Bankruptcy - Blogs
- Housing Bankruptcy Ripple Effect
We're starting to see the bankruptcy ripple effect of the housing crisis beyond the housing and financial services industry. Now municipalities are being forced to declare bankruptcy because property tax revenue has dried up while foreclosures have imposed significant strains on municipal resources. While moral hazard concerns are a real issue for any government aid to borrowers or lenders, its worthwhile remembering a major exception to moral hazard--third-party costs. As Larry Summers...
(May 7, 2008) - Who Are The Trustees In Your Neighborhood, Part VII
If you are in the Western District of Missouri, Kansas City Division, there are 10 Chapter 7 Trustees. You can never choose the trustee for your case, they are assigned by the Court at the time of filing. So far we have introduced you to Mr. David Stover, Ms. Erlene Krigel, Ms. Janice Stanton and [...]
(May 7, 2008) - Bankruptcy help for students and their lenders?
Yesterday, the President signed into law H.R. 5715, the "Ensuring Continued Access to Student Loans Act of 2008." The law responds to a perceived liquidity crisis in student lending by allowing government purchases of privately-issued student loan portfolios, so that the lenders will have funds to re-lend. The law is characterized as a useful first step in the lead editorial of today's New York Times, but the Times urges a broader remedy: greater use of direct governmental student loans. From...
(May 7, 2008) - Consumer Credit Skyrockets in March
The tough outlook for the economy has made many consumers feel the ill effects and caused them to make many changes in their day-to-day life. But according to new figures made available, via Bloomberg.com, many aren't quite ready to give up the affluent lifestyles to which they have grown accustomed. According to these statistics, U.S. consumer borrowing more than doubled what was forecast for the month of March. Instead of the $6 billion that economists predicted for the month, consumer credit...
(May 7, 2008) - Interview with Justice Scalia on his new Book
Here is the transcript of a very entertaining recent interview of Justice Scalia by Brian Lamb of C-SPAN discussing his new book, Making Your Case. Now if I could find where to get one of those bobbleheads.
(May 7, 2008) - Tips & Tools: Foreclosure
The subprime mortgage and credit crisis shows no sign of waning anytime soon, and if you're one of the millions being foreclosed on, panic may be quickly setting in. But just because a solution seems unreachable doesn't mean that you can't plan ahead to minimize the possibility of foreclosure or mitigate the damage if you find yourself sliding toward it. Lately, I've been working with my colleagues at Nolo to produce useful materials that will help anyone in any stage of the foreclosure process...
(May 7, 2008) - 33rd Annual Meeting of the Supreme Court Historical Society
The Supreme Court Historical Society will hold its 33rd Annual meeting and Dinner on June 2, 2008 at the Supreme Court Building. The meeting includes a tour of the building and later a lecture by Justice Alito. There is a...
(May 7, 2008) - Comment on Weigand re Commitment Period for Self-Employed Person
Jon: I read Weigand, and understand Judge Jury's analysis. Strict statutory construction controls. While I understand Judge Jury's analysis, I felt completely let down by the BAP's conclusion that it was acceptable to treat sole proprietors differently from wage earners....
(May 7, 2008) - Personal Articles and Bankruptcy in Ontario
Question: Are my exemptions specific to me or do my children have to include their personal clothing, computer etc. in with my assets? And on the same topic. If my husband has assets and I have assets, is the bankruptcy only interested in my assets? Both of our cars are in his name, does that mean one must be assigned to me? My husband guaranteed a percentage of some of my loans. Our house is in his name and has little or no equity. Does my husband also have to declare personal bankruptcy? Can...
(May 6, 2008) - How Many Bankruptcies Will Be Filed In 2008?
Will bankruptcy filings exceed 1 million this year? A look at the current data and the historical data make the case for bankruptcy filings to exceed 1 million. But wait a minute, I thought Congress changed the bankruptcy laws in October 2005 to curtail consumer filings and prevent abuses in the system. I though Congress had fixed the problem. As usual, Congress fixed a problem that didn't need fixing and created several other bigger problems. Our fearless leaders have created an economic...
(May 6, 2008) - Is It "Above-Median" or "Over-Median"? ...
I find myself switching back and forth when I make comments about some of the new BAPCPA provisions. So I did a google search-analysis-study with " at each end and here are my official findings" "Above-Median" - 476,000 hits; "Over-Median"...
(May 6, 2008) - Denying the debt collector
Pam Stewart writes about debt collectors suggesting a cash advance on the card they were collecting on to pay the arrears. That one ups the story I've heard twice in the past 2 months: the collector offers a new credit card if you will settle the amount due on the card he is collecting on! Clearly, it's a crazy world in the realm of debt collectors. Collectors have to be imaginative or compelling to get you to write the check, or authorize the bank account debit for money they can't reach...
(May 6, 2008) - RRSP's and bankruptcy in Ontario
Question: I have a healthy enough RRSP. I had repeatedly been told it was protected because it was "locked-in" and I could not touch it. When we asses risk it is these pieces of information we consider. Is my RRSP available to creditors in my bankruptcy? It is locked in until 2015 (or longer). Once someone suggested I put it under an insurance but that seemed overkill. Is it at risk if I go bankrupt? Answer: Probably. If an RRSP is "locked-in" as a result of previous employment, where your...
(May 6, 2008) - In re Draisey: 707(b) Motions Governed By Thirty Day Deadline, Minnesota Bankruptcy Court Says
Yet another bankruptcy court has issued a ruling recognizing what should have been obvious all along: the U.S. Trustee must file its "ten day statement" regarding supposed abuse of chapter 7 as a prerequisite to any 707(b) motion, whether the motion is based upon the means test (707(b)(2)) or the "totality of the circumstances" (707(b)(3)). [...]
(May 6, 2008) - Another Unintended Consequence of the Foreclosure Crisis
The San Jose Mercury News is reporting that local health officials are worried about the potential for disease epidemics like West Nile Virus carried by mosquitoes. And where would mosquitoes carrying the deadly disease be likely to breed in record numbers? The swimming pools of foreclosed homes. A Santa Clara County official remarked "One of the first things to go bye-bye for a resident in foreclosure is pool maintenance. It's a drain on their resources." To discover places where mosquitoes...
(May 6, 2008) - Countrywide Admits Bankruptcy Errors, Tells Senate It Is Making Changes To Avoid Similar Errors ...
From CNNMoney.com The Countrywide executive told a U.S. Senate Judiciary subcommittee that the company was taking new steps to address concerns that have led to an outcry from consumer advocates and that were the catalyst for Tuesday's hearing. Bailey said Countrywide plans to hire an independent auditor to review its treatment of loans whose borrowers have filed for bankruptcy. If Countrywide made mistakes that hurt borrowers, the company will compensate them, he said. Countrywide also plans...
(May 5, 2008) - One More Means Test Problem
Another example of questionable legislative drafting in BAPCPA--the 2005 amendments to U.S. Bankruptcy Code--appears in an opinion of the Ninth Circuit BAP issued last month, In re Weigand. At issue is whether "current monthly income" (CMI) includes the gross receipts from a debtor's business or rental property or only includes the net income--gross receipts reduced by by business or rental expenses. There can be a big difference between the two possibilities. One Mary Kay saleswoman, for...
(May 5, 2008) - Preemption Chutzpah
Elizabeth Warren draws our attention to an astonishing example of banking industry chutzpah--claiming preemption protection against state foreclosure laws. Not only has no one ever historically believed that state foreclose law was preempted; the OCC's preemption reg's specifically carve out state debt collection law from preemption. There's no conflict preemption here, and given specific mortgage preemption laws like DIDMCA and AMTPA that preempt state usury limits on some mortgages and limits...
(May 5, 2008) - Banks: State Laws Not for Us
Just when you think the mortgage mess can't get any worse, the banks come up with a new idea: They shouldn't have to obey state law when they foreclose on someone's home. Pre-emption has been a gravy train for the national banks, insulating their credit card business from state laws. Some banks now want another ride on the pre-emption train, claiming that they shouldn't have to follow local foreclosure laws when they take people's homes. Tomorrow Congressmen Brad Miller (D, NC) and Steve...
(May 5, 2008) - Case Invoking Doctrine of Marshaling
In re Szwyd, 2008 WL 1766591 (Bkrtcy.D.Mass. 2008), the Massachusetts Bankruptcy Court rejected the position of the IRS that it could not be required to marshal assets to satisfy tax liens for the benefit of the bankruptcy estate. Marshaling is a rarely invoked doctrine that, as the Court noted, "rests upon the principle that a [...]
(May 5, 2008)