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“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Bankruptcy Legislation
New Bankruptcy Chapter: Chapter 14 ???
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Written by Craig D. Robins, Esq.
Written by Craig D. Robins, Esq.
Written by Craig D. Robins, Esq.
Written by Craig D. Robins, Esq.
Written by Craig D. Robins, Esq.
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Proposed bill would have helped struggling homeowners in Chapter 13 Bankruptcy. Long Island consumers will suffer without this law.
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In what will certainly be upsetting news to consumers and homeowners, House Speaker Nancy Pelosi, (D-Calif.), gave a strong indication today that House lawmakers will not try to put the Chapter 13 bankruptcy cram-down provision back into a housing bill that the Senate had taken out in their version of the bill.
One of the legislature’s objectives was that if bankruptcy judges were given greater authority, mortgage companies would be more willing to work with troubled homeowners to alter the terms of their loans before they were forced into bankruptcy. Many Long Island bankruptcy attorneys such as myself had hoped to utilize this measure to help our clients whose homes were underwater.
Written by Craig D. Robins, Esq.
Written by Craig D. Robins, Esq.
I previously wrote a number of posts about proposed legislation to “cram-down” or “strip-down” mortgages in Chapter 13 bankruptcy cases. (Will the Senate Approve Cram-Down Legislation to Enable Mortgage Modification in Chapter 13 Bankruptcy Cases?).
If passed, this new law will enable bankruptcy court judges to modify mortgages of Chapter 13 debtors and reduce monthly mortgage payments.
Unfortunately, the mortgage cram-down legislation is faltering because there may not be enough votes for the pending bills to pass. This is the result of fierce Republican opposition and possibly even some opposition from moderate Democrats.
Senate Majority Leader Harry Reid (D-Nev.) has said previously that he is prepared to drop the cram-down language provision from a broader housing bill if the votes are not there.
Written by Craig D. Robins, Esq.
I previously wrote that President Obama wants Congress to pass legislation permitting bankruptcy courts to modify mortgage terms in Chapter 13 bankruptcy cases. (President Obama Announces Foreclosure Remedy )
This legislation has moved closer to becoming reality, but still faces a major hurdle in the U.S. Senate.
On March 5th, the U.S. House of Representatives, on a bipartisan vote of 234-191, approved H.R, 1106, the “Helping Families Save Their Homes Act of 2009. This was the first step. (See my post, House Approves Cram-Down Bankruptcy Bill)
Now, the Senate must vote in favor of the same legislation, which is pending as S. 61. Our own New York Senator, Chuck Schumer, has been instrumental in pushing this bill. However, we are seeing that the Senate can be a very challenging environment. The bill is facing fierce opposition from Republicans and the banking industry.
The rules of the Senate require 60 votes to get a bill considered on the Senate floor. This has not yet been met. It appears that there are currently various conversations taking place among Senate members and with various industry groups that oppose S. 61 in its current form, to see if there is some consensus that can be reached that addresses concerns without eviscerating the effectiveness of the remedy.
Hopefully the proposed bankruptcy cram-down legislation will move forward which will have the effect of helping many Long Island homeowners with their options in Chapter 13 bankruptcy cases. I will keep you posted.
House Approves Cram-Down Bankruptcy Bill
Posted on
Many Long Island Homeowners Will Be Able to Save Homes Through Chapter 13 Bankruptcy
Written by Craig D. Robins, Esq.
This afternoon, the House of Representatives approved legislation that should enable over a million Americans to reduce their mortgage payments through bankruptcy.
This is part of the Democratic efforts to stem a U.S. housing crisis that has erased more than $2.4 trillion in home values.
How Bankruptcy Judges Will Be Able to Modify Mortgages
The so-called cram-down bill, approved 234-191, lets federal bankruptcy judges modify mortgages in the following ways:
➔ reduce the balance on mortgages
➔ lengthen terms
➔ cut interest rates
Senate Must Still Vote on the Bill
In order for the bill to become law, it must still be approved by the U.S. Senate, who can vote on a companion bill as early as next week. President Obama would then sign the bill into law shortly thereafter.
The bankruptcy provision is opposed by the banking industry and most Republicans, who said it would further destabilize home prices. President Barack Obama and a majority of Democrats backed using bankruptcy as a last resort for homeowners facing default or foreclosure in the worst housing crisis since the Great Depression.
Long Island Bankruptcy Filers to Benefit
This legislation will certainly encourage many more Chapter 13 bankruptcy filings on Long Island.
As a Chapter 13 Long Island bankruptcy attorney, I have many homeowners who will certainly benefit from the measure. The new law should have the effect of enabling many Long Islanders to stop foreclosure by seeking a mortgage modification through bankruptcy.
The Approved Bill Contains a Compromise
In my blog post a week ago today (Today’s a Big Day For Homeowners Seeking Debt Relief in Bankruptcy), I wrote that this measure was up for vote. However, Democratic leaders pulled the measure from consideration last week amid opposition from industry organizations including the American Bankers Association.
Stricter provisions were added at the urging of a group of self-described moderate lawmakers called the New Democrat Coalition, including a requirement that borrowers seek loan modifications from their mortgage companies before they could qualify to amend repayment terms through bankruptcy.
The bill that was approved today reflects a compromise from earlier proposed legislation. Under the approved bill, bankruptcy judges would have the discretion to decide whether banks had offered a “qualified” loan modification that would bar borrowers from cramming down their mortgage in bankruptcy.
A qualified modification must meet standards set out by Obama yesterday as part of his housing rescue plan. It calls for lenders to cut a borrower’s monthly payment to as little as 31 percent of gross income by first reducing the interest rate on the mortgage, then lengthening repayment terms and reducing the outstanding loan balance if necessary.
Additional Chapter 13 Provisions
Borrowers taking advantage of provisions in the legislation would have to reimburse mortgage companies for a portion of losses if the property is sold before the debtor completes a five-year Chapter 13 bankruptcy repayment plan. Chapter 13 of the bankruptcy code allows individuals with regular income to pay all or part of their debts without losing their homes to foreclosure.
Our Office is Ready and Prepared to Help Long Island Homeowners File Chapter 13 Bankruptcy to Save their Homes
For years, the Law Offices of Craig D. Robins, Esq. has provided Long Island Chapter 13 legal representation. Long Island homeowners seeking assistance to stop foreclosure are invited to contact us for an appointment