Blogs
CFPB Knocks Out Another Scam Yesterday, the Consumer Finance Protection Bureau put another credit repair outfit out of business. This was National Credit Advisors. These folks claimed that you can use them to “free yourself from bad credit.” According to the Consumer Finance Protection Bureau, they collected $20 million from 50,000 consumers over a three […]
CFPB Knocks Out Another Scam Yesterday, the Consumer Finance Protection Bureau put another credit repair outfit out of business. This was National Credit Advisors. These folks claimed that you can use them to “free yourself from bad credit.” According to the Consumer Finance Protection Bureau, they collected $20 million from 50,000 consumers over a three […]
The post Consumer Finance Protection Bureau Knocks Out A Scam by Robert Weed appeared first on Robert Weed.
Upright Law on trial in Roanoke Bankruptcy court Trial is set on September 25, 2017, for Upright Law, at the bankruptcy courthouse in Roanoke VA. The US Justice Department, through the Office of the United States Trustee, is asking that Upright be banned from accepting cases in Virginia. They are also asking for refunds for […]
Upright Law on trial in Roanoke Bankruptcy court Trial is set on September 25, 2017, for Upright Law, at the bankruptcy courthouse in Roanoke VA. The US Justice Department, through the Office of the United States Trustee, is asking that Upright be banned from accepting cases in Virginia. They are also asking for refunds for […]
The post Upright Law on trial in Roanoke Bankruptcy court by Robert Weed appeared first on Robert Weed.
Upright Law on trial in Roanoke Bankruptcy court Trial is set on September 25, 2017, for Upright Law, at the bankruptcy courthouse in Roanoke VA. The US Justice Department, through the Office of the United States Trustee, is asking that Upright be banned from accepting cases in Virginia. They are also asking for refunds for […]The post Upright Law on trial in Roanoke Bankruptcy court by Robert Weed appeared first on Robert Weed.
Here at Shenwick & Associates, we’ve been paying close attention to developments concerning the plummeting values of New York City taxicab medallions. A client we’ve been working with sent us this AP story last month that describes how the taxicab medallion crash isn’t just affecting owners of medallions and cab drivers, but has spread to lending companies.
According to the article, three credit unions that specialized in loans collateralized by taxicab medallions have been placed into conservatorship with the National Credit Union Administration (NCUA), including LOMTO Federal Credit Union and Melrose Credit Union . The article also alleges that the NCUA is aggressively attempting to collect from borrowers, even those who are current on their loan payments, by demanding payment of the loan in full and threatening foreclosure on the assets pledged as collateral against the loan (which may include not just the medallion, but also motor vehicles and real estate).
In a April 2014 supervisory letter regarding taxi medallion lending , the NCUA advised field staff to “[c]onfirm that a credit union that places more emphasis on the collateral value than on standard cash flow qualifications supports the market premium with other committed sources of repayment to the loan and additional collateral.” Based on this guidance, we can expect that that the management teams hired by the NCUA to administer these credit unions will demand additional collateral to further secure these loans, and if they’re unsuccessful, to commence foreclosure actions against the current collateral.
As we’ve detailed in our initial e-mail on the topic , there are many possible options to consider to address “underwater” taxi medallions, including a workout and several bankruptcy scenarios, but a detailed financial analysis is necessary. Our firm specializes in debtor/creditor relations and bankruptcy, so if you need help with your taxi medallion debt, please contact Jim Shenwick.
The American Bankruptcy Institute ‘ABI’ released a report addressing the astronomically high failure rate of chapter 13 bankruptcy. The findings are not surprising for those of us who work in this world, but are shocking for the rest of the consumer community.
It is likely that many bankruptcy judges have never had a successful chapter 13 pro se case.
Chapter 13 bankruptcy
According to the Report addressing pro se cases (filed without an attorney) Each year 25,000-40,000 debtors decide to file a chapter 13 case without an attorney. In California, one-third of chapter 13 cases have been filed pro se, accounting for nearly 40 percent of all such cases nationwide.
Only about one in 45 pro se chapter 13 cases result in a completed bankruptcy plan.
Regardless of where the cases are filed, the data paints a fairly dismal picture of the consequences of a pro se filing. More than half are dismissed within three months of filing, and more than 80 percent are gone with-in six months.
Chapter 13 bankruptcy – path to success or failure?
Chapter 13 bankruptcy[/caption]
Less than one in 200 pro se debtors who satisfy all three of these criteria below end up with a successfully completed repayment plan.
The pro se success rates are even worse for debtors with:
- only one source of income (only one working debtor),
- debtors with a prior filing and
- debtors who do not pay their filing fees.
The moral is – you would not do your own open heart surgery, why would you do something as complicated as a chapter 13 without an experienced bankruptcy attorney in your corner?
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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Why Chapter 13 Bankruptcy Can Be Doomed for Failure appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
The American Bankruptcy Institute ‘ABI’ released a report addressing the astronomically high failure rate of chapter 13 bankruptcy. The findings are not surprising for those of us who work in this world, but are shocking for the rest of the consumer community.
It is likely that many bankruptcy judges have never had a successful chapter 13 pro se case.
Chapter 13 bankruptcy
According to the Report addressing pro se cases (filed without an attorney) Each year 25,000-40,000 debtors decide to file a chapter 13 case without an attorney. In California, one-third of chapter 13 cases have been filed pro se, accounting for nearly 40 percent of all such cases nationwide.
Only about one in 45 pro se chapter 13 cases result in a completed bankruptcy plan.
Regardless of where the cases are filed, the data paints a fairly dismal picture of the consequences of a pro se filing. More than half are dismissed within three months of filing, and more than 80 percent are gone with-in six months.
Chapter 13 bankruptcy – path to success or failure?
Chapter 13 bankruptcy[/caption]
Less than one in 200 pro se debtors who satisfy all three of these criteria below end up with a successfully completed repayment plan.
The pro se success rates are even worse for debtors with:
- only one source of income (only one working debtor),
- debtors with a prior filing and
- debtors who do not pay their filing fees.
The moral is – you would not do your own open heart surgery, why would you do something as complicated as a chapter 13 without an experienced bankruptcy attorney in your corner?
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Why Chapter 13 Bankruptcy Can Be Doomed for Failure appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
CFPB REPORT WARNS THAT TAKING OUT A REVERSE MORTGAGE LOAN CAN BE AN EXPENSIVE WAY TO MAXIMIZE SOCIAL SECURITY BENEFITS
Reprint from The Consumer Financial Protection Bureau (CFPB) (8/24/2017) CFPB issued a report warning older consumers about taking out a reverse mortgage loan in order to bridge the gap in income while delaying Social Security benefits until a later age. In general the costs and risks of taking out a reverse mortgage exceed the cumulative increase in Social Security lifetime benefits that homeowners would receive by delayed claiming.
“A reverse mortgage loan can help some older homeowners meet financial needs, but can also jeopardize their retirement if not used carefully,” said CFPB Director Richard Cordray. “For consumers whose main asset is their home, taking out a reverse mortgage to delay Social Security claiming may risk their financial security because the cost of the loan will likely be more than the benefit they gain.”
- Costs of a reverse mortgage can exceed the lifetime benefit of waiting to claim Social Security: The average length of a reverse mortgage loan borrowed at age 62 is seven years. By age 69, borrowers that pursue this strategy will pay approximately 60 percent in costs (interest, insurance, and fees) for the amount borrowed to bridge the gap in income while delaying Social Security benefits until a later age. Because reverse mortgages are an expensive way to delay Social Security, the report found that by age 69, the costs of a reverse mortgage loan are $2,300 higher than the additional cumulative lifetime amount the typical borrower will expect to gain from an increased Social Security benefit.
- Decreased home equity limits options to handle future financial needs: A reverse mortgage reduces the equity homeowners have in their house. Homeowners who wish to sell their homes after taking out a reverse mortgage are particularly at risk because the loan balance is likely to grow faster than their home values will appreciate. This could limit options for moving or handling a financial shock. For example, a 62-year-old homeowner who has a home worth $175,000, with a 2 percent appreciation per year, will have 61 percent of the home’s total value available as equity at age 67. By age 85, this homeowner will have only about 16 percent of equity in the home if they sell the house.
CFPB Releases Consumer Guide and Video Explaining Reverse Mortgages
The Bureau released the following guide and video to help prospective borrowers and their families understand how reverse mortgages work so that they can make an informed decision before agreeing to borrow.
The report can be found at: http://files.consumerfinance.gov/f/documents/201708_cfpb_costs-and-risks-of-using-reverse-mortgage-to-delay-collecting-ss.pdf
The “Reverse Mortgage Discussion Guide” can be found at: http://files.consumerfinance.gov/f/documents/cfpb_reverse-mortgage-discussion-guide.pdf
The video explaining reverse mortgages can be found at: https://youtu.be/L89d3faoFGw
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Reverse Mortgage – good or bad idea? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
CFPB REPORT WARNS THAT TAKING OUT A REVERSE MORTGAGE LOAN CAN BE AN EXPENSIVE WAY TO MAXIMIZE SOCIAL SECURITY BENEFITS
Reprint from The Consumer Financial Protection Bureau (CFPB) (8/24/2017) CFPB issued a report warning older consumers about taking out a reverse mortgage loan in order to bridge the gap in income while delaying Social Security benefits until a later age. In general the costs and risks of taking out a reverse mortgage exceed the cumulative increase in Social Security lifetime benefits that homeowners would receive by delayed claiming.
“A reverse mortgage loan can help some older homeowners meet financial needs, but can also jeopardize their retirement if not used carefully,” said CFPB Director Richard Cordray. “For consumers whose main asset is their home, taking out a reverse mortgage to delay Social Security claiming may risk their financial security because the cost of the loan will likely be more than the benefit they gain.”
- Costs of a reverse mortgage can exceed the lifetime benefit of waiting to claim Social Security: The average length of a reverse mortgage loan borrowed at age 62 is seven years. By age 69, borrowers that pursue this strategy will pay approximately 60 percent in costs (interest, insurance, and fees) for the amount borrowed to bridge the gap in income while delaying Social Security benefits until a later age. Because reverse mortgages are an expensive way to delay Social Security, the report found that by age 69, the costs of a reverse mortgage loan are $2,300 higher than the additional cumulative lifetime amount the typical borrower will expect to gain from an increased Social Security benefit.
- Decreased home equity limits options to handle future financial needs: A reverse mortgage reduces the equity homeowners have in their house. Homeowners who wish to sell their homes after taking out a reverse mortgage are particularly at risk because the loan balance is likely to grow faster than their home values will appreciate. This could limit options for moving or handling a financial shock. For example, a 62-year-old homeowner who has a home worth $175,000, with a 2 percent appreciation per year, will have 61 percent of the home’s total value available as equity at age 67. By age 85, this homeowner will have only about 16 percent of equity in the home if they sell the house.
CFPB Releases Consumer Guide and Video Explaining Reverse Mortgages
The Bureau released the following guide and video to help prospective borrowers and their families understand how reverse mortgages work so that they can make an informed decision before agreeing to borrow.
The report can be found at: http://files.consumerfinance.gov/f/documents/201708_cfpb_costs-and-risks-of-using-reverse-mortgage-to-delay-collecting-ss.pdf
The “Reverse Mortgage Discussion Guide” can be found at: http://files.consumerfinance.gov/f/documents/cfpb_reverse-mortgage-discussion-guide.pdf
The video explaining reverse mortgages can be found at: https://youtu.be/L89d3faoFGw
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Reverse Mortgage – good or bad idea? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
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