I just received an email from NACBA – National Association of Consumer Bankruptcy Lawyers. They say that the mortgage modification in Chapter 13 Bankruptcy amendment which NACBA was trying to get passed was defeated today in the Senate. The amendment in question was to be part of the Helping Families Save Their Homes Act.
I think that means it’s totally dead for this session of Congress. Had it passed, I was going to have to find a class or seminar to attend to learn what all the bill contained as finally passed. NACBA has it’s convention in Chicago at the end of this month, and I would have had to be sure that I got there. As it is, I can probably wait till next year without missing anything essential.
While you are waiting to come down with the swine flu, you might want to have a good laugh. The funniest thing I’ve seen in a long time is a recession sing along at the Newsday web site. Click the following for a direct link to the animated video.
Maybe you have to be old enough to remember the West Side Story movie from the 1960s to fully appreciate this thing. I don’t see how the mortgage broker singing “I Feel Greedy” could quite have the full intended impact unless the viewer is familiar with the original “I Feel Pretty” from the movie.
It seems that the leadership of our Minnesota state legislature is considering slapping a sales tax on legal services. If they have to do that, I would suggest that there be an exception for legal services connected with bankruptcy filings. I just sent the following email to Minnesota State Representatives Kelliher, Sertich, Lenczewski and Benson; and to State Senator Bonoff:
I am a lawyer who does bankruptcy work. Many people who contact me cannot afford to file a bankruptcy the way it is. Adding a sales tax to my fee would make that much worse.
A sales tax for filing a bankruptcy. Some change that would be.
An email I received today from the National Association of Consumer Bankruptcy Lawyers (NACBA) says that Senate Bill S. 61 is stalled. It might never get to the floor for a vote. This is the bill that passed the House about a month ago, and which would have provided bankruptcy judges with authority to rewrite mortgages.
Bankruptcy judges were going to be allowed to reduce balances, lower interest rates and extend terms of mortgages. Only a very narrow group of people would have qualified for this benefit, but it still would have been – as we native Minnesotans say -a pretty big deal.
If it had passed it was my plan to attend a three day convention – basically three days of classes on bankruptcy law – which is scheduled by NACBA in Chicago for the end of May. I would have expected that there would have been plenty of classes and materials explaining the proposed changes, if they had passed. Now I think I’ll skip it for this year. I did go last year, and without those changes it would be a lot of the same material.
In a way it’s a relief. Learning a lot of new stuff would have been a bit of work. I must say, however, that I am disappointed to see all the hoopla and fanfare followed by nothing but a big thud.
I’m looking this morning at the March 15th tip of the day from Kim Komando. It’s a rather long article entitled Beware of debt management offers. She describes three different types of programs which one will find when running a Google search: 1) Debt negotiation, 2) debt consolidation, and 3) debt elimination. Personally I would like to add one more type: 4)debt management.
The third one – debt elimination – is always a scam. These are people who are trying to sell information that they claim is secret that you can use to make your debt just go away entirely. If anybody tells you they have that sort of a program, which sometimes is in the form of a magic form you can fill out and then send to the creditors, run away as fast as you can. There is no such program.
Debt negotiation or debt consolidation programs may or may not be legitimate. The Komando article suggests that you should make sure that any agency you use is licensed by your state and also accredited by one of two organizations, the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. I would also suggest that you make sure they are on the approved Department of Justice list for counseling programs acceptable for the pre-filing and post-filing credit counseling required by the bankruptcy statute. You can find a link to the Department of Justice list of approved bankruptcy counseling agencies on my web page at http://www.mn-bankruptcy.com/chapter7.html. At that page click on “Credit Counseling Requirement.”
My two favorite local places to go for real counseling are Lutheran Social Services and Family Means. Both have offices fairly close to my office. Both are non-profit. Both do debt management, my Item 4 on the above list. Debt management might involve negotiation, but not necessarily. They are not trying to make money out of your desperate situation. They are tying to figure out how to get you on a payment plan that will actually work. And if that is a hopeless idea for you, they will tell you and suggest that you talk to someone like me.
Question received today from LawGuru:
“I sold my house in an short sale and now the bank wants me to repay the $60,000 shortfall. Should I file bankruptcy? …”
This person must not have seen my remarks on Youtube concerning this subject: The Trouble with Short Sales.
I find myself looking at a 32 page report, complete with colorful graphs and charts, written by a gentleman by the name of Michael Simkovic. Mr. Simkovic was a fellow in law and economics at Harvard Law School between 2006 and 2007. He published this report last July. His subject is the effect of the 2005 “Bankruptcy Abuse Prevention and Consumer Protection Act.” Many of us call that BAPCPA (pronounced “bapceepa“).
The report begins by reminding us that supporters had claimed that ultimately this law would benefit consumers, because it would lower the cost of credit card debt. The data shows, however, that while credit card company losses decreased, and the card companies had record profits, costs to consumers actually increased. “In other words,” says Mr. Simkovic, “the 2005 bankruptcy reform profited credit card companies at consumers’ expense.”
No big surprise there. But thanks to Mr. Simkovic for laying out the details and proving it beyond a reasonable doubt. This seems to be very consistent with a series of articles published in the Star Tribune last October which stated, among other things, that BAPCPA has been one of the contributors to our current economic meltdown.
The electronic sign over I-394 just a half mile here from my office says “Enhanced DWI Enforcement Thru Jan 1.” I don’t think they’re kidding.
“Enhanced” according to the old hard-bound dictionary on my desk means “to make greater” or to raise, intensify or heighten. It seems to be a term that is used a lot in connection with DWI. For example, if you have a second offense within ten years, that second offense is “enhanced” because of the first. Please remember that taxi cabs are really cheap compared to the cost of being arrested.
As I think I have mentioned earlier, I am noticing that the fact that one is considering or working on filing a bankruptcy seems to enhance to possibility of either being arrested for DWI or being injured in a serious accident. If you should happen to have bankruptcy on your mind, please keep a proper perspective. Focus on what you are doing, when you are doing it. It’s only money. You have more reason now than ever to properly care for yourself – including making sure that whatever you consume is in moderation.
I have received a summons to show up for jury duty on December 29th — downtown at the Hennepin County Government Center. The people who run the program tell me that I can arrange to check in by telephone to see if they need me. This apparently, however, can only be done after I at least show up in person on the first day.
Not long ago I commented to one of the court clerks that I supposed that the week of New Years Eve and New Years Day would be a slow week for jury trials. She laughed at me and said the opposite was the case. Apparently that week is loaded up with jury trials by people who didn’t want to have the trial Christmas week.
When I first received the summons I called in and got a hold of one of the supervisors. I had lots of excuses, not the least of which was that I have served as a referee in the Hennepin County settlement and arbitration programs. I have worn a black robe, sat at the big desk in front of the courtroom and have been called “your honor.” “So what”‘ was the response. They have required retired district court judges to serve. There is an exception for judges who are actually on duty as judges, but that of course would not apply to me.
I anticipate having more to say on this topic as the situation unfolds.
One of the things Congress did before going home was pass the “National Guard and Reservists Debt Relief Act.” I haven’t heard if the President has signed it, but it seems to me he must. This law would exempt certain members of the armed forces from the means test if a bankruptcy petition is filed within 540 days after they complete active duty. I would hope that the same rule would apply WHILE they are on active duty.
I’m glad to see this law being passed. However, I doubt it has much real effect because almost all of these folks would qualify for bankruptcy anyway.