CORONAVIRUS AND THE SAFETY NET PROVIDED BY THE BANKRUPTCY CODE

CORONAVIRUS AND THE SAFETY NET PROVIDED BY THE BANKRUPTCY CODE

The news of the coronavirus pandemic has exploded into the American consciousness over the past few days. Our office hopes that everyone has been able to stay healthy in the face of this health scare. After the initial health concerns that people will rightly worry about, financial issues will become a necessary concern, as well. May 12, 2020 reminded me of the day that Lehman Brothers filed for bankruptcy in 2008 – it seemed like a defining day in the history of the financial institutions in this Country.

A trio of events started the current financial downturn that we are currently facing. First was the almost universally negative reaction of the financial system to the Presidential address. Secondly, the NBA season was cancelled with almost no notice. Finally, the news that a beloved actor and his Wife had been diagnosed with the virus spread more fear regarding the lack of testing and knowledge of the virus’ spread. By the end of the day, almost all normal sporting and/or gathering activities in the entire Country were halted.

The effect of the grinding to a halt of the financial health of the Country comes at a very dangerous time for most Americans. It seems that three different forces will be colliding at the same time to push working families to the edge of their financial ability in the near future.

  1. Record Consumer and Business Debt levels – Both business and consumer debt are at record levels. In fact, for the first time in nearly 30 years, business debt has exceeded consumer debt.

https://www.americanbanker.com/articles/business-debt-exceeds-households-for-first-time-since-1991

  • Rising Costs of living for consumers – Living costs have been increasing faster than wage increases for many years now. A recent article at:

https://www.businessinsider.com/america-middle-class-living-expenses-family-of-four-2020-2

demonstrated this in dramatic fashion. In 1985 it took the average male 30 weeks of pay to support a family of four during one year. In 2018 it took 53 weeks!!! The entire point of the article was that there were not 53 weeks in a year and that one single breadwinner was not able to support a normal family of four any longer. The statistics were even worse for women. Clearly, the cost of living has risen much faster than wages for the average worker and that has placed a tremendous burden on families. So you see the record debt levels in paragraph 1 above as a result of families trying to pay normal living expenses with credit.

  • Coronavirus economic factors – The above two factors have left the average American family subject to a financial disaster if there happens to be any interruption of income. This appears to be exactly what may happen in the near term with business telling people to stay home, events cancelled and related ripple effects spreading throughout the entire economy.

The Bankruptcy Safety Net

            The bankruptcy system is not a substitute for broader financial safety nets that have been lost or never implemented over the years. There is not any system for paid leave for a worker who is suddenly told not to come to work due to the coronavirus. There is no universal healthcare for a worker who loses their job due to the coronavirus economic consequences. Finally, the financial costs of missing work due to the virus are too great for most people to take time off to get well or even get tested.

            However, should a family face financial issues as a result of the impending financial crisis, bankruptcy can make a huge difference in whether that family can weather the financial storm. The bankruptcy system can provide relief from credit card and other unsecured financial obligations through Chapter 7. If a family falls behind on secured claims such as mortgage or vehicle loans than a Chapter 13 may offer a way to become current and keep the family home or needed transportation. Each family would need a different solution to be tailored to their individual situation and needs.

Be sure to obtain the proper legal advice for your financial situation prior to any decision to file bankruptcy. At Mickler & Mickler we fight every day to protect your family from poor financial planning. Our office has the experience and the dedication that you deserve when your family is looking for financial help. Please contact us at 904-725-0822 or bkmickler@planlaw.com for any additional questions.

RENTAL THEFT – A GROWING ISSUE IN CONSUMER BANKRUPTCY

RENTAL THEFT – A GROWING ISSUE IN CONSUMER BANKRUTPCY

I recently have begun to notice a growing trend in consumer financing: leasing small personal property items such as beds, sofas, toys and other items normally financed as a sale. As the trend became more common, I began to wonder why such finance arrangements were suddenly showing up in almost all of our cases. The answer became frightfully clear with just a little research.

First, a little history. Leasing was traditionally reserved for small, niche retail outlets such as Rent-A-Center and Aarons. These establishments offered short term leases for electronics and furniture for temporary tenants who were looking to use an item for several weeks or months and then return the items with no future obligation. The leases were traditionally very expensive compared to the purchase of a similar personal property. A quick scan of any lease site will show that a 24 month lease (to own) of a 55” LG TV will be $59.99 per month for 24 months, or $1,439.76 total to own the TV. The same TV is $399.99 if you purchase it at your local Best Buy. The two deals are below:

https://www.aarons.com/55-class-54-6-diag-smart-4k-uhd-tv-7301LF1.html?cgid=tvs#start=3
v.
https://www.bestbuy.com/site/lg-55-class-led-uk6090pua-series-2160p-smart-4k-uhd-tv-with-hdr/6290171.p?skuId=6290171&ref=212&loc=1&extStoreId=429&ds_rl=1260573&ds_rl=1266837&ref=212&loc=1&ds_rl=1266837&gclid=EAIaIQobChMIxtH7loTh3gIV2FmGCh3OiwluEAQYBCABEgImufD_BwE&gclsrc=aw.ds

Leasing was set up as a way for short term, high cost tenants to obtain items on an as needed basis without a long term commitment and a need to dispose of purchased items at the end of the short term stay. However, times have changed with respect to leasing.

Our office is now seeing leasing for any number of small personal items that were normally financed. It seems that financing companies have decided to enlist the power of the criminal court and Sheriff in order to save on collection costs. This is because of the Florida Statute Sec. 812.155 which provides that the failure to return leased property within 5 days of a certified letter demand to return the items may result in criminal prosecution. Any item with a value over $300 may result in a felony charge.

So, instead of the creditor being responsible for lawsuit costs, attorney costs and related collection expenses, finance companies can now just call the Sheriff’s office and have the State pick up the expense of collection. This is similar to the private education student loan scam that was so prevalent in the past few years. Charge exorbitant rates for tuition and then have the government pay you that rate and take the risk of non-payment and collection. Pretty good deal. Throw in the threat of some criminal penalties and you really can reduce your risk of non-payment at no extra expense.

Monetary compensation and not the return of the equipment is the goal of this scheme by finance companies. They don’t really want the used couch back from the renter. Instead, the goal is to have the consumer feel threatened by criminal prosecution and offer to pay the account off.

These leases are typically just disguised sales that are subject to the same rules as financed items in a Chapter 7 or Chapter 13 case. Our office uses the Federal Bankruptcy Code to prevent the threat of criminal prosecution with the use of redemption in Chapter 7 and valuation in Chapter 13 cases. In either situation, we can usually allow the retention of the leased items for what is generally a greatly reduced sum. Give us a call to explore your options based on your individual situation. We will be happy to set you up a free consultation with an attorney to discuss your legal rights.

At Mickler & Mickler, we personally attend court hearings on an almost daily basis. We keep up with the latest developments in bankruptcy law and related areas. We can provide you the type of bankruptcy advice which will allow you to make the best financial decision for your situation. Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or bkmickler@planlaw.com

Bryan K. Mickler

HOME EQUITY SECOND MORTGAGES – TAX REFORM CHANGES AND BANKRUPTCY

The new tax reform law passed by Congress in 2017 continues to offer new surprises in a variety of areas. For instance, mortgage interest is still deductible – Right? The answer is a qualified “probably for the first mortgage, but not a second”. As discussed in the below linked article, the new tax law suspends the deduction for home equity interest from 2018 to 2026 — unless the loan is used to “buy, build or substantially improve” the home that secures the loan.:

https://www.nytimes.com/2018/03/09/your-money/home-equity-loans-deductible.html

This has implications for individuals who find themselves considering filing for bankruptcy with a second mortgage on their home. In a Chapter 13 bankruptcy, wholly unsecured second mortgages can be stripped off and discharged upon completion of the Chapter 13 plan. Often, the consideration to filing a Chapter 13 or Chapter 7 depends upon whether a second mortgage can be stripped off in a 13.

With the loss of the tax deduction for home equity loans, that may sway some individuals to consider Chapter 13 instead of a Chapter 7. For instance, an individual with 2 mortgages and $50,000 in credit card debt would normally just file a Chapter 7 and discharge the credit card debt. That individual would have been able to continue to deduct both mortgage interest charges from their taxes in the past. Now, the second mortgage interest may no longer be tax deductible. If the loss of the tax deduction is enough to offset the cost of the 13, should the individual now make a financial decision to file a Chapter 13 instead of a Chapter 7?

An experienced bankruptcy attorney can help you make that type of decision based on your personal financial situation and goals. That attorney should be able to advise you on the bankruptcy and other implications of your financial decisions.

At Mickler & Mickler, we personally attend court hearings on an almost daily basis. We keep up with the latest developments in bankruptcy law and related areas. We can provide you the type of bankruptcy advice which will allow you to make the best financial decision for your situation. Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or bkmickler@planlaw.com

Bryan K. Mickler

TITLE PAWNS AND CHAPTER 13 BANKRUPTCY- NO REDEEMING QUALITIES

TITLE PAWN AND BANKRUPTCY – NO REDEEMING QUALITIES

When I first started practicing bankruptcy law over 20 years ago, title pawns were a fast growing, very lucrative business in Florida. Then in the year 2000, the Florida Legislature adopted a title loan statute to get the industry under some type of regulatory structure. Gone were the days of title loans being treated as pawn transactions and allowing nearly unlimited interest charges. Instead of interest rates of over 300% as had been routine before, the new statutory scheme required a 30 day default prior to repossession and capped title loan rates as follows:
537.011 Title loan charges.—
(1) A title loan lender may charge a maximum interest rate of 30 percent per annum computed on the first $2,000 of the principal amount, 24 percent per annum on that part of the principal amount exceeding $2,000 and not exceeding $3,000, and 18 percent per annum on that part of the principal amount exceeding $3,000.

The response from the industry was predictable – move to a better (i.e., less regulated) region and continue to charge the exceedingly high rates that used to be available in Florida. Kingsland, GA, less than an hour North of Jacksonville, became the new epicenter of title loan lending in NorthEast Florida.
Why is that relevant to a Florida bankruptcy filing? In our practice we see many individuals who have made the short drive to the North to take advantage of a title loan based on the Georgia title loan provisions. If that is the case, then your Chapter 13 case to save that car just became much more difficult. In December of 2017 the Eleventh Circuit Court of Appeals issued a ruling related to Georgia title loans (or “title pawns” as called in the case). The case can be found here:
http://media.ca11.uscourts.gov/opinions/pub/files/201617467.pdf
The basic holding in the case is that if the Debtor has a title pawn under Georgia Law, then that title pawn must be paid off within 60 days of the filing of the case or the title to the vehicle is automatically transferred to the title lender. You read that right – automatically transferred. That means no further ability to cure the default through the plan, modify the loan terms or redeem the property through the Chapter 13.
Obviously, the best course of action would be to never enter into such a loan agreement. However, if you do find yourself facing a Georgia title loan repossession, then you should have counsel for your 13 who understands what you are facing and can properly advise you on what your rights are in Chapter 13.
Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or bkmickler@planlaw.com

Bryan K. Mickler

CURRENT BANKRUPTCY NEWS – JANUARY 2018

CURRENT BANKRUPTCY NEWS – JANUARY 2018

Several articles recently highlighted the deepening sense of financial pain being felt by middle class and working class Americans. Below are some of the recent bankruptcy related news stories for January of 2018 and how these trends may affect bankruptcy filings in the future.

Hurricane mortgage woes continue to pile up

https://www.nationalmortgagenews.com/news/severe-delinquencies-associated-with-harvey-irma-keep-piling-up

This article focused on the continuing economic toll of the major hurricanes of 2017. There are currently 4% of all Florida mortgages that are at least 90 days late as of January, 2018 according to the article. In addition to the economic toll of the hurricane, it seems that my recent experience has been that most people who applied for mortgage held did not fully understand the terms of the help. Most people who I have spoken to regarding the forbearance programs thought that the loans would be easily modified or the payments were not due in 90 days. Instead, the January, 2018 end of the forbearance program meant that 4 mortgage payments are now due all at one time.

20% Jump in credit card delinquency rates

https://www.newsmax.com/finance/personal-finance/banks-credit-card-losses/2018/01/22/id/838551/?ns_mail_uid=19301467&ns_mail_job=1774900_01222018&s=al&dkt_nbr=01050299wswo

Banks and other card issuers suffered a 20% jump in credit card delinquencies in 2017 as compared to the year prior. The main point of the article focused on normal consumers using credit cards as day to day living income to supplement low or no wage growth.

Top 1% income earners earned 82% of all wealth created in 2017

https://www.bizjournals.com/phoenix/news/2018/01/22/top-1-percent-rake-in-82-of-economic-stock-gains.html

Worldwide, the top 1% of income earners kept 82% of all new wealth created in 2017. Only 18% went to the other 99%.

Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or bkmickler@planlaw.com

Bryan K. Mickler

FORBEARANCE ON MORTGAGE ISSUES AFTER HURRICANE


FORBEARANCE ON MORTGAGE ISSUES AFTER HURRICANE

In September of 2017, Florida experienced it’s second major hurricane episode within the past year. Hurricane Irma caused extensive damage to major population centers in Florida, including Jacksonville. A federal disaster declaration was issued just prior to the storm making landfall in the Florida Keys. As a result of the federal disaster declaration, both Fannie Mae and Freddie Mac, two large federal mortgage holders, have temporarily suspended foreclosure sales in the State of Florida. See article below.

http://www.tcpalm.com/story/weather/hurricanes/2017/09/15/lenders-offering-mortgage-assistance-hurricane-irma/670047001/

As part of the federal disaster declaration, there are several mortgage companies that have offered what are termed forbearance plans. In reality, these plans are a trap for unsuspecting homeowners struggling with repair bills and missed work.
If you elect to take advantage of the mortgage assistance program through your lender, the lender will offer an immediate 90 day forbearance of the mortgage payments through the end of 2017. In January of 2018, if you made no payments during that previous 90 days, you will owe 4 months of payments. Again, the payments were only temporarily put on hold while the disaster effects have subsided. The payments were not forgiven and the loan was not modified in any way.
The servicer may attempt to offer a modification package to the homeowner in January of 2018. This will require the normal modification documentation be provided to the servicer by the homeowner. The modification is not guaranteed and will have no legal effect on foreclosure proceedings being commenced.
If you find yourself in such a predicament, our office can advise you on relief offered by Chapter 13 bankruptcy. Chapter 13 in Jacksonville, Florida offers the ability to stop foreclosure proceedings and submit modification documents through a court supervised process. Our office has a dedicated staff member who handles only the modification documents for your case and ensures that all of the appropriate documents are submitted through a dedicated website that is used by Chapter 13 filers. No more faxing or mailing multiple copies of the same documents to the mortgage company after they lost things for the third time!!! The Chapter 13 process also can allow for a cure of past due amounts over a period of up to 60 months if your loan was recently modified. Either way, the homeowner has the ability to save the home.
At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, what Chapter to file. When you contact our office, we can help you in your case with sound legal advice.
Please contact Mickler & Mickler at 904.725.0822 or bkmickler@planlaw.com. We will be happy to set you up a free appointment to discuss your situation and potential solutions.

Bryan Mickler

FANNIE MAE AND FREDDIE MAC SUSPEND FORECLOSURE SALES IN FLORIDA

 

FANNIE MAE AND FREDDIE MAC SUSPEND FORECLOSURE SALES IN FLORIDA

In September of 2017, Florida experienced it’s second major hurricane episode within the past year. Hurricane Irma caused extensive damage to major population centers in Florida, including Jacksonville. A federal disaster declaration was issued just prior to the storm making landfall in the Florida Keys. As a result of the federal disaster declaration, both Fannie Mae and Freddie Mac, two large federal mortgage holders, have temporarily suspended foreclosure sales in the State of Florida. See article below.

http://www.tcpalm.com/story/weather/hurricanes/2017/09/15/lenders-offering-mortgage-assistance-hurricane-irma/670047001/

The Sale Suspension and Forbearance Program

In Duval County, the foreclosure sales have been suspended until after January 1, 2018.  There are also additional options to temporarily suspend car and credit card payments as a result of the federal disaster declaration.

If you elect to take advantage of the mortgage assistance program through your lender, the lender will offer an immediate 90 day forbearance of the mortgage payments through the end of 2017. In January of 2018, if you made no payments during that previous 90 days, you will owe 4 months of payments. Again, the payments were only temporarily put on hold while the disaster effects have subsided. The payments were not forgiven and the loan was not modified in any way.

Often, after January of 2018, the servicer may attempt to offer a modification package to the homeowner. This will require the normal modification documentation be provided to the servicer by the homeowner and will have no legal effect on foreclosure proceedings being commenced.

If you find yourself in such a predicament, our office can advise you on relief offered by Chapter 13 bankruptcy. Chapter 13 in Jacksonville, Florida offers the ability to stop foreclosure proceedings and submit modification documents through a court supervised process. Our office has a dedicated staff member who handles only the modification documents for your case and ensures that all of the appropriate documents are submitted through a dedicated website that is used by Chapter 13 filers. No more faxing or mailing multiple copies of the same documents to the mortgage company after they lost things for the third time!!!

CONTACT US

At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, what Chapter to file.   When you contact our office, we can help you in your case with sound legal advice.

Please contact Mickler & Mickler at 904.725.0822 or bkmickler@planlaw.com. We will be happy to set you up a free appointment to discuss your situation and potential solutions.

Bryan Mickler

HURRICANES AND BANKRUPTCY: HOMEOWNERS BEWARE OF HIGH DEDUCTIBLES

HURRICANES AND BANKRUPTCY FILINGS: HOMEOWNERS BEWARE OF HIGH DEDUCTIBLES

In September of 2017, Florida experienced it’s second major hurricane episode within the past year. Hurricanes Matthew and Irma both caused extensive damage to major population centers in Florida. The damages ranged from falling trees to complete flooding of homes. In any situation, the homeowner may be in for a terrible financial consequence due to the effects of the storms.

Initially, most Americans are living paycheck to paycheck. Two-thirds of households don’t have more than $1,000.00 in savings. A recent article from the end of 2016 explained the dire financial situation of most households:

https://www.fool.com/retirement/2016/09/25/nearly-7-in-10-americans-have-less-than-1000-in-sa.aspx

That article found that “even though lower-income adults struggle with saving money more than middle- and upper-income folks, no income group did particularly well. Some 29% of adults earning more than $150,000 a year, and 44% making between $100,000 and $149,999, had less than $1,000 in savings. Comparatively, 73% of the lowest income adults (those earnings $24,999 or less annually) had less than $1,000 in their savings account.”

This situation has been largely characterized as people having less than 2 weeks of savings to handle an emergency such as a loss of job, medical episode or other work loss. The result of such an episode can lead to immediate financial pressure without adequate savings to make such basic payments as mortgage payments, rent, car payments, health insurance, etc. Unfortunately, our office sees such individuals on a daily basis.

But what about damage to your home from a Hurricane? How does that impact a homeowner with only two weeks of savings? The answer is based on the value of the home. In Florida, damage to a home from a hurricane is generally covered by insurance. However, the insurance coverage normally has a 2% deductible or higher. That percentage is based upon the value of home – not the estimated repair costs. See:

https://www.iii.org/issue-update/background-on-hurricane-and-windstorm-deductibles

This could mean that out of pocket deductible expenses will be in the tens of thousands of dollars for some homeowners. For example, a $250,000 home (about average sale value) would have a $5000 deductible. Obviously, the more the home is worth, the more that the deductible will be for the homeowner. Having to come out of pocket for $5000 is a financial impossibility for most families based on the less than $1000 in savings figures above. Other expenses may not even be covered by homeowner’s insurance, such as tree removal for trees which did not hit the structure, flooding costs and business losses for self-employed individuals. Most people will generally lose time from work due to the approach of a storm and the loss of power/internet for several days after the storm passess.

The result of a large out of pocket expense is usually that the homeowner is left without funds to pay car payments, credit card bill or other expenses which are not as critical as ensuring shelter for themselves and their family. In such a situation, financial pressure may start to mount once the emergency of the situation has worn off. Within a couple of months after a hurricane, collectors and creditors are generally not sympathetic to homeowner’s expenses related to the storm. Lawsuits and other collection activity will generally pick right back up and threaten wages, vehicles and other assets. If you find yourself in such a situation, then bankruptcy may provide the financial tools necessary to save your home, vehicles and income from collection.

At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, which Chapter to file. When you contact our office, we can help you in your case with sound legal advice.

Please contact Mickler & Mickler at 904.725.0822 or bkmickler@planlaw.com. We will be happy to set you up a free appointment to discuss your situation and potential solutions.

Bryan Mickler

ZOMBIE DEBT RETURNS WITH A TWIST

ZOMBIE DEBT ISSUES IN CHAPTER 13 CASES

Zombie debt appears to be making a comeback due to some recent Court rulings involving Chapter 13 bankruptcy cases. Recently, there was a Supreme Court ruling which prohibited the filing of an FDCPA action against a debt collector in Chapter 13 cases where a “stale” claim had been filed, i.e. a claim based on a debt which was deemed uncollectible based on an applicable statute of limitations. The opinion is found here:

https://www.supremecourt.gov/opinions/16pdf/16-348_h315.pdf

An interesting note in the opinion is that the Court considered a Proof of Claim that was obviously time barred. “Whether Midland’s assertion of an obviously timebarred claim is “unfair” or “unconscionable” (within the terms of the Fair Debt Collection Practices Act) presents a closer question.” Page *5 above. The Claim in the above case made no misrepresentations regarding the age of the account or whether such account was past an applicable statute of limitations. In such a case, the Supreme Court has said that debt collectors are free to file such a claim and suffer no liability through the FDCPA for attempting to collect on a stale claim.

But what if the claim is presented in such a way as to attempt to appear timely? What if a creditor or debt collector intentionally “re-ages” an account in an attempt to collect a stale debt so that the claim wasn’t “obviously time barred” as stated by the Supreme Court? Would that type of collection activity subject the creditor or debt collector to liability through the Bankruptcy Code or the FDCPA?

Twice in the past 2 years our office has seen large institutional creditors (not debt collectors, surprisingly) file claims that contained account statements dated for the month of the petition when the account is well past the Florida five year statute of limitations. In one case the creditor filed multiple claims with the same deceptive account statements. We filed suit against both creditors in adversary proceedings in an attempt to bring such behavior to the attention of the Bankruptcy Judge and to prevent future repeat violations.

Such behavior is an obvious violation of Bankruptcy Rule 3001 which requires that claim filers provide in the Proof of claim the date of the last transaction, date of last payment and date charged off for all unsecured open end or revolving accounts. The reason for such a requirement is obvious: Put everyone on notice as to whether the claim is collectible. The Rule also provides the Bankruptcy Judge with the ability to disallow the presentation of evidence of the missing items, award attorney’s fees and costs, as well as other “appropriate relief”. Our office believes that any “appropriate relief” that is awarded should be sufficient to deter repeated violations of claim standards and to prevent deceptive filings in reorganization cases.

As we move well past the limitations period for most debts incurred and charged off during the financial crisis of the late 2000’s, it becomes critical to any successful reorganization effort to make sure that only legitimate claims are provided with financial benefit in a reorganization case. Stale claims, deceptive claims and the other variations of uncollectible debt should be carefully checked in each case and taken out of any reorganization plan to allow for the best chance of success.

At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, what Chapter to file.   When you contact our office, we can help you in your case with sound legal advice.

Please contact Mickler & Mickler at 904.725.0822 or bkmickler@planlaw.com. We will be happy to set you up a free appointment to discuss your situation and potential solutions.

Bryan Mickler

POST MORTGAGE MODIFICATION ISSUES IN CHAPTER 13 CASES

tampa

POST MORTGAGE MODIFICATION ISSUES IN CHAPTER 13 CASES

Some disturbing trends appear to making a comeback in the Chapter 13 mortgage sector. It was hoped that the trend towards modifying loans in Chapter 13 cases would reduce the number of issues associated with the servicing of loans during Chapter 13 bankruptcy. In the past, servicers would routinely misapply payments from a Trustee, fail to apply payments to an account or add charges and fees to accounts that were not approved by the Bankruptcy Judge. In such cases, our office would routinely see mortgages coming out of Chapter 13 cases with arrearages of thousands of dollars in past due payments and fees.

Of course, no one wanted to struggle through three or five years of Chapter 13 payments only to be told that the mortgage they fought so hard to cure was again delinquent. Our office routinely filed suit against mortgage servicers which had refused to comply with the terms of the Chapter plans and other Court orders to make sure that the hard work which went into the Chapter 13 was rewarded with a current mortgage.

Beginning in 2012, the Jacksonville Bankruptcy Court allowed for modification mediation in Chapter 13 cases involving a mortgage. Since that time, our office has had great success with saving homes through the modification process. Homes which were once unable to be saved through Chapter 13, could then be modified and cured of arrears through the program. Unfortunately, the five year cycle of Chapter 13 means that many of these loans are completing the Chapter 13 process. Instead of complying with the terms of the modification and the Chapter 13 confirmation order, we are again seeing mortgages exit Chapter 13 with substantial arrears alleged.

It is unfortunate that mortgage servicers will not honor the promises that they make to borrowers in modifications. Our office understands that filing bankruptcy and making a five year plan be successful are difficult. We will make sure that your efforts are not wasted. Mortgage servicers must be held accountable for errors in the servicing of Chapter 13 loans and for not applying payments as required by the Court and modification documents.  Give our office a call or email if you find yourself in such a position for free analysis of your potential case.

At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, what Chapter to file.   When you contact our office, we can help you in your case with sound legal advice.

Please contact Mickler & Mickler at 904.725.0822 or bkmickler@planlaw.com. We will be happy to set you up a free appointment to discuss your situation and potential solutions.

Bryan Mickler