NEW PHONE SPOOFING SCAMS TARGETING BANKRUPT INDIVIDUALS

 

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I recently had a couple in my office who alerted me to an ongoing scam against people who have filed for Chapter 13 bankruptcy. This couple had filed for Chapter 13 protection pro se (without an attorney) and immediately began to receive calls from the “clerk of the court” – at least that was the number which was popping up on their cell phone caller ID.

The caller had information from the Chapter 13 filing (which is a semi public record that can be pulled with a PACER account) related to their debts, place of employment and other bankruptcy related filings. The caller said that there was an issue with the Chapter 13 related to one of the debts having to be paid off immediately. The caller insisted that unless the debt was paid off (approximately $500) immediately by wire transfer, then the FBI would have be called to prosecute them for some type of fraud.

If you read the above paragraph, red flags are all over place. Never wire money. Never believe that a law enforcement group is going to enforce a civil debt. Never pay money to a creditor directly after you have filed for Chapter 13 unless your Plan says to pay directly.

Luckily, the individuals did not fall for the scam, but plenty of people have in the past. In fact, this scam has been ongoing for at least a year, even with files who have been represented by attorneys.

If you are experiencing harassment as a pro se filer, give us a call. We can alert you to this type of activity. We will review your situation and give you an honest opinion of whether we can help you through the process. We may even be able to help you avoid criminal scams so that you can put your money towards saving your home and vehicles as the Chapter 13 intended.

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

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

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

 

 

MORTGAGES AFTER BANKRUPTCY – IS IT ABOUT TO GET BETTER?

MORTGAGES AFTER BANKRUPTCY – IS IT ABOUT TO GET BETTER?

One of the leading questions that I receive while consulting with people is about the effect of bankruptcy on the ability to purchase a home in the future. Despite financial troubles, people tend to look ahead in their lives and see a brighter financial future. This can be especially true when they consider that they could be essentially debt free after many bankruptcies.

A recent article highlights the potential to quickly recover from a negative credit event in order to purchase a home:

http://www.wsj.com/articles/call-it-a-comeback-for-risky-home-buyers-1435185671

The Wall Street Journal article discussed the new lenders pouring into the mortgage market in order to fund home mortgages shortly after foreclosure, bankruptcy or other types of credit events. Typical waiting times for mortgages after such events are normally 2-4 years. According to the article, hedge funds and other private lenders have stepped into the void left behind by traditional lenders. These non-traditional lenders can approve a mortgage loan in just weeks after a foreclosure according the article. Often these lenders charge rates between 5-10% and require down payments of 25% for mortgage loans, well above traditional levels.

The service provided by these lenders is a valuable one. But like the subprime mortgage crisis that caused the financial turmoil of the last few years, it will be interesting to see if the loosening of lending standards causes a return of the high default rates of the past.

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

The End of Stripping Second Mortgages in Jacksonville Bankruptcy

13802 Windsor Crown Ct E, Jacksonville, FL 32225

 

The End of Stripping Second Mortgages in Jacksonville Bankruptcy

 

It was fun while it lasted. For the past two years, the 11th Circuit decision of McNeal v. GMAC Mortgage LLC (In re McNeal), 2012 WL 1649853 (11th Cir. May 11, 2012), allowed lien-stripping of a wholly unsecured lien or second mortgage in chapter 7. However, the as the saying goes, “The party is over . . . “

 

This week, however, the Supreme Court voided the ability to strip second mortgages in Chapter 7 cases. Now, Chapter 13 may be the only avenue to obtain relief from the second mortgage. This option is still attractive if the first mortgage is subject to modification. 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/

 

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

 

Bryan Mickler

 

TAX REFUNDS AND DEBT COLLECTORS – IS IT ABOUT TO GET EASIER TO TAKE YOUR MONEY?

 

 

TAX REFUNDS AND DEBT COLLECTORS – IS IT ABOUT TO GET EASIER TO TAKE YOUR MONEY?

One of the leading causes of filing bankruptcy is having a judgment entered against an individual. In Florida, the entry of a judgment allows a judgment creditor up to 20 years to collect the debt, allows the judgment creditor to place liens on property and even garnish wages in certain instances.

Now it appears that some debt collectors feel that is not enough power. Recently, an article out of Indiana House of Representatives highlighted the aggressive nature of debt collection these days. The article can be found here: https://iga.in.gov/legislative/2015/bills/house/1358

This bill provides that if a debt has been reduced to a judgment in Indiana and the judgment has not been satisfied, set aside, or discharged in bankruptcy, the judgment creditor may garnish a state tax refund otherwise due to the debtor. The bill also allows a writ of garnishment to be electronically filed with the department of state revenue. The easy garnishment of the tax refund will deprive many needy families of a source of income that many rely upon for providing extra income for necessary expenses.

At this point the legislation is only related to Indiana State tax returns. However, the debt collection industry is very powerful at lobbying. It would not be at all surprising if similar legislation is introduced in other States and/or targets the federal refunds of State citizens. If you have a judgment against you, don’t wait until your wages or property are seized. Call our office today to see if the debt may be discharged in a bankruptcy procedure.

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

 

 

New FHFA Rules May Help With Modification of Mortgages through Chapter 13 in Jacksonville, FL

 

Recently an article came out about loan buyers and some new requirements for attempting to modify delinquent mortgage loans prior to foreclosure. The article, found here:

http://www.wsj.com/articles/fannie-freddie-regulator-puts-new-rules-on-delinquent-loan-sales-1425318221

 

summarized the new Fannie Mae and Freddie Mac sale rules for delinquent mortgages.

It appears that Fannie Mae and Freddie Mac are preparing to auction a large portion of delinquent mortgage loans to private entities in order to recover some portion of the outstanding debt. The loan buyer would then be required to institute procedures for modifying the loan prior to foreclosing as part of the sale terms. It was interesting to note that according to the article, “Loan buyers also have the flexibility to take drastic steps to keep homeowners in place, such as by cutting mortgage principal balances, which Fannie and Freddie are largely prohibited from doing.” This has been a big problem in mortgage modifications in loans owned by a governmental agency since most of the loans are severely underwater. In some instances, the homeowners have received a modification designed to save the home from foreclosure, but have walked away due to the amount of debt on the property as related to the value.

If the loan buyers do follow through on actually working with families to save homes, reducing principal, extending terms and lowering interest rates, then the program could potentially save thousands of homes from being foreclosed. In the past, this type of relief has been hard to achieve as hedge fund investors have purchased the loans and looked to turn a quick profit by foreclosing on the homes in order to sell or rent them quickly.

Our office has worked for the last three years through the Bankruptcy Court Modification program. The results so far have been very positive if you compare the current system to the old “cure” plans that were required under the Bankruptcy Code. Under Chapter 13 (Section 1323(b)(2)), the Chapter 13 Plan may not modify the rights of lien holders secured by real estate that is the principal residence of the debtor. The same prohibition exists in Chapter 11 in § 1123(b)(5). These sections have been interpreted to mean that principal residence mortgages may not be “stripped down” to current value, may not have legitimate interest charges as allowed by the note and mortgage deleted from the account and also may not prohibit attorney’s fees and other charges if allowed by the note and mortgage. The end result was that many people were unable to save their home from foreclosure due to a variety of factors.

Take, for instance, a hypothetical example of a couple who went to a foreclosure defense firm prior to the mediation program. The foreclosure defense firm may have been able to stall the foreclosure process due to the backlog in the court system. Eventually, however, the home will be severely delinquent and a summary judgment hearing will be looming. At this point, many foreclosure defense firms would have simply told the couple to plan on moving out shortly. Or that firm may have recommended to the couple to file Chapter 13. However, due to the delay in the filing of the Chapter 13 case, the arrearages under the old “cure” Chapter 13 would have been too large to cure while trying to maintain the regular mortgage payments each month. Not only did the foreclosure defense serve only to delay the inevitable, it also made a cure plan impossible.

HAMP Program now in use by the Jacksonville Bankruptcy Courts

In December of 2011, the Jacksonville Bankruptcy Courts began a HAMP modification program in Chapter 13 cases. The program is a voluntary mediation program that was modeled after successful programs in Orlando and Tampa Bankruptcy Courts. The program cannot force the mortgage company to modify a loan. But, it does provide a process to obtain a HAMP modification through a mediation session with a federally appointed mediator. The great benefit of the program is that it is run through the Federal Bankruptcy Court and is subject to the Mediation Order issued by the Bankruptcy Judge. If the mortgage company fails to cooperate or does not offer a HAMP modification to an otherwise qualified candidate, that mortgage company may be subject to sanctions.

In fact, statistically, our office has seen great success in obtaining modifications, either through HAMP or an “in house” program offered by the servicer. Each financial situation is different, so a full evaluation of your particular eligibility for the modification program must be performed prior to any recommendation to attempt to obtain a modification through Chapter 13.

HAMP Eligibility

To be eligible for HAMP, a homeowner must owe less than $729,750 on a one-unit property, have established the mortgage prior to January 1, 2009, and have monthly mortgage payment greater than 31 percent of his monthly gross income. Also, a homeowner must be able to provide documentation indicating that he is facing a serious financial hardship as a result of his mortgage. Our office has a full-time person devoted to making sure that your paperwork is organized and prepared properly prior to submission to the mortgage servicer. Based on our experience, the paperwork component of the modification process is the step that most denials have been based upon outside of Chapter 13. Without the experience of a dedicated staff member and multiple past modifications, it is simply too difficult to put together a complete modification package. We utilize a court approved website which serves as a deposit site for all mortgage related documents provided to the mortgage servicer. No More lost documents!!

Once our office has obtained your package, the mediation session is set up to provide a decision on the modification request. Typically, the mediation session is held about 45 days after the modification package has been presented. The mediation session is held at our office with the mortgage company on the phone and generally lasts about 20 minutes. The mediator is present during the mediation session and will guide the parties through the process in order to ensure that each side has a chance to present whatever documentation and testimony is needed. A modification is usually offered at the mediation session or at a follow up phone conference to be held within two weeks of the mediation session.

There are also instances where the modification is denied at the mediation session. Normal reasons for denial are that the mortgage payment is currently low enough to be below the 31% of gross income, the borrower does not currently have income to support the modified payment amount needed or that the Net Present Value of the home is greater through foreclosure.

The mortgage modification process has been extremely beneficial to those people who qualify for HAMP treatment on their principal residence. With the benefit of judicial oversight and attorney involvement on by both the borrower and lender, more modifications have been obtained through the Chapter 13 loan modification program. While no modification can be guaranteed, you can at least have your modification application reviewed by mortgage company and expect to receive a written approval or denial instead never receiving any response. 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