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On January 14, 2021, the U.S. Supreme Court decided City of Chicago, Illinois v. Fulton (Case No. 19-357, Jan. 14, 2021), a case which examined whether merely retaining estate property after a bankruptcy filing violates the automatic stay provided for by §362(a) of the Bankruptcy Code. The Court overruled the bankruptcy court and U.S. Court of Appeals for the Seventh Circuit in deciding that mere retention of property does not violate the automatic stay. Case Background The City of Chicago (the “City”) impounded respondents’ vehicles for failure to pay fines for motor vehicle infractions. Thereafter, each respondent filed a Chapter 13 bankruptcy petition and requested the return of their vehicle. The City refused to return the vehicles, and the bankruptcy court in each case found the City’s refusal to be a violation of automatic stay. The Seventh Circuit affirmed, concluding that by retaining possession of the debtors’ vehicles after they declared bankruptcy, the City had acted “to exercise control over” the debtors’ property in violation of the automatic stay. Read More ›
Tags: Case Law Updates, Chapter 13, U.S. Supreme Court

With Protections Expiring, Millions are in Danger of Losing Their Home

by: Jann Swanson  Mortgage News Daily, Mar 2 2021, 9:17AM (Reprint for education purposes only)

What happens to homeowners and landlords when the federal, state, and local protections put in place during the pandemic go away? The Consumer Financial Protection Bureau (CFPB) is warning that the answer is hanging in the balance.
Moratoria on foreclosures and evictions coupled with widespread availability of forbearance plans have held disaster at bay, but CFPB says 2.1 million families are behind at least three months on mortgage payments, and another 8.8 million are behind on rent. The aggregate 11 million represent 10 percent of total U.S. households. Homeowners alone are estimated to owe almost $90 billion in missed payments. The last time this many families were behind on their mortgages was during the Great Recession.
“Put simply,” the report says, “we have very little time to prevent millions of families from losing their homes.”
CFPB Acting Director Dave Uejio says, “I am deeply concerned that a mass wave of evictions and foreclosures will turn millions of families out on the streets. Such an event will not only be a humanitarian and public health disaster but will have repercussions throughout the housing sector and our economy at large.
“It’s common sense that safe, affordable, and stable housing provides the foundation for people’s well-being, financial and otherwise. Stable homes mean stable neighborhoods and communities. When people lose their homes, their lives, health, and finances are all disrupted. Even the threat of losing a family’s home can force tough financial decisions, including skipping payments on food, medicine, and heat to keep a roof over their head.”
This danger is much higher in certain communities. The ban on evictions is generally available only to tenants in properties held in real estate owned (REO) portfolios belonging to Fannie Mae and Freddie Mac (the GSEs), the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). In some cases, owners of multifamily properties financed by those agencies are also prevented from evicting non-paying tenants.
Nine percent of renters, who do not have the same protections or options as homeowners, say that they are likely to be evicted. Black and Hispanic households are more likely to report being at risk.
The 2.1 million homeowners who are more than 90 days in arrears on mortgage payments will probably experience severe financial hardship when forbearance ends. Of these families, an estimated 263,000 families are seriously behind on their mortgages and not in forbearance, putting them at higher risk of foreclosure once federal and state moratoria end.
Many families, particularly in Black and Hispanic communities, have not fully recovered from the last financial crisis, more than a decade ago. And those same communities are once again bearing a disproportionate financial and health burden during the pandemic, through no fault of their own. Black and Hispanic families are more than twice as likely to report being behind on housing payments than white families.
Twenty-eight percent of manufactured home residents are behind on their housing payments, compared to 12 percent of single-family home residents, and 18 percent of residents in small-to-mid-sized multi-unit buildings.
The Acting Director says, given its roots in the aftermath of the Great Recession, CFPB is uniquely equipped to address the current looming housing crisis and, where possible, will use its authority to keep people in their homes. It will also try to coordinate public and private efforts to save homes and attempt to prevent the weight of this crisis falling upon communities which are already struggling. “In those unfortunate instances where families can no longer stay in their homes, we will do everything we can to ensure that people are treated with dignity, families are able to preserve as much of their equity as possible, and everyone can make a smooth transition to other safe, secure, and affordable housing.”
Lenders, landlords and mortgage servicers are also working to keep people in their homes. Lenders realize the chaos of the last housing crisis wasn’t good for their bottom line, either. Most mortgage servicers are reaching out to the record number of homeowners in forbearance and other homeowners struggling to make payments. Many landlords have dipped into their own savings or run up credit card debt to cover expenses during the pandemic.
The report notes that Federal Housing Finance Agency, FHA, VA, and USDA have extended most of the pandemic relief measures through at least June 30, 2021. After that date, families who cannot resume making regular payments will need to make an agreement with their lender to avoid foreclosure. Residential eviction protections for renters are extended through March 31, 2021.
Uejio says it is a priority to get a firm picture of the crisis and he has directed CFPB research teams to increase efforts to track mortgage performance metrics and evictions. “We need to know more about homeowners and communities to help them overcome the inevitable financial impacts of a crisis of this magnitude. While there are significant differences compared to the last mortgage crisis, including a more stable mortgage market and substantial homeowner equity, we need to know more.
“We don’t know if the most vulnerable communities, hit the hardest by COVID-19 and its financial impacts, have sufficient equity to buffer them from the consequences of extended forbearances and job loss. Cascading foreclosures in a neighborhood can bring down housing values, shrinking equity. Families hit hardest by the pandemic and its financial impacts may not be able to find adequate alternate and safe housing, even if they are able to sell their homes without losses. The scale of housing insecurity among both renters and homeowners presents new risks to families and the communities they live in. We will be working hard to understand these interlocking risks.”

.fusion-body .fusion-builder-column-1{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-1 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:Since the COVID “rescue” policies went into place I have been warning my clients not to use any forbearance, mortgage or rent, unless ABSOLUTELY NECESSARY.  Why?  Because, unless they are extremely lucky, hit the lottery or inherit lots of money, they will still have to bring the missing payments current at the end of the forbearance.  A few lenders may offer to put the missing payments to the end of the loan, but there is no guaranty.  Most likely the lender will want all of the missing payments immediately, just like the missing rental payments.  So, if your home is important or you want to stay in your current apartment, do everything possible to keep the payments current. 
Bankruptcy attorneys are gearing up for a huge onslaught of new clients by fall of 2021 or the beginning of 2022.  Great for the attorneys, but terrible for their clients.  But, if that is the only way to save the client’s home, then bankruptcy may be an option.  Please seek competent advice before taking a “freebee”,  you may not like the consequences.

@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-2{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation
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• Federal Home Loans, Foreclosures and COVID-19
• 10 Things You Need to Know Before Filing Bankruptcy
• Rebuilding Your Credit Score After Bankruptcy
• Consumer advisory: Don’t fall for a foreclosure relief scam or bogus legal help.

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The post With Protections Expiring, Millions are in Danger of Losing Their Home appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

A powerful story from one man who refused to be bullied to one of the devious debt collectors:
Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance
Andrew Therrien wanted payback. He got it—and uncovered a conspiracy.  “It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.
…

The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams. In most cases, regulators weren’t able to identify the original perpetrators because the data files had been sold and repackaged so many times. Victims have essentially no recourse to do anything but take the abuse.”

…

This article goes on in detail about the years that Therrien spent tracking down the frauds and international schemes.  In May 2016, Therrien emailed his discoveries to the FTC. A lawyer replied right away: “Andrew, we need to talk about this.” Therrien also gave his intel to some private lawyers who were going after Tucker in Texas. They contacted Harsh, and in August 2016 he submitted an affidavit to the court. Harsh, who declined to comment for this story, testified that Tucker had asked him to manipulate a database of almost 8 million payday-loan applications, writing in a made-up lender and adding an amount owed of $300 for each person.
…

.fusion-body .fusion-builder-column-1{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-1 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:If you read the article above you will see it took one man years to expose this on-going conspiracy of mass fraud on our friends, relatives, and, perhaps, ourselves.  Tucker (the founder of this scam) is a sorry human being.  He whines that he is tired of being attacked, yet he never takes ownership that he caused this mess.  He hurt thousands of others who did not have the energy to do what Therrien did for the rest of us.  We should all send our thanks to Andrew Therrien for looking out for us and bringing a few bad guys to justice. 
@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-2{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation
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• Debt collectors cannot yell, curse or threaten you.
• Warning – Debt Collectors “Friending” You on Facebook Make Public Demand for Payment
• Debt Collectors Trick You into Bringing Old Debts Back to Life
• Debt Collectors Profit Because of COVID and Want More Money

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The post Millions Are Hounded for Debt They Don’t Owe appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

Declaring bankruptcy is not an easy decision to make. It happens when a person or a company fails to pay back its financial obligations to creditors. Some individuals believe that bankruptcy is the only way for them to stay out of debt.
One of the common types of bankruptcy is Chapter 13. It is also called the wage earner’s plan. If you decide to declare bankruptcy under this chapter, you will be given a period of three to five years to pay back and reorganize your existing debts to the creditor. This chapter does not require liquidation of assets. Hence, you will have the chance to save your assets such as a house or car from foreclosure. Moreover, you will be protected from co-signers and third parties who are accountable to the borrower toward unpaid consumer debts.
A designated Chapter 13 trustee will guide you throughout the whole bankruptcy process. He or she needs to carry out specific duties and obligations as you file for bankruptcy. Your United States trustee acts as the mediator between you and any creditor concerned.
The first task that needs to be done is to review your bankruptcy paperwork. It should comply with the bankruptcy rules. The bankruptcy trustee must cross-check your Chapter 13 bankruptcy repayment plan. He or she will help you in restructuring your plan since it needs to be fair for both the creditor and the debtor. It should explain how you plan to repay your debts. The trustee needs to check all the bankruptcy forms that you have filed from the start of the case. He or she needs to ensure the accuracy of all the figures declared in those forms. You need to provide supporting documents such as bank statements, bank account details, tax returns, and most recent payslips. These are needed to confirm your monthly income, personal properties, debts, living expenses, credit score, assets, and liabilities. All these details should be thoroughly checked before proceeding to the next step.
After one month from the bankruptcy filing date, your trustee will set up a 341 meeting with you and your creditors. The queries are usually relevant to your assets, liabilities, income, and other related information about your finances. While under oath, you will be asked several questions regarding your bankruptcy plan and paperwork. If there is a need for further verification, the trustee will organize another meeting.
If the United States bankruptcy court will not approve your bankruptcy petition, you will be given a time frame to make amendments to your plan and to correct the conflicts. Your trustee will be responsible to oversee bankruptcy hearings. He or she will ensure the feasibility of your plan and will negotiate with the judge. After the confirmation hearing, the bankruptcy judge will decide whether your plan should be approved or denied.
Furthermore, the trustee is also liable to object to any fraudulent claims. Within 70 days from the filing date, a creditor will submit a “proof of claim” to court. This proof declares the total amount that you owe. Your trustee needs to ensure that this claim is sufficiently supported by legal documents.
Another duty of a trustee Is to collect and manage the repayment plan. You need to give monthly payments to your trustee 30 days from the date of filing Chapter 13. Once you obtain the court order confirming the approval of your plan, the collected fund will be distributed by your trustee to pay your creditors. This will be done according to the terms and conditions of the payment plan. He will help you during the process of debt settlement. This bankruptcy chapter will last for about three to five years. Within this period, the trustee will still collect payments from you and use them to pay off the debts that you owed. All the transactions will be recorded accurately.
Filing for bankruptcy takes a lot of time and effort. It does not happen in a snap of a finger. You might experience hardship and failure. It is a gradual process that will help you solve your financial problems one step at a time. For inquiries and legal bankruptcy advice, do not hesitate to contact us at Northwest Debt Relief Law Firm and schedule a consultation with our experienced bankruptcy lawyers.
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The post Trusting a Trustee: The Role of a Chapter 13 Trustee appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.