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11 years 4 months ago

high cost anxietyA reasonable question posed about the student loan debate is whether the anxiety about costs is really anxiety about jobs after graduation? That’s one of the issues spotted in a recent blog post by an unnamed Community College Dean, and it bears consideration.
When the economy was growing, the cost of education was no big deal. We knew that if we plunked down $10,000 for tuition, we’d come out the other side with a job that could pay the student loans handily.
Even when the economy went through a downturn (part of the natural cycle of capitalism), those who considered the matter would reasonably bet that things would brighten up in time for the student loans to come due.
As S. E. Hinton said, that was then – this is now. Time to adapt.
Here’s How It Went
Back in the old days we went through a boom-and-bust cycle. We’d do really well as a country, stumble and fall, then brush ourselves off and resume the race.
Unemployment would go up, then down. Industry would chug along, churning out goods for the American population to consume. It was the engine of capitalism, and that’s how it worked.
Over time, we stopped making things. We shipped our manufacturing overseas where it could be done cheaper.
Still, we employed people to sell that which we imported. Jobs began to center around providing services rather than goods. Brute force was replaced by the power of human intelligence.
With that came the rise of higher education. We needed to educate the people who would provide services in a way that was unlike the education provided to those who built things on factory lines.
A philosophy major could graduate and find a job. Likely not in the field of philosophy, but a job nonetheless. So, too, a political science or literature major.
The first wave of those with a college education had little competition from the older generation, those who had largely bypassed college due to lack of need.
The World Changed
Ever since the late 1990s, we’ve seen a creep of technology into our lives that renders us far more efficient than ever before.
Fewer bodies are needed to do the work required before the rise of the machines.
Those with jobs – the parents of recent graduates – are living longer, healthier lives and don’t slink into retirement as soon as did the generations before them. No longer are they felled by black lung disease and physical disabilities due to accidents on the line. Retirement comes later because the promise of Social Security has failed them.
Take both of these factors – greater efficiencies and fewer openings – and you’ve got the perfect storm for graduates.
Higher Education Needs To Adapt
Higher education needs to realize that students aren’t getting the skills they need to compete in the current economy. They aren’t being taught creativity, business-building, and how to build an expertise that will be independent of the work provided by an employer.
Colleges at the four-year and community college level need to bring the real world into their classrooms, to invest in their teaching staff in a way that enables them to teach practical skills that will help graduates earn a living.
It’s also time to trim the fat from the higher education system. Streamline the system, bringing learning online whenever possible to lower overhead.
Pay attention to technology in a way that makes it less expensive to gain an education. Pass along those savings to the students, lowering the need for student loans.
If higher education doesn’t change, the risk to our society in the long run is frightening.
Image credit:  401(K) 2013
The Anxiety About The Costs Of Higher Education was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.


11 years 4 months ago

TaxFiling for bankruptcy has helped many debtors save their home by giving them more time to get caught up on payments or even prevent foreclosure.  But, if you are considering Chapter 7 as an option regarding missed mortgage payments, you may need to review this with your bankruptcy attorney to see if this will remedy [...]


11 years 4 months ago

bad decisionHe thought he got a great deal on his Chapter 7 bankruptcy. Coming out of the meeting of creditors, he realized just how much it cost him.
A few months back I was waiting with a client for their meeting of creditors to be held. It was the typical setup: lots of nervous people, a few lawyers scurrying around, and me – talking nonsense with my client.
He was prepared, ready to go, and all set. Petition reviewed, potential questions covered, and Social Security and driver license in his hand.
Another day in bankruptcy court. As I heard out of the corner of my ear, however, it didn’t go nearly as well for one of the other people sitting in that big room.
It All Unraveled At The Meeting Of Creditors
This guy’s sitting in front of the Chapter 7 trustee with his lawyer by his side. The lawyer’s face is bright red, and the client looks as if he’s ready to bolt.
The trustee’s asking the guy about his schedules, and the guy seems genuinely perplexed.
The value of the house? Gee, I have no idea.
Did I sign the petition before it was filed? Well, I did sign a bunch of stuff. No, I didn’t read it – my lawyer told me it was alright.
A car? No, the car that’s listed on those papers isn’t mine.
On and on and on.
Now It Gets Worse
So the guy walks out of the room at the end of the meeting (the Chapter 7 trustee tells him he’s got to come back another time) and asks his lawyer what happened.
What was the trustee talking about?
What’s the petition? Did I sign it? Because the papers the trustee showed me didn’t look like anything I’ve ever seen before.
The lawyer turns to him client and begins to berate him to making a fool out of him in front of the trustee.
Why It All Went Bad – And When
I took the liberty of pulling the bankruptcy petition from the bankruptcy court’s website. I had to figure out what the hell had happened in that room – and how things went so wrong for what appeared to be an honest guy.
The first problem was the legal fee. I’m not one to quibble with how other lawyers price their services, but this attorney had charged (according to the fee disclosure) the princely sum of $500 for the Chapter 7 bankruptcy case. I’ve never seen that low of a fee since sometime in 2004, so I dug a bit deeper into the attorney’s history.
Looking at this record with the court, he’d been filing bankruptcy cases for about six months. Newbies are welcome, but this guy was going full steam ahead. In less time than it takes for the calendar to come full circle, he’d filed over 100 Chapter 7 bankruptcy cases. This looked to me akin to a huge marketing machine rather than someone who’d been around the block for long enough to have built up a steady referral base.
Hitting the state bar’s website my suspicions were confirmed – he had been admitted to practice law for less than a year. As someone who’s been admitted to practice law in the State of California for less than a year, I’m aware the the attorney may have had a huge career elsewhere before setting up shop. Unfortunately, his website showed someone who’d obviously come out of law school recently.
The Docket Reveals More
I went back to the court’s website and read the rest of the case docket, which was so bizarre as to qualify as fiction.
The client sent in a letter to the court indicating that he’d never signed the petition, nor had he been given the opportunity to review it. To his knowledge, it was signed and filed by a paralegal.
His attorney never took his calls, and since the meeting of creditors had dodged every attempt at contact.
The attorney filed a notice to withdraw from representation.
The Chapter 7 bankruptcy trustee filed a motion to dismiss the debtor’s case and prevent him from filing for bankruptcy again.
In sum, it was all a giant storm of badness.
WTF
You’re probably wondering what this guy was thinking. The lawyer was clearly terrible, the process convoluted, and the client’s future jammed up in a big way.
And if you’re thinking about filing for bankruptcy, you’re convinced you’d never be a sucker like THAT guy was.
I sure hope not, but let’s untangle the knots before armchair quarterbacking this one.
The person looking to file for bankruptcy went with the lawyer who was clearly offering the lowest price. Not terrible in and of itself, but still a red flag.
The lawyer’s credentials were clearly never investigated.
The client wasn’t clear on how the process would work – including the filing of papers with the bankruptcy court.
Nobody prepared the client for the meeting of creditors. If someone had done so, he would have realized that the whole, “sign your bankruptcy petition before filing,” thing was something he should know about.
Don’t Be That Guy
Talk with a bunch of bankruptcy lawyers before you decide who to hire.
Check out their credentials with the state bar (my California bar information is here; my New York bar information is here).
Once that’s done, Google them. Then look at review sites such as Avvo to see what other people say.
Finally, ask a bunch of questions. And if you don’t get every single one of them answered in a way that makes you trust the attorney … walk out the door.
Image credit:  Wickerfurniture
The Time Things Went Bad At The 341 Meeting was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.


11 years 4 months ago

Oregon consumers have traditionally been at a severe disadvantage in bankruptcy compared to consumers in Washington due to Oregon’s failure to allow its consumers to claim the federal exemptions to protect their property in bankruptcy. Ever since I started practicing bankruptcy thirteen years ago, I have had to watch as my Washington clients kept all of their property in bankruptcy while my Oregon clients have often had to turn over their tax refund or wages owed to them on the date of filing or the contents of their bank accounts. This disparity has finally come to an end as Oregon has now adopted the federal bankruptcy exemptions
The table below shows how the federal exemptions can be used as an alternative to the traditional Oregon exemptions. Pay particularly close attention to how the Wild Card Exemption in conjunction with an unused homestead exemption (you either don’t own a home or don’t have significant equity in the property) can be used to protect over $10,000 in property for a single debtor and well over $20,000 for married filers.

Exemption
Oregon
Federal

Homestead
ORS 18.395/11 USC 522(d)(1)
$40,000 Individual
$50,000 Joint
$22,975 Individual
$45,950 Joint

Wild Card
ORS 18.345(1)(o)/11 USC 522(d)(5)
$400 Individual
$800 Joint
Oregon wildcard cannot be combined with or used to increase any other exemption
$1,225 Individual
$2,450 Joint
Plus, up to $11,500 per debtor of any unused homestead exemption. Federal wildcard can be added to any exemption to increase it

Motor Vehicle
ORS 18.345(1)(d)/11 USC 522(d)(2)
$3,000 Individual
$6,000 Joint
$3,675 Individual
$7,350 Joint

Household goods and furnishings, wearing apparel, appliances and books, animals and musical instruments
11 USC 522(d)(3)

$12,250 Individual
$24,500 Joint
(Maximum of $575 per item)

Jewelry
11 USC 522(d)(4)

$1,550 Individual
$3,100 Joint

Household goods and furnishings
ORS 18.345(1)(f)
$3,000 Individual
$3,000 Joint

Wearing Apparel and Jewelry
ORS 18.345(1)(b)
$1,800 Individual
$3,600 Joint

Books, Pictures and musical instruments
ORS 18.345(1)(a)
$600 Individual
$1,200 Joint

Animals and poultry for family use
ORS 18.345(1)(e)
$1,000 Individual
$1,000 Joint

Personal Injury Awards
ORS 18.345(1)(k)/11 USC 522(d)(11)(D)
$10,000 Individual
$20,000 Joint
$22,975 Individual
$45,950 Joint

If you would like to discuss how the federal exemptions can be used to protect your personal property contact our offices. Unlike the majority of Oregon firms, we have been practicing in Washington for over a decade and these exemptions are not new to us.
The original post is titled Federal Exemptions Come to Oregon , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .


11 years 4 months ago

taxlienWhen you file bankruptcy, the automatic stay goes into effect which stops collection attempts from creditors.  Yet, this may have a different effect on a tax lien depending on your situation.  A tax lien is when a taxing authority, such as the Internal Revenue Service (IRS) or state government, places a lien on your property [...]


10 years 8 months ago

Any exploration of this topic requires an understanding of reaffirmation agreements. Under New York bankruptcy law (In re Boodrow) a debtor does not have to sign a Reaffirmation Agreement for a mortgage on real estate. This is a good thing (especially when dealing with second or third mortgages), since a signed Reaffirmation Agreement causes you... Read More »


7 years 2 months ago

Any exploration of this topic requires an understanding of reaffirmation agreements. Under New York bankruptcy law (In re Boodrow) a debtor does not have to sign a Reaffirmation Agreement for a mortgage on real estate. This is a good thing (especially when dealing with second or third mortgages), since a signed Reaffirmation Agreement causes you to remain personally liable for the mortgage debt after bankruptcy, and for any resulting deficiency judgment determined to be due after a foreclosure of the “reaffirmed” mortgage.
Modifications After a Bankruptcy Discharge
Even if you did not reaffirm your mortgage (which we would not, in most circumstances, advise you to do anyway) in your bankruptcy case, there is absolutely no prohibition against your lender offering you a HAMP mortgage modification after receiving your Chapter 7 Discharge. The HAMP Handbook for Servicers of Non-GSE Mortgages, version 4.0 sets forth that “Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the first lien mortgage who did not reaffirm the mortgage debt under applicable law are eligible for HAMP”. In addition, if you did not reaffirm your mortgage debt, the following language must be inserted in the Home Affordable Modification Agreement: “I was discharged in a chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based upon this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”
Modifications During a Pending Bankruptcy Case
Borrowers in an active Chapter 7 or Chapter 13 bankruptcy case are eligible for HAMP consideration. In addition, if you are in a HAMP trial period plan and subsequently file bankruptcy, you may not be denied a HAMP modification due to the bankruptcy filing. In 2009 the Southern District of New York adopted a Loss Mitigation Program, where the modification process is put on a timeline and “monitored” by the Bankruptcy Judge through intermittent status conferences. Debtors can choose to participate in this process, or pursue a modification on their own outside of bankruptcy.
How Does Bankruptcy Affect Your Liability On A Modified Mortgage?
If your mortgage modification agreement was entered into prior to your Chapter 7 bankruptcy filing:

  • The terms of the modified mortgage survive the bankruptcy filing and discharge.
  • Your personal liability on the payment obligation gets discharged in your subsequent bankruptcy, providing you do not reaffirm the mortgage debt in the bankruptcy. The mortgage lien survives the bankruptcy, but if the lender eventually has to foreclose all he can do is sell the property at auction–he cannot pursue you for a deficiency judgment after the auction sale.

If your modification agreement is entered into after your Chapter 7 Discharge:

  • Your personal liability on the payment obligation was discharged in your prior bankruptcy, providing you did not reaffirm the mortgage debt in your bankruptcy. The post-bankruptcy modification does not reaffirm the debt, as reaffirmation can only occur in Bankruptcy Court (1) while your bankruptcy case is pending, and (2) after full compliance with the strict requirements of Code § 524. The mortgage lien survived the bankruptcy discharge, but the lender has recourse only against the property, and cannot pursue you for a deficiency judgment after the auction sale.

If your mortgage modification is entered into while your bankruptcy case is pending:

  • Your personal liability on the payment obligation will be discharged in bankruptcy, providing you do not reaffirm the mortgage debt in your bankruptcy. The modification does not reaffirm the debt, as reaffirmation can only occur when there is full compliance with the strict requirements of Code § 524. The mortgage lien will survive the eventual bankruptcy discharge, but the lender will have recourse only against the property, and cannot pursue you for a deficiency judgment after the auction sale.

A loan modification does not re-establish liability on a loan that is (or was) discharged in bankruptcy. The modification changes the terms of the loan, but a new loan is not being created, and the debtor is not agreeing to once again take on personal liability for the loan. The only instance where personal liability on a modified loan survives a bankruptcy is if it was reaffirmed during the bankruptcy. Contrast this with a post-bankruptcy mortgage refinance, where (1) an entirely new loan is being created (after bankruptcy), and (2) you would have personal liability on the payment obligation.
It appears that certain lenders are now claiming that they cannot agree to a mortgage modification because the homeowner did not reaffirm their loan in bankruptcy. As noted above there is no “rule” establishing this; in fact, quite the opposite is true. Such assertions are simply the internal company policy of the particular lender, but they are causing some people to wonder whether they should have reaffirmed their mortgage during their bankruptcy. These lenders are suggesting that “they would have been open to considering a modification, had only a reaffirmation agreement been signed”. While this sounds somewhat disingenuous, given the fact that nothing bars them from entering into a HAMP modification, it sidesteps the real issue at hand, where the stakes are fairly high and two distinct factors must be considered. On the one hand, a reaffirmed mortgage creates the certainty that you will be saddled with future personal liability on the note (generally to the tune of several hundred thousand dollars). On the other hand, there is the possibility that the lender might offer a modification in the future. The issue ultimately boils down to: Is maintaining a general hope for a possible future modification worth anchoring yourself to hundreds of thousands of dollars worth of non-dischargeable mortgage debt?


11 years 4 months ago

Can I leave some creditors off of my bankruptcy?No. Any creditor whom you owe a balance to must be listed on the petition. Does this mean you should go pay off all the credit cards that you want to keep?No. Even with a $0.00 balance the credit card companies will likely close your accounts once you file bankruptcy. Some creditors WILL let you keep your account but even if this is the case, you do not want to pay off any large balances right before filing for bankruptcy. If any creditor receives more than $600 in the 90 days prior to filing it is considered a preferential treatment, meaning that the trustee can request the money back from the creditor.I owe $1000 to my Dad (any family member or friend). Can I pay him back right before I file bankruptcy?No. As stated above, if you owe money to someone they are a creditor. The trustee and the Bankruptcy Court do not allow preferential payments. They do not like to see you pay Dad back, but not Visa for example. For this reason, any payments made to family members or friends in the past year before filing must be listed on the petition. You certainly do not want the trustee contact Dad to get the money back that you paid to him.Does this mean I can never pay my Dad, or any family member or friend, back the money that I borrowed? No. The bankruptcy wipes out your LEGAL liability to the creditors. However, you can choose to make VOLUNTARY payments to certain creditors if you chose. Keep in mind this cannot be done until the bankruptcy case is closed.  I owe my Doctor money. Does this mean that I have to change doctors? No. Similar to the voluntary payment to Dad described above, you can make voluntary payments to the doctor if they are requiring payment before using their services again. However, you will want to check with the doctor before making payments. A lot of times, they will wipe of your balance before the bankruptcy and let you start fresh with a new account. 


11 years 4 months ago

Do I have to appear in front of a Judge for my bankruptcy? No. The Judge does oversee the bankruptcy process; however you are not required to appear in front of him. Depending on your specific case, your attorney may need to appear in front of the Judge for certain motions or objections that may arise, but you do not need to attend.So do I have to go to court at all for my bankruptcy?Yes. One time during your bankruptcy you are required to appear in front of a trustee who has been assigned to your case. This appearance is often referred to as the “meeting of creditors”.What happens at the meeting of creditors?  The meeting of creditors is required under 11 USC §341 of the United States Code. This meeting is required in order to receive your discharge under both Chapter 7 and Chapter 13 bankruptcies.At the meeting the trustee will ask you questions under oath. There are some required questions and other questions will be asked depending on what you have listed on your petition, schedules, statements, and related documents. Generally, the questions are aimed towards verifying information you have listed (i.e. Are all of your creditors listed? Is your income still the same at it was on the date the petition was filed?).If you were honest and reviewed for accuracy your documents before they were filled with the court, then you will have nothing to worry about at this meeting.Are my creditors going to show up and tell me that I have to pay them back?Yes and no. Can creditors show up at your meeting of creditors? Yes, but they usually do not. Even if some of your creditors do show up, they cannot come and tell you to pay them back. Their appearance is permitted to allow them to ask you questions about your income, assets, etc. Again however, appearance by creditors is rare.Who is the trustee and what does he do?The trustee is appointed by the United States trustee, an officer of the Department of Justice, who oversees the bankruptcy. The trustees’ role is to determine whether there are assets that can be liquidated for the creditors’ benefit. They are essential appointed to make sure your bankruptcy complies with the bankruptcy code and that you have disclosed all income and property and that those items do not exceed that which is allowed in the bankruptcy in order to receive a discharge.In Closing…. The meeting is nothing to be worried about. If you have been thorough and completed your forms honestly and accurately, then this will be a breeze. Show up on time with your ID and SS card and the rest is easy! 


11 years 4 months ago

What happens if I get behind on mortgage payments while I am in a Chapter 13?You made the decision to file a bankruptcy and decided to keep you home. You file a Chapter 13 and are making your mortgage payments and your Chapter 13 plan payments as scheduled. Something comes up and you get several months behind on the post-petition mortgage payments. Now what? Several things will happen…First is that the attorney for the mortgage company will likely contact your attorney let you know that payments are delinquent. If this happens, the attorney should contact you advising you that payments needs to be brought current. However, this step of a “warning” from the mortgage company is not required and does not always happen.The next step (often times the first step), is that the mortgage company’s attorney will file a Motion for Relief with the court in your bankruptcy case. Essentially this is the mortgage company bringing notice to the court that you are delinquent on post-petition payments on your mortgage. They are also asking the court to grant the mortgage company relief from the automatic stay. In short, the mortgage company wants permission to be able to continue with a foreclosure process even though you are in a bankruptcy due to being delinquent.The motion for relief will set out a hearing date. 7 days prior to that hearing date a response must be filed by you or your attorney (if you are represented) stating your intentions, whether you intend to become current on the mortgage, etc. If not response is filed, the motion for relief will automatically be granted to the mortgage company 7 days before the hearing.Options
1. Become Current: Respond to the motion and become current on post-petition mortgage payments before the hearing2. Stipulation Agreement: Depending on how far behind you are on your mortgage, you can ask the mortgage company to allow you to enter into a stipulation agreement. This stipulation agreement usually requires some sort of down payment and spread the delinquent post-petition mortgage payments out over 6 months. This may sound like a great option, however, be aware that you now have 1) ongoing mortgage payments, 2) chapter 13 plan payments, and 3) a stipulation payment.3. Surrender the home: If at this point you realize you cannot maintain payments on the mortgage, you can allow the Motion for Relief to be granted and surrender the home through the bankruptcy. The decision to file bankruptcy and the decisions related to any motion for relief in a bankruptcy are important and should not be made based on this article. You should seek legal advice before making a decision. 


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