Seasoned Cincinnati bankruptcy lawyers know that the bankruptcy code is complex, and filing a bankruptcy petition in either a chapter 7 or chapter 13 bankruptcy case requires specific information and documents to perfect the bankruptcy filing. Sources indicate that Suleman's bankruptcy filing was deficient-lacking what the media characterizes as a dozen financial documents and statements that are required under the bankruptcy laws to prove the case.
]]> Originally, Suleman filed a bankruptcy petition that alleged she owed as much as $1 million in various debts. She indicated that she owed money to at least 20 creditors, ranging from her father to the parochial school where her kids attend classes.The bankruptcy court had given Suleman until Monday to complete her bankruptcy documentation, but apparently, the missing paperwork was never filed with the court.
Suleman, often called "Octomom" in the media, rents a home and has been unable to pay her landlord. The home went into foreclosure due to delinquent payments by the landlord toward the mortgage. The bankruptcy petition put a halt to the foreclosure proceeding, which was scheduled for a foreclosure sale.
In dismissing Suleman's bankruptcy case Tuesday, the automatic stay placed on collection efforts by the bankruptcy court was also lifted. That means all of Suleman's creditors can resume collection activities on her outstanding debts.
The foreclosure sale on the home where Suleman resides was temporarily halted. The original foreclosure auction was scheduled to occur May 7. The mortgage holder asked for a delay on that sale until May 21. Now that the bankruptcy case has been dismissed, the foreclosure proceedings can resume.
The original owner of the home says that he has never seen a dime from Suleman. He says that she owes him $483,000 in back rent. He is taking Suleman to court and has a court hearing scheduled for June 14.
Sources:
The recent study suggests that more American households have no savings to cover unexpected financial setbacks. The research, conducted in our neighbor to the north at the University of Michigan says that 23.4 percent of American households have no savings at all. That is a significant increase from 2009, when 18.5 percent of Americans reported a lack of savings.
The research includes a variety of unsecured debts, including student debt, which is typically not a debt that can be discharged in bankruptcy. However, many unsecured debts, such as credit card debt and medical debt, can generally be discharged in a chapter 7 bankruptcy.
]]> Secured debts, such as a home mortgage or car payment, may be discharged but, depending on the circumstances, the owner may elect to continue paying on the obligation and retain the home or car. An experienced Cincinnati bankruptcy lawyer can help an Ohio resident to understand how the bankruptcy code works in specific circumstances.The recent Michigan research seems to indicate that, although many economists say that the country is in recovery, many Americans continue to struggle under high debt loads with little or no savings. One of the c-authors of the research says that, "The people who were down and out, without much money, in the recession have ended up staying there or even worse."
Not all of the data from the research is negative. The economists say that 14.6 percent of Americans have more than $50,000 in savings accounts or other forms of liquid investments. That percentage is an increase from the 11.8 percent of households with significant savings reported in 2009. Nearly half of the households responding to the survey have no unsecured debt. That percentage remains unchanged from 2009.
The discrepancies between the current number of households with no savings versus significant savings, and the percentage of households carrying high debt loads coincides with an increase in the number of Americans hanging on by a thread. The research shows that 10 percent of households are carrying more than $30,000 in unsecured debt. That is an increase from the 8.5 percent of households reporting that amount of outstanding bills in 2009.
Source: USA Today, "Recession added debt, drained families' savings," Christine Dugas, May 14, 2012
]]>Many credit restoration issues involve more subtle mistakes that need to be removed from a credit report. In the more drastic cases of merged identity, a consumer with no past credit issues may be merged with a consumer who has suffered severe credit problems, devastating the former consumer's ability to obtain credit.
]]> The credit reporting system has specific rules on what information can be included in a credit report. Creditors and the reporting agencies are required to only report accurate credit information and investigate disputed information. But a number of consumers fall into the group of people who have an odd kind of mistaken identity-those whose credit history has been mistakenly merged with another person.In 2004, the Federal Trade Commission reportedly decided that imposing tighter standards on the matching criteria for the credit industry might adversely impact lenders' interests. Mismatched credit information can be devastating for consumers.
Mixed-file credit history issues can be devastating for a consumer. The Columbus Dispatch recently recounted the story of a nurse from northern Ohio whose credit history got mixed with a woman from Utah who had bad credit. The Ohio woman did not know that her credit history had been merged with the Utah woman, but the Ohio woman suffered a series of credit and loan rejections. She received calls from Utah, requesting payments for debts that were not hers.
Eventually, the Ohio woman sought legal representation and was apparently able to resolve the credit history issue. That resolution came after years of unjust issues in dealing with lenders and bill collectors.
In most cases, errors in credit reports are not founded on merged credit files, but are plain errors in reporting, or issues involving old data that should no longer be included in a credit report. Ohio residents who believe that they are not being treated fairly due to mistakes in a credit report should consider speaking with an experienced Cincinnati credit restoration lawyer to learn what options may be available.
Source: The Columbus Dispatch, "Credit Scars: Mixed and marred," Mike Wagner and Jill Riepenhoff, May 7, 2012
]]>In many cases, a financially strapped consumer can rebuild credit after a setback. However, when errors in a credit report cause difficulties for a consumer, an experienced credit restoration lawyer may be able to assist in eliminating mistakes in a credit history that adversely affect the credit score.
But our economic system relies on the credit reporting agencies. The recent newspaper investigation into credit reporting issues revealed that certain types of errors in a credit report can be more devastating than any other type of credit issue, according to the Columbus Dispatch. The newspaper reports that those whose credit histories have been erroneously blended with someone else's credit history are the consumers who suffer the most damage from credit report mistakes.
]]> The Federal Trade Commission has fielded a number of complaints from consumers in recent years over the issue of mixed-file issues in the credit reporting system. The Columbus Dispatch reports that credit history files of consumers have been mistakenly merged with the credit histories of close relatives, such as a mother, father or sibling. But mistakes also involve erroneously merged files between neighbors, or strangers who share a similarity in their names. Merged files, however, reportedly may not have any discernable similarity at all, according to the Dispatch.In the next post, this blog will continue to discuss the issue of credit reporting mistakes, especially in light of mixed-file cases.
Source: The Columbus Dispatch, "Credit Scars: Mixed and marred," Mike Wagner and Jill Riepenhoff, May 7, 2012
]]>The federal bankruptcy laws place student loans in a special category of consumer debt that makes the loans very difficult to discharge. As this blog has reported, student loan debt exceeds credit card debt in the United States. Some advocates have called on Congress to change the bankruptcy laws to put student loans on an even playing field to other forms of consumer debt.
]]> The Associated Press and the Times-Dispatch recently ran a story that highlights the personal effect that the bankruptcy laws can have on individual consumers. An Ohio couple suffered a series of setbacks recently that placed the couple in financial straits.Cincinnati bankruptcy lawyers know that unexpected events can often lead to financial stress--and in the recent economy, that idea may even be compounded.
The Sandusky couple took on debt in college, like many across the country. The woman had lost her scholarship and had to take on student debt to get through college. The man in the relationship also incurred student loan debt in pursuit of his degree.
Then medical expenses arose. The two schoolteachers bought a house, but the U.S. economy tanked. The convergence of economic and medical struggles combined to bring the schoolteachers to bankruptcy. Unfortunately, under current law, the student loan debt cannot be discharged in bankruptcy to give the Ohio couple a true fresh start.
The troubling story highlights the plight of many in Ohio, and although the couple is going through it on their own, they really are not all that alone in the bigger picture.
The Ohio couple, like many in similar circumstances, reportedly are seeking bankruptcy protection to find meaningful debt relief in the other available areas of consumer debt.
Many people find that, although student loans may not currently be dischargeable, bankruptcy can still provide meaningful debt relief in tough economic times.
Source: The Times-Dispatch, "Bankruptcy can't erase student loan debt," Associated Press, April 26, 2012
]]>The woman's bankruptcy papers reportedly indicate that she is carrying as much as $1 million in debt. The total assets listed in her bankruptcy petition reportedly amounts to roughly $50,000, according to media reports. Newspaper accounts do not indicate what portion of her total assets fall under a legally recognizable exemption, and what assets, if any, may be subject the potential liquidation in the bankruptcy case.
]]> The famous mother made headlines in 2009 when she gave birth to octuplets. At that time, she was living with her mother in a house that was in foreclosure proceedings. Now, the mother of 14 is living in a four bedroom home that is under foreclosure. A foreclosure auction was originally scheduled for Monday, but sources indicate that that auction has been postponed for one week.Suleman lists $30,000 in past rent on her current home as among her outstanding debts in her chapter 7 bankruptcy petition. The landlord apparently has not been able to keep up on the mortgage payments on the rental property and has allowed the home to go into foreclosure.
Meanwhile, Suleman reportedly continues to relay on food stamps and Social Security disability payments to support her kids. Her notoriety apparently has not produced sufficient income, and her debts have continued to mount.
Source: Washington Post, "'Octomom' Nadya Suleman files for bankruptcy, owes more than $30K in late rent payments," Associated Press, April 30, 2012
]]>Many Ohio residents can be concerned about what property may be subject to the bankruptcy estate when facing financial distress. However, it is important to discuss individual assets with a seasoned debt relief lawyer, as many assets may be covered by a legal exemption, and in other cases chapter 13 may be a viable option to protect property, depending upon the individual circumstances of a person's financial status.
]]> With the recent stories involving pro athletes and former athletes seeking bankruptcy relief, and others who have faced wage garnishment and bank account seizures, it appears that the recent stories among athletes may not be so isolated as one might think.USA Today recently looked into the issue of pro athletes and apparent financial woes that can befall the pros after retirement. One source in the story estimated in 2009 that a whopping 78 percent of NFL players are in financial dire straits within two years of retirement, and 60 percent of NBA players go broke within five years of retiring from the professional court.
Many pro athletes sign huge contracts at a young age, but the profession generally has a short time frame for an average professional career. The NFL Players Association, for example, estimates that the average football career is a short four years. Add in the potential for bad investments and public lifestyles at such a young age and the financial woes are not necessarily so surprising.
Many say that most people who seek bankruptcy protection do so because of significant changes that can unexpectedly occur. Few economists predicted the recent economic meltdown, and any who may have were lost in the cacophony of information in better times.
Medical issues, a loss of work and foreclosure can be some of the types of events that act as a tipping point for many American consumers who have worked hard to maintain a household budget. It is important to consider many options when financial stress hits an individual, and an experienced bankruptcy lawyer can help a debtor to learn how the legally authorized bankruptcy process can help in providing financially distressed Ohioans with a fresh start.
Source: USA Today, "Pro athletes often fumble the financial ball," Russ Wiles, Apr. 22, 2012
]]>A recent study, however, says that one in 10 children in the country has been, or will be affected by a foreclosure. First Focus, a bipartisan advocacy group says that the study reveals 2.3 million children have been uprooted from their home due to foreclosure in the past five years.
More children may be at risk, as the advocacy group estimates 3 million children live in a home that is currently at risk of foreclosure proceedings. On top of that, 3 million kids have lived in a rental home that went into foreclosure against the landlord.
]]> The author of the report says that the recent study is the first to look into the effects of foreclosure on kids who have lived in a rental home. Foreclosure is difficult for anyone who may be affected, but the study authors say that kids may be exposed to issues beyond the stress. While stress can cause health issues, and children are not immune in that area during a foreclosure, kids can suffer effects in development and lower performance at school.Many children caught up in the foreclosure crisis are forced to move during the school year. The lead author of the First Focus study says that such children's math and reading scores may drop as much as if the students missed a full month from school. She uses a synthesis of 16 studies to reach the tough conclusion.
The estimates in the study use Census data and mortgage loans made from 2004 to 2008-the period that included a large number of risky and sub-prime loans that experts attribute as being primarily responsible for the foreclosure crisis. The researcher says that actual numbers may be higher, as loans granted outside the time period may skew the numbers one way or the other if factored in.
Source: Chicago Sun Times, "Study: Foreclosures take toll on kids," Julie Schmit, April 19, 2012
]]>In December, a court issued a wage garnishment order to collect on the nearly one-half million court judgment from Hernandez's checks from the Nationals, but at that time Hernandez was a free agent, and the attorneys withdrew the garnishment order. He later signed a minor league deal with the Astros. Attorneys petitioned the court in February to garnish the pitcher's wages from his Astro's paychecks, which the court granted.
]]> The saga continued during spring training, when Hernandez was cut just 11 days after the court issued the garnishment order. In March, the Braves signed Hernandez to a one-year deal worth $750,000. The attorneys for the bank went back to court and the judge agreed Monday to garnish the ball player's wages under his current contract.The series of wage garnishment orders seek to collect money related to the nearly half-million judgment entered last October on a promissory note and line of credit from SunTrust Bank. That judgment, however, is not the only judgment that has resulted in court orders issuing that are intended to collect on judgment debts.
Last year, Hernandez faced a bank account seizure. American Express Centurion Bank reportedly sued Hernandez on past due debts and obtained a judgment of just over $46,000. Subsequently, a judge ordered $12,321.38 to be taken from Hernandez's bank account to be applied toward the judgment debt.
Cincinnati bankruptcy lawyers know that wage garnishments, bank account seizures, repossessions and other forms of legal debt collection practices can wreak havoc on financially strapped consumers. Many Ohio residents who are struggling under a mountain of debt have sought debt relief under the bankruptcy laws on their way to a fresh financial start.
Source: The Washington Times, "Court orders Livan Hernandez's wages with Atlanta Braves garnished," Nathan Fenno, April 17, 2012
]]>Her modest income of less than $2,000 a month is used to keep a roof over her and her two children's head, and pay all the expenses that a single mother of two must cover-not to mention her own medical expenses associated with her disabling conditions.
She reportedly never missed a single mortgage payment-until she was in a car accident that totaled her 2000 Dodge Neon. Insurance covered the balance of the car loan, but the accident left her without transportation to get to the grocery store to provide for her family. She is now considering filing for chapter 13 bankruptcy to retain her home from a potential foreclosure.
]]> After the car accident, the mother of two faced a hard choice to make. She has always kept current on her mortgage, but there is no public transportation where she lives, and she knew that she needed a car to provide for her kids. She found what her friends told her was a good deal on a car. The 2000 Chrysler has 153,000 miles on it and a price tag of $1,500. She decided to but the car, and make arrangements with her bank on her home loan.She explained to her mortgage holder her situation when she bought the car, but she missed two mortgage payments late last year-in November and December. She had promised the bank that she would make up the $520 payments over time, offering to pay $600 each month until she got back on her feet. In January and again in February, she made the $600 payment as promised. But in March, the bank would not accept the $600. She then received a letter stating that she must pay $145,277 to avoid foreclosure.
She learned from a friend that chapter 13 bankruptcy may help her to stop the foreclosure and help her to retain her family home through the reorganization. She says that she is determined not lose the home.
Chapter 13, like chapter 7 bankruptcy may not be for everyone-but for many the bankruptcy code can help a financially strapped person to get back on his or her feet. Most people look at many options, but it is important to consider speaking with professionals who can explain what is available in finding meaningful debt relief in order to make an informed decision on how to move forward.
Source: St. Louis Today, "McClellan: Mom determined to hold on to house" March 18, 2012
]]>Struggling Cincinnati area residents who are buried under a mountain of debt, like consumers anywhere in the nation, often what for the tax refund to come and use that money to find meaningful debt relief under the bankruptcy code.
The 2005 bankruptcy reforms placed different controls on how bankruptcies can proceed. The law requires that bankruptcy fees be reported to the bankruptcy court in the petition for debt relief. Part of the theory underlying the way fees are handled was lawmaker's fears that too many people were filing for bankruptcy who could afford to pay their debts without seeking a bankruptcy discharge.
]]> A professor of finance at Washington University essentially says that the bankruptcy reform provisions enacted to prevent bankruptcy abuse makes it more difficult for financially strapped debtors to seek relief. He recently told USA Today that, "The people who really need bankruptcy are the ones who will be unable to pay for the fees."The recent NBER study provides consistent information in the trends in the area of bankruptcy law. It confirms that many people who are struggling under excessive debt loads often wait to seek bankruptcy protection until they come up with some form of one-time increase in cash flow, like a company bonus, a tax rebate or a tax refund.
Many consumers find that a tax refund can be nest used to file a bankruptcy petition and begin the process of gaining a fresh start from bankruptcy. Statistics showed that a large number of Americans filed for bankruptcy just before the 2005 reforms went into effect.
The numbers of consumers who have sought bankruptcy protection since the reforms took effect have generally bee fewer. The Washington University professor of finance says that recent bankruptcy statistics may not reflect that fewer people need debt relief. He says, "It just means that financially distressed people are not necessarily getting the help they need."
Source: USA Today, "Tax refunds being used to pay for bankruptcy filings," Christine Dugas, April 13, 2012
]]>Edward DeMarco, the acting director of the Federal Housing Finance Agency has received criticism for refusing to allow mortgage principal reductions in Fannie Mae and Freddie Mac backed loans. He said Monday that although a preliminary analysis conducted by the FHFA has concluded the write-downs could save significant money, he does not think a broad based principle reduction program will solve the housing market problems that continue in the wake of the home mortgage foreclosure and financial meltdown.
]]> The head of the housing regulatory agency says that a broad based principle reduction program may encourage homeowners with underwater mortgages to become delinquent on their payments to quality for a principle reduction. He says that added delinquency rates in government backed home mortgages would add financial burdens on taxpayers. "A key risk in principal forgiveness targeted at delinquent borrowers is the incentive created for some portion of these current borrowers to cease paying in search of a principal forgiveness modification," he says.Many economists, state officials across the country, and lawmakers have urged that the federal government should allow principle reductions for underwater mortgages. DeMarco says that he believes there are more cost-effective ways to help struggling homeowners, such as lower interest rates, instead of principle write-downs.
He says that much of the $1.7 billion in savings that his agency says the government-owned mortgage companies would save would be more than offset by costs incurred in the incentive program that would be associated with a principle reduction program. He says the savings noted in the preliminary report do "not account for any offsetting benefits in terms of greater housing market stability" if a principal reduction program resulted in reduced foreclosures across the country.
The FHFA analysis continues, and the agency is expected to complete the analysis soon. DeMarco says that he will make a final decision when the analysis is complete, and expects to finalize his decision on principle reductions for Freddie Mac and Fannie Mae loans later this month.
Source: Los Angeles Times, "Regulator: Mortgage principal reductions could save $1.7 billion," Jim Puzzanghera, April 10, 2012
]]>Warren Sapp filed for chapter 7 bankruptcy and listed his assets and liabilities. Any bankruptcy petition includes the debtor's assets and liabilities. Cincinnati bankruptcy lawyers know that the accuracy of a bankruptcy petition is vital. Leaving out a creditor, for example, may leave that debt intact after a discharge. But it is also important to note that accuracy in the petition is vitally important for purposes of avoiding bankruptcy fraud.
]]> Most individuals do not have luxurious assets like many former professional athletes. And many commentators say that most people filing personal bankruptcy do not own assets that are not exempt, meaning little or nothing is liquidated in a bankruptcy case. Chapter 13 bankruptcies also allow debtors to retain assets that exceed the allowable exemptions under the law.In Warren Sapp's chapter 7 bankruptcy petition, sources say that he lists more than $6.7 million owed to creditors. Among his listed assets is nearly $6,500 of Jordan athletic shoes. It appears from media reports that some of Sapp's financial issues may not be dischargeable in chapter 7 bankruptcy. Sapp reportedly owes money for back child support and alimony.
Although support payments are generally not dischargeable in bankruptcy, a person who is buried under a mountain of debt and owes debts, like child support, student loan debt or back taxes that may not be dischargeable in chapter 7, may benefit from filing for bankruptcy. Relieving the dischargeable debts may often make the non-dischargeable debts more manageable.
In other cases, a person may be able to make headway on past due debts, like mortgage or student loan debts among others, during a chapter 13 bankruptcy. An experienced Ohio bankruptcy lawyer can help an individual to understand what options may be available under the bankruptcy code in individual circumstances.
Source: USA Today, "Warren Sapp files for bankruptcy in Florida," Associated Press, April 7, 2012
]]>The foreclosure settlement includes various ideas that are intended to help distressed homeowners maintain possession of their homes. That and the recent news on home sales and market prices are positive signs. However, some people who watch the housing and credit market, or foreclosure issues, believe that a second wave in foreclosures may be on the way.
]]> The executive director of Empowering & Strengthening Ohio's People, a statewide counseling group, recently told Reuters that he thinks, "We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010."There is no question that Ohio was hit very hard by the economic collapse and ensuing foreclosure crisis that has occurred for roughly the past five years. Last year, at least as far as home mortgage foreclosures go on a statewide statistical basis saw a welcome decline. ESOP's executive director says, "Last year was an anomaly, and not in a good way."
Statistic data concerning the rates of foreclosure for 2012 has generally not been compiled on a national scale. One mortgage servicing company said that overall foreclosure starts soared 28 percent in January. And a watchdog group down south that is credited for helping to bring the "robo-signing" scandal to light says resurgence in foreclosures this month has appeared in the previously hard hit area around Palm Beach County. Same say similar increases could be replicated across the country.
Statistical data, however, only shows an overall trend that may occur at some geographical level. Cincinnati bankruptcy lawyers know that, although statistics may show that many are suffering financial distress, what truly matters in an individual household, is that household's financial status.
The prospect of foreclosure, or other issues involving collections, such as garnishment, bank account seizures, repossessions and just plain creditor harassment, can often act as a catalyst to learn more about bankruptcy protection. Any Ohio resident facing financial distress, may be able to learn more about the fresh start provided under our nation's bankruptcy laws without reading national statistics, but may speaking with an experienced debt relief professional.
Source: Reuters, "Americans brace for next foreclosure wave," Nick Carey, April 4, 2012
]]>Do violations of the basic protection occur? A bankruptcy judge outside of Ohio has ordered Bank of America to pay damages and fees after the bank continued to attempt to collect on a debt after the debtor filed for bankruptcy. The judge found that the bank ignored an injunction in the bankruptcy proceeding, known as a debtor's discharge, which is intended to prohibit the creditor from pursuing the debt.
]]> The judge reportedly imposed the penalty against the lender after the bank made a reported 38 calls seeking payment on the debt after the bankruptcy petition was filed and the bank knew, or should have known, that the injunction was in place.It should be known that it is not only primary, or original, lenders may have been known to run afoul of the protection against creditor harassment. Many creditors send information about debts to outside collection agencies. Banks also often sell the right to sue on a debt. The new collection agency is also prohibited from making attempts to collect after a bankruptcy petition has been duly filed.
Financially distressed Cincinnati area residents who are tired of the phone ringing related to outstanding debts may wish to consider speaking with an experienced Chapter 13 or chapter 7 bankruptcy lawyer to learn what relief a bankruptcy petition can accomplish on an individual set of financial circumstances.
Source: The Huffington Post, "BofA Allegedly Called Debtor 38 Times After He Filed For Bankruptcy," Alexander Eichler, Mar. 30, 2012
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