Archives for May 2007

They got her full tank of gas!!!!

I tell this story with permission from the person to whom it happened. To me it is sad, profound, a sign of the times and just awful – all at once. This sort of thing may have something to do with the fact that I seem to enjoy filing bankruptcies and more or less thumbing my nose at the big banks and credit card companies.

It seems here a few days ago that a woman from Minneapolis, who was behind in her auto loan payments, drove to the gas station and spent over $50 filling her tank with gas. With the prices going up as they have been, this is becoming a more common experience. I know it just happened to me.

Then after going home, and before having a chance to even use that gas, along came some repo guys with a tow truck who hooked up the car and drove away with it. On top of taking the car, they got her full tank of gas!!! How sad. How terrible.

I must admit to having a few unkind thoughts about the repo guys. I can’t help but wonder: by the time the car got to the lender or impound lot or whatever place they were taking it, did it still have the gas in it; or would repo guys be doing a bit of a black market gas business on the side?

Lakes Heavily Patrolled over Memorial Day Weekend

The media are reporting that Twin Cities area lakes will be heavily patrolled by the Sheriff’s Water Patrol. They are giving special attention in particular to Lake Minnetonka. This means that they will be arresting a substantial number of people for power boating while intoxicated. I haven’t heard, but I would expect that this may be going on in other parts of Minnesota as well.

For most purposes, a boat with a motor is considered to be a “motor vehicle” under Minnesota law. There was a time when driving while intoxicated was defined as driving on a “roadway.” Years ago that was amended to “within the state of Minnesota.” This means you can be given a DWI ticket for doing almost anything almost anywhere as long as it involves something with a motor on it.

There is a break given to first time offenders. The first offense in a boat or snowmobile or ATV does not involve taking away one’s license to drive. Any second or subsequent offense, however, is treated as if it was in a car. So I get these phone calls from second or third time offenders who are surprised to learn that because they were drinking and operating a boat, they now have to turn in the plates from their cars or trucks, and they are having their driver licenses suspended for ninety days. I’d like to have your business, but I’d really hate to see this happened to you.

I suggest you pass this warning along to anyone who you know will be out boating this weekend. You can use the utility on this page to email this to your friends.

For more detail about Minnesota law about boating while intoxicated, see my page at http://www.mn-dwi.com/snowmobile-boat-atv-dwi.html.

Despicable Practice by Mortgage Lenders

Here’s a nasty practice by engaged in by many mortgage lenders which is just coming to light.

Background. Most debtors in bankruptcy have certain things they want to continue paying, such as automobile and mortgage payments. The lenders prefer to have these debts reaffirmed by means of a reaffirmation agreement. Reaffirmation agreements reinstate the loan as if the bankruptcy had not taken place; but even without such an agreement the lender continues to have authority to either foreclose or repossess of the loan in question is not paid.

Under the new law, however, a debtor and the debtor’s attorney have to certify that reaffirming the debt will not create a hardship – otherwise the court will not approve the reaffirmation. This is almost never true, so my policy is that I will not sign such certifications. If I sign it and there is difficulty later, I’m in trouble. Without such a certification, the court will probably not approve the agreement. Bottom line is that in most cases, reaffirming is not an option for most debtors.

My advice is don’t reaffirm, but in most cases do keep paying your mortgages and car loans. Most of the time the lender is glad to take the money and will leave you alone.

Despicable Practice. Several of the mortgage lenders are making it a practice that they accept payments and don’t foreclose in cases where there has been no reaffirmation; but they will not report to the credit agencies that they are receiving payments. So people who are making their payments have credit reports that look as if they are not paying anything. They say “you didn’t reaffirm, so we don’t have to report your payments.”

They are in punishing debtors for not reaffirming while still getting all their money. The debtors in most such cases couldn’t get a reaffirmation approved if they wanted to. This is nasty, and I would like to compile a list of lenders who are doing this and publish that list. If this is happening to you, please leave your comments here with the name of the lender.

Homestead Exemption Heaven

This past Monday Governor Pawlenty signed into law a revision to the Minnesota homestead exemption which does two things. First it increases the amount of equity in a homestead which is exempt from the current $200,000 to $300,000. Second, it increases the amount of land which is considered exempt from half an acre for the usual homestead located in a city to 160 acres.

When this new law goes into effect, which should be on August 1st, it should be much easier to claim a homestead as exempt in a bankruptcy or in any proceeding where a creditor is going after a homeowner in this state.

Questionable Police Incident in or near Chaska

I got a call a few hours ago about an incident at a high school prom in the Chaska, MN area. If what was described to me is true – and I always recognize that it might not be – there was an incident in or near Chaska this past weekend where the police just decided to throw the constitution out the window.

A limo load of prom attendees were supposedly met when they got out of the limo by a number of police officers with portable breath testers and asked to take breath tests on the spot. The last I checked, police officers were required to have probable cause to believe that a crime had been committed before they can detain someone and start collecting evidence. The only reason the police had, as far as I know, was that these young people were on their way to a prom. That’s no kind of probable cause I ever heard of.

For a summary of underage drinking consequences in Minnesota, check out my site at http://www.mn-dwi.com.

Big Victory for Broke People

The Eighth Circuit Court of Appeals just issued a decision today which fixes one of the numerous rules of bankruptcy law that had been wrong for a long time. They actually did something that makes sense.

The rule was that any money in a debtor’s checking account was considered to be an asset of the debtor even if there were outstanding checks that had not yet cleared the bank. In the case of Brown v. Pyatt, U.S. Court of Appeals Case No: 06-3404 from the U.S. Bankruptcy Court for the Eastern District of Missouri – St. Louis, the federal appeals court told the United States Trustee’s office that they can no longer count money in a checking account as an asset if there are outstanding checks that the money is needed to cover.

I consider this a victory for compassion and clear thinking. Up until now, a debtor in bankruptcy, after being lectured by a credit counselor about the need to learn better financial habits, was then told by the trustee that already spent money in a checking account still counted as an asset. It was a stupid rule, and I’m glad to see it apparently gone.

I hope this doesn’t turn out to be an empty victory. The fine print in the decision indicates that the trustee can go after the payees of the checks and recover the money from them. I’m not sure if the trustees will actually go ahead and do that. But lets say one of the checks is for a house payment and the trustee demands repayment from the mortgage company. I would assume that the mortgage company would then claim that the mortgage is a month behind – which puts the debtor back in a tight spot. Even though I like the looks of this decision, I will continue for now to advise clients to avoid having checks out there that have not cleared as of the date of filing. What I’ve been doing is telling them to use money orders instead of writing checks in the week or so prior to filing.

For a rundown on filing bankruptcy in Minnesota, see my site at http://www.mn-bankruptcy.com.

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