The federal government has bailed Wall Street firms out to the tune of $700,000,000.00. This is a form of corporate welfare. The restructuring was done to prevent large Wall Street firms from going bankrupt. Instead of amending the Bankruptcy Law to help these Wall Street firms, the government simply gave them $700,000,000.00 in loans.

Recently, Jamie Dimon of JP Morgan Chase and Lloyd Blankfein received millions of dollars in salary packages. The government bails out Wall Street and the Wall Street tycoons get richer and richer. During this period of time, between 7.1 million and 7.9 million households according to mortgage bond trader, Amherst Securities, fell behind in their mortgage payments and are subject to losing their home.

It is estimated that as many as 25% of all the homes in the United States have mortgages on them that are greater than the value of their home. The term used to describe this situation is calling the home “under water”. President Obama had initially asked that when individuals do mortgage modifications with their banks that the banks restructure their mortgage so they only have to pay an amount equal to the value of their home. The banks have refused to do this. The mortgage modifications by banks in the United States modify the payments but do not reduce the amount that is owed. 

The Bankruptcy Law Needs to Be Changed

The United States Constitution reserves all rights to make laws concerning bankruptcies to the federal government. Congress passes all laws that deal with bankruptcy.

Congress needs to strengthen the bankruptcy court’s ability to restructure mortgage loans when individuals file bankruptcy. Congress has already bailed out Wall Street. Now they need to bail out the American homeowner. Unfortunately, the large financial institutions in this country oppose any modifications to the Bankruptcy Law to help out homeowners.

Congress needs to help the American homeowner and modify the Bankruptcy Laws to deal with the issue of restructuring mortgages that are under water. Congress has already bailed out the financial industry to the tune of $700,000,000.00, now they need to bail out the American homeowner!

Should you have questions concerning bankruptcy or mortgage modifications, feel free to contact the Law Office of Elliot S. Schlissel to discuss these matters at 1-800-344-6431 or email us at schlissel.law@att.net.

-Elliot S. Schlissel, Esq.

Picture courtesy of grassland properties.

Projections have been made that there will be as many as 3,000,000 foreclosures in the United States in 2010. This will surpass the foreclosure rate for 2009.

The United States Treasury Department has been in negotiations with many of the country’s largest financial institutions regarding their participation in a new second mortgage program designed to modify foreclosures. Unfortunately, negotiations have not been successful up to this point.

New loan modification programs are necessary to help individuals going into foreclosure this year. Foreclosures have a negative effect on the value of real estate in local communities. In 2009, mortgage modifications set a record. However, foreclosure still were at an all time high in 2009. Hopefully, the new mortgage modification programs being proposed to the Treasury Department will stem the tide of new foreclosures.

If you need help with loan modification, foreclosure, or bankruptcy help, you can always e-mail us or call us anytime at 800-344-6431.

Many Americans unfortunately find themselves having difficulty paying their mortgages. When a family falls behind on their mortgage payments, there are a number of ways to deal with the situation. Houses go into foreclosure for a variety of reasons. Loss of employment, divorce, injuries, illnesses and disabilities. In this situation, you have a number of options:

1. Mortgage Modification 

An application to your financial institution can be filed for a mortgage modification. This is a long and difficult process and unfortunately in many situations, the request for mortgage modification is denied. 

2. Forebearance Agreement 

Forbearance Agreements are agreements to allow you to catch up on your Mortgage while either freezing or modifying the mortgage payments. They are very similar to mortgage modification arrangements. 

3. Bankruptcy 

You can file a Chapter 13 Bankruptcy in the United States Bankruptcy Court. Bankruptcies are Federal Proceedings whereas the foreclosure proceedings are initiated in state courts. The bankruptcy filing gives you an automatic stay (freezes) the foreclosure proceeding and allows you to enter into repayment plan thru the bankruptcy court concerning your debt. Deed in Lieu of

4. Foreclosure

 You can simply deed your house back to the financial institution. 

5. Sell Your House 

You can sell your house, pay off the mortgage and keep the balance of the proceeds from the sale. If your house is worth less than the amount of your mortgage, you have to initiate a short sale with the permission of your financial institution. 

6. Fight Back 

Experienced Foreclosure Defense Attorneys can help you in defending foreclosure proceedings. Due to the large volume of cases, currently pending in New York State Courts, it could be 12 to 24 months for the foreclosure to be completed. 

7. Foreclosure 

Does this mean the bank owns my house? 

Foreclosure is the start of a process whereby a financial institution that has a mortgage or equity loan on your home seeks court intervention to have the house either sold or have the deed put back in the name of the financial institution. It is a long and detailed process. The foreclosure Is the start of the process and not the end of the process. The end of the process is the point at which you lose your home. The best way to deal with this process is to hire competent, experienced, Foreclosure Defense Attorneys. 

Fighting foreclosures are difficult but they can be dealt with by experienced dedicated attorneys who understand the foreclosure process. Feel free to contact our office anytime for information or a free consultation regarding our mortgage modification, foreclosure, and bankruptcy services. We will help you decide which path is right for you and then we will help guide you through the entire process.

You can reach us 24/7 at 800-344-6431 or click here to e-mail us.

Picture courtesy of planohomesandland.com.

The Supreme Court heard arguments on Monday in the case of Milavetz, Gallop & Milavetz v. the United States. The specifics of the case were discussed in a series of articles in the New York Law Journal Monday and yesterday by Marcia Coyle.

The Milavetz & Gallop firm, based outside Minneapolis, Minnesota, along with some of their clients, challenged certain provisions of the amendments to the Bankruptcy Code of 2005, called BAPCPA (Bankruptcy Abuse and Prevention Consumer [credit card company, actually] Act) on First Amendment grounds, only one month after it became law.

The Milavetz firm most prominently challenged provisions of the Code which demands that they place a notice on all Bankruptcy related advertising that indicates that the firm is a “debt relief agency,” thus equating law firms with the fly-by-night debt counselors you hear about on the radio. The firm argued that this is insulting to lawyers and an unconstitutional regulation of true, non-misleading speech.

They also challenged the Code’s new requirement that attorneys representing clients contemplating bankruptcy may not advise those  individuals, if they are below a certain income level, to take on any new debt. Milavetz asserts that this rule unconstitutionally interferes with the lawyer/client relationship. It also prevents attorneys from advising clients to consolidate debt by taking out a new loan, a strategy which may help keep some people out of bankruptcy altogether.

Milavetz even said that if the high court doesn’t come down on their side, holding the challenged provisions of the Bankruptcy Code to be unconstitutional, “we will handle no more consumer bankruptcy cases…”

Hopefully the Supreme Court will indeed find these overeager provisions of the 2005 Bankruptcy Code amendments unconstitutional.

If you need help with a Bankruptcy, Foreclosure, and Mortgage Modification matter in the New York area, please give us  a call at 800-344-5431 or you can click here to contact us by e-mail.

Picture courtesy of  Milavetz, Gallop & Milavetz, P.A.

faqs

As readers know, our office has a significant bankruptcy practice (more bankruptcy information is available there). I addition to the issues Mr. Schlissel addressed yesterday, below are some more frequently asked questions and Mr. Schlissel’s answers. For help with Bankruptcy, or any other matter, you can always contact our office.

Q: How does filing for bankruptcy affect others, like creditors, family members, and co-signors

A: It depends on the type of bankruptcy. If it’s a Chapter 7 Bankruptcy, which is very often called a “straight bankruptcy,” the purpose of that is to eliminate your debts completely.  In a Chapter 7 bankruptcy, all of your assets are basically liquidated, except for exempt assets, and distributed to your creditor. Now, if you don’t have any assets, such as a house, chapter 7 is usually the way to go and at the end of the bankruptcy, you have no debts at all.

The problem is that if you file a Chapter 7 bankruptcy and you have a co-debtor, only you are discharged from the debt. At the end of the bankruptcy, the co-debtor still owes the debt. Whatever portion you didn’t pay, or if you didn’t pay anyportion of it, the co-debtor or guarantor owes the balance of he debt. In those situations where there’s husbands and wives or co-debtors, it is very often recommend that they both file for bankruptcy.

In a Chapter 13, you’re entering into a “plan” where you pay a percentage of the amount owed. If it’s a secured creditor which has a lien on your car, or a bank that has a mortgage on your house, very often you’re paying 100% of what is owed to them.  If the debt is owed to credit card companies, some plans have you paying as little as 10-15% of what you owe.

In a Chapter 13, there is a stay, or injunction, preventing any creditor from taking legal action against a co-debtor or guarantor. But that is only a temporary form of relief. It doesn’t release the co-debtor for the amount of the debt that is not paid under the Chapter 13 plan.

The law is complicated, even more so than a lot of other areas of law that consumers have to deal with. Not only that, but not all attorneys do bankruptcy work. In fact, most of them do not do bankruptcy. Very few attorneys get involved in dealing with federal proceedings such as bankruptcy.

Q: How long does the bankruptcy process usually take?

A: Chapter 7, from start to finish, will usually take between three and six months. But a Chapter 13 proceeding can take anywhere from three to five years.

Q: What sorts of things do you usually do to help your clients rebuild their credit after bankruptcy?

A: After filing for bankruptcy, most good attorneys talk with their clients about how they can rebuild their credit. If done correctly, you can rebuild your credit within six months to a year after filing for bankruptcy.

When an individual falls behind on their financial obligations, all sorts of negative credit information is placed on their credit report. Filing for bankruptcy can help most people in the long run as they can develop good credit becxause if you fall behind on your mortgage, credit card payments or car payments, your credit score goes way down.

After you file for bankruptcy and you’re discharged, you don’t have any debt. If you enter into an agreement for a secured credit card or something else of that nature, you can rebuild your credit score. People whose bankruptcies I have handled have credit scores of 750 because they have no debt.  they are now debt-free and the have been able to reestablish credit and show that they’re making payments to their creditors on a timely basis.

Any good bankruptcy attorney should want to have a long term relationship with his clients and should discuss rebuilding the person’s credit.  It’s something we always do for our clients. We feel that it’s part of the process of educating them on how to rebuild their credit after the bankruptcy is complete.

Contact us anytime for bankruptcy help.

Picture courtesy of hrbor.org.

frequently asked questions head question markAs readers know, our office has a significant bankruptcy practice (more bankruptcy information is available there). Below are some frequently asked questions and Mr. Schlissel’s answers. For help with Bankruptcy, or any other matter, you can always contact our office.

Q: Have you seen a lot of new bankruptcy filings due to the economy?

A: Yes, there has been a significant increaes in bankruptcies, but it is important to understand that the bankruptcy law was amended during the Bush administration. It is more complex, time-consuming and more expensive to file for bankruptcy since the law changed several years ago.

The basic changes were that before filing bankruptcy, one must take an online course. After they file, they must take a second  course. The filing requirements are a little more complicated and more detailed as well.  For instance, one must have filed tax returns for the last two years in order to file bankruptcy.  the record keeping and bookkeeping circumstances of hte filings are also more detailed.

In addition, if individuals have a high income or high expenses, there are detailed requirements that sometimes prevent those individeuals from filing a Chapter 7 bankruptcy. In such cases, they’ have to file a Chapter 13 Bankruptcy instead.

The purpose of the amendments to the bankruptcy statute was ostensibly to prevent bankruptcy abuse, but the reality of the situation was that the statute was written by the banking industry for the purpose of preventing or making it more difficult for consumers to file bankruptcy. It was basically an anti-consumer statute. It makes the process more difficult, more time-consuming and more expensive than it used to be.

Q: What does it generally cost to file for bankruptcy?

A: The cost could be anywhere from $1,500 and up.

Q: How would someone pay for a bankruptcy when they don’t have any money? Isn’t it a Catch 22?

A: Very often lawyers will tell their clients to stop making certain payments. For example, if you have a mortgage on a house and you fall behind, the bank will generally accelerate the debt, meaning that the whole remaining balance becomes due and you can’t make your mortgage payment.  At that point in time, the individual is basically saving their mortgage payments because the bank won’t accept their payments.

The same can be true for credit card payments. At some point, it doesn’t make sense to make the payments, so a debtr should just acumulate the money, stop making the payments, use it to pay the administrative expenses of filing the bankruptcy and pay the attorneys’ fees. Also many attorneys will accept payment plans from their clients.

Consumers should know that there is indeed a way out. They should speak with an attorney who will be able to educate them on how to accumulate money even while they’re in debt in order to file the bankruptcy.

Contact us anytime for bankruptcy help.

Picture courtesy of Adam Stradt.

clock alarm tickingIf you have already completed your Chapter 13 payment plan or Chapter 7 bankruptcy proceeding, and have received a discharge, you will hopefully be in good shape to begin a new financially unencumbered life. You will hopefully have taken our advice and attained financial health.  But life does not always cooperate with our plans and so you may need to know whether you can refile for bankruptcy protection again.

In the event that this does become necessary, it is worth noting that a second (or third or fouth) Bankruptcy filing is possible and may be advisible, based on circumstances. However, time limits do apply. 

The waiting period after a Chapter 7 Bankrutpcy discharge is 8 years for another Chapter 7 discharge, but only 4 years for a Chapter 13 discharge. However, if you received a Chapter 13 discharge, the waiting period is 2 years for another Chapter 13 discharge and 6 years for a Chapter 7 discharge.

As always, it is worth noting that our firm has a significant bankruptcy practice and can assist anyone with information and help with filing for bankruptcy. Just contact the office.

Picture courtesy of markettalk.

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