Bankruptcy: There’s an App for that!!!!

 

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BANKRUPTCY: THERE’S AN APP FOR THAT!!!!

This past weekend I read an interesting article on healthcare and expectations of people of various ages for delivery of health services:

http://www.usatoday.com/story/news/politics/elections/2016/02/07/heres-how-millennials-could-change-health-care/79818756/

            The premise of the story was that the younger generation expected rapid delivery of health services, along the lines of shoes, electronics and other consumer goods from Amazon. The promise of the internet and its efficient marketplace was not being reached according to the younger generation, since healthcare required them to wait weeks for an appointment, show up in person and all the other inconveniences of obtaining health services.

            In contrast, the older generation in the story expected personal service from a Doctor or other health care professional. They did not mind the waiting time for an appointment if they felt that it would lead to personal service and results for health issues.

            I don’t claim to have the answers to fix the healthcare system and make it work for two such contrasting expectations. However, the story made me think of the services that I provide for people and the expectations that they have for a bankruptcy filing through our office. Are people looking for an efficient model or do they want a personal touch with filings? How can I continue to deliver quality legal services in bankruptcy law if I don’t know expectations?

            It appears that the Courts are trying to set up the bankruptcy system for the efficient model. In December of 2015, the Official Bankruptcy Forms were changed to provide for new schedules (your financial and asset related information) for each Chapter of bankruptcy forms. The forms were designed with a “check box” approach to facilitate a yes/no type of answer to each question regarding assets and other financial information. I can see a day in the near future where a consumer could log onto a website, check some boxes, swipe a debit card and have bankruptcy filing completed in a short time period. I believe that day is coming sooner than most bankruptcy attorneys want to imagine.

            Here is the problem with the efficient model for bankruptcy: People rarely go to jail, lose assets or lose the ability to discharge debt as a result of mistakes in filling out medical forms. All of those things can and do happen to people who fill out bankruptcy forms incorrectly. Failure to list assets, incorrect valuations, fraudulent transactions prior to filing and other form related issues are all grounds for loss of a bankruptcy discharge, criminal referrals and significant legal consequences.

            With those consequences in mind, our office tries to take a balanced approach to filing each case. We respect your time. You will not be sent to a waiting room and made to wait for hours when you set up an appointment. Our attorneys will see you promptly at your appointment time. If there is a conflict that was unavoidable, then we have three attorneys to make sure that you are taken care of right away.

            We use the latest technology to make your completion of the forms as thorough and quick as possible. We routinely use services to pull all three credit bureaus. We check all the court records for judgments and other liens on property. All of these make your time at our office as efficient as possible, while still safeguarding your ability to properly complete the forms to be filed.

            When you need to file bankruptcy, don’t rely on Amazon to deliver a Chapter 7 in a box. Bankruptcy filings have real consequences and should be treated seriously by each filer. Let us give you the attention that you need to make sure that your bankruptcy is completed properly and you understand the process – no matter your generation or approach to services.

           At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 or bkmickler@planlaw.com.

 

Bryan K. Mickler

 

 

Refiling Chapter 13 in Jacksonville

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REFILING CHAPTER 13 BANKRUPTCY

When I started practicing bankruptcy law 20 years ago, Chapter 13 was a revolving door of refiling. A case would be dismissed and we would immediately have the client in our office to re-file and start a new 60 month plan. Sometimes it seemed that the 5 year Chapter 13 Plan was really morphing into a 10-15 year process.

A couple of things changed to stop the revolving door. First, the Bankruptcy Code amendments of 2005 made it much more difficult to immediately refile after a dismissal. You now have to have Court approval to extend the stay/protection past the initial 30 days after filing. If you have to re-file twice within a year after the initial dismissal, then you receive no stay/protection unless the Judge imposes the stay within 30 days of the filing. At each type of hearing, you are required to prove that the dismissal was caused by unforeseen circumstances and that the new case was filed in good faith due a change in those previous circumstances.

The second big change was the introduction of mortgage modification to Chapter 13 in Jacksonville. Now, we don’t have to cure the entire mortgage arrears during the 5 year plan. Instead, a mortgage modification may allow for a re-amortization of the outstanding balance on the mortgage over a new 30-40 year term at a reduced interest rate. This has significantly increased the success rate of our Chapter 13 cases and cut down on the refiling rate.

If you do need to re-file your Chapter 13 case, we routinely have clients refile and receive the protection of the Court due to a change in circumstances. If you are considering changing attorneys or have experienced some issues in your current 13 and need another start, contact us and we will be happy to discuss your re-file options.

At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.

 

Bryan K. Mickler

FRAUDULENT STUDENT LOAN CANCELLATION AND DISCHARGEABILITY IN BANKRUPTCY

 

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FRAUDULENT STUDENT LOAN CANCELLATION AND DISCHARGEABILITY IN BANKRUPTCY

           I had written previously on the issue of potential changes to the student loan crisis and the potential for change in relaxing the strict rules to discharge student loans in bankruptcy. Both Public and Private student loans are currently nearly impossible to discharge in bankruptcy, due to a bankruptcy reform package pushed through by Republicans in 2005. Essentially, a consumer must be disabled to the point of never being able to rise above the poverty line standard of living in order to attempt to discharge any portion of a student loan debt, whether publicly or privately backed.

            The Supreme Court recently refused to hear a student loan appeal which had the potential to relax the bankruptcy requirements for forgiveness of student loans. So, for now, the strict requirements remain in place.

           However, it appears that many students have taken another approach to the problem. In this article:

http://www.wsj.com/articles/thousands-apply-to-u-s-to-forgive-their-student-loans-saying-schools-defrauded-them-1453285800

 students have begun to challenge student loans with a 1994 Federal Law which allows for forgiveness of the loans based on fraudulent conduct by a school. The examples cited for fraud in the article include over promising on job prospects, earning potential and other problems which lead to high student loan debt with no reasonable job prospects to repay such loans.

           Our office has seen first hand the growing problem of student loan debt. Student loan debt has been growing tremendously over the past few years. The total outstanding student loan balance is $1.08 trillion, and a whopping 11.5% of it is 90+ days delinquent or in default. That’s the highest delinquency rate among all forms of debt and the only one that’s been on the rise consistently since 2003. (see http://www.forbes.com/sites/halahtouryalai/2014/02/21/1-trillion-student-loan-problem-keeps-getting-worse/ for chart and other statistics). The delinquency rate on student loans is higher than credit cards, mortgages and auto loans which have all seen a decline in late payments.

            Our office has started a new program to apply for such forgiveness if the potential client can show that the school over-promised earnings, job prospects, education standards or other conduct which would make the loans fraudulent. Let us speak to you about applying for such a program and any other financial issue that you may have.

At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 or bkmickler@planlaw.com.

 

Bryan K. Mickler

STUDENT LOANS, BANKRUPTCY AND THE ELDERLY IN 2016

STUDENT LOANS, BANKRUPTCY AND THE ELDERLY IN 2016

What if you knew that a loan that you were going to make was not likely to be repaid 50% of the time? Would you make the loan? Would you consider it a smart investment?

            Right now, 50% of education loans held by people age 75 and over are in default – meaning no payment for at least 270 days. 27% of education loans held by people age 65-74 were in default, as well. http://www.abi.org/newsroom/bankruptcy-headlines/analysis-student-debt-may-be-the-next-crisis-facing-elderly-americans

            The education loans above include loans for the education of the borrower and Parent Plus loans for the parents of the person attending school. The Parent Plus program allows the borrower/parent to borrow the entire cost of the education with no need to show ability to repay the amount borrowed. However, most programs for income based repayment plans or forgiveness do not apply to Parent Plus loans. http://www.bloomberg.com/news/articles/2015-12-18/this-parent-trap-involves-71-billion-of-federal-education-debt

            In consulting with people recently, we have seen a dramatic increase in elderly clients having social security and tax refunds garnished for repayment of defaulted federally backed student loan debt. The loss of such income has begun to cause great hardship to elderly clients with the increase in medical costs, living expenses and housing costs.

            I regularly have to explain to the potential client that the Parent Plus student loans are treated just like other student loans. This means that there is almost no possibility of being able to discharge the student loan through any type of bankruptcy filing. Several recent cases have served to re-emphasize the impossibility of student loan discharge. See http://www.ksb.uscourts.gov/images/ksb_opinions/REN_11-05138-40.pdf

(sex offender can’t discharge student loans despite inability to find job due to status).

            The first paragraph above is meant to warn parents that good intentions alone will not provide for repayment of student loans taken out for their own education or their children’s education. Default rates of 50% are a sure indication that most elderly student loan borrowers are not able to maintain even minimum student loan payments based on reduced income, increased medical costs and other factors. The consequences of default are also draconian, with the loss of government benefits and tax refunds and the inability of the borrower to escape the debt through bankruptcy as the most obvious problems. So the borrower should make sure that such an investment is financially “worth it” based on the expected consequences.

            At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.

 

Bryan K. Mickler

BANKRUPTCY PREDICTIONS 2016

BANKRUPTCY PREDICTIONS FOR 2016

            In my 2014 Blog on the state of bankruptcy filings, I discussed the causes of bankruptcy filings and how it was related to the availability and amount of consumer credit. That article is here: http://www.planlaw.com/bankruptcy-predictions-2014-beyond/

            Now with 2015 behind us, it appears that the expansion of short term credit has still continued to push bankruptcy filing numbers down. Consumer credit has continued to expand at approximately a 6% annual rate through 2015. As expected, the 2015 numbers show a nearly 12% decline in bankruptcy filings compared to 2014. That is on top of the 11% decline in 2014. http://www.creditslips.org/creditslips/2015/08/yep-800000-bankruptcy-filings-this-year.html#more

            The filings in the Middle District of Florida show an even larger decline of nearly 18% compared to 2014 filings through the latest October, 2015 statistics. http://www.flmb.uscourts.gov/statistics/2015/October.pdf

            As expected, after the short term credit bulge, delinquencies are starting to rise. In the Third Quarter of 2015, credit card delinquency rates started to creep just a little higher. Car loan delinquency rates bottomed out in July of 2015 and have started to rise slowly through the Third Quarter of 2015.

            So based on the slight rising in default rates throughout the last half of the year, what can we expect for 2016? It appears that the bankruptcy filing rate should start to pick up during 2016 and accelerate in 2017. This would coincide with a greater amount of consumer debt levels and the gradual tightening of the credit markets as delinquencies start to increase. Of course, this being an election year, most of the activity in the economy and major life decisions will most likely take place in the last part of the year and into 2017.

            At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.

 

Bryan K. Mickler

SERIAL BANKRUPTCY FILERS

SERIAL BANKRUPTCY FILERS AND THE NEED FOR EXPERIENCED BANKRUPTCY ATTORNEYS

            I was reading an article recently regarding the problem of serial bankruptcy filings in Tampa, Florida. You can find the article here:

http://www.tampabay.com/news/business/realestate/tampa-bay-judges-crack-down-on-serial-bankruptcy-filers/2234543

            The article serves to warn people to consult experienced bankruptcy counsel prior to filing a Chapter 13 Petition. In Tampa, a new system will flag your case if you have filed three (3) times for Chapter 13 relief. If you are caught as an “abusive filer” then you can be banned for up to two (2) years from re-filing to save the home.

            Now, most people don’t like to think about filing Chapter 13 once, much less three times. But it does happen. A common pattern that we see is a first filing dismissed after being prepared by a paralegal for failure to file proper documents or propose a Plan that complies with the Court requirements. Then a second filing is typically filed immediately by the same paralegal petition preparer in order to cover up the first mistake. That second case is generally dismissed for the same reasons as the first. By the time people reach our office, the third case needs to be filed in order to save the home. However, now the filing looks abusive and can be flagged. Losing your home to save a few dollars of attorney’s fees starts to look like a bad idea in such a situation.

            Chapter 13 has become increasingly complex in the past few years. The new mortgage modification procedures require a great deal of experience and organization to navigate. The new Chapter 13 form plan is now required and is much more complicated than the older plans. Finally, the requirements for self employed people, tax returns, tax refunds and other financial issues have recently changed to require much more documentation.

            When you consider saving your home through Chapter 13, we invite you to talk to our experienced and compassionate attorneys. We will walk you through the entire process and attempt to make the filing as financially affordable as possible. That way, you don’t end up being labeled as an abusive filer due to simple errors or missing documents.

            At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.

 

Bryan K. Mickler

STUDENT LOAN BANKRUPTCY DISCHARGE STAYING DIFFICULT

STUDENT LOAN DISCHARGEABILITY CHANGES NOT COMING SOON

            There has been some hope that change from the Federal Government was coming soon to the growing issue of student loan debt. Both Public and Private student loans are currently nearly impossible to discharge in bankruptcy, due to a bankruptcy reform package pushed through by Republicans in 2005. Essentially, a consumer must be disabled to the point of never being able to rise above the poverty line standard of living in order to attempt to discharge any portion of a student loan debt, whether publicly or privately backed.

            Now the Obama administration has weighed in on the issue. And the results are not what many borrowers were hoping for from this administration. In this article:

http://www.bloomberg.com/news/articles/2015-10-14/obama-administration-hits-back-at-student-debtors-seeking-relief

 the administration argues in Court filings that the current standards for discharging student loans should not be relaxed. This case involved a parent taking out loans on behalf of his three children, but the standard for any student loan discharge would be covered by the filing. Essentially, the government argues that to allow a discharge in bankruptcy would endanger the entire federal student loan program due to the expected loss of repayments.

            Student loan debt has been growing tremendously over the past few years. The total outstanding student loan balance is $1.08 trillion, and a whopping 11.5% of it is 90+ days delinquent or in default. That’s the highest delinquency rate among all forms of debt and the only one that’s been on the rise consistently since 2003. (see http://www.forbes.com/sites/halahtouryalai/2014/02/21/1-trillion-student-loan-problem-keeps-getting-worse/ for chart and other statistics). The delinquency rate on student loans is higher than credit cards, mortgages and auto loans which have all seen a decline in late payments.

            Putting in some form of ability to discharge private student loans would be a good start to addressing the growing student loan problem that continues to plague today’s struggling consumers. Often, private student loans have been incurred at predatory type of institutions which provide minimal benefit to consumers or which have very low graduation rates compared to the level of lending. More than 70 percent of Americans matriculate at a four-year college — the seventh-highest rate among 23 developed nations. But less than two-thirds end up graduating. Including community colleges, the graduation rate drops to 53 percent. (http://www.nytimes.com/2013/06/26/business/economy/dropping-out-of-college-and-paying-the-price.html?pagewanted=all&_r=0). Allowing truly needy consumers the ability to discharge some private loans would allow those consumers the ability to enter the credit markets again in order to purchase homes, cars and other necessary items in order to contribute to the economy, without the burden of crushing student loan debt. The rate of home ownership is 36% less among those currently repaying student debt, according to research from ProgressNow.

At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 or bkmickler@planlaw.com.

 

Bryan K. Mickler

Hidden Second Mortgages

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Hidden Second Mortgages in Jacksonville Bankruptcy

I have previously written about modification of Mortgages through Chapter 13 in Jacksonville, FL bankruptcy:

http://www.planlaw.com/modification-of-mortgages-in-chapter-13-in-jacksonville-fl/

 Since the Supreme Court did away with Chapter 7 second mortgage stripping in early 2015, the ability to strip second mortgages has been limited to Chapter 13 cases. So what does that do with modifying your mortgage? The two have come together recently in a number of my cases recently. In several Chapter 13 cases, I have seen previous modifications that were actually treated as second mortgages – usually without the understanding of the clients.

 The typical scenario is that our office starts working on the modification paperwork required for the current modification and we pull a title report from the local public records. What we see is a large second mortgage from the Florida Housing Finance Corporation or HUD related to a previous modification on the first mortgage. When I contact the clients about this mortgage, they claim there is no second mortgage and don’t know anything about the recorded mortgage on their property.

 This is disturbing on several levels. First, it appears that creditors are not explaining important legal documents to homeowners when completing modification paperwork. All of the previous modifications were done without the benefit of an attorney and were outside of the Chapter 13 process. Second, it means that your Chapter 13 attorney had really be able to understand this issue even if the clients never inform them of the potential existence of the second mortgage.

 Our office will make sure that your public records are thoroughly checked and that all liens are discovered and dealt with in the Chapter 13 case. Judgments should be cleared from the title. Second mortgage should be stripped where appropriate. Finally, HOA liens should be cleared also.

 Don’t risk coming out of Chapter 13 with liens on your property. All of your hard work in completing a Chapter 13 plan could be wasted if the appropriate action was not taken with respect to liens and mortgages on your property.

  If you feel that you may benefit from a loan modification or any type of mortgage relief, contact our office at 904.725.0822 for a free consultation.

Bryan Mickler

bkmickler@planlaw.com

 

RAISING A CHILD AND THE ROAD TO BANKRUPTCY

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RAISING A CHILD AND THE ROAD TO BANKRUPTCY

            There seems to be a new emphasis on the cost of raising a child in this Country. Rather, how it is becoming impossible to afford to have children. Maybe it’s the Millennials starting to have children and realizing the enormous financial cost or the student loan crisis that is ensnaring many parents who co-signed for their children? Whatever the cause, it is apparent that educating and raising children has become prohibitively expensive. A recent article talked about the average annual cost of raising each child as $13,248.00. Per year!!!

http://www.usatoday.com/story/money/personalfinance/2015/09/27/credit-dotcom-moms-debt/72629890/

            That was the average cost. In fact, many parents feel the need to go further into debt to send children to private schools, fund extra-curricular activities or create a “perfect childhood”. Such was the pressure to provide everything for their children, that 46% of the parents in the article were actually creating debt, such as credit cards and other loans. The article took no real position on the creation of such debt, other than to say it could have long term credit report implications (the article was sponsored by credit.com where you could check your credit reports to see the debt that you created).

            The creation of such debt in order to provide for children is more than just a credit reporting issue. It is a conscious choice that most parents will make even if faced with the long term consequences of the debt. That is why the percentage of people who responded and said that they were creating debt is so high. It may be an even higher percentage based on how people will usually respond to a question that may embarrass them (such as whether your deeply in debt).

            If you find yourself in long term debt due to the choice of raising your children as you wish versus what you could really afford, contact our office for solutions. We have experience in guiding couples of all ages and economic status out of financial problems. We offer private and supportive consultations to explain all of your options when faced with long term debt. You can even bring your kids to save on expenses.

            At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 orbkmickler@planlaw.com.

 

Bryan K. Mickler

RISING RENTS AND THE NEED FOR CHAPTER 13 BANKRUPTCY

13802 Windsor Crown Ct E, Jacksonville, FL 32225

 

The biggest rental increases in years have been sweeping across the United States over the past 2+ years. This recent article by Forbes illustrates the problem of rising rents:

http://www.forbes.com/sites/laurengensler/2015/02/24/rising-rent-smaller-cities/

According the article, even small cities are seeing double digit rental increases year over year. In fact, in many areas, rental rates have increased twice as fast as wages. Increasingly, rental payments take up a larger portion of monthly income than ever before. Rental payments now account for approximately 30% of the monthly income of the average renter. That is surprisingly close to the 31% standard for mortgage payments. It will not be long before the rental percentage surpasses that of the mortgage percentage.

If you have a home or are interested in owning one, then it makes financial sense to hang on to the home in order to stop the prospect of ever-increasing rental rates. Our office specializes in providing Chapter 13 modification solutions to people faced with the prospect of losing their home. We have saved hundreds of homes through modification of defaulted mortgages, even after a failed foreclosure defense. We recently received a modification in a case where a foreclosure defense firm had tried to obtain one for several years while defending the foreclosure. Eventually, a sale was set and our office filed a bankruptcy to stop the sale and provide much needed help in the modification process. Ultimately, the home was saved and 5+ years of arrears were modified into the modified payment.

 At Mickler & Mickler, we provide solutions to your financial issues. Please contact us for a free consultation to review your situation.

 

Bryan Mickler

bkmickler@planlaw.com