvity. We will talk about more about bankruptcy and what their questions are when it comes to bankruptcy. Thank you so much for your time.
Tom:
I’ll talk to you then. Thanks. It was a pleasure. Bye-bye.
.inter_tbl {margin-top: 30px;border:none;}.inter_tbl tr td:first-child {min-width: 85px;}.inter_tbl tr td:nth-child(2),.inter_tbl tr td:nth-child(2) p {font-size: 13px;line-height: 20px;}
The original post is titled Attorney Tom McAvity – June 2016 Interview , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
http://nwdrlf.com/wp-content/uploads/2016/06/Attorney_Tom_McAvity_June_2016_Interview.mp3
Katherine:
Attorney McAvity? You’re going to help me with your name. We’re going to practice this again. Attorney McAvity.
Tom:
I’ll try. I’ll try.
Katherine:
Is here today to answer questions about bankruptcy. He’s given me a little grace on his last name here. He’s going to spend some of the next several months with us answering all of your questions when it comes to bankruptcy, anything from the terminology and the process and really helping you to be more comfortable with the process and helping you understand that it’s not as scary as it may have felt the moment you had to make the decision about this. We’re going to start with some terms that our listeners have been curious about. I’m glad that you’re here today to help us get some answers on those. Thank you for being here with us on This Needs To Be Said radio.
Tom:
I’m happy to be here.
Katherine:
One of the first times that we came across was a cram down. What is a cram down in terms of bankruptcy?
Tom:
A cram down actually is a wonderful feature of chapter 13 bankruptcy, which most of our clients don’t initially want to file, because they’ve heard that they’re going to have to make payments back and that it’s not going to be as good as a Chapter 7 bankruptcy where they are done in a few months. Then a lot of them hear about the cram down future and that they wanted to file chapter 13. What a cram down is, is it’s a feature that’s only available in Chapter 13. It comes up in a few different situations.
Let’s say you own a car, and you owe $10,000 on it, and it’s worth about 5. For most of us that’s often the case. Cars are rarely worth what you owe on them. You can kind of feel yourself, as I have on numerous occasions and told myself that the car was probably worth what I owed on it, but usually most of us are underwater on our cars. The cars are worth a good deal less than what you owe. In this example if you own a car and it’s worth less than what you owe, what you’re entitled to do is just repay back the amount that the vehicle is worth through the chapter 13. Where in Chapter 7 you might keep your car loan but have to repay $10,000 to your car creditor, in chapter 13 you might repay only 5. It’s a great feature. Often in a 2 car family it can just save a family a ton of money.
It can come up and see whether instances. One where with personal property … One thing I should mention, that I forgot to mention, is that the cram down for cars is available where the car was financed at least 910 days ago. That’s the one condition for doing the cram down. The other instance where it can come up is personal property. Let’s say you financed a refrigerator and now the thing is worth 50 bucks to have someone tow it away, and you still owe $1,000 on it. You’re entitled to just repay the amount that the refrigerator is actually worth. With personal property the only condition is that it has to have been financed over a year ago. Again as you can imagine with TV loans, furniture loans, refrigerator loans usually you owe way more than the stuff is worth. There’s a potential there for a lot of savings.
The final situation, you don’t see it come up much, although it sure would be wonderful if it did, is was investment property. Say you have a rental property. You’re entitled to cram it down to the amount of the property is actually worth. The reason why this doesn’t come up that much is yes, you can cram down that rental property to the actual value of the rental property. The problem is you have to repay the entire amount during the 3 or 5 years chapter 13 plan payment. For most of us that’s just not realistic, so you don’t see that come up a whole lot. The other thing I should mention for all of these is in a lot of cases we are reducing the interest rates as well. Normally it’s somewhere between 4 and 6%. For a lot of us we are paying a whole lot more than that in interest, so once again chapter 13 provides a great opportunity for a family to do some real savings. Sorry to talk your ear off.
Katherine:
No. I’m taking notes as you’re talking.
Tom:
About the cram down.
Katherine:
Not at all. I’m taking notes as you’re talking, because these are things I didn’t even know. When the question came to me, I’m just like “I don’t know, but I know somebody that can answer the question.” This is great information. What about collateral valuation? What does that mean? To me that’s like “blah, blah, blah.” What does it mean?
Tom:
It sure sounds like “blah, blah, blah,” doesn’t it?
Katherine:
Mm-hmm (affirmative).
Tom:
There’s what it means and what it … I’m just going to say what it tends to actually mean. When the court is looking at what this stuff is worth … Let’s take this example where the car is worth 5 and you owe 10. For practical purposes we might want to, our firm and the consumer, we might want to say this car is worth only 5, because let’s say that’s the wholesale value of it. We want to give a real value, whereas the creditor will want to give a retail value, which is really high. I think the reality is, for practical purposes, though there’s a much longer legal definition of it, the judge is going to ask us to meet somewhere in between those two values. Probably a little closer to their creditors value honestly, but in most cases it doesn’t matter. The car or the personal property is so underwater that meeting somewhere between wholesale and retail, maybe a private party value, if you look at that on Kelley Blue Book for cars, our clients do really well just striving for a private party value, which is probably fair. We’re talking about what the property would sell for to a private party, not what it would sell for on a car lot.
Katherine:
What about if someone’s unemployed? Of course when people are unemployed things financially change. Get my tongue together. Is bankruptcy something that they can consider?
Tom:
Absolutely. Particularly for chapter 7. At least in assessing whether the consumer is eligible for bankruptcy, it makes the inquiry really easy, because if you’re unemployed, obviously you should qualify at least on the basis of looking at your income. Even for chapter 13 though, we see a lot of people filing chapter 13 where they’re just receiving unemployment, and they end up making some kind of nominal payment to the bankruptcy court. It’s allowed. The only qualification for chapter 13 is that there’s a regular source of income. Unemployment is a regular source of income. At least we hope. Probably more regular than a lot of sources. The answer is yes. For our firm we make it really easy if you’re unemployed, because we are one of few firms that will actually take some of the attorney fees before filing, but most of them afterwards in monthly installments, which makes it a whole lot easier if you’re unemployed to get a case filed.
Katherine:
What’s the difference between a mortgage modification and bankruptcy?
Tom:
They’re not mutually exclusive. I think a lot of people think … They think of it that they have two options. Let’s say that you’re behind on your mortgage. You think, “I either need to get this mortgage modified or I need to file a chapter 13 bankruptcy.” A chapter 13 bankruptcy will enable you to take the mortgage arrears that you’re behind and repay them over a 5-year period at a 0% interest. You can’t beat it in terms of an interest rate, because you’re paying what you’re behind at 0% interest. It’s almost like someone’s giving you an interest-free loan. They really kind of are over a 5-year period. Maybe you pay that back slowly, or maybe you pay most or all of that back in one lump sum at the end of a 4 or 5-year period. That’s how you can handle mortgage arrears in chapter 13.
In a mortgage modification you are often either increasing the length of the loan or hopefully decreasing the interest rate, at least this is in theory, and taking those mortgage arrears that you’re behind and putting the back in the loan. Where I don’t like the mortgage modification is if you’re taking those arrears and putting them back in the land and you’re not lowering the interest rates, and just the lengthening the term of the loan. You’re adding potentially anyway tens of thousands of dollars to your mortgage obligation, whereas in the chapter 13 you could be repaying that at 0% interest and not accruing more and more interest debt over the course as the years go by.
I would like to point out that they’re not mutually exclusive. You can always file a Chapter 13 to stop a foreclosure to start that process or get a loan out of default, and then pursue a mortgage modification while you’re in chapter 13. In fact what we’ve seen is lenders who were not willing to modify mortgages at all, this is often the case, is you’ll see a lender who is not willing to modify a mortgage prior to the chapter 13, you can’t even reach him on the phone, they come to the table after the chapter 13 has been filed. It can often be an impetus
Katherine:
Why is that?
Tom:
You know what I think it is they don’t want to be repaid the mortgage arrears at 0% interest over 5 years. The modification becomes a little more attractive to them. I think also potentially they see that you’re eliminating all of your other debt, so maybe that is one of the obstacles to getting the modification done. That’s removed or is on its way to being removed after the bankruptcy is filed. It could be that as well.
Katherine:
That definitely sheds a whole lot of light on what I was even thinking. I was like, “Well, wouldn’t it just make sense that one would eliminate the other,” but you’re saying that there’s a possibility that they both could be used together, and that the bank may be more enticed to listen to what you have to say.
Tom:
Absolutely.
Katherine:
This last question I have for you until our next meeting, we’re talking about all sources of income. We have tax season that is just passing is. Maybe some people have still delayed or maybe they’ve gotten an extension. When they think about getting a tax refund they’re concerned that “If I file bankruptcy, will that money be garnished? Will my wages be garnished if I file bankruptcy?”
Tom:
You certainly won’t get garnished after you file bankruptcy at all. Bankruptcy will stop almost all garnishments from taking place. If you’re getting garnished right now, the surest way to stop that garnishment is by filing bankruptcy, because the creditor can’t garnish you afterwards. That’s the solution. Please, if you’re out there and getting garnished, there’s just no need for that going forward. Please contact a bankruptcy attorney immediately to put an end to that. In terms of the tax refund, you usually can protect a tax refund if you live in a state that has the federal exemptions, because it provides enough protection to make sure that you keep that next tax refund. I can’t say that that’s always the case, but it’s almost always the case.
Katherine:
It’s a possibility.
Tom:
There are a lot of states that have large enough exemptions to enable you to do that as well. In chapter 13 sometimes you’re asked to contribute part, and in some states all of your tax refund. I know that where I practice in Oregon and Washington, in the case of Washington you can always keep a large part of the tax refund, and normally in Oregon you can as well. I would say the norm is that you’re going to be asked to contribute some part of your tax refunds.
Katherine:
That would be fair enough. Let everyone know how to pronounce your name, and teach me again how to pronounce your name, and then how can they get in touch with you outside of This Needs To Be Said? I gave it my best try. I did. I thought I had it.
Tom:
No, I thought you were great. I thought you were great. You did better than some of my family. It’s Tom McAvity. I can be reached at our Seattle office at 206-674-4559 or our Portland office at 503-232-5303. Our website is and nwdrlf.com. That’s the acronym for Northwest Debt Relief Law Firm, so nwdrlf.com.
Katherine:
You also have a book on your website that people can get a copy of.
Tom:
The Benefits of Bankruptcy. I wrote it about a year ago, because I just wanted to have material so that if people were wondering what the benefits of bankruptcy were, and either they weren’t ready to come into a lawyer’s office, or they were just a little shy to be asking the questions about it, they’d just be able to consult to consult a book to get some of those answers. I wrote one for readers in Oregon and Washington in mind, so that they could get the information that they needed. Currently anyway I’m giving out the books for free with no obligation whatsoever. If anyone does contact me, I would be more than happy to mail them a copy. Not a coffee. A copy.
Katherine:
I want to copy. Thank you so much, and until next time, Attorney McAvity. We will talk about more about bankruptcy and what their questions are when it comes to bankruptcy. Thank you so much for your time.
Tom:
I’ll talk to you then. Thanks. It was a pleasure. Bye-bye.
.inter_tbl {margin-top: 30px;border:none;}.inter_tbl tr td:first-child {min-width: 85px;}.inter_tbl tr td:nth-child(2),.inter_tbl tr td:nth-child(2) p {font-size: 13px;line-height: 20px;}
The original post is titled Attorney Tom McAvity – June 2016 Interview , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
CFPB proposing a rule to protect consumers from payday loan traps.
The Consumer Financial Protection Bureau is working to end payday loan traps. Today, we’re announcing a proposed rule that would require lenders to determine whether borrowers can afford to pay back their loans. The proposed rule would also cut off repeated debit attempts that rack up fees and make it harder for consumers to get out of debt. These strong proposed protections would cover payday loans, auto title loans, deposit advance products, and certain high-cost installment loans. For more on the rest of this announcement…
Consumer Financial Protection Bureau “CFPB” has successful knocked the knees out from under large banks for fraudulent lending practices, car dealers for misleading loans, military loans designed to put veterans in a financial nightmare. Their web site is full of great reference materials about your rights and the obligations of lenders. It is very easy to file complaints, and, unlike most Attorney General’s Office, those complaints are actually investigated.
CFPB’s latest blog and announcement explains their pursuit of payday loan companies. Go here for more information related to payday loans. Learn why they are dangerous and why a borrower of one small loan ends up owing hundreds of dollars in interest. CFPB is asking that borrowers share their experiences with payday lenders. It is easy to fill out the information and valuable for gathering statistics on this industry that currently has very few controls.
The post Payday Loan Traps appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
CFPB propose rule to protect consumers from payday loan traps.
The Consumer Financial Protection Bureau is working to end payday loan traps. Today, we’re announcing a proposed rule that would require lenders to determine whether borrowers can afford to pay back their loans. The proposed rule would also cut off repeated debit attempts that rack up fees and make it harder for consumers to get out of debt. These strong proposed protections would cover payday loans, auto title loans, deposit advance products, and certain high-cost installment loans. For more on the rest of this announcement…
Consumer Financial Protection Bureau “CFPB” has successful knocked the knees out from under large banks for fraudulent lending practices, car dealers for misleading loans, military loans designed to put veterans in a financial nightmare. Their web site is full of great reference materials about your rights and the obligations of lenders. It is very easy to file complaints, and, unlike most Attorney General’s Office, those complaints are actually investigated.
CFPB’s latest blog and announcement explains their pursuit of payday loan companies. Go here for more information related to payday loans. Learn why they are dangerous and why a borrower of one small loan ends up owing hundreds of dollars in interest. CFPB is asking that borrowers share their experiences with payday lenders. It is easy to fill out the information and valuable for gathering statistics on this industry that currently has very few controls.
The post Payday Loan Traps appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Our Delavan real estate attorney knows that when purchasing a home, not everything goes according to plan. Some mishaps could have devastating impacts on your home purchase and even stop the closing. When interacting with so many people (appraisers, buyer’s agent, seller’s agent, lenders, inspectors, title company personnel, insurance salespersons), you never know where a real estate nightmare will originate. Our Delavan real estate attorney lists 20 closing nightmares that could happen to you.
Things That Can Go Wrong During a Delavan Real Estate Transaction
1. The Seller Doesn’t Show Up For The Closing
2. The Seller Doesn’t Fix Specified Repairs
3. The Title to the Home has Incurable Defects
4. The Home Has Several Liens Against It
5. The Home Is Destroyed By Nature or Fire Before Closing
6. No Insurance Company Will Insure the Home
7. The Home Doesn’t Pass Certain Inspections (i.e., Mold, Termites)
8. The Seller Hid a Home Defect
9. The Financial Institution Doesn’t Approve the Loan
10. The Appraiser Devalues the Home
11. The Home is Zoned Incorrectly
12. The Property Has Easement Issues
13. The Seller Leaves With Items Which Were Included in the Sale
14. The Seller Decides Not to Sell
15. The Seller Becomes Ill or Dies
16. A Real Estate Agent Acts Unprofessionally
17. New Home is Not Completed on Time
18. Financial Institution Goes Out of Business
19. Title Company Loses Paperwork
20. Seller Leaves Town Without Signing Paperwork
Contact Our Delavan Real Estate Attorney
The aforementioned problems are just a small list of literally hundreds of things that can go wrong during a real estate transaction. It is always smart to have an experienced Delavan real estate attorney on your side. You do not have to go through the real estate process alone. Our Delavan real estate attorney can help protect you from real estate transaction nightmares and take preventative measures to ensure your home purchase goes as planned. Contact our Delavan real estate attorney by phone at 262-725-0175 or by email via our website’s contact page. Wynn at Law, LLC has real estate offices in Lake Geneva, Salem, Muskego, and Delavan, Wisconsin.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
If a debtor does not know the true value of his home, he may find himself in an asset case under chapter 7 bankruptcy. This was almost the case for a recent client who was seeking a fresh start under Chapter 7 bankruptcy law. The debtor purchased his home slightly over three years ago for+ Read More
The post Increasing Home Value Knocks Debtor Out Of Chapter 7 Eligibility appeared first on David M. Siegel.
Here at Shenwick & Associates, we're devoted to helping our clients discharge as many of their debts as possible in bankruptcy. We also aggressively attempt to help our clients retain as much of their property as possible after their bankruptcy case is concluded.
However, with regard to property that's secured by a debt, whether a debtor can retain that property will often depend on whether he or she is willing to sign a reaffirmation agreement. We covered reaffirmation agreements in a recent e-mail, but have recently done some more investigation into the topic, which we wanted to share with you.
As a hypothetical, let's say we have a married couple, filing jointly, who own a house with a mortgage and are current on their mortgage payments. There is no equity in the house. They want to keep their house after their bankruptcy case is concluded and continue to pay their mortgage during the pendency of the bankruptcy case. Does this couple need to file a reaffirmation agreement with the secured creditor? Our answer, for cases filed in the Second Circuit (New York, Connecticut and Vermont) is no.
Prior to the enactment of BAPCPA in 2005, courts in several circuits (including the 2nd Circuit in Capital Communications Federal Credit Union v. Boodrow (In re Boodrow) and BankBoston, N.A. v. Sokolowski (In re Sokolowski) had held that debtors had the option (the "ride through option") to retain both real property and personal property collateral and maintain current performance on the loan. Furthermore, secured creditors could not foreclose based solely on the debtor's filing of a bankruptcy petition and failure to reaffirm.
When BAPCPA was enacted, 11 U.S.C. §§ 521(a)(6) (which governs the debtor's duties with respect to secured personal property) and 362(h) (which governs termination of the automatic stay with respect to secured personal property) specifically eliminated the ride through option for personal property. However, decisions in several circuits (including a decision from Connecticut, In re Caraballo) have held that Boodrow and Sokolowski remain binding authority that the ride through option is still in effect with respect to real property. Accordingly, in New York a mortgage on a house does not need to be reaffirmed, but a loan on secured personal property needs to be reaffirmed.
As with all of our opinions expressed in these e-mails, this is not legal advice–every bankruptcy case is different and we cannot render legal advice without being retained. To discuss your unique situation with respect to your personal and real property, reaffirmation of secured debts and whether bankruptcy is right for you, please contact Jim Shenwick.
On May 16, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz[1], ruling that the term “actual fraud” in section 523(a)(2)(A) of the Bankruptcy Code includes forms of fraud that do not involve a fraudulent misrepresentation.
In this case, Husky International Electronics, Inc. sold products to and was owed money by Chrysalis Manufacturing Corporation. Daniel Ritz, one of the owners of Chrysalis, transferred money from Chrysalis to other entities that he owned, draining Chrysalis of its assets and making it impossible for Chrysalis to pay its debts owed to Husky and other creditors. Read More ›
Tags: Chapter 7, U.S. Supreme Court
CBS News.com reports “Overdraft fees are raking in billions of dollars for the banking industry. But who’s paying them? Predominantly a tiny subset of consumers: young, working in lower-wage jobs and heavy users of debit cards.
Surveying 304 individuals who reported paying more than $100 in overdraft fees during the past year, the Pew Charitable Trust found that the bulk — 67 percent — of those paying hefty overdraft charges are working but earning less than $50,000 annually. Roughly one-third earn $25,000 or less. Their preferred method of payment is a debit card, and more than a third of them are under age 36.
Nearly a quarter of those surveyed said they paid more than a week’s wages in overdraft fees in the past year, with one in four reporting that the charges added to $300 annually or more. Nearly one in five of these individuals said overdrafts cost them $500 or more last year.” Read more…
The post 5 Ways to Cut Costly Overdraft Fees appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.