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There’s a new clock out there to obsess over – the student debt clock. It shows that we’re racking up more and more debt by the second – in fact, America’s student-loan debt is growing by a whopping $3,055 every second.
If that doesn’t make you start asking questions about where this is all headed, nothing will.
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As the kids say, I can’t even.
The post Student Debt Clock Shows Scary Growth In What We Owe appeared first on Bankruptcy and Student Loan Lawyers - 866.787.8078.
In a case decided by a Florida Court of Appeals in 2012, the issue presented was whether a person's long-term leasehold interest in his condominium could qualify as a "homestead" exempt from forced sale under article X, section 4 of the Florida Constitution. The Court held that such a condominium may qualify as a homestead.
The Court explained that article X, section 4 of the Florida Constitution does not distinguish between the different kinds of ownership interests that are entitled to the homestead exemption against forced sale. The Court reviewed that the Florida Supreme Court "has long since adopted the general rule that a fee simple estate is not necessary to this exemption." In determining a homestead, the Court noted that a court must instead focus on the debtor's intent to make the property his homestead and his actual use of the property as his principal and primary residence.
The Court held that when a lessee's interest in a leasehold estate includes the right to use and occupy the premises for a long-term and the lessee uses the property as his principal and exclusive residence, such an interest is entitled to the Florida homestead exemption from forced sale.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
By: Steven P. Taylor
Law Office of Steven P. Taylor, PC
Bankruptcy Rule 3002(c) requires creditors to file proofs of claim within 90 days of the date set for the meeting of creditors. However, getting a timely filed proof of claim by a mortgage creditor has long been an exercise in frustration. This has been due to significant changes in the proof of claim form that creditors must file to support their claims in bankruptcy. Some of these changes are the explicit requirement that all writings supporting a claim or showing perfection of a security interest must be attached. In addition, the signer of the proof of claim must include a statement under the penalty of perjury that all of the information is “true and correct to the best of the signer’s knowledge, information, and reasonable belief.” The practical effect of these requirements is that creditors personally review all information and supporting documentation with greater scrutiny to avoid issues and liability.
Bankruptcy courts have come to conflicting conclusions on whether Rule 3002(c)’s deadline applies to all creditors or merely unsecured ones. However, a recent Seventh Circuit decision has not only impact for creditor practice for proof of claim filings but debtor’s counsel. In re Pajian, No. 14-2052 (7th Cir. May 11, 2015). In re Pajian involved the debtor’s objection to a proof of claim filed by his secured creditor more than 90 days after the meeting of creditors. The bankruptcy court overruled the debtor’s objection as to the secured portion of the claim, concluding that a secured creditor seeking a distribution under a debtor’s plan need only file a proof of claim before the plan’s confirmation.
The Seventh Circuit reversed that decision and concluded that all creditors are bound by the Rule 3002(c) deadline. It is blackletter law that a secured creditor’s failure to file a claim does not void its lien. This is codified in 11 U.S.C. §506(d)(2). The secured creditor’s failure to file a claim means that the creditor does not participate in the distribution from the bankruptcy estate. Only the Chapter 13 Trustee or the Debtor may file a timely proof of claim (for thirty days) after the secured creditor has failed to do so timely.
Unfortunately that also means that the carefully crafted Chapter 13 plan that provided for Trustee conduit mortgage payments and cure payments for the mortgage arrears is now worthless unless the debtor (through counsel) or the Chapter 13 Trustee does file a proof claim on the mortgage company’s behalf. If that is not done, you could be contributing disposable income that will not go to the intended secured creditor, but ultimately unsecured creditors. This could expose your client to a deficiency at the end of the bankruptcy. It would seem unlikely that negligently failing to file a proof of claim (based on your plan numbers) to protect your plan and your client would not raise issues of legal malpractice. To establish legal malpractice under negligence, it is necessary to demonstrate the following:
- The lawyer owed a duty to provide competent and skillful representation;
- The lawyer breached the duty by acting carelessly or by making a mistake;
- The lawyer’s breach caused an injury or harm;
- The harm caused a financial loss.
On the other side, very rarely does Debtor’s counsel have all of the supporting documents of the debt, evidence of the perfection or sometimes even the proper party to receive payments. Conceivably, debtor’s counsel may need order a title search and obtain missing documents to ensure that he can file a proof of claim with a “reasonable belief”. In addition, most attorneys are not well versed in the minutiae of escrow analysis or amortization tables. It is not likely that a Debtor’s proof of claim (in a mortgage context) is going to be somewhat accurate as to the ongoing payment if there is any kind of arrearage at all. Potentially, the failure to provide accurate information could lead to sanctions from the court. The penalty for filing a fraudulent claim is a fine of up to $500,000 or imprisonment for up to 5 years, or both.
Filed under: Chapter 13 Bankruptcy Tagged: bankruptcy, Bankruptcy Rule 3002(c), legal malpractice, proof of claim 
In the wake of the collapse of Corinthian Colleges, tens of thousands of student loan borrowers have faced what can best be described as an uphill battle in their quest for student loan debt relief.
This led to the Corinthian 100 (now the Corinthian Collective), a group of former students who flat out refused to pay their student loans.
They got a lot of flack from the mainstream media, but they sure got the attention of the right people.
On June 8, 2014 the US Department of Education announced new plans to ensure that students who have been defrauded by their college, or because their school closed down, receive every penny of the debt relief they are entitled to, as efficiently and easily as possible.
Students who were enrolled at Corinthian schools that closed can now choose between discharging their student loans (called a “closed school discharge”) and transferring their credits to another school.
That’s nothing new – federal student loan borrowers have had the ability to obtain a closed loan discharge for quite some time.
What is new, however, is the Department’s stance towards borrower defense to repayment. This rule has been in place as well, but it’s not something used often. Procedures were murky and seemingly shrouded in secrecy, likely because most people in the Department had never used it.
Now, according to the Department:
Borrowers can make a claim for debt relief because of fraud under a legal rule called “borrower defense to repayment.” This rule requires students to show that they were defrauded by their college under a state’s laws, and we are committed to working with students to make that the simplest, fastest process possible.
In order to ensure that students do not fall behind on payments or default on their loans before claims can be resolved, we will offer all applicants for debt relief the option to go into loan forbearance (a special permission to stop payments), and for students in default, to halt collection activity.
In order to promote efficiency in the resolution of claims and to minimize the burden on students, wherever possible, we will work to use legal findings applicable to groups of students (for example, an entire academic program at a specific campus) to resolve students’ claims. As a first step, in this particular case, the Department has already established that Corinthian misrepresented job placement rates for a majority of programs at its Heald College campuses between 2010 and 2014. Today, we are announcing that these serious findings entitle the defrauded students enrolled in these programs to a discharge of their Federal Direct Student loans, based on a simple attestation that they relied on those fraudulent rates. And we are providing a simple form that will allow students to quickly give us the information we need to give them debt relief.
Going forward, the Department will appoint a special master to oversee borrower defense issues and charge that person with ensuring our process is clear and fair, including a simple, streamlined application for debt relief.
If you’re looking at a closed school discharge you can check out Next Steps EDU to talk with a volunteer counselor. Or you can get in touch with me if you’d prefer to work with a lawyer. Either way, help’s available.
All in all, a good day for Corinthian students.
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On August 26, 2014 the Securities and Exchange Commission approved final rules cracking down on credit rating agencies and asset-backed securities — two areas that SEC Chairwoman Mary Jo White said were “at the center of the financial crisis,” according to an article in ThinkAdvisor.
In her opening remarks at the SEC open meeting at the agency’s Washington headquarters, White said that the final rules in the “two closely related areas” give investors “powerful new tools” for independently evaluating the quality of asset-backed securities and credit ratings. “ABS issuers and rating agencies will be held accountable under significant new rules governing their activities,” said White, adding that the issuance of “flawed credit ratings by certain credit rating agencies was a key contributor to the financial crisis.” Since 2011, SEC staffers have annually examined each of the nationally recognized statistical rating organizations (NRSROs) registered with the SEC, as required by the Dodd-Frank Act. “While the reports from these reviews have cataloged a number of improvements, they have also identified concerns that persist, including ones related to the management of conflicts of interest, internal supervisory controls, and post-employment activities of former staff of NRSROs,” White said.
The post SEC Cracks Down on Credit Reporting Agencies appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
As a consumer bankruptcy attorney it amazes me how very smart people make some very poor business decisions. Now don’t get me wrong – at least fifty percent of my clients are in financial distress because of challenges they faced from outside forces such as medical, divorce, changing real estate, employment, business demands, aging, and many more reasons.
Welcome to Feed the Pig!
We’re here to help you do just that, feed your piggy bank. Here, you’ll find helpful tools, articles, tons of tips and other resources to help you on your path to financial stability. We’ll help you think through your spending and saving habits, identify ways you can start saving and commit to making changes that will reduce your debt and grow your savings.
Your time here could include:
- Creating a savings plan to help get you on track to reach your financial goals.
- Getting free savings tips.
- Watching and listening to Feed the Pig TV and radio ads.
- Learning a ton more about saving through our friends and our companion site, 360financialliteracy.org, which has financial helpers for all stages of life.
- And much more!
The post Feed the Pig – How to Manage Your Money. Let’s Teach Our Young appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Did You Get a Mortgage Deficiency Letter From Dyke O’Neal? Lots of people in Virginia, whose houses were foreclosed three, four, or five years ago, are getting collection letters from Dyke O’Neal. Dyke O’Neal is a collection agency and debt buyer, specializing in foreclosed real estate. They try to collect on mortgage deficiencies. What’s a […]The post What’s this Letter From Dyke O’Neal? by Robert Weed appeared first on Robert Weed.
Of all the lawyers that came before me – Abraham Lincoln is my role model. Early in his life he faced financial ruin, but preserved. Hence the “honest Abe” moniker. Abe was truly a spokesperson and advocate for the people. He represented 4,000 to 5, 000 clients; the majority of which were debt related issues.
“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time.” Abraham Lincoln
Here is a wonderful article by Joel M. Aresty about our 16th president’s professional and private life before the White House. This article is also a great summary of the early development of the bankruptcy laws.
Bankruptcy laws have gone through significant changes since our national Constitution became law in 1783. The Constitution provided that Congress was to create laws relating to bankruptcy (Article I, section 8), but Congress did not pass a bankruptcy law until the Bankruptcy Act of 1800. This law was very creditor friendly and only provided for involuntary bankruptcies of business debtors. In 1841, in response to the financial crisis gripping the nation, Congress passed the Bankruptcy Act of 1841. Unlike the prior law which was limited to business debtors, this new law opened up bankruptcy as an option individuals to file voluntary bankruptcies and receive a discharge of their debts.
The bankruptcy laws have gone through other changes, but none as significant as the change to allow individuals to file voluntary bankruptcies. I am often asked “what type of people file for bankruptcy?” My reply – “people like you, your neighbors, family and friends”. Bankruptcy is never a goal, it is usually the best choice of several bad options.
I laughed aloud when I read Lincoln partner’s description of his style of office and paper organization. “Lincoln had always on the top of our desk a bundle of papers into which he slipped anything he wished to keep and afterwards refer to. It was a receptacle of general information. Some years ago, on removing the furniture from the office, I took down the bundle and blew from the top the liberal coat of dust that had accumulated thereon. Immediately underneath the string was a slip bearing this endorsement, in his hand: ‘When you can’t find it anywhere else, look in this.”
I looked to the side of my desk at a similar stack and thought about leaving the same note at the bottom of the stack. Diane
The post Abraham Lincoln – Bankruptcy Lawyer appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Two of the largest banks, Chase and Bank of America, have finally agreed to update consumers’ credit reports within the next three months to properly depict debts as being discharged in bankruptcy. This long overdue move is a win for Oregon debtors whose have been living with inaccurate credit reports, sometimes for years after bankruptcy.
While this change is obviously welcome, it hardly arose out of the kindness of the banks’ hearts. Both banks along with Citigroup, GE Capital and Synchrony are in litigation right now with plaintiff debtors accusing them of purposefully ignoring bankruptcy discharges in order to make more money when they sell off pools of debt to third parties.
Litigation initiated by private parties is not the only impetus for the banks’ credit reporting policy change. Attorneys with the United States Trustee Program, a branch of the Justice Department, charged with policing the bankruptcy law violations, are apparently investigating the banks to determine whether the banks are deliberately violating federal bankruptcy law. Seems difficult to imagine that they are not doing so, but, hey, maybe I am a little biased.
The original post is titled Banks Agree to Report Debts as Discharged in Bankruptcy , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
A new study from the Consumer Financial Protection Bureau (CFPB) found that reverse mortgage advertising can be confusing and misleading, and issued a warning to older Americans to be on the lookout for potentially deceptive reverse mortgage advertisements. CFPB reports that borrowers have “false impressions’ that reverse mortgages are a government benefit or that getting a reverse mortgage would ensure consumers could stay in their homes for the rest of their lives.
“According to the CFPB, the number of reverse mortgage originations is likely to increase in the coming years with the retirement of the “baby boom”generation. The CFPB says that members of this group have more home equity than retirement savings. Studies have estimated that among Americans nearing retirement, 41 percent have no retirement savings account. But a majority of them, about 74 percent, own their homes and have built up good equity, the CFPB said.”
Reverse mortgage ads don’t always tell the whole story, so consider these facts when you see advertisements:
1. A reverse mortgage is a home loan, not a government benefit
Reverse mortgages have fees and compounding interest that must be repaid, just like other home loans. With most reverse mortgages, federal insurance guarantees that borrowers will receive their loan funds if their lender has financial difficulty or if their loan balance exceeds the value of their home. However, borrowers pay for this insurance and it’s not a government benefit.
2. You can lose your home with a reverse mortgage
When a reverse mortgage ad says you’ll retain ownership of your home, or that you can live there as long as you want to, don’t take these messages at face value. These statements are true only if you continue to meet all requirements of the reverse mortgage. If you fall behind on your property taxes or homeowners insurance, are absent from your home for longer than six months, or fail to satisfy other requirements, you can trigger a loan default. If you don’t take care of the default in time, the lender can foreclose on your home. Sometimes these requirements are listed in fine print, but not always. If you have a question about reverse mortgage requirements, contact a HUD-approved housing counselor near you.
3. Without a good plan, you could outlive your loan money
Read more
The post CFPB Warns Reverse Mortgage Advertising is Misleading appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
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