Loan Modifications, Meteorites and the StarTribune

Not long ago I was meeting with a client who was pursuing the mortgage modification process through the federal progam known as HAMP. We were close to filing a bankruptcy; and my client expressed concern that if the modification came through, the lower house payment would mess up the budget numbers we were about the file with the bankruptcy court.

I don’t ever mean to be rude. I certainly hate to discourage people. Sometimes I need to apoligize to my clients for the things I say. Sometimes I even try to apologize in advance, because the nature of what I need to say could be offensive – not to mention that my sense of humor is really backwards too.

BUT – without any advance apology – I told this particular client that I believed the chances of getting the mortgage modification were about the same as the chances of being hit by a meteorite.

I don’t claim to be an expert on mortgages or finance. I don’t provide legal advice on that subject. It’s enough trouble for me to keep track of the bankruptcy laws. A large number of my clients, however, have tried on their own to do these mortgage modifications. My estimate of his chances of success were based only on what I have seen others go through, not on any direct knowledge or expertise. Almost nobody I have known has ever been successful. Two clients, maybe three, have actually succeeded.

I was reminded of my talk with that client when I read the headline story about mortgage modifications in yesterday’s Sunday StarTribune. They had a front page story that continued in a full page layout on one of the inside pages. The reporter described multiple incidents where the lender encouraged borrowers by temporarily lowering payments, only to announce a year or so later that the modification was denied. Suddenly all the formerly reduced payments became due and payable immediately. Foreclosure often followed.

I have spent more time than I should have just now trying to put a link to that StarTribune story into this blog entry. I guess it can’t be done, because that article is designated as “premium content.” Its only available to subscribers. I could carry on at length just about that, but I better shut up now.

No, I’m not associated with "Legal Helpers"

I got a fax yesterday from someone who said he had been given my name by an outfit called “Legal Helpers.” He said they were not attorneys and that they were helping him prepare his own bankruptcy without an attorney. He seemed to think that somehow I was associated with them. Please let the record reflect that I am not.

I have nothing to do with them. In addition I want to say that anyone trying to file their own bankruptcy without a lawyer is taking a very serious risk. To anyone who is trying to do that: please don’t rely on anything I have posted on my web site or anywhere else. Nothing written or provided by me is intended for do-it-yourself use, and trying to use my material that way could lead you to disaster. My web pages are nothing but a few general comments, not intended to be any sort of an exhaustive treatise.

Lincoln said it: “He who represents himself has a fool for a lawyer.”

Median Incomes Drop – Judges Require New Checklist

Effective November 1st there are new median income numbers for prescribed by the US Trustee’s office. The only state I have looked at is Minnesota. I don’t know if median incomes rose anywhere else, but here they seem to have dropped significantly. I am now in the process of reviewing the cases I am working on to see if these new numbers will create a problem.

There are a few cases I was hoping to file before the end of this month. For most if not all of them there is still something I need my client to provide, such as a counseling certificate, before the case can be filed. I will be trying to contact all of those clients to emphasize how important it is to not delay. Even if you can get by with the new numbers, the cases will certainly look better if we can use the old pre-November median income table. I have already posted the new median numbers on my Chapter 7 page.

I mentioned in my last post that the judges of the district were unhappy with many of the younger new lawyers who are filing bankruptcies but making all sorts of mistakes. They are also displeased to learn that many clients feel abandoned by their lawyers after the case is filed. The judges and the clerk of court are getting calls from debtors who can’t seem to get their lawyers on the phone. In other cases the clients have never actually met with the person who is supposed to be their lawyer, but have only worked with other staff in that lawyer’s office. To try to remedy some of this the judges have provided a new checklist – one for Chapter 7 cases and one for Chapter 13 cases. It lists what the lawyer is supposed to be responsible for and what the debtors are responsible for. Each list runs about five pages. A copy of both lists can be found on my site under a link labeled “responsibility forms.” I guess I don’t mind the forms, although they do create more work. I just wish they weren’t needed.

Two Days at the Bankruptcy Institute

Just spent all day today and all day yesterday at the Minnesota Continuing Legal Education’s Bankruptcy Institute. For me the best part was this afternoon, a presentation about the preparation and amendment of Chapter 13 plans.

It was also just good to reconnect with some of my fellow bankruptcy lawyers. Things are getting really complicated out there. Some of the judges and trustees were expressing frustration with a number of younger and inexperienced recent law school graduates who have not been acclimated to the level of professionalism that’s required. Apparently there is some concern that clients are being abandoned by their lawyers.

To try to combat this the judges of the district are about to order a new procedure – from my point of view just another form that must be completed before filing. This one is going to be a long list of duties and responsibilities – one list for the lawyer and the other for the client. It’s going to be food for conversation to say the least.

I’ll have more to say about the new form once I have actually started working with it.

More later.

Fall Colors on the Road to St. Cloud

I had a hearing (meeting of creditors) in St. Cloud this past Thursday. I go there fairly regularly, because that’s where the initial bankruptcy hearings are for residents of Wright County – and quite a few of my clients are from Wright County. I’m really not that far from the Wright County border. Particularly since the most recent straightening of Highway 12, getting here from places like Delano, Montrose and Waverly isn’t that hard.

That hearing was fairly early in the morning, and I got to look at the fall colors along I-94 in the early morning sun. I think the low angle of the sun in back of me as I headed northwest contributed to the drama. If those colors weren’t at their peak, it had to be about as close as I’ll ever see. Every time I came around a curve to a fresh view of reds and oranges, I was thankful that I had an excuse to be making that drive.

The hearings in St. Cloud are at the Red Cross Building on St. Germain St. It does not at all look like a court house. In fact I would say it’s a strange place to be having hearings like that. I had my camera in the car and I was thinking of taking some pictures of the place for my web site. By the time I was done with the hearing, however, I had forgotten about taking pictures. I was concentrating on the case to the point that I didn’t remember anything about the picture idea until I was half way back.

The drive southeast from St. Cloud allows one to contemplate the railroad which runs parallel to the freeway. Burlington Northern Santa Fe I think. Until a few years ago there were the remnants of some sort of railroad-related telephone or telegraph lines along that railroad. Every now and then as one drove along an old pole could be seen in the trees or bushes along the railroad with a few wires draped over it and hanging to the ground. Those seem to have all been removed now, because I don’t see them anymore. One time I spent a few minutes on Google trying to see if anyone had posted anything about the history of those old poles and wires, but I found nothing.

As a kid I remember that all railroads had lots of telegraph or telephone wires running alongside. It was explained to me, I no longer remember by who, that those were private railroad communication lines so they could keep track of where the trains were and keep them from running into each other. Obviously they’ve found a better way to communicate and don’t need the wires anymore. I’m curious about it, but I can’t seem to find a write up on this topic anywhere. If anybody knows of a good place to look for such info, please let me know.

Well, that was a good ramble. More later.

Guess that Facebook Page is shaping up.

There’s a lull in my phone calls and appointments today – day after Labor Day. Something to do with the first day of school I would guess. As usual my schedule is very busy starting tomorrow and going about two weeks out, but not today.

So I was able to spend part of the morning working on a “Welcome” tab for my facebook page. There’s a free utility for that, which Kim Komando recently recommended. I trust her recommendations, and this one was as described. It consists of a template, actually a choice of templates, where one can fill in graphics and text with a link to one’s web site. I’m pretty satisfied with mine, which you can find by clicking on this bit of text.

I guess I’m a bit shy when it comes to facebook. To me the whole concept is hard to wrap my brain around. That probably has something to do with my core belief about computers, which is that they are nothing but glorified typewriters. It’s not right for a typewriter to do what facebook does.

Still the questions about jail time for being in debt

I’ve been trying to reassure people that in most cases winding up in jail because of a debt is unlikely. Here’s what I said about it recently on youtube:

Minnesota Bankruptcy filings Highest in a Decade?

So says today’s Pioneer Press. The headline is “State bankruptcy levels highest in decade.” I found this interesting to say the least, and just spent a bit of time looking at statistics for Minnesota bankruptcy filings on the American Bankruptcy Institute site. I thought I would check it out, because I always thought we had never gotten back to the levels we were at in October of 2005 just before the new law went into effect.

Turns out I was right, or at least I think I was. The Pioneer Press article is apparently comparing the first five months of the year this year with the first five months of every year going back ten years. If you do that, yes this is the highest year ever. However, if you compare the first quarter of this year with the last quarter of 2005, the last quarter of 2005 was significantly higher. I don’t think we have ever really surpassed that big rush we had in late 2005.

I have to admit though, it has been really busy around here. I did just file five cases in the last five days of June. Maybe that’s not a lot for some lawyers, but it’s a lot for me.

Might be hard to find a good bankruptcy lawyer for the next few days

Because they’re all at a convention. In San Francisco. National Association of Consumer Bankruptcy Attorneys.

This includes me. I’m in the middle of about 18 hours of classes. It’s not exactly a party.

I’ll be back in the office Wednesday morning, May 5th.

Busy with Bankruptcies

Well, it seems that nearly all I am doing these days is bankruptcy. At least as a practical matter. I have decided that for now it would be best for me to not accept any more probate cases or DWI cases. At least that’s how I feel about it today.

There’s only so much that one guy can do. It’s time for me to start concentrating on one thing, especially since there’s so much of it.

So I thought it was time to change the URL of my blog. It was “mn-bankruptcy-dwi-probate.blogspot.com.” I think at this time it’s best for me to drop the “dwi-probate” part. A while back I was surfing here at blog spot and saw a utility to migrate a blog to a new URL.

It might take me a while, but now that I have this new blog set up at this location; my intent is to migrate my whole old blog to here – if I can figure out how to do it.

So come back later and see how I’m coming.

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