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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Archive for May, 2010

What Debts Can be Eliminated in Bankruptcy?

Posted on Friday (May 28, 2010) at 4:00 am to Benefits of Bankruptcy
Chapter 7 Bankruptcy

debt relief pill redblue 270x229 What Debts Can be Eliminated in Bankruptcy?Written by Craig D. Robins, Esq.
 
Chapter 7 bankruptcy is designed to enable an honest consumer to get a fresh new financial start.  This is done by permitting the consumer to permanently eliminate or “discharge” most debts.
 
The Most Common Debts That Are Dischargeable Include:
 
• Credit Card Debts
• Personal Loans
• Medical Bills
• Utility Bills
• Checking Account Overdrafts
• Certain Income Tax Debts Older Than Three Years
 
The Most Common Debts that Can’t Be Eliminated in Bankruptcy Include:
 
• Alimony and Child Support Obligations
• Most Recent Tax Debts
• Most Student Loans
• Debts Owed to Governmental Units (Traffic Tickets and Fines)
• Debts for Willful or Malicious Injury
• Debts Incurred While Driving a Vehicle When Intoxicated
• Debts Incurred Through Fraud or False Pretenses
• Criminal Restitution
 
What Happens to Non-Dischargeable Debts?
 
Those debts that are non-dischargeable will survive the bankruptcy.  However, with most non-dischargeable debts, the creditor is precluded from collecting them during the pendency of the bankruptcy proceeding, which usually lasts several months.
 
What About Discharging Taxes in Bankruptcy?
 
Certain income tax debts can be eliminated in a Chapter 7 bankruptcy case.  However, there are several multi-prong tests for determining whether a tax debt can be discharged.  For a complete discussion, see Eliminating Taxes in Bankruptcy .
 
Don’t Be Greedy — Using Credit Cards After Deciding to File Bankruptcy Can Cause Big Trouble
 
Once you decide to seek bankruptcy relief, do not use your credit cards any further.  Doing demonstrates bad faith and can make all of your debts non-dischargeable.  See:  Big No-No: Using Credit Cards After You’ve Decided to File Bankruptcy.
 
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Report from NACBA 2010 Annual Bankruptcy Convention

Posted on Wednesday (May 26, 2010) at 11:45 pm to Bankruptcy Means Test
Bankruptcy Practice
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Current Events
Foreclosure Defense
Issues Involving New Bankruptcy Laws
Lawyer to Lawyer
Suffolk Lawyer

nacba banner logo 500x138 Report from NACBA 2010 Annual Bankruptcy Convention   

Written by Craig D. Robins, Esq.

  

I am currently in San Francisco where I just attended the annual convention of the National Association of Consumer Bankruptcy Attorneys (NACBA).  I write this report from there on May 1, 2010.
 
[Note:  this article was previously published in the May 2010 edition of the Suffolk Lawyer].
 
[I will soon post a number of photos that I took at the NACBA convention}
  
Many years ago I discovered how exciting it is to travel across the country to interact with fellow bankruptcy practitioners and learn the latest about strategies for protecting consumer bankruptcy debtors, and tips for running a bankruptcy law office.
 
Over the course of three days, some of the country’s leading bankruptcy attorneys as well as a number of bankruptcy judges, provide valuable insight at daily programs and seminars.
 
What I find just as important is trading notes and war stories with other bankruptcy attorneys from across the country and learning about new products and services at the accompanying trade show.
  
  
Here Are Some Highlights of the Bankruptcy Convention
 
 
New Trend in Interpreting the Means Test
 
In a half-day program which addressed the means test, the speakers concluded that both the United States Trustee and our country’s bankruptcy judges have become more lenient in interpreting the means test in Chapter 7 cases.  There are three reasons for this trend.
 
Apparently, the current recessionary climate and sentiment against large banking institutions is resulting in the U.S. Trustee bringing fewer Section 707 motions alleging that the debtor filed an abusive case. 
 
In addition, more and more debtors are providing information to the U.S. Trustee’s office in cases where there are means test issues.  This enables the U.S. Trustee to evaluate the issue of abuse and reach a conclusion that the U.S. Trustee should not object.
  
Finally, there seems to be a greater number of experienced bankruptcy attorneys who know what red flags to look out for and consequently these experienced attorneys refrain from filing abusive cases.
 
Wide-Spread Concern Over Bankruptcy Judge Salaries
 
Judicial salaries are relatively low.  It appears that we are losing a large number of bankruptcy judges because the level of judicial pay is so low.  When there is a vacancy on the bench, this causes the bankruptcy court’s entire case load to slow down, which means unhappiness and dissatisfaction to litigants and all others involved.
 
This was indeed the case just two three years ago here, in the Eastern District of New York.  Our Chief Bankruptcy Judge for the district, Hon. Melanie L. Cyganowski, left the bench to pursue a much more profitable position as a partner in a leading bankruptcy firm. 
 
I interviewed Judge Cyganowski at that time and she clearly indicated that her reason for leaving the bench was because of her unreasonably low judicial salary.  See:  Chief Bankruptcy Judge Melanie Cyganowski Stepping Down.
 
HAMP Bankruptcy Update
 
There was ample discussion about President Obama’s Home Affordable Modification Program (HAMP) which seems to be rife with problems as an unusually small percentage of homeowners actually get permanent relief.
Here’s why: 
 
a) there is a major lack of communication on the part of the lender;
 
b) lenders are continuing to threaten homeowners with foreclosure even as the lender is evaluating the homeowner for a modification, and even if the homeowner has been approved for a trial term; and
 
c) lenders are arbitrary in granting relief.
 
On a positive note, however, a new law is going into effect on June 1, 2010 that, among other things, makes it illegal for a lender to discriminate against a bankruptcy debtor because he or she is in the HAMP program. 
 
The new law will also provide certain protections to Chapter 13 debtors as mortgagees will be precluded from objecting to discharge.
 
Lower Prices for Credit Counseling
 
When the 2005 Bankruptcy Amendment Act first went into effect in 2005, there were only four approved credit counseling agencies in our jurisdiction (E.D.N.Y.), and they all charged the same rate – $50 per credit counseling session.
  
There must have been about 20 credit counseling companies exhibiting at the trade show and many now charge fees as low as $15 per session. 
 
In addition, they gave out so much shwag that my ten-year-old son, Max, will be delighted to receive from me upon my return a large number of squeeze toys, flashlights, keychains, fancy chocolates, playing cards, puzzles, T-shirts and what-not that I picked up from these exhibitors.
              
My hard-working office staff will also be the recipient of a good deal of this booty.
 
Emerging Technologies for Consumer Bankruptcy Practices
 
One of the most crowded exhibitor booths belonged to a OTB, an company that created BK Express, a comprehensive practice management system which is designed for consumer bankruptcy attorneys.
 
I actually just set up my office to use this software which is basically a special shell designed to work on top of LexisNexis’s Time Matters system. 
 
Problems with MERS Mortgages and Foreclosure Defenses
 
In a very dynamic session, we were told that 50% of all residential mortgages in this country are nominally owned by MERS, which is Mortgage Electronic Registration Systems, a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States.
  
The problem with MERS-recorded mortgages is that MERS really does not own the mortgage, thereby creating an interesting argument that MERS does not have any standing in bankruptcy court. 
 
I previously wrote about special defenses that a homeowner can assert to defend a foreclosure action involving a MERS mortgage.  See:  A New Powerful Mortgage Foreclosure Defense — Compliments of MERS.
  
If your client has a MERS mortgage, consider looking at the pooling and service agreement to make sure that there was a true and valid assignment at every link of the chain, including delivery and acceptance of assignment documents.  If there was not, you may have a good objection to a MERS proof of claim or motion to lift the stay.
 
Few Bankruptcy Attorneys From New York
 
I was rather surprised the very small turn-out from our state.  Out of about 1,600 bankruptcy attorneys who attended the convention, there must have been fewer than 20 from New York, and only one other member, I believe, from the Suffolk County Bar Association.  That was Allison Shields, who was actually one of the speakers – she spoke on managing a successful bankruptcy practice.
 
 
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Can a Chapter 7 Discharge Be Revoked?

Posted on Monday (May 24, 2010) at 11:49 pm to Chapter 7 Bankruptcy

debt6 270x266 Can a Chapter 7 Discharge Be Revoked?Written by Craig D. Robins, Esq.
 
In a typical Chapter 7 bankruptcy case, the debtor is able to discharge most debts.  Dischargeable debts include credit card debts, personal loans and medical bills.  Some debts are non-dischargeable such as most taxes and student loans.
 
In most Chapter 7 cases, the court grants the debtor a discharge about four months after the case is filed.
 
However, if a debtor engages in certain improper conduct, the bankruptcy court can revoke the debtor’s discharge.
 
For example, if the Chapter 7 trustee leans that the debtor obtained the discharge fraudulently by lying about material facts in the petition or by failing to disclose assets, then the trustee can bring this to the attention of the court and ask that the debtor’s discharge be revoked.
 
Other grounds for revoking the debtor’s discharge include failing to cooperate with the trustee.
 
Generally, an application to revoke the debtor’s discharge must be brought within one year of the date of discharge.
 
Debtors should be aware that receiving a discharge is not an excuse for refusing to cooperate with a trustee
 
I currently have a recalcitrant client who was directed by the trustee to turn over the tax refund which was not exempt. 
 
Before the debtor received his tax refund, the court granted him the discharge.  The debtor then contacted me saying that since he received his discharge, he was not going to cooperate with the trustee.
 
This debtor is sadly mistaken.  If he does not turn over the tax refund to the trustee, it is just a question of time before the trustee brings a motion to revoke the debtor’s discharge. — and the trustee will prevail since the debtor is demonstrating bad faith.
 
If the debtor fails to cooperate with the trustee by refusing to turn over assets of the estate, then the trustee will often bring a motion against the debtor seeking to vacate the debtor’s discharge.
 
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“Take a Tip From Poppy” — Lessons to be Learned by Consumers After Charges Leveled at David Learner Associates

Posted on Friday (May 21, 2010) at 7:30 pm to Bankruptcy and Society
Consumer Advice
Current Events

david lerner logo 270x48 Take a Tip From Poppy    Lessons to be Learned by Consumers After Charges Leveled at David Learner AssociatesWritten by Craig D. Robins, Esq.
 
The consumer public can be very gullible.  Long Island brokerage firm David Lerner Associates — exceptionally well known in the New York metro area for saturating the radio airwaves with advertising spots for its services — was just charged with ripping off consumers by charging excessive fees.
 
The Financial Industry Regulatory Authority (FINRA) has accused the Lerner firm of charging excessive markups on normally-safe municipal bonds and high-grade mortgage backed securities.
 
Consumers Fell for David “Poppy” Lerner — Coming Across as a Wise and Trustworthy Father Figure
 
david lerner 300x300 150x150 Take a Tip From Poppy    Lessons to be Learned by Consumers After Charges Leveled at David Learner AssociatesI remember hearing ads for Lerner’s financial services business on the radio for almost 20 years.  His ubiquitous spots seem to run nonstop night and day.
 
In the past decade, Lerner came up with a family-friendly advertising campaign in which he calls himself “Poppy”, referring to the grandfatherly nickname his grandkids call him. 
 
His radio spots created the impression that he was a fatherly figure, out to protect the retired consumer by selling them safe investments.
 
He also featured numerous spots from alleged customers providing testimonials, praising and thanking him.  New Yorkers have heard, “Take a tip from Poppy” a million times.
 
As it turned out, he generated so much trust that well over a thousand consumers, who I suspect are mostly senior citizens investing their retirement savings, were lulled into, what appears to be, a false sense of security, believing Lerner would treat them well and charge them reasonable fees.
 
However, Lerner totally ripped off these consumers by unreasonably jacking up the prices that his Long Island financial services business charged, according to the FINRA complaint.
 
FINRA is now seeking to obtain full restitution for the consumers and a stiff fine against David Lerner Associates and his top-level broker, William Mason.
 
Incidentally, this is not the first time Lerner has been in trouble.  He paid a hefty fine to NASD several years ago.
 
Many Consumers in Financial Difficulty are Just as Susceptible to Those Taken Advantage of by Lerner
 
Just last night I met with a very nice couple that consulted me for a bankruptcy filing.  They, too, were taken advantage of by smooth-talking radio spokesmen. 
 
They fell for an out-of-state debt settlement program that ripped them off for thousands of dollars while promising them the moon.  The couple came to me after just being served with a collection law suit.
 
Every day I hear convincing radio spots and see slickly-produced television commercials touting debt settlement services.  Many of these companies pour big bucks into the commercial production and use quality actors.  The commercials boast (unrealistic) promises of curing debt problems.
 
Many of these spots claim that the debt settlement company is part of some federal debt settlement program, when there is no such thing.  Yet, an incredible number of consumers are falling for this.
 
Two weeks ago I discussed the problems created by debt settlement companies who heavily advertise on radio and TV, making false promises:  Debt-Settlement Firms Misled Consumers According to FTC
 
Consumers need to become more aware that slick advertising does not make a company reliable.  New York Commences Nationwide Investigation Into Debt Settlement Industry — Many Offers to Eliminate Credit Card Debt are False and Misleading
  
The bottom line is that consumers need to be much more vigilant.  Just because a radio or TV spokesperson appears trustworthy, does not mean that they are.
 
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Long Island Mortgage Foreclosure Clinics on News 12 Tonight

Posted on Friday (May 21, 2010) at 4:44 pm to Consumer Advice
Foreclosure Defense
In The News
Mortgages & Sub-Prime Mortgage Meltdown

imgp0495 270x202 Long Island Mortgage Foreclosure Clinics on News 12 TonightBy Craig D. Robins, Esq.
 
For several years I have volunteered for the mortgage foreclosure clinics put on by the Nassau County Bar Association.
 
Tonight, Gale Berg, Director of Pro Bono Activities for the Bar Association, will be discussing the Foreclosure Clinic Program on “Long Island Talks” tonight on News 12, between 7:00 and 7:30 p.m.
 
Pictured above right is our associate, Jason S. Leibowitz, Esq., who recently volunteered at one of the Clinic’s events in which he provided free foreclosure advice to Nassau County homeowners.
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Chapter 7 Bankruptcy Trustees Get Audited, Too

Posted on Friday (May 21, 2010) at 3:00 pm to Chapter 7 Bankruptcy
Info on Bankruptcy and the Court
Lawyer to Lawyer

16954059 180x270 Chapter 7 Bankruptcy Trustees Get Audited, TooWritten by Craig D. Robins, Esq.
 
We all know that as part of the Bankruptcy Amendment Act, debtors are audited from time to time to make sure that they are providing accurate information to the court (see:  Random Audits of Consumer Debtors).
 
Most people aren’t aware that Chapter 7 panel trustees are audited as well, but for different reasons. 
 
There Are About 1,100 Chapter 7 Trustees Across the Country 
 
In our district, which is the Eastern District of New York, there are 20 Chapter 7 trustees.  That breaks down into nine who receive cases in the Central Islip Bankruptcy Court (see:  Long Island Chapter 7 Bankruptcy Trustees ) and eleven who receive cases in the Brooklyn Bankruptcy Court (see:  Brooklyn Chapter 7 Bankruptcy Trustees ).
 
How Chapter 7 Panel Trustees Are Audited
 
The Executive Office forthe United States Trustee engages in full audits, field exams, trustee interim reports and performance reviews as part of its program to measure a trustee’s compliance with his or her fiduciary duties and other obligations under the U.S. Trustee program.
 
Chapter 7 panel trustees are fully audited at least once every eight years by an independent Certified Public Accountant.
 
Every four years, a staff person from the U.S. Trustee’s office conducts a field exam.
 
All trustees must submit regularly to a trustee interim report.
 
In addition, the Office of the U.S. Trustee evaluates each panel trustee every two years.
 
What Are the Most Common Findings in Audits of Chapter 7 Trustees?
 
The most common finding based on audits is that the trustee was not careful enough in reporting information about assets on a particular form that the trustee is required to file.
 
Findings that can lead to an “inadequate” opinion include not timely investigating or liquidating assets, failing to supervise support staff, and co-mingling bankruptcy estate funds with non-estate funds.
 
What Happens if the Chapter 7 Trustee is “Inadequate”?
 
The U.S. Trustee has determined that some findings are so important that if an auditor uncovers them, the trustee will be given an “inadequate” audit opinion. 
 
This usually happens when the auditor determines that the Chapter 7 trustee accounting and cash management practices are insufficient for safeguarding any funds the trustee is holding on behalf of a bankruptcy estate.
 
If a Trustee receives an “inadequate” opinion, the trustee gets suspended from the active rotation of receiving new cases.
 
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Getting Credit After Bankruptcy

Posted on Wednesday (May 19, 2010) at 10:00 pm to Bankruptcy Tips Consumers Should Know
Consumer Advice
Credit
Current Events

credit after bankruptcy 270x180 Getting Credit After BankruptcyWritten by Craig D. Robins, Esq.
 
How easy is it to get credit after filing for bankruptcy?  This is a question that clients ask me every day.  It’s on almost every client’s mind who is considering filing for bankruptcy.
 
About three years ago I wrote an article that was published in the Suffolk Lawyer entitled, Life After Bankruptcy: Getting Credit Has Become Too Easy .  At the time I discussed how my bankruptcy clients were inundated with credit card offers and solicitations to open new credit card accounts, and that they received a flood of these offers immediately after emerging from bankruptcy.
 
I haven’t addressed this topic in a while.  Over the past few years, as a result of an economic change to recessionary times, such offers have not flowed as much — but times may be changing.
 
The Tightening of the Credit Market Has Affected Everyone’s Ability to Get Credit
 
Just over two years ago when the we saw a mortgage meltdown, and banking institutions started to run into trouble, the credit market tightened.  This had an impact on almost everyone.  Banks became very reluctant to extend credit except to those in the highest echelons of good credit.
 
As a result, many individuals were no longer able to obtain credit and actually had to file for Chapte 7 bankruptcy as a result.
 
Up until this tumultuous economic time, credit card companies and banks extended credit cards to everyone like they were going out of style (and in fact, they were, for a period of time).  Lenders flooded the mailboxes of consumers who had filed for Chapter 7 bankruptcy and Chapter 13 bankruptcy, almost immediately after they received their bankruptcy discharges.
 
I used to regularly hear from my clients that they were amazed to receive offers for new credit cards just weeks after their bankruptcy cases were finished.  However, the tighter credit market changed that for everyone — at least until recently.
 
Banks Increasing Credit Card Offers Again      
 
According to a recent report by Synovate Inc., a company that provides market data research and monitors credit card solicitations, there was a 29% increase in credit card solicitations over last year’s levels.
 
Last year apparently produced a recession that was the worst we’ve seen in years, and as a result, credit card issuers pulled back dramatically on offers.  As a result, annual mail volume of credit card offers dropped to its lowest levels since 1993.
 
Now, however, banking institutions believe the economy is strengthening, and they are renewing their efforts to again flood the mail boxes of consumers with offers of new credit card accounts.
 
One major bank, HSBC, actually considered leaving the credit card industry entirely last year.  However, just tripled the number of credit card offers that they mail consumers.
 
Another bank, Capital One, had pulled out of the sub-prime market last year.  However, they recently announced their intention to re-enter it.  They, too, have started flooding mail boxes again.
 
Reasons Why Banks Are Upping Credit Card Solicitations
 
– Legislation which placed stricter rules on interest rates and fees took effect in February.  Initially, banks were reluctant to extend additional credit after these new laws went effect.   However, the banks have worked out the kinks.  (You will note that as a result of the credit CARD Act, all Credit card statements now have additional disclosures).
 
– Banks lost a great deal of money last year.  Now that they have written off substantial losses, their account balances have stabilized, and they are in a better position to extend new credit.
 
– It appears that the economy is rebounding and consumer spending is increasing again.  With such signs of economic recovery, banks can look forward to better times again and go back to soliciting new customers.
 
What Else Should Debtors Know About Reestablishing Credit After Bankruptcy?
 
Most of the matters that I discussed in my older article still apply.  Please see:  Life After Bankruptcy: Getting Credit Has Become Too Easy .
 
Remember:  Nothing is Forever
 
Although a bankruptcy filing is certainly a negative factor that creditors will consider in deciding whether to extend credit, this fact becomes less and less important over time.
 
Even though a bankruptcy can remain on one’s credit report for up to 10 years, its effect diminishes on a regular basis each month that goes by after the bankruptcy cases is closed.
 
Get a Secured Credit Card
 
It’s a generally accepted fact that a consumer needs two types of credit to quickly rebuild a credit score.  One is installment credit, which includes auto loans or leases, student loans, and mortgages.
 
The other is revolving credit, which includes credit cards and home equity lines of credit.
 
Since someone emerging from a recent bankruptcy may have a tougher time qualifying for a regular credit card, the best solution may be to obtain a “secured” credit card, which is one in which you place a deposit with the bank, and then get a line of credit for that amount, typically about $500.
 
Get a Book on Rebuilding Credit
 
Any big box book store like Borders or Barnes and Noble will have a whole shelf of books on how to rebuild credit.  Go there, take your time looking at the books, and then buy the one that looks best. 
 
For about ten to fifteen bucks, it will be a great investment.  You can also look at Amazon.com.  In a future blog post, I will review some of the credit repair books.
 
 
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Problems Continue with HAMP and Federal Mortgage Programs — Is HAMP Dying?

Posted on Tuesday (May 18, 2010) at 9:00 pm to Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

hamp activity 494x500 Problems Continue with HAMP and Federal Mortgage Programs    Is HAMP Dying? 
Written by Craig D. Robins, Esq.
 
HAMP Not Working As Planned
 
Recent figures show that only a small fraction of homeowners are seeing any kind of permanent relief under the federal Making Homes Affordable Program (HAMP), and fewer consumers are applying for the program, leading one well-known economics blog to suggest that the program is dying.
 
Thus, a major effort by President Obama’s administration to assist homeowners and keep them out of foreclosure appears to be failing.
 
On Monday, the government issued data showing that HAMP only helped 300,000 defaulting households obtain permanent relief by way of new loans.  Yet, there appear to be over four million households in danger of losing their homes through foreclosure. 
The government previously estimated that HAMP would help 1.7 million households.
 
I Just Received a Call from a Typical Frustrated HAMP Applicant
 
Yesterday, I received the umteenth complaint from a Long Island homeowner, struggling to use HAMP to save their home. 
 
The homeowner, who lives in Medford (Suffolk County), complained that they applied for HAMP; they were approved for the trial program; they made regular monthly mortgage payments during the trial period for almost half a year while trying to provide all of the requested documentation; they did provide all of the docs; they were then turned down.
 
Understandably, the homeowner was not happy.  Yet, this seems to be a regular occurrence with HAMP applicants — they apply; they make their payments; many encounter difficulties with their lender; they are ultimately turned down. 
 
This led me to write a blog post over two months ago — WARNING: HAMP Can Drive Homeowners Into Bankruptcy .  Sometimes it doesn’t even make sense to try to make the program work when you can just stay in the home for a period of time and eliminate all liability on the mortgage through a Long Island bankruptcy filing.
 
Fewer Homeowners Are Now Applying for HAMP Assistance
 
The New York Times just reported yesterday that the number of homeowners that enrolled in the trial phase of the HAMP program in April 2010 was only a about a third of the number who signed up in September 2009.
 
The article suggested that a key reason for the reduced interest in HAMP may be that many homeowners are feeling that it is more financially advantageous to default, pay nothing to live in their home for a substantial period of time, and then just walk away from the home. 
 
This is what’s called ‘strategic default” — which I wrote about at length just last week — Strategic Mortgage Defaults Increasing .
 
One Popular Financial and Economics Blog Says HAMP is Dying
 
Yesterday, the Calculated Risk Blog reviewed the slow-down in HAMP applications and came to the conclusion that HAMP is dying. 
 
The above-chart is courtesy of the Calculated Risk Blog.
   
Another Possible Reason for HAMP Denial – Insufficient Income
 
It seems that a lot of homeowners applied for the program, only to be declined later on — after their income was verified.
 
Apparently, many mortgage servicers who were administrating the HAMP program on behalf of the mortgage company did not bother to verify income at the beginning of the trial period, and only did so towards the end.
 
Had they done so early on, they would have learned that a good number of applicants did not have sufficient income to make the program work, and they could have alerted those applicants right away, rather than giving them false hope.
 
Consequently, the administration is now requiring mortgage loan servicers to verify income at the beginning of the application process, rather than at the end.
 
Homeowners:  Think Twice About Applying for HAMP
 
Even if a homeowner gets approved for a permanent HAMP modification, they only stand to save $500 a month.  For those living on Long Island where the cost of living is high, saving just $500 a month can be just a nominal amount.
 
Any homeowner considering a HAMP remedy should be very wary about slightly lowering their monthly mortgage payments if they will nevertheless continue to struggle under a very high debt load.
 
For those homeowners who would still like to explore HAMP and get additional information, please see this post:  Seeking HAMP (Homes Affordable Mortgage Program) in Bankruptcy — Eight Things to Know.
 
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You Will Probably Never Meet Your Bankruptcy Judge

Posted on Monday (May 17, 2010) at 11:47 pm to Chapter 13 Bankruptcy
Chapter 7 Bankruptcy

20321539 270x185 You Will Probably Never Meet Your Bankruptcy JudgeWritten by Craig D. Robins, Esq.
 
Most consumers who file for bankruptcy will likely never see who their bankruptcy court judge is.
 
Interaction with the bankruptcy judge is very limited in most cases.
 
Chapter 7 Cases
 
In a Chapter 7 case, the debtor meets with the Chapter 7 trustee, and it is the trustee who asks the debtor questions. 
 
The debtor will not go before the actual judge unless there is some kind of motion or dispute that requires the debtor’s appearance, and in Chapter 7 cases, that is very unlikely.
 
Chapter 13 Cases
 
Chapter 13 trustees also examine debtors.  Remember, it is the trustee who interviews the debtor and it is the bankruptcy judge who settles disputes between parties (the debtor, the creditors and the trustee).
 
A Chapter 13 debtor is more likely to appear before the judge, but typically, that is just for the confirmation hearing which is when the bankruptcy judge formally approves the debtor’s Chapter 13 payment plan. 
 
Furthermore, if you’re fortunate, and you and your attorney do everything that the Chapter 13 trustee requires, then the trustee may waive your appearance at the confirmation hearing.
 
When Might You Meet Your Bankruptcy Judge?
 
If you fail to cooperate with the trustee by providing documents or information, then the trustee can bring a motion to dismiss the case, in which event you will probably end up having to go before the judge.
 
In a Chapter 13 case, if you fall behind with your obligations, such as making payments to the trustee or mortgagee, and one of them brings a motion to dismiss your case or lift the stay, then you will also probably have to go before the bankruptcy judge.
 
But one thing is certain, you will never meet your bankruptcy judge at the meeting of creditors because Bankruptcy Judges Are Barred by Law From Attending the Meeting of Creditors .
 
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What is a Motion for Relief from Stay in Bankruptcy Court?

Posted on Thursday (May 13, 2010) at 10:30 pm to Bankruptcy Terms
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy

367762445 5a81e7832e 177x270 What is a Motion for Relief from Stay in Bankruptcy Court?Written by Craig D. Robins, Esq.
 
When you file for bankruptcy relief, a very powerful federal law immediately goes into effect, called the automatic stay.  This is the law which makes it illegal for creditors to take any action of any kind to collect a debt.  This is how you get debt relief when you file for bankruptcy.
 
It is against federal law for creditors to violate the stay.  This means that any litigation comes to a grinding halt.  However, in certain situations, creditors have the right to ask to bankruptcy court to “lift the stay” which is done in a “motion for relief” from the stay.
 
Under What Circumstances Do Creditors Bring Motions to Lift the Bankruptcy Stay?
 
Motions for relief are often brought by mortgage companies and lenders when a homeowner files for Chapter 7 bankruptcy relief and is behind on the mortgage. 
 
Automobile lenders also bring such motions when debtors are in arrears on car loans. 
 
In Chapter 13 bankruptcy cases, lenders bring such motions when the debtor fails to stay current with post-petition obligations.
 
If the Court grants a motion for relief, it enables the creditor to continue where it left off in its efforts to collect on a debt or foreclose on a house.
 
Creditors must bring a motion to lift the stay and be granted relief before engaging in any further collection activity.  If they do not, then they can be severely penalized.  See:  What Are Your Rights If a Creditor Violates the Automatic Bankruptcy Stay?
 
When Are Motions For Relief Brought In Typical Consumer Bankruptcy Cases?
 
Although some creditors will rush to file a motion for relief from stay within days of the bankruptcy filing, most creditors do not act that fast. 
 
In a typical Chapter 7 case, even if the debtor is extremely behind with mortgage or car loan payments, it will often take the lender 30 to 60 days before bringing such a motion.
 
How Long Does It Take for the Bankruptcy Court to Grant Relief from the Stay?
 
Once a motion for relief is brought, the debtor must be given the opportunity to defend the motion.  Thus, the hearing on the motion will usually not occur until several weeks after the motion is brought. 
 
If the debtor does not defend the motion, which is usually the case, the court will grant the motion.  However, some bankruptcy court judges will not sign the order lifting the stay until the creditor serves (“settles”) a proposed copy of the order on the debtor and the debtor’s attorney.
 
Creditors Held to Strict Requirements When Bringing Motions for Relief from Stay
 
Most bankruptcy courts, including ours on Long Island, have stiff rules that creditors must adhere to when bringing a motion for relief.  If they do not, the Court will either dismiss the motion or adjourn the hearing.
 
Up until recently, most creditors had a much easier time of bringing motions for relief, as many bankruptcy judges permitted them to do this on a “Notice of Presentment” — a method of getting the order granting the motion without having to show up in court if the debtor didn’t put in a defense.
 
However, most bankruptcy court judges in our jurisdiction have begun to require creditors to show up in court on motions for relief, and no longer permit them to seek relief through a Notice of Presentment.
 
Defending Motions for Relief from Stay
 
I wrote a lengthy article about this five years ago — Defending Motions to Lift the Stay .  Almost all of the principals that I discussed in that article still apply.
 
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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »

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Craig D. Robins, Esq.
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Tel : 516 - 496 - 0800

CraigR@Craigrobinslaw.com