Pittsfield MA Bankruptcy Law Blog

The title of this Posting, about Consumer Finance, is from an Opinion piece in the New York Times Sunday, Jan. 22,2012 by Elisabeth Rosenthal regarding the matter of Disclosures. Her position is that there isn't any, especially in the Consumer Finance area. The link to the article is shown at the end of this posting. It's worth reading, every word of it!

NOW MY POSTING:

FOR DISCLOSURE PURPOSES ONLY!!!!!!

I am a lawyer. Please do not pillage me for thinking, many years ago, that lawyers HELPED people, and had a high degree of integrity. Even worse, at one foolish time I actually considered getting into politics, again thinking that our elected officials actually care about their constituents.

I come face to face every day, handling foreclosure prevention work and consumer finance, with federally mandated and corporate sought after disclosures like the "[NO] Truth In Lending" disclosure required at all real estate transactions. Unlike many of my brethren and sisteren I actually understand the documents. Having spent 18 years in Banking, at times working for regulatory bodies, and being an attorney, I learned the hidden meanings of the documents. Dan Brown would just be disappointed as would the Incas.

Instead of calling the volumes of paper presented to borrowers of any type disclosures, how about some honesty - call them DISCLAIMERS "NO MATTER WHAT WE DO TO YOU, WE HAVE NO RESPONSIBILITY FOR ANYTHING. IF YOU SHOULD ATTEMPT TO ENFORCE ANY LAWS WE WILL BRING THE FURIES OF HELL UPON YOU".

Unfortunately the last statement is only a mild exaggeration. The law firms representing the lenders and other large corporations can inundate a consumer or her/his lawyer with paper and deadlines.- EXPERIENCE.

No matter what a disclosure states, if there is no regulatory oversight in a meaningful way to protect consumers, the disclosures are worthless. The Tea Party et al who want less government better have an army of lawyers ready.

Most recently a Bankruptcy case involving a foreclosure was decided when the judge rules that all of the required disclosures were given to the borrower - the fact that the lender didn't follow federal guidelines was excused - guideline don't count. DISCLOSURES=OBFUSCATION.

Just remember "Less is More" in many cases

Richard I Isacoff, Esq.

Author's Copyright by Richard I. Isacoff, Esq, January 2012
rii@isacofflaw.com
www.isacofflaw.com

http://www.nytimes.com/2012/01/22/sunday-review/hard-truths-about-disclosure.html?pagewanted=1&_r=1&ref=opinion by Elisabeth Rosenthal

 
Bankruptcy? Me? NO! (or maybe).The need to PayBills is a perception among those of us who are of retirement age, or past it; we have to pay every bill we have even if it means going without prescribed medications or proper food. To say that this is a wrong or bad idea is not appropriate. Those of us who try our best to honor our commitments should be commended, not condemned.

HOWEVER, the LAW , that's the Federal law, specifically Title 11 of the United States Code, provides for DEBT RELIEF. So, why don't more people take advantage of this legal RIGHT? There are many reasons but most are rooted in a belief system that not paying obligations is immoral, unethical, something only shysters or "those kind of people" would do. Many of these same people, those of us who feel there is no way but to pay, have had no qualms, no hesitations, about utilizing many different sections of Title 26 of the US Code which provides TAX RELIEF.

We all take deductions when we file taxes, rather than paying the maximum tax that we could pay based on income. We use the standard deduction or we itemize - and we itemize everything possible: real estate taxes, mortgage interest, medical expenses including part of the cost of medical insurance, tax return preparation fees, costs of caring for a dependent - and on & on. Somewhere there is a disconnect in the two position/attitudes.

The Debt Relief is Bankruptcy Protection - Protection from Creditors. IT IS A RIGHT, NOT A PRIVILEGE. Unless you have committed fraud, or some other unsavory act you are cannot be denied the Right to Obtain a Fresh Start. That is what the law discusses: a "FRESH START". And that refers to a FRESH START from DEBT.

There is no shame in admitting that the $10,000 of credit card debt that has been being paid for years, never denting the balance owed, is too much to repay. Keep in mind, that while it's counter-intuitive, the credit card companies will not make deals to accept less than 100% of what's owed. The fact that gas is now $4.00/gallon, and that fresh fruit and vegetables are more expensive than the best steaks, and that medical costs go up almost daily it seems....

The shame of the current economic environment is that some of the lifelines that many people have relied upon have been eliminated or cut-back. Programs like food stamps, fuel assistance, community health care programs, and subsidized housing are all under-funded because of the recession here and the on-going financial crisis world-wide.

I can only suggest that if you are having your own personal economic meltdown you seek advice from a competent Bankruptcy attorney. Any attorney worth her/her "salt" (or pepper) will give you enough information that you will know what options are available to you. If you cannot find someone in your area, feel free to call my office or send me an e-mail and I can get you connected to the proper referral folks.


Author's Copyright by Richard I. Isacoff, Esq, November 2011
rii@isacofflaw.com
http://www.isacofflaw.com/

My mortgage modification clients often ask about the class actions or Attorney Generals actions against mortgage companies, lenders, and servicers, when the newspapers/Internet proclaims "XYZ Bank settles with Massachusetts for $XXX Million". The biggest single question is "Where did the money go?" Unfortunately, the answer I give is "I don't know except that there was no fund set up for modifications". Then I get the BLANK STARES from my clients.

"How can that be?" they query, to which I reply, "I do not know - probably to offset the cost of the suit and to establish a new unit to investigate mortgage fraud AND to help balance the budget." To this date I have never received notification that the Commonwealth of MA is setting up a fund to help borrowers avoid foreclosures, or even to set up an agency to help homeowners apply for a loan modification.

At this juncture, homeowners are being cast adrift. The 50 States +/- CA & MA (depends on the day) have been arguing with the biggest lenders/servicers over a settlement for all of these institutions evil-doings; and they were indeed evil! The proposals are at $26Billion but no one is offering to pay. Instead the Banks et al want to promise they won't do it again and that they will make it easier for homeowners to get a modification. Making it more difficult would be to say "NO, WE WON'T DO MODS ANYMORE". No money will go to individual homeowners. No funds will be set up to help a borrower get caught up. As the title of the movie proclaimed "GONE IN 60 SECONDS" (so where is Nicholas Cage when we need him?).

Even if there is money made available, the selection/application process will be as difficult as getting the modification as evidenced by the recent Federal "EHLP" (Emergency Home Loan Program) program that only gave out 1/2 of the $1Billion allocated for it.

The refrain often heard when one is trying to get a modification is "The Investors do not allow modifications" or "This requested modification is outside investor guidelines". (Investors are the entities which make and buy the bonds - lots of incest) When the investor is the Federal Nation Mortgage Association (FannieMae) or the Federal Home Mortgage Corporation (FreddieMac) or the Federal Housing Administration (FHA) the formula used to determine "Yes" or "No" is at least obtainable. And, because these are either Government Agencies or quasi-government agencies, they do participate in the HAMP program. But, you deal not with Fannie or Freddie or the FHA but with the loan SERVICER. This is the company picked to run the pool of loans - to collect payments and send out bills, and to start foreclosures and to actually WORK ON MODIFICATIONS.

There is no rhyme or reason to the process. Each servicer has slightly different requirements, all allowed by the Making Home Affordable program which created HAMP. Paperwork must be submitted and often resubmitted again and again. This is the period that most borrowers give up or taking time from work to put documents together again and again, in the hope of getting an affordable payment now that there is no more overtime or even one less job for the borrower(s) to count-on for the money to meet the payments.

I often sit at my desk working on one or two cases, while on hold with a servicer for an hour or sometimes two. I can keep working on my computer and have at least one other phone in use while I work with a servicer. So far, my results are good but my client has no money to pay for all of that time, even when I only count the time I am actually doing calculations and filling out forms or talking to a servicer's representative. Because, in addition, there are the hours spent with the client who has no money to pay for the time and the results.

The head of the Fedeal Hosuiing Finance Agency said within the past day or so that FreddieMac will be concenttrating on selling foreclosed properties to investors who will rent them. READ MY LAST POST - I AM A STEP AHEAD OF HIM.

As we get ready (a year early) for the Presidential election one cannot help but wonder whether anyone in D.C. knows what is going on - or cares! And will it be any different in a year - nah - well yes it will be - more people will be out of their homes!

Author's Copyright by Richard I. Isacoff, Esq., Nov 2011

rii@isacofflaw.com     www.isacofflaw.com

Bankruptcy is rising but filings are falling! Why? Simple answer: People do not have money to file for protection under the Bankruptcy Code. That may sound/read like an "Of course they cannot afford bankruptcy, they don't have any money!" Unfortunately, this is a new phenomenon.

Until recently, people would call regularly to ask for free debt counseling and consultation to discuss financial problems which could result in a Bankruptcy case. Generally, we are able to work out payment arrangements with almost anyone. ALMOST is the operative word. If the person has no money and no job, and no way to pay us, even on a $25 per week basis, there is little that we can do as an office.

Understand that every lawyer does a certain amount of INTENTIONAL pro-bono work, and I do not know of an attorney who would turn away a truly troubled indigent person who just lost the house, car, wife/husband etc. That stated, none of us in Private Practice can do everything for nothing - work for free all of the time!

Because of the downturn and especially the lack of employment people aren't even calling because they feel that they cannot afford the cost of getting "peace of mind". My view of the problem is slightly different. We have accepted payments every week for a year from clients, all the while giving them as much protection as we could from creditors. Most lawyers will do that for people really in need.

Some ground rules apply:

1. Don't come in with your partner and state that you cannot afford our fees because you can't cut back on smoking 2 packs a day each. At $9/pk, that's $36/day or more than $1,000 per month.

2. While I encourage people to come in, I do not expect them to ask me to help them with a bankruptcy THEY are going to file.

3. Some folks will have to file Bankruptcy but do not want to give up they "toys" - the snowmobile, PWC, 4-wheeler, or cut back on the $200 per month cable or satellite bill because of all of the special sports channels and events, or drop the $200/mo cell service and on and on...

Filing for Bankruptcy is to give someone(s) in debt a "FRESH START". It is written that way in the Code and is discussed in cases and in Court. No one expects someone looking for that second chance to sell their soul, but to cut back on smoking, or drop a few cable channels, or give up the "bike" would seem a fair trade. The reality is that in a bankruptcy, where no unsecured creditor is getting paid back anything, you are not allowed to keep the snowmobile and the bike and the...

If you have a house, we can help you find the funds to pay your mortgage by eliminating unsecured debt. You can keep almost all of your personal property and your home, except for things like the PWC for which you are paying $300/month for the next 36 months etc. But clothing, regular furniture, tools, in most cases automobiles (not 4 or 5), RETIREMENT plans including IRAs, and if you are renting or have no equity in your house a reasonable amount of cash/money in the bank. Depending on the situation, maybe even $10,000.

If you have the $10,000 but your debt is $70,000 you cannot pay everyone back if you have $35,000 in income and a child. But, you can either pay a small portion back, and you can pay the legal fees to file the Bankruptcy. It could be a Chapter 7 (no payback) or a Chapter 13 (payback of what you have left as disposable income each month). Or, if you wish, you can give the Trustee the $10,000, less attorneys fees, and have the Trustee distribute what is left to creditors on a pro-rata basis. It is not required, but if you feel that you should pay back what you can afford, the Trustee will certainly oblige. Just be aware that it isn't necessary in most cases.

ADVICE: If you are in debt to a point where you know you cannot make any meaningful payments, call a Bankruptcy attorney. Payment plans can be worked-out, and the initial consultation to find out about YOUR RIGHTS is always "NO COST" here.

Author's Copyright by Richard I. Isacoff, Esq., October, 2011
rii@isacofflaw.com;  http://www.isacofflaw.com