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Just over three years ago, I received a phone call from an old acquaintance who seemed extremely stressed out. This gentleman had previously been in sales and I had done business with him over 20 years ago. During our dealings we had discovered that we shared several mutual friends and over the years I had run into him several times on social occasions.Now, he needed advice about some significant debt problems. His small business was failing and he owed tens of thousands of dollars to multiple creditors. After reviewing his paperwork I suggested that Chapter 7 would work and should be considered. My friend agreed but did not want to file because he felt very guilty about not paying back his debts.For the next two and a half years, I would talk to my old friend on the phone about his debt problems. He was sued by several creditors but because he was unemployed there were no wages to garnish. He had no bank account so the judgments just sat there waiting for his financial situation to improve.
Finally, about two months ago, my friend called to say that he was ready to file. It turned out that he had a new job and his prospects were improving. I ran the means test numbers and….determined that he no longer qualified for Chapter 7 because he had too much disposable income.My friend’s situation is, unfortunately, all too common. He did not want to file bankruptcy and avoided it successfully for over two years. His concerns were somewhat vaguely stated misgivings as opposed to a firm moral conviction. When his financial situation changed for the better, it was too late. Now, he is faced with the prospect of losing 25% of his take home pay to a wage garnishment and, given that he owes well over $200,000, he’ll be paying for a long time.I would submit to you that my friend made a poor financial decision. I also do not think that he made a particularly good moral decision as he never articulated a thought out moral objection to filing bankruptcy (a fact he has acknowledged to me). From a purely business standpoint, my friend has subjected himself and his family to a great deal of hardship.Everyone has heard of Donald Trump. A business tycoon, reality TV star and sometimes politician, the Donald has filed bankruptcy on corporate debt dozens of times over the past few years. Mr. Trump structured his business deals to avoid personal liability and I’m sure that the interest rates he paid on borrowed funds reflected that. I am equally certain that for every bad deal, Trump was successful on ten others and paid back his loans in full.Trump recognizes that bankruptcy functions as a financial tool. The banks that loaned his corporations money also understood that not every deal works and that there is a risk of default. Banks are in the business of evaluating risk and charging fees and interest to reflect that risk.When you are in financial distress you should make your decision about whether or not to file bankruptcy in the context of a business decision. When your creditor made the decision to loan you money that decision was based on business calculations and you should keep the transaction in this same arena. If you allow personal feelings of guilt to creep into your decision making you will almost certainly not make the best business decision for yourself.As a bankruptcy attorney I help my clients evaluate their bankruptcy options as a good or not so good business choice. My friend allowed non-business considerations to influence his decision making and he will pay the consequences. Don’t you make the same mistake. The post Your Decision to File Bankruptcy Should Reflect Business Considerations Only appeared first on theBKBlog.
When bankruptcy is an option you are considering it is likely you may have questions about which chapter you should file. Some debtors wonder if they can choose which chapter to file or should they consider one over the other. Most people file either Chapter 7 bankruptcy or Chapter 13 bankruptcy, but it depends on [...]
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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The economy has been hard on all segments of society. The legal profession is not exempt from these difficulties, and many law school graduates are finding it tough to land a job after they finish school. But add to that the mounting student loan debt and low starting salaries, and many law school graduates are […]The post How Many Law School Graduates File for Bankruptcy? appeared first on Tucson Bankruptcy Attorney.
This is the case of Brian and Lori Shearing who reside in Plainfield, Illinois, Will County, Illinois. They were in my office today to discuss the possibility of a Chapter 7 fresh start. Let’s go through the particulars of their case. They had a prior Chapter 13 back almost 20 years ago. So they are+ Read MoreThe post Chapter 7 Bankruptcy Filing Is The Recommendation appeared first on David M. Siegel.
As parents you try to do everything you can to ensure the well-being of your family. Sometimes it can be difficult to talk to your children about financial problems, especially when you can’t afford to get them that special something they wanted. Other parents may not think their filing will affect their children, and in [...]
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