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“Hello Landlord” is a Free Tool that Helps Tenants Write to Their Landlords
With Hello Landlord, tenants and landlords can work together to resolve issues before eviction. When tenants stay in their homes, landlords save money and communities are more stable.
In order to develop Hello Landlord, we surveyed tenants, landlords, social services, government agencies, lawyers, judges, and court staff to create Hello Landlord. We found that in most cases landlords are willing to work with tenants if they respectively reach out. Our free tool collects a series of details about your situation then generates a document for you to send to your landlord. Communicating with your landlord about missed rent or an apartment repair can help tenants avoid evictions.
Hello Landlord was created by LawX, the legal design lab at BYU Law School, the Innovation for Justice (i4J) Program at University of Arizona College of Law, and SixFifty, the technology subsidiary of the law firm Wilson Sonsini Goodrich & Rosati.
Can’t Pay Rent?
Hello Landlord will help you write a letter to your landlord. According to them, “You’re less likely to be evicted if you do”.
Need Repairs to Your Rental Unit?
Hello Landlord will help you write a letter to your landlord. According to them, you’re more likely to get the repairs you need if you do.
They have articles on How to Avoid Eviction, the Eviction Process and Cost of Eviction.
* Hello Landlord is a collaboration between BYU Law School’s LawX innovation laboratory and the University of Arizona College of Law’s Innovation for Justice Program. Students and faculty at the two schools worked together to develop a free web-based tool to help tenants better community with their landlords, in order to work through issues, with the goal of avoiding eviction proceedings.
The post Free Advice for Arizona Tenants Facing Eviction appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
Old Debt Can Die, But If You Pay Even a One Cent the Debt Comes Back to Life “Zombie Debt”
LAWS THAT PROTECT THE BORROWER – UNTIL THEY DON’T. DEBT COLLECTORS TRICK CONSUMERS INTO BRINGING DEAD DEBTS BACK TO LIFE.
There are legal protections for the consumer if a creditor does not take steps to collect a debt in a certain period of time – referred to as the statute of limitations (in Arizona, depending on the type of debt, ranges from 2 to 6 years). Even though there is a debt, once it is beyond the statute of limitations the borrower cannot be sued. But, debt collectors found a back door – they bully the borrower into paying “just a little” (somewhat like a whiny child). The moment the borrower pays this “little bit” the statute of limitations starts all over. The debt collectors are not required to notify the borrower about their rights.
The Consumer Financial Protection Bureau proposed a national standard for how debt collectors must explain to borrowers that they cannot be sued on an expired debt “zombie debt”.
Five Sample Letters to send debt collectors:
Wondering how to respond to a debt collector? Our sample letters can help if you:
- Need more information
- Do not owe the debt
- Want the debt collector to stop contacting you while you dispute the debt
- Want the debt collector to only contact you through a lawyer
- Want to specify how the debt collector can contact you
* These letters are not legal advice. You’ll also want to keep copies of any letters you send.
CONSUMER FINANCIAL PROTECTION BUREAU PROPOSAL WOULD ALLOW DEBT COLLECTORS TO CALL 7-TIMES A WEEK AND UNLIMITED EMAILING OR TEXTING (PUSHED BY THE TRUMP ADMINISTRATION)
An example of the Trump Administration working against the consumer: wants to allow debt collectors to call 7 times a week and text, email as much as they want, according to the Washington Post.
The Trump administration has been the war-path trying to limit the powers of the Consumer Financial Protection Bureau (CFPB) because it was looking out for you and me, not the big banks, payday lenders, unscrupulous car dealers and others that prey on the consumer (you). May 7, 2019 – issued a Notice of Proposed Rule-making to “modernize” the Fair Debt Collection Practices Act (FDCPA) (which has been law since 1977). The 1977 law did not address digital communications.
Debt collectors monitor your Facebook and other social media accounts
The report discloses that debt collectors monitor Facebook and LinkedIn accounts to find former employers and family members and contact these people, with the hope to put pressure on the borrower to pay, when many times it is not a valid debt (wrong borrower, debt paid in full or identity theft).
MUSINGS FROM DIANE:
Many people, my Dad included, feel that if you don’t pay your bills, you deserve to be called every hour, on the hour, demanding payment. In his mind, and many others like him, it is okay for debt collectors to call your office, neighbors, family and friends. I remind him of the days when our family could not afford allowances or Christmas presents because his largest client had filed for bankruptcy (Dad was a mechanical engineer and operating out of our front room at that time). Things were tight, but he does not remember that six decades later when he is financially stable. Instead, he falsely assumes that everyone has a financially stable life and the reason someone does not pay their bills is because, they don’t want to.
Be Kind to Each Other
Our prospective of the world changes with each life change. The loss of a loved one (perhaps the primary income producer) causes an extreme upheaval in your file. A diagnosis of cancer – not only emotionally challenging, but also financially disastrous.Your life may be great today, but tomorrow it may fall apart. Before you say something unkind – put yourself in their shoes.
How Can I Help You?
The post Debt Collectors Trick You into Bringing Old Debts Back to Life appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
Seniors are the Fastest Growing Group with Student Loan Debts.
Older student loan borrowers quadrupled since 2005
According to a report by the Consumer Financial Protection Bureau (CFPB.gov) The number of consumers age 60 and older with student loan debt has quadrupled over the last decade in the United States, and the average amount they owe has also dramatically increased. In 2015, older consumers owed an estimated $66.7 billion in student loans. Although most student loan borrowers are young adults between the ages of 18 and 39, consumers age 60 and older are the fastest-growing age segment of the student loan market.
Grandparents financing grandchildren’s education
This trend is not only the result of borrowers carrying student debt later into life but also the growing number of parents and grandparents financing their children’s and grandchildren’s college education. Today, the majority of older student loan borrowers have loans that were used to finance their children’s education. They may have taken out these loans directly or cosigned on a loan with the student as the primary borrower.
This is affecting senior’s ability to retire
A 2019 AARP Public Policy Institute report found that 15 years ago, borrowers 50 and over held $47 billion of the nation’s $455.2 billion in student loan debt. By 2018, that figure had risen to $289.5 billion of an overall $1.5 trillion.
A senior’s Social Security can be garnished
Most seniors are unaware that their social security benefits can be garnished for failure to pay federal student loans up to 15 percent if the borrower defaults. Many seniors depend solely on social security to pay their basic expenses and any garnishment can be the difference between that senior living in a safe area or having to move to a dangerous, but a cheaper area.
MUSINGS FROM DIANE:
Education is supposed to be an investment in a society’s future.
For most of my life, I have paid my bills. College was expensive, but I had two part time jobs to cover the costs (no, my parents did not help). When it came to law school, I was told by the law school that a job was not an option. After my savings ran out, that meant relying on student loans. In those days the colleges were not a profit center, so their tuition was reasonable. But that is not the case today. Rather than looking at the long range benefit education offers our society, colleges everywhere see students as cash registers. Every year they raise their tuition, usually far above the average cost of living increases. While cutting their costs as much as possible (hiring less capable professors and offer fewer classes), with the goal to increase their profits. The school knows the students will take loans in order to obtain the education they believe will help provide a better life. But, the students rarely know how much that loan will cost; they only know that their family is so proud they are going to college. Many don’t complete their college education, but are still strapped with the student loans that grows more and more each day.
When are we going to return to the recognition that education is an investment in our future?
The post Seniors Saddled With Student Loans appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
Lower-income debtors simply cannot afford the high cost of filing chapter 7, and that is a real problem when garnishments strike.
The cost of filing Chapter 7 in Nebraska ranges from $1,300 to $1,800 and ALL of those fees must be paid in full to file a case. How can low-income debtors stop garnishments if they cannot afford the fee?
Many debtors have no choice but to file a chapter 13 case which can be filed for as little as $75 down. But attorney fees in Chapter 13 cases are currently set by court rules at $4,000 payable in monthly installments over 3 to 5 years. Chapter 13 cases are cheap to file but cost 3 to 4 times more in the long run.
And whereas chapter 7 cases have a 95% success rate, chapter 13 discharge rates are less than 50% nationally.
Lower-income families face a tough choice, but a bankruptcy court in Kentucky recently issued an opinion that may provide a roadmap to making the chapter 7 process more affordable.
Kentucky’s Bifurcation Opinion.
In the case of Chanda S. Carr, the Kentucky court reviewed a bifurcated fee arrangement in which the debtor was charged $300 down to file an incomplete chapter 7 petition consisting of nothing more than her name and a list of her creditors.
After the case was filed, the debtor signed a new fee agreement to pay $1,185 payable in 12 monthly installments of $98.75 for the remainder of the legal work.
On it’s own motion, the court reviewed this fee arrangement in great detail. The court noted several important factors in approving this Dual Contract scheme.
Disclosures.
It was very apparent that the debtor’s attorney made a full disclosure of all payment options.
First, the debtor was offered the option of filing a normal chapter 7 case for $1,135, but all of that fee had to be paid in full before the case could be filed.
Then, the debtor was offered a bifurcated fee arrangement of $300 down and then 12 payments of $98.75, for a total of $1,485. This bifurcated arrangement would ultimately cost the debtor an extra $350 since it is more costly to prepare cases in this manner and payment to the attorney is stretched out over a year.
The combination of an inability to pay for a lower upfront fee combined with an imminent garnishment was a key factor in the court’s analysis. In other words, the debtor made an informed choice.
What is important to observe here is that the debtor was first offered a standard contract–pay a lower fee upfront to file a standard chapter 7 case. The debtor was not steered to the dual contract scheme, but rather chose that option when it was apparent that she could not afford to prepay all the fees up front and garnishments were pending.
The combination of an inability to pay for a lower upfront fee combined with an imminent garnishment was a key factor in the court’s analysis. In other words, the debtor made an informed choice. She chose the lesser of of two evils–to pay a little more in the long run in order to avoid losing even more from a garnishment. All the alternatives were laid on the table. She made a reasoned choice. That is a key factor.
Pre-petition Fees Not Shifted to Post-Petition Payments.
The United States Trustees Office–the supervisor of bankruptcy cases–is highly suspicious that attorneys using the Dual Contract method are really preparing most of the case prior to filing and then attempting to collect their fees after the case is filed. In other words, the US Trustee believes this scheme is a fraud.
In fact, US Trustee investigations of attorneys using bifurcated contracts have revealed that some attorneys have clients sign both contracts at the same meeting and that most of the petition was prepared before the case was filed.
In the Carr case the Kentucky court determined that attorney and the debtor had a post-petition meeting to sign the second contract. The court found that the attorney really did prepare the bulk of the petition and perform the majority of the legal work after the case was filed. The court underscored the importance of this factor.
The Debtor’s Case Must Be Simple.
Bifurcation agreements are not appropriate for complex cases. Why? Because complex cases require more pre-petition analysis to determine if a debtor’s income is too high to qualify for chapter 7 and even more analysis to determine if the debtor’s property is protected by exemption laws.
Cases involving higher-income debtors who own substantial property require most of the legal work be completed before the case is filed. Thus, it is a fraud to use bifurcated contracts in those cases since no competent attorney would file a risky case without a full analysis of the debtor’s income, expenses, property and property transfers. A bifurcated fee arrangement in complex cases would be a lie.
But cases involving lower-income debtors with little property are inherently simple and require little pre-petition analysis. Determining if a debtor is above or below Median Income is simple. For example, the annual median income for a single person in Nebraska is $48,796. A debtor earning $12 per hour clearly earns less than that amount. A debtor who rents an apartment with only basic household goods and who owns a used vehicle does not present a complex asset case requiring careful exemption planning.
Lower-income debtors with few assets facing imminent garnishments are the ideal candidates for bifurcated fee agreements since the bulk of the legal work can be prepared post-petition. The Kentucky court agreed with this reality.
Bifurcated Legal Fees Must Be Reasonable and Should Not Utilize Factoring Arrangements.
The common link between cases where attorneys have been disciplined for the use of bifurcated fee agreements is the presence of factoring arrangements.
Almost all the attorneys sanctioned in bifurcated fee arrangements were using an accounts receivable factoring arrangement offered by BK Billing or Fresh Start Funding.
The factoring finance companies present attorneys with a slick marketing package complete with fee agreements, disclosure statements and a pricing scheme that basically doubles the cost of the chapter 7 case. Attorneys that would normally charge $1,500 to file a chapter 7 case are encouraged to bump the price of the case to $2,400. After the dual contracts are signed by the client, the attorney sells off his post-petition contact to the finance company and receives an immediate payment of $1,500. The financing company collects future payments from the debtor at typically high interest rates.
Factoring the legal fee contract is attractive to attorneys. Instead of waiting for debtors to slowly pay in their normal fee, they can now streamline the process and get paid now by advertising “No Money Down” chapter 7 services. And believe me, you can file a lot of chapter 7 cases if you can really charge no money down. There is no shortage of people who need to file bankruptcy, but there is a real shortage of debtors who can afford the $1,500 fee to go broke.
Factoring arrangements should be avoided since they escalate the price of bankruptcy services to unreasonable levels.
But the attorney in the Carr case did not utilize a factoring arrangement. Nor did the attorney charge high interest rates. The extra cost he charged the client for the bifurcated fee arrangement was only $350, and that amount seems reasonable given the extra work bifurcated contracts require and the delay and risk associated with collecting payment.
Birfurcated contracts that charge only slightly higher fees than standard contracts for lower-income debtors with relatively simple cases are likely to be respected by the US Trustee and the courts.
Is the Bifurcated Contract Affordable?
The debtor in the Carr opinion was only required to pay 12 monthly payments of $98.75 post-petition. Her monthly budget indicated that she could afford that payment. The amount of that payment was reasonable. The Kentucky court found this payment agreement to be feasible and modest.
Courts that have sanctioned attorneys have found the payment demanded by factoring finance companies to be excessive and predatory. In those cases the debtor’s income and expense schedules would often show negative monthly income but the factoring contract would require payments of $200 per month or more.
If it is clear that a debtor cannot afford to a pay post-petition legal fee installment it is advisable not to enter into a bifurcated fee arrangement.
Conclusion.
The time has come for bankruptcy courts to craft Safe Harbor rules on the use of bifurcated fee arrangements. If we are really serious about addressing the very real problem of low-income debtors being denied access to our justice system, then we need to come up with a compensation system that encourages attorneys to assist those debtors now.
Just making statements like “we really need to change the bankruptcy law” is not enough. We have to work with the tools we have in our hands now instead of waiting for a legislative change that may never come. Bifurcation is a tool we currently have that can immediately help lower-income debtors facing wage garnishments.
The cost of delaying the establishment of safe harbor bifurcation rules is significant. When low-income debtors cannot afford to pay for bankruptcy fees their wages become garnished, they fall behind on rent, they suffer evictions, their financial distress ignites family distress, and their children pay a dear price.
Attorneys feel threatened by the US Trustee’s office. The attorney in the Carr case faced a significant investigation by the US Trustee and faced potential sanctions and disgorgement of fees. Without safe harbor rules attorneys are reluctant to take a chance of being sanctioned or having their fees disgorged.
Congress is not going to fix this problem anytime soon. Nonprofit organizations lack the resources to handle the volume of cases.
The bankruptcy community of attorneys, trustees and judges must lay the framework to help the working poor access our justice system with the tools we already possess.
Image courtesy of Flickr Carl Wycoff.
New York taxi drivers and politicians are raising alarms after a secretive hedge fund this week quietly became the city’s largest owner of taxi-medallion loans.
Marblegate Asset Management — a tight-lipped investment firm that has already scooped up some 300 medallions and 1,000 loans, many of them previously owned by disgraced “Taxi King” Gene Freidman — has taken over loans tied to an additional 3,000 New York medallions, sources told The Post.
The deal — valued at about $350 million with the inclusion of an additional 1,500 loans from Chicago, Philadelphia and other cities, according to sources — makes Marblegate New York City’s biggest-ever owner of medallion loans, with nearly a third of the total of 13,500 issued.
The Greenwich, Conn.-based hedge fund didn’t respond to requests for comment, even as critics raised fears that the deal could spell more bad news for cab drivers.
The market value of a New York City taxi medallion — which had topped $1 million in late 2013 — has since tanked below $200,000 with the rise of ride-sharing startups like Uber and Lyft. With passengers defecting in droves, New York’s yellow-cab drivers are facing mounting debts, with nine suicides reported in the last two years.
Some industry sources said they were skeptical whether Marblegate would be interested in taking a haircut on the loans to help out taxi drivers.
“[Marblegate] is happy owning these assets because they want to own a superfleet and build economies of scale,” according to one industry insider. “The idea is to keep buying the loans, keep foreclosing on them and keep gobbling up medallions until you control the market.”
About 60 members of the New York Taxi Workers Alliance had driven down to Virginia on Wednesday in a last-ditch effort to stop Marblegate’s purchase of the loans from the National Credit Union Administration, a federal agency that had taken on the New York loans after the collapse of two local credit unions in 2018.
“It’s ridiculous,” said Bhairavi Desai, the taxi driver group’s executive director. “We’re pretty pissed off.”
Letitia James preps suit against city over medallion debt crisis
Desai says the group met with NCUA reps two weeks ago to discuss letting the Taxi Workers Alliance find a private partner that would help the nonprofit buy the loans. The alliance has said it wants to restructure the loans at uniform values of $150,000 and freeze monthly payments on those debts at $900.
Instead, Desai said that the NCUA — which said in a Wednesday announcement it has lost $760 million holding onto the debt — simply turned around and sold the medallions to the highest bidder.
“We are fiduciaries for the share insurance fund. We are not some hedge fund selling assets,” NCUA board member J. Mark McWatters told the 60 visiting New Yorkers at the regulator’s monthly board meeting in Virginia. “We needed to take this offer.”
The NCUA has assured the Taxi Workers Alliance that Marblegate is open to talking debt relief with medallion owners and that a meeting between the parties to start those talks has been set for “sometime next week,” Desai said.
City officials are equally concerned about what putting an outsize share of taxi medallions in the hands of a hedge fund means for taxi operators on the brink.
“People will read this story and think about committing suicide,” said City Council Member Ydanis Rodriguez, chair of the Transportation Committee. “We cannot wait for the city to create a public-private partnership to buy medallions in foreclosure and hold the medallions so that the debt on them can be reduced. We need to act yesterday on fixing this.”
The state’s attorney general is seeking $810 million from the city to compensate financially struggling taxi medallion owners. New York State’s attorney general on Thursday accused New York City of committing fraud by artificially inflating the value of yellow taxi medallions, and she demanded $810 million from the city to compensate the thousands of cabdrivers who are now saddled with enormous debt.
The city’s Taxi and Limousine Commission marketed the medallions — city-issued permits required to own a yellow cab — as “a solid investment with steady growth” and reaped a profit from the sale of thousands of them at auction at exorbitant prices from 2004 to 2017, according to an investigation by the attorney general’s office. The attorney general, Letitia A. James, said the city must provide financial relief to the debt-ridden taxi medallion owners within 30 days or she would sue for fraud, unlawful profit and other violations of state law. “These taxi medallions were marketed as a pathway to the American dream, but instead became a trapdoor of despair for medallion owners harmed by the T.L.C.’s unlawful practices,” Ms. James said. “The very government that was supposed to ensure fair practices in the marketplace engaged in a scheme that defrauded hundreds of medallion owners, leaving many with no choice but to work day and night to pay off their overpriced medallions.’’Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, which represents cabdrivers, said she welcomed Ms. James’s action and saw it as a validation of the city’s culpability in the taxi crisis. “The devastation that has happened across the taxi industry has been a deep betrayal by the city,” she said. “Not only did they close their eyes to predatory practices and directly engage in inflating the prices but they then allowed in Uber and Lyft completely unregulated.” Freddi Goldstein, a spokeswoman for Mayor Bill de Blasio, said that although the taxi crisis began under Michael R. Bloomberg’s administration, city officials since then have taken steps to provide financial help to taxi drivers and tighten oversight of Uber and other ride-hailing companies. The attorney general began her inquiry in response to an investigation by The New York Times, which found that a handful of taxi industry leaders earned hundreds of millions of dollars by deliberately inflating the price of a medallion to more than $1 million from about $200,000. The Times found that thousands of drivers, many of them immigrants, thought they were safe taking out loans to buy medallions because of the taxi commission’s assurances of their high value. City, state and federal officials exacerbated the problems by exempting the industry from regulations, The Times revealed. The city also filled in budget gaps by selling medallions and running ads promoting the permits as “better than the stock market.” Ms. James said that the city continued to market the medallions at inflated prices even after internal warnings were raised. During the last auction for medallions in 2014, the city sold 350 new medallions at the height of the market, generating $359 million in revenue. Since then, medallion prices have cratered, selling for a fraction of the record $1.3 million price in 2014. In many cases, they are worth far less than what their owners borrowed to buy them. In 2018, New York became the first major American city to adopt a one-year moratorium on issuing new vehicle licenses for Uber, Lyft and other ride-hail services. It came three years after Mr. de Blasio attempted to adopt a similar cap but abandoned the effort after Uber waged a fierce campaign against him. Since then, the city has extended the moratorium. “This crisis has been ours to solve — working tirelessly to clean up the carelessness and greed of others,” Ms. Goldstein said. “If the attorney general wants to launch a frivolous investigation into the very administration that has done nothing but work to improve the situation, this is what she’ll find.” But Ms. Desai said the city’s response has been slow and its efforts so far have generally been underwhelming. She noted that the city waived some small fees for taxi owners even as they drowned under huge debts. “There has been no substantial financial relief — this restitution would be the first,” she said.
The city comptroller, Scott M. Stringer, said Ms. James had made “significant allegations” and that his office “takes these issues very seriously.” The city controls the number of medallions — currently capped at just under 13,600 — to prevent an oversupply of cabs like what happened in the 1930s when concerns over congestion, reckless driving and cut-rate fares led the city to step in. As medallion prices soared, drivers were steered into taking out loans totaling billions of dollars that they could never repay, plunging many into bankruptcy. A spate of suicides by taxi owners and professional drivers in recent years underscored the severity of their plight and has spurred city legislation to try to improve their working conditions. A spokesman for Ms. James said that while Thursday’s action was focused on the city’s role in the taxi crisis, their ongoing investigation continued to examine “all aspects of the taxi industry.” The United States Attorney’s office in Manhattan has also launched a criminal investigation. Taxi industry leaders have denied doing anything wrong, characterizing their actions as normal business practices. They have sought to blame the taxi meltdown entirely on the rise of competing ride-app services such as Uber and Lyft. Last month, a city panel appointed by the New York City Council and Mr. de Blasio proposed a bailout of up to $600 million for taxi drivers, but most of that money would come from private investors. Ms. James is seeking $810 million directly from the city. It is unclear how her demand would affect the bailout plans. City Councilman Ydanis Rodriguez, who was the co-chairman of the panel, said he believed the city did bear some responsibility for creating the taxi crisis, and as a result, it had an obligation to provide financial relief to taxi owners. He added that the city should consider all proposals, including Ms. James’s demand for compensation as well as the private-public bailout proposed by the panel. “What I know is this crisis is so huge and the medallion owners are so desperate that they cannot wait any longer,” Mr. Rodriguez said. Ms. James said the payment from the city would be used to pay restitution to taxi medallion owners, which could include paying off loans, and compensating them for damages resulting from the city’s actions. She also plans to take additional measures to prevent the Taxi and Limousine Commission and the city from inflating taxi prices in the future.Nino Hervias, a taxi owner and spokesman for the Taxi Medallion Owner Driver Association, which represents many immigrant taxi owners, said that it was time that the city was held directly liable for destroying the yellow taxi industry and pushing so many drivers into bankruptcy.
From: nypost.com By: Thornton McEnery
https://nypost.com/2020/02/20/cabbies-worry-as-hedge-fund-snaps-up-taxi-medallions/
From: sfchronicle.com
By: Nanette Asimov
https://www.sfchronicle.com/bayarea/article/Ex-students-blame-for-profit-Academy-of-Art-15061438.php
Wiping out the nation’s student-loan debt could have unintended financial consequences for borrowers
By: Andrew Keshner
From: Marketwatch
By: Annie Nova
From: cnbc.com
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