St. Petersburg Bankruptcy Attorney Blog | Tampa Foreclosure Lawyer | Florida Law firm

Law school grads learned about bankruptcy, seek its protection

2012-02-21T17:34:33Z

Many parents have dreams for their children's future. They hope that they are happy, that they meet someone they love and who loves them. Many parents hope that their children will study hard and become a doctor or a lawyer. Now, some graduates have done everything that they can to prepare, but they are finding that the market economy is making reaching their goal even more difficult.

Even though student loan debt is generally not dischargeable in bankruptcy, it is this exact kind of debt that is driving many recent law school grads to seek protection from the courts. The increased number of consumer bankruptcies by law school graduates even goes against the general national trend that saw a decrease in the number of personal filings of 11 percent in 2011.

]]> Many students today are graduating with debt liability of around $100,000 or more. In fact, in the nine years between 2001 and 2010, the average amount of debt that law students were graduating with increased by 50 percent.

In the past, the increased amount of debt may have seemed like a lot, but a graduate's earning power made it all worthwhile. That earning power has drastically decreased due to a tightening job market and more and more students are defaulting on their loans. The number of defaults began to rise in 2008 and did not stop, peaking in 2010. Many experts say that the decrease in defaults after 2010 were due to Congressional changes that essentially ended many of the government-backed student loans from private lenders.

In our next post, we will discuss the other side of the coin that is playing a role in the increased number of law school grads filing for bankruptcy protection.

Source: Reuters, "Law grads go to court for bankruptcy protection," Leigh Jones and Moira Herbst, Feb. 3, 2012

Judge dismisses T-Boz's Chapter 13 case

2012-02-15T16:13:38Z

Tionne Watkins is known by her fans as T-Boz and has had a string of success in the past as a member of the singing group TLC. The group produced several hit songs in the past that shot the group straight to the top of the charts and brought in a measurable profit. The young woman's recent situation shows that even a multiple Grammy-winning singer is not immune from financial struggle.

The singer had filed for Chapter 13 bankruptcy protection after she found herself unable to pay the bills. The papers were filed on Oct. 31, 2011 but were recently dismissed.

]]> According to U.S. Bankruptcy Court Judge James R. Sacca, the singer was not following the debt restructuring plan set out by the court. The failure to follow was brought to the attention of the bankruptcy court by the singer's case trustee. The trustee claimed that the singer had failed to make payments on certain debts to creditors such as Mercedes-Benz Financial Services and also failed to file the necessary financial paperwork required under bankruptcy law.

Judge Sacca wrote in an order drafted on Feb. 1, 2012 that "Such a failure represents an unreasonable and prejudicial delay in protecting the rights and interests of the estate and debtor's creditors. The court finds that based on the entire record and the circumstances of this case, debtor has willfully failed to properly prosecute the case."

The judge's ruling dismissed her bankruptcy case and also prevents her from being able to re-file for Chapter 13 protection within the next 180 days.

Some individuals attempt to handle their own bankruptcy case. However, the rules and requirements regulating the process can be very complex. Some of these individuals do not get a repayment plan that they know they can follow, and many more miss deadlines or fail to file necessary documents simply out of confusion. Bankruptcy attorneys ensure that no deadlines are missed, all necessary paperwork is filed and they work to get you a repayment plan that provides an avenue for successful completion.

Source: The Wall Street Journal, "Judge Scrubs T-Boz's Bankruptcy," Jacqueline Palank, Feb. 13, 2012

Military members set to receive mortgage relief from settlement

2012-02-13T19:50:24Z

Members of the military who lost their St. Petersburg, Florida, homes to illegally conducted foreclosure could soon see some financial relief.

A recent story in the New York Times reports that members of the military services will receive some of the biggest benefits from the historic settlement reached earlier in February by the federal government and some of the nation's largest mortgage lenders.

]]> According to the settlement, four large mortgage providers will identify military service members who lost their homes to foreclosure or who were denied reductions in their mortgage-interest rates in violation of a law protecting military members from credit-card or mortgage abuses.

The lenders agreeing to the settlement are Wells Fargo, Citigroup, Ally Financial and JPMorgan Chase.

Under the terms of the agreement, Citigroup, Ally Financial and Wells Fargo will provide service members whose homes were wrongly foreclosed upon at least $116,785 in addition to lost equity and interest. JPMorgan Chase will provide victims with the option of either returning their residences to them free and clear of any debt or the cash equivalent of their homes' full value at the time of the foreclosure sale.

The arrangement also states that service members do not have to formally apply for this mortgage relief. Instead, these military members will be notified.

The foreclosure crisis has hit many homeowners hard. The hope is that the settlement between the government and mortgage lenders will provide at least some financial relief to homeowners who owe more on their mortgages than what their homes are worth and those who unfairly lost their homes due in part to the lending industry's robo-signing scandal.

It looks like service members, at least, will be receiving some much-needed mortgage relief. If you are in need of foreclosure relief, experienced attorneys ensure that you are not out of luck.

Source: The New York Times, "Mortgage Relief for Service Members," John H. Cushman Jr., Feb. 12, 2012

Florida investigates deceptive debt collection practices

2012-02-10T19:39:37Z

Debt collection and debt collectors have rules and regulations that must be followed when contacting consumers regarding their debt. Inappropriate contact between creditors and consumers has serious implications for the creditors and consumers. Recently, the debt collection agency Asset Acceptance agreed to a settlement with the U.S. Federal Trade Commission regarding misrepresentations made during contact with debtors. This settlement prompted Florida officials to investigate the Asset Acceptance's debt collection practices in Florida.

The agency is being investigated under Florida's Deceptive and Unfair Trade Practices Act. Under this act, Florida consumers do not have to make payments on certain written contracts if no payments have been made on the contracts for at least five years. Written contracts include, but are not limited to, credit cards, mortgages and car loans.

]]> Although consumers may not be obligated to pay on these loans, if a payment is made toward the debts the consumers may become liable again for the debt. Any payment, even a small payment, can restart the five year timeframe. Debt collectors are focusing on this issue and requesting small payments from consumers for this reason.

Florida law requires debt collectors to send consumers written notice in five days to consumers who have been contacted by debt collectors. This letter must address the debt in question and state the actions the consumer can take if the consumer does not owe money to the debt collection agency.

Debt collection agencies are prohibited from making misrepresentations to consumers regarding their debt. If you have been contacted by a debt collection agency, contact a knowledgeable attorney to understand your rights in the debt collection process before making a payment.

Source: Sun Sentinel, "State probe into debt firm that settled with FTC for $2.5 million," Donna Gehrke-White, Jan. 30, 2012

If I file for Chapter 7, will I lose my home?

2012-02-08T21:40:35Z

For most people, their home is the most valuable possession that they own. A home not only is incredibly important because it provides shelter from the elements, a place to sleep, a place to raise a family and a place to store other valuable possessions. A home also holds significant financial value.

When a person in St. Petersburg struggles financially, the thought of losing the homestead can quickly turn into fear. Many people turn to Chapter 7 bankruptcy as a way to start fresh. The process involves the liquidation of valuable assets, so does this include the home?

]]> The answer is not always clear because every individual's situation is unique. In many instances, the homeowner is able to keep their home and even a vehicle. Although chapter seven involves liquidation, it does not mean that you will be forced to sell everything. Although your home may be worth a lot of money, a bankruptcy court will consider more than just the cold numbers.

Filing for Chapter 7 can help stop the foreclosure process for a period of time after a lender has begun an action. During this time, an experienced bankruptcy attorney will work with the court and creditors to find a solution.

Failing to make mortgage payments -- whether by choice or as the result of hardship - can lead to your lender filing a foreclosure action. If you find yourself facing money problems, being proactive and consulting a bankruptcy attorney is the best way to find a solution.

Source: Fox Business, "Can Bankruptcy Cause Me to Lose My Homes?" Justin Harelik, Feb. 7, 2012

Time-barred debt and fair collection practices in Florida

2012-02-02T16:26:07Z

The Fair Debt Collection Practices Act is a law most debtors in Florida have at least heard about. Some may know a little more detail about the law, but many are unaware of the level of protection it affords debtors. The law is extensive, and individual debtors should not be expected to know every little detail. There are bankruptcy attorneys for that.

Some creditors take advantage of this lack of knowledge in order to collect debts that may no longer be legally due. Debts, believe it or not, have a shelf life. There is a statute of limitations -- a set number of years which varies from state to state -- in which a collector can sue to recover the debt owed.

]]> Debts that pass beyond this point become "time-barred." This does not mean that a lender cannot attempt to collect the money owed, but they must notify the debtor of the time-barred status of the debt and the fact that there is no legal duty to repay the debt.

When a collector fails to inform a debtor of the time-barred status, an innocently unaware debtor may make a payment. In some states, when the debtor does this it restarts the statute of limitations period removing the time bar and resetting the clock.

If you receive a collection call over a debt you suspect could be time-barred, it is within your rights to refrain from making a payment until you have discussed the debt obligations with your attorney.

Debtors with old debts should have a conversation with a bankruptcy attorney who can help clarify the status of the debt, the obligations left under the debt and what your rights are when it comes to fair collection of that debt.

Source: The Washington Post, "Have old debts? Read up on your rights." Michelle Singletary, Jan. 31, 2012

Florida residents may find foreclosure relief from federal government

2012-01-31T18:20:16Z

Florida residents facing housing foreclosure received some potentially good news earlier this month. In late January, the Obama administration announced that it plans to expand its government foreclosure-prevention program as a way to help homeowners facing significant debt avoid losing their homes.

The administration also said that it would extend the Home Affordable Modification Program through 2013, according to a report from the Associated Press.

]]> According to the story, the government will triple the amount of money it gives to private lenders who agree to reduce the principal amount of mortgages held by homeowners who are in danger of losing their residences to foreclosure.

The government also announced that it will now offer financial incentives to encourage Fannie Mae and Freddie Mac to sign off on principal reductions. This last point is important; the government has never taken this step.

The Home Affordable Modification Program has not been a rousing success. The Associated Press reports that the 3-year-old program -- which has the goal of helping struggling homeowners reduce their monthly mortgage payments -- has failed to help more than half of those who have applied for assistance. Many homeowners have complained that trying to navigate the program is an overly complex and frustrating experience.

During his recent State of the Union speech, President Obama addressed the foreclosure problem sweeping the country, a problem that is especially acute in Florida. He admitted during his speech that the government needs to do more to lower the foreclosure rate across the country.

Whether the tweaks to the Home Affordable Modification Program will do this is unknown. What is known, though, is that the struggling housing industry -- and the rising number of foreclosures that come with it -- remains a drag on the nation's economic future.

Source: Fox News, "Obama administration to extend and expand foreclosure relief program," Jan. 27, 2012

Potential settlement over misleading foreclosure practices

2012-01-26T16:34:33Z

Some of the largest and most powerful banks in the United States, including Citibank, JPMorgan Chase, Bank of America, Wells Fargo, and Ally Financial, may be on the verge of reaching a settlement over what have been deemed misleading foreclosure practices. Negotiations on behalf of the government are being conducted by a number of state attorneys general, including Florida Attorney General Pam Bondi.

Some homeowners across the country have lost their homes because they were taken advantage of during the foreclosure process. Abuses included companies neglecting to check the accuracy of information and the illegal practice of "robo-signing," which involves the forging of signatures on foreclosure documents.

]]> For all the deception that went on, however, homeowners stand to gain comparatively little from the proposed settlement. Sources indicate that the settlement could reach $25 billion, which is a relatively small pie to split among the many homeowners affected. In addition, the settlement would affect only those mortgages given by private companies from 2008 to 2011.

For those who have experienced it, home foreclosure is one step along a tumultuous and stressful road that often involves the loss of a job or the incurring of a disability. It is essential that homeowners who are facing the prospect of foreclosure or those who are in foreclosure understand their rights. Being aware of the misleading practices mentioned above is only one aspect of the process.

Bills will come due, and aggressive creditors may begin pursuing their claims. Homeowners should know their legal and financial options, including a home loan modification or even bankruptcy. All courses of action, including bankruptcy, offer pros and cons. Homeowners should examine each option carefully with an experienced attorney and choose the one that will help them weather the financial storm.

Source: The Palm Beach Post, "Major banks offer $25 billion over foreclosure abuse," Derek Kravitz, Jan. 23. 2012.

Peta seeks OJ Simpson's Florida house in foreclosure action

2012-01-24T16:47:18Z

A single Florida home has caught a multitude of attention after the owner went into default on his mortgage. The home is located in Miami and the owner owes approximately $720,000 on the mortgage. JP Morgan Chase Bank has filed an action to foreclose the property in a Miami-Dade County court.

The owner of the home is OJ Simpson, a man who has had a less than quiet past. With the home in foreclosure, Simpson does not have the same ownership rights to his home. Knowing that, the advocacy group People For the Ethical Treatment of Animals has asked the JP Morgan's CEO Jamie Dimon to donate the home to their cause.

]]> Peta has made it clear that they want the home for a "Meat is Murder" museum. "This museum would encourage visitors to choose nonviolent vegan meals over those that cost millions of cows, pigs, fish, chickens, and other animals their lives," said a Peta spokeswoman.

The animal rights group hopes to play on Simpson's history whether rumor or real. The group said that the murder of his wife and waiter Ron Goldman as well as his current incarceration for a Las Vegas Robbery are a part of what would draw attention to the museum. Peta also says that Simpsons ownership of chicken restaurants and HoneyBaked Ham stores were part of their motive for acquiring the home.

No matter what your situation is, your home is a significantly important part of your life. It not only provides protection from the elements, but it is a vault for what you hold most dear. Retaining an experienced attorney at the first feeling of concern is the best way to keep in control and protect that important part of your life.

Source: Forbes, "UPDATE: Animal Lovers Ask JP Morgan Boss To Donate OJ Simpson's House for Vegan Museum!" Jose Lambiet, Jan. 20, 1012

Creditors using deceased debt confusion to harass family members

2012-01-20T16:05:19Z

In some societies past, the debt obligations of the father were passed along to the son. Children were often burdened by family debts. This practice has passed, but debt collectors use the confusion between what they can collect and who they can collect it from, sometimes crossing the line from legal collection to unlawful creditor harassment of family members.

The practice of collecting debts of the deceased is not an illegal practice in Florida, but there are guidelines regulating what can be collected and who it can be collected from. Guidelines issued in a Federal Trade Commission policy set out some of those rules.

]]> Debts of the deceased remain personal to the estate not the family, unless a relative has personally guaranteed a loan, agreement or put personal assets up as collateral or if his or her name is on a joint account.

Many debt collectors attempt to collect from family members by playing on moral obligations. There is a clear line between using a moral obligation and inferring that there is a legal obligation. When a creditor misrepresents that there is a legal obligation either by implication or outright statement, it is considered an illegal practice.

However, there is often a gray area surrounding the use of the "moral obligation" technique. A Florida judge recently ruled that the level of one collection company's moral obligation attempts constituted harassment.

If you believe that you are being harassed by a collector over your debt or a deceased family member's, the first step is to hang up the phone. There is no law saying that you have to stay on the line. Contact an experienced attorney immediately. They can help determine whether the practices are illegal and what options you may have for settling outstanding debt.

Source: gazette.com, "Money & the Law: Beware overeager debt collectors," Jim Flynn, Jan. 7, 2012

Could I face Florida foreclosure if my husband's ex fails to pay?

2012-01-18T19:55:49Z

Second marriages are more successful if both parties pay close attention to financial details, especially as they relate to financial contracts incurred during a first marriage. For example, in Florida, if one ex-spouse is behind on mortgage obligations, and if their ex-spouse remains legally obligated for that debt, both may be subject to collection activities. This should be a concern to engaged couples as they plan a future together.

One question often asked is whether or not a divorced person can be held accountable for marital debts that were divided in a divorce decree. The answer is yes, they are still responsible unless they have been properly removed from that obligation. The details of the divorce agreement do not supersede financial contractual agreements made while married. If their ex falls behind on mortgage payments or on a second mortgage, a new finance may arrive at the altar of a second marriage with heavy financial baggage.

]]> The best way to solve this touchy financial dilemma is to be sure that a new fiancé is totally cleared of debt from their first union, especially if you plan joint ownership of assets. If possible, one solution is to have the ex-spouse refinance those obligations in their own name. That will remove the now divorced partner from financial obligations. It is wise for engaged couples to fully disclose to each other any possible financial conflicts and debts that may still be hanging on from a previous marriage.

For a fresh start to be truly fresh, one or both parties of a previous marriage may need to declare bankruptcy. This can be a drastic, but viable solution for major debts. Another solution could be a shortsale. Consult with your bankruptcy attorney to see what path may be available for your best chance at financial success in the future.

Source: Bankrate.com, "Is fiancé on the hook for ex's 2^nd mortgage?" Steve Bucci, Jan. 12, 2012

Homeowners should beware of mortgage modification scams

2012-01-13T19:21:57Z

Statistics reveal that in 2011, more than 750,000 homeowners received default notices. Almost as many homes were repossessed. Unfortunately, many Florida homeowners continue to face default and remain at risk of losing their homes to foreclosure. Simply put, our country is facing a terrible mortgage and foreclosure crisis that as of yet has shown little sign of stopping.

Unfortunately, because scam artists are eager to take advantage of unsuspecting and vulnerable victims who are desperate to keep their homes, people whose mortgages are in trouble may be particularly at risk of losing even more money, and being left in a position in which they are more likely to lose their home, after they are taken for a ride by a scammer.

]]> In the past, mortgage modification scams tended to focus on certain geographic areas. However, now that the Internet is so widely utilized, mortgage modification fraud is very widespread. In fact, mortgage modification scams have become an epidemic nationwide, including in Florida.

Florida homeowners should be very wary of mortgage modification firms that sound official, but do not have the homeowner's best interest in mind. For example, in one such case, a scam artist convinced an elderly woman to sign over the deed to her home. After the scam artist did not make any payments, her home went into foreclosure and she was evicted.

While investigators are pursuing schemers and shutting them down by filing criminal charges, new scammers pop up all the time. It's a constant race to stay ahead and sometimes authorities find themselves one step behind.

As a result, it is important for Florida homeowners to protect themselves from scams. Homeowners should be particularly wary of anyone who guarantees a successful mortgage modification, because though it is very possible to modify your home mortgage terms, there is no guarantee that a lender will agree to such a modification. Anyone who is seeking relief under the U.S. Home Affordable Modification Program (HAMP) should be extremely careful to rely only on a reputable and well-established firm.

Source: Tucson Citizen, "Foreclosures feed mortgage modification scams," Jennifer Dixon, Jan. 8, 2012

Florida foreclosure process remains under extended legal management

2012-01-09T16:38:51Z

Standing amid metros like New York and Illinois, the State of Florida has experienced a steady increase in foreclosure rates throughout the 2011 calendar year. At 2.8 percentage points, Tampa, Florida endured the highest increase of three cities. Chicago came in at 2.3 and New Your City trailed the three at 2.1. The period of measurement stretched from December 2009 to June 2011.

Nationwide for the same time frame, the occurrences of serious mortgage delinquency slowed down. Data displayed at Foreclosure-Response.org presents an average foreclosure rate that lingered at 5.5 percent throughout the final three quarters of the study period. Yet Florida, New York and Illinois remain in a situation that requires extended judicial involvement in foreclosure proceedings.

]]> In order for any foreclosure to take place, a court must determine the status that enables a property to exit foreclosure. Under such mandatory legal management, backlogs to the process become inevitable.

For many homeowners, the nationwide decrease in foreclosure proceedings is good news. Less legal involvement often results in quicker resolution to a process that already entails many heart-breaking decisions. For Florida residents, the situation remains complex and frustrating without the assistance of an experienced attorney.

Foreclosure-Response.org gathered data by examining the portion of loans in foreclosure along with the portion of loans in default for more than 89 days. Between December 2009 and June 2011, the number of delinquent loans nationwide decreased from 5.5 percent to 3.7 percent. This makes the residents of Riverside, California, which experienced a foreclosure rate decrease of 1.9 percentage points, come out okay while Florida residents continue to face larger and more complicated struggles.

Bankruptcy involves many difficult processes and decisions. These are choices that should not be handled by the inexperienced. Do not let the current Florida foreclosure process prevent you from questioning the proceedings. Consult with an experienced bankruptcy attorney today. You can make a fresh start.

Source: Collections & Credit Risk, "Large Metro Mortgage Delinquency Rate Slows," Dec. 29, 2011

Some creditors ignoring debts discharged in bankruptcy

2012-01-05T16:27:48Z

Bankruptcy lawyers are busier than ever these days, as tough economic times hit consumers hard in their pocketbooks. In Florida, and across the country, bankruptcy filings by about 1.4 million citizens are up this year as roughly $120 billion in debt move into Chapter 7 and Chapter 13 proceedings. Debt collection violations are surfacing as some unscrupulous creditors overstep the law and continue to plague consumers who have already received bankruptcy discharge of debts.

Weary consumers may be harassed by debt collectors and creditors even after they take the financial step to declare bankruptcy. Some, like Capital One Financial Corporation, continue to notify customers that the company is suing for old debts. Just when the consumer is getting a breather from their bad debts, unexpected creditor calls can get worse, causing much emotional distress.

]]> In light of these obvious violations of fair credit collection laws, many consumers are contacting their bankruptcy attorneys to begin or join lawsuits against collections agencies and companies that overstep their legal collection boundaries, as seen in litigation currently in process against Capital One Financial Corporation.

This is no small problem, according to a court-appointed auditor who discovered that Capital One had gone after 15,500 claims that had already been discharged by a bankruptcy judge. Some consumers are going it alone, filing their own lawsuits against that company. Problems become nightmares for the consumer, unable to escape harassing collection efforts long after such actions should have ceased.

For their part, Capital One did settle by providing reimbursements to 130 borrowers, but without mention of wrongdoing. There is a small window for legal debt collection between times of bankruptcy filing and discharge, and any amount collected can be beneficial to lenders. Collectors pay pennies on the dollar to buy out bankruptcy debt, hoping to profit from any collections. If you are being unfairly hounded by collectors following bankruptcy actions, contact your bankruptcy attorney to review what can be done to halt this distressing practice.

Source: The Wall Street Journal, "Debts Go Bad, Then It Gets Worse," Jessica Silver-Greenberg, Dec. 23, 2011

More mortgage owners donating homes to charities

2012-01-03T16:29:03Z

The housing crisis has surely hit Florida harder than many states. Although we have discussed the high rates of foreclosures in the area, there are many families who are current on their mortgage payments but know that the status will not last for long. So many homeowners across the state live in homes that they know they cannot afford but feel like they are stuck with no solutions.

In many of our posts, we have mentioned "discussing your options" with an attorney when struggling financially. It is amazing at times what options exist that most of the public is unaware of. For instance, many homeowners across the nation have chosen to donate their homes when they cannot sell them.

]]> "It's a win, win, win" said the Bank of America's donation program. She said that it is one positive solution for families who need to get out of the homes that they cannot afford without having to face foreclosure. The homeowner no longer has to maintain the home and they can take a substantial charitable tax deduction.

It seems as though many homeowners are taking advantage of the option now more than ever. As a measure of the increase in donated homes, an Illinois-based Real Estate Donations president said that in the past there were approximately 20 homes donated per year in the area. In 2011, there were at least 117 homes donated to the program.

Not only does donating a home help the homeowner who badly needs to sell their home but cannot, but it helps those who have needed to downsize or who could not previously own a home. Many of the donated homes are resold at major discounts sometimes as high as 25 percent to 30 percent.

If you are struggling financially, think about contacting a bankruptcy attorney who specializes in foreclosures and debt reduction. You may think that there is no way out, but they may discuss a variety of options you never knew existed.

Source: USA Today, "Charities get more donated homes," Julie Schmit, Dec. 30, 2011