Thursday, August 15, 2013

When and Why do people file a Chapter 13 Bankruptcy

There are 3 kinds of bankruptcies that individuals can file. Chapter 7, 11 & 13.

Today we will discuss why people file a Chapter 13 bankruptcy.
Chapter 13 Bankruptcy is a "Reorganization" bankruptcy. Reorganization means that you will pay some or part of your debts back. How much you will pay depends on various factors: Income, Assets, etc.

People file a Chapter 13 bankruptcy for one or more of the following reasons:

1. An intense desire for moral or personal reasons to pay back some of the debts.
2. To save or protect an asset or assets [cars, homes, personal property..stocks, bonds, etc.]
3. When one is not qualified to file a Chapter 7 because of high income or because the person has already filed a Chapter 7 earlier and received a discharge in the prior bankruptcy.
4. To deal with IRS tax issues.

Chapter 13 is a procedure for individuals with a regular source of income to reorganize their debt while under the protection of the Bankruptcy Court. Chapter 13 is similar to chapter 11, except, that its procedure is greatly streamlined and the creditors do not get to vote on whether the chapter 13 plan of reorganization is approved.

There are two primary situations where Chapter 13 is used the most. The first is to use Chapter 13 to stop a mortgage foreclosure and to propose a plan to catch mortgage payments over a period of time, i.e over 36 to 60 months. The filing of a chapter 13 case stops any foreclosure action and gives you an opportunity to catch the mortgage payments up-to-date over a 3-5 year plan. As part of the plan, your credit cards and other unsecured debt are put on hold and these creditors are paid a very small percentage (10 to 20%) over the life of the Plan, depending on your disposable income or the value of your non-exempt assets, also known as the “liquidation test, ” at the end of which time, these debts are completely forgiven.

Debts debts incurred through fraud cannot be discharged in a Chapter 13 Bankruptcy. However, the creditor has the burden of proving that you have committed fraud.

A Chapter 13 bankruptcy must be filed before your house is actually sold at a foreclosure sale. Once your house is sold at the Courthouse steps, it is usually too late to file a bankruptcy to save that property. You can still file a bankruptcy to get rid of the deficiency on that property.

The other major use of Chapter 13 is by individuals who do not have mortgage problems, but who are behind with their credit cards, loans, medical bills, and other unsecured debt, but for some reason cannot file a Chapter 7 (the usual reason is that these Debtors have previously filed and received a Chapter 7 in the last 8 years). In such cases, a chapter 13 plan is proposed with monthly payments over 3 to 5 years sufficient to pay in a typical case around 10 to 20 cents on the dollar. If a person has a lot of ”non-exempt” assets, the monthly plan payment will be a little higher, but still affordable to most people.

The payments under a chapter 13 plan are made on a monthly basis to the chapter 13 trustee, who then distributes the funds to all the creditors. The Bankruptcy Court requires that the monthly plan payments come directly from your wages. Therefore, a Wage Deduction Order is signed by the Bankruptcy Judge which instructs your employer to send money from your wages directly to the Chapter 13 Trustee. In some cases the Wage Deduction Order can be waived. This happens if you are working in the financial industry or you have a good faith belief that your job may be jeopardized if the employer finds out that you have filed a bankruptcy or employees working strictly on commissions and piece meal or as temps.

What will be my Plan Payment to my unsecured creditors [credit cards, medical bills, etc.]

How much you will pay to your unsecured creditors depends on various factor:

1. You have to make a good faith payment to your unsecured creditors. you cannot pay them $0.00.

2 . Income. You have to pay at 90% of your disposable income to your creditors. Gross Income minus Reasonable and Necessary Expenses equals Disposable Income.

3. Liquidation Test: If the Trustee were to take your non-exempt assets, and liquidate them for cash, how much money will be able to be distributed to the unsecured creditors. You have to pay at least that amount to your unsecured creditors through the Chapter 13 Plan.

4. A new formula is the CMI disposable income formula. We will discuss this later in another blog.

Whatever yields the most and the highest distribution to your creditors..is what you will pay through the plan. So if item # 2 yields $6,000, however, item # 3 will yield $10,000, then you will pay $10,000 through the Chapter 13 Plan to your unsecured creditors.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices.

If you have questions on this Program, please call me at 954-358-5911.

MY MISSION:
I am very passionate about helping consumers protect their rights, and my goal is to compassionately and passionately help people reorganize their debts, help them keep all or most of their property, save their homes from Foreclosure, stop wage garnishments, and assist people to “get a fresh financial start”. I am available to assist and advise you on how to rebuild your credit and buy the new house or start the new business that you always wanted to. This is a small law firm, and as such, can and does provide personal service, professional representation, and follow up. If you would like to learn
more about your options, contact me as soon as possible for a FREE INITIAL CONSULTATION so
that I can assist you through these difficult times. I also offer an affordable payment plan for legal fees.

Elias Leonard Dsouza, Esq.
"The best compliment you could ever give me is a referral."
A CONSUMER RIGHTS PROTECTION LAW FIRM
LIFE IS SHORT. GET RID OF DEBTS !!!
"Life is Short. Get Rid of Debts"
111 N. Pine Island Rd., Suite 205
Plantation, Florida 33324
Phone: 954-358-5911
Fax: 954-357-2267
www.DsouzaLegal.com
Skype: elias.leonard.dsouza
Skype: 954-762-7608
Http://Facebook.com/Elias.Leonard.Dsouza
Blog: http://dsouzalegal.blogspot.com

Tuesday, August 13, 2013

Court Rules Borrowers Can Fight Bank's Decision to Deny Modification

Homeowners who are denied a modification under the Home Affordable Modification Program (HAMP) even after completing a trial period plan (TPP) have legal standing to sue their lender, the 9th U.S. Circuit Court of Appeals in San Francisco ruled Thursday.

The ruling reversed a lower district court dismissal that concluded Wells Fargo was not required to offer borrowers a modification if the bank did not send a signed modification agreement.

The federal appeals court decision, however, ruled that Wells Fargo actually was contractually required to offer the plaintiffs a permanent mortgage modification since the plaintiffs submitted accurate financial documents and completed their trial period plan.
“The panel held that the district court should not have dismissed the plaintiffs’ complaints when the record before it showed that the bank had accepted and retained the payments demanded by the TPP,” the court opinion stated.
The ruling was based on two lawsuits from borrowers who filed separate actions against Wells Fargo. In Corvello v. Wells Fargo Bank, NA and Lucia v. Wells Fargo Bank, NA, the plaintiffs alleged that the bank offered them a trial period plan with the promise of a permanent modification, but after they completed the trial, the bank did not offer them a permanent modification or send them a notification of ineligibility.
The panel in the federal appeals court also cited a prior case, Wigod v. Wells Fargo Bank, NA, in its ruling. In Wigod, the 7th Circuit Court of Appeals found Wells Fargo’s interpretation of the trial period plan could allow banks to avoid obligations to modify borrowers simply by deciding not to send a signed modification agreement even if the borrower submitted accurate financial documents and the required trial payments.

This Article is from the DSNew.com

By: Esther Cho

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices.

New Loan Modification Mediation Program introduced in the U.S. Bankruptcy Court Southern District of Florida

On April 1, 2013, the U.S. Bankruptcy Court for the Southern District of Florida unveiled a new Loan Modification Mediation [LMM] Program through a Chapter 13 and Chapter 11 Bankruptcy.

If you have ever applied for a Loan Modification, you know how frustrating the loan modification process is. You are probably familiar with the the following situations:

1. Dealing with multiple bank representatives and getting no results.

2. Lost paperwork.

3. Repeated request for the same documents over and over again.

4. Modification Denials without giving a specific reason.

The New Loan Modification Mediation Program through a Chapter 13 and Chapter 11 Bankruptcy removes all of the above hurdles. This Program has been in use in the Orlando district and has had a 73% success rate. The possibility of getting a Loan Modification on your primary home or even an investment property is much greater through the Bankruptcy Court's LMM Program.

Here are some of the highlights of the LMM Program

There is ACCOUNTABILITY, and a Bankruptcy Judge oversees the process. Here is what you get under this New Program:

1. No more lost documents because all documents are uploaded on a Internet Portal for all parties to review and make a decision. Parties include the Lender, Homeowner, and the Mediator. The portal is safe, and the general public cannot access your personal information.

2. The Bankruptcy Judge enters Orders where the duties of all parties are clearly spelled out, and if the parties [including the homeowner] fail to do what they are supposed to do, the Court can issue sanctions.

3. Banks have to mediate in “good faith” and have to give you a reason if they expect to deny the Loan Modification.

4. You do not have to deal with multiple bank representatives.

5. The Mediator acts as a facilitator to help You in the Loan Modification process.

6. If you are denied a Modification, you can have a second bite at the apple, and request another mediation if circumstances [financial] have changed.

7. You are allowed to do a “short sale” of the property and waive the deficiency through this program.

8. You can do a “deed in lieu of foreclosure” through this Program and be discharged from all liability on the mortgage.

YOU ARE QUALIFIED EVEN IF YOU HAVE FILED A PRIOR CHAPTER 7 OR A CHAPTER 13 BANKRUPTCY AND RECEIVED A DISCHARGE.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices.

If you have questions on this Program, please call me at 954-358-5911.

MY MISSION:
I am very passionate about helping consumers protect their rights, and my goal is to compassionately and passionately help people reorganize their debts, help them keep all or most of their property, save their homes from Foreclosure, stop wage garnishments, and assist people to “get a fresh financial start”. I am available to assist and advise you on how to rebuild your credit and buy the new house or start the new business that you always wanted to. This is a small law firm, and as such, can and does provide personal service, professional representation, and follow up. If you would like to learn
more about your options, contact me as soon as possible for a FREE INITIAL CONSULTATION so
that I can assist you through these difficult times. I also offer an affordable payment plan for legal fees.

Elias Leonard Dsouza, Esq.
"The best compliment you could ever give me is a referral."
A CONSUMER RIGHTS PROTECTION LAW FIRM
"Life is Short. Get Rid of Debts"
111 N. Pine Island Rd., Suite 205
Plantation, Florida 33324
Phone: 954-358-5911
Fax: 954-357-2267
www.DsouzaLegal.com
Skype: elias.leonard.dsouza
Skype: 954-762-7608
Http://Facebook.com/Elias.Leonard.Dsouza
Blog: http://dsouzalegal.blogspot.com

Monday, December 17, 2012

How will Bankruptcy Improve Your Life !!!

Ways Your Life Will Improve After Bankruptcy !!!

The New Year is upon us. Make a resolution today to get rid of your debts, and start fresh !!!

Here is how a bankruptcy can help you !!!

1. Reduce Stress: Collectors will stop calling you immediately because of the Automatic Stay.

2. Eliminate Debts: Most debts can be eliminated by the filing of Bankruptcy. Remember, a bankruptcy discharge is given to an "honest but unfortunate" person. Certain debts never go away. Call me for details.

3. Stop fights at home: Most divorces takes place because of financial problems at home. Debts causes stress in the relationship. Eliminate debts, and live happily ever after.

4. Save your home: You may be able to apply for loan modification through a Chapter 13 bankruptcy. You can get rid of your second mortgage if you do not have equity in your home. You can reduce the principal owed on an investment/rental property. You can get rid of judgments in bankruptcy.

5. Fresh Start: You get a fresh financial start. Learn from your past mistakes, and be fiscally wise the second time around.

6. Improve your credit score: Initially you score may drop, but in a couple of years it is not unusual to have a credit score of 650 or more. Contact me. I have hints for you to improve your credit score after or even during a pending bankruptcy.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices.

I offer a FREE INITIAL CONSULTATION. Please call me at 954-358-5911.

Thursday, October 25, 2012

The $100 Million Question. I just got served with a Foreclosure Lawsuit. What do I do ??

The $100 Million Question. I just got served with a Foreclosure Lawsuit. What do I do ??

When somebody files a lawsuit, whether it is a bank, your neighbor, or a credit card company, it is the beginning of a "fight." Somebody is trying to fight with you and take something that belongs to you. You have the following options:

1. Don't do anything [I do not recommend this]. Let them throw their arrow at you. You just sit there like a sitting duck, and get yourself killed.
2. You take an arrow from your quiver, and throw it back at them.
3. You find a friend, ask them to take one of their arrows, and throw it back at the enemy.

I recommend options 2 and/or 3. Always fight back or die trying. But never surrender.

Foreclosure is a scary process. I represent a couple of attorneys who are in foreclosure, and attorneys know the legal system, and yet they are scared of losing their homes. I can just imagine what non-attorneys must go through when they are served with a foreclosure lawsuit.

Here are some of the things I recommend homeowners do when they are served with any kind of lawsuit:

1. Doing "nothing" is not an option. It is the moral duty of every homeowner to fight for their home.
2. Read the summons and lawsuit. Never just ignore any legal papers. You have 20 days to file some kind of response.
3. File a response yourself, or consult with an attorney. There are plenty of attorneys who will give you a free consultation. My initial consultation is always FREE. You have absolutely no obligation to retain me. I will spell out in simple language all your options and remedies.
4. Defend the foreclosure lawsuit by yourself or through an attorney.
5. Start talking to the bank to give you a loan modification, principal reduction, interest rate reductions, extend the length of the mortgage, etc.
6 Do a short sale.
7. File a Chapter 13 bankruptcy, and try to get a loan modification through the Bankruptcy.

There are plenty of other options.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. 954-358-5911. www.DsouzaLegal.com.

Friday, September 21, 2012

What Happens After the Meeting of Creditors

The Meeting of Creditors or a 341 meeting is scheduled about 30 days after the filing of the bankruptcy. At that Meeting, the Trustee appointed in your case will ask you some questions. Usually the Meeting lasts no more than 5 minutes unless the case is unusually complicated or there are issues that come up during the questioning.

Creditors usually don't show up. The only creditors that I have seen show up are parents, brothers, sisters, ex-wives, ex-husbands, and sometimes former best friends or business partners. They hate it when you try to get rid of their debts, and they have information on you, and whether that information is relevant or irrelevant, they will spill their guts out to the Trustee.

Many times my Clients are confused, and think that if everything goes well at the Meeting of Creditors, the case is over, and they are now guaranteed to get their Discharge. Discharge, as we know is the legal forgiveness of debt, and is only given to the "honest but unfortunate" Debtor.

After the Meeting of Creditors, Creditors and other interested parties have the right to object to your discharge. Remember, you filed a bankruptcy to get rid of your debts, but other people may have other ideas and may not want you to be legally forgiven of your debt obligations. Why and Who would be objecting to your bankruptcy:

Creditors: they can object if you have committed "fraud." Fraud would be borrowing money knowing that you are never going to pay it back. For example: just days or weeks or even a few months before the bankruptcy, you go on a shopping spree, and use your credit cards like crazy buying everything in the world like paintings, expensive clothes, airline tickets, jewelry, gifts for their children, grand children or significant others, etc. I know of one person whose bankruptcy attorney told them to go and have a good time on their credit cards, and a good time they had. They went on a round the world cruise, and spent $60,000 on their American Express card, and $20,000 on their Chase card [in less than 3 months,] and then as soon as they came back, their bankruptcy attorney filed them in a Chapter 7 Bankruptcy. Wrong move !!! American Express objected to their Discharge, and then the Trustee joined the band wagon. This poor elderly couple never got a Discharge in their bankruptcy.

Trustee: A Trustee can object to your Discharge if he or she feels that you are not being honest, your are not cooperative with documents and records, you are hiding assets, or if you have transferred assets before the bankruptcy, or you are not being truthful about the value of your assets. Did you know that even a defunct..worthless corporation that you have formed is an asset in a bankruptcy. Reason: you own 100% of the shares of that corporation, and when you disclose this corporation on your bankruptcy papers, a Trustee or a Creditor can then inquire about it. But if you fail to disclose this corporation, and the Trustee or a creditor finds out, they will think you are trying to hide something. Not all Trustees will object if some defunct corporation is not disclosed. But there are some who go by the book, and will object for the sake of objecting. And they are well within their rights. The moral of the story is: be honest and disclose. If the timing is not correct, your Bankruptcy Attorney can delay the filing of the Bankruptcy.

U.S. Trustee: The U.S. Trustee works for the Department of Justice, and their job is to make sure that all of us follow the law, and that the filing of your bankruptcy is not an "abuse" of the Bankruptcy Law. The filing of your Bankruptcy may be deemed an abuse if you are making too much money, and that you should be filing a Chapter 13 and paying back some of your debts, or you never made enough money but you owned millions in assets. The U.S. Trustee wants to know how did you come to own 15 homes when you have never made more than $30,000 a year in the last 5 years. They may want to see your loan applications to see if you lied on your mortgage applications, and if you did they may turn you over to the U.S. Attorney who may prosecute you for mortgage fraud.

If none of these people/entities object in the 60 days following the Meeting of Creditors, the Court will automatically enter a "Discharge of Debtor" in your case. Once this is entered, your debts are legally forgiven and you now have your "fresh start."

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.Dsouzalegal.com. 954-358-5911

Sunday, September 9, 2012

"TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

A "TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

Any time an "individual" or a "business" files a Bankruptcy, a Trustee is appointed in that case. The United States Trustee who works for the U.S. Department of Justice appoints the Trustee in each and every case. In Chapter 11 Bankruptcies, the Debtor [person or individual filing for Bankruptcy] is the Trustee or Debtor-in-Possession. The U.S. Trustee supervises the Debtor, and if the Debtor mismanages or does not do what he/she or it is supposed to do.. the U.S. Trustee will ask the Court to appoint a Trustee in the case.

The Trustee is your best friend or your worst nightmare.

If you are an honest Debtor, and you follow all the bankruptcy rules (and some of the rules made up by Trustees,) then the Trustee is your best friend, otherwise, the Trustee is your worst nightmare in a Bankruptcy case..more so than your creditors.

One of the the Trustee's job is to collect all your "non exempt" assets, liquidate them for cash, and then distribute the cash prorata to all your creditors after taking out his fees for administration and fees for any attorneys he may have to hire.

Another function of the Trustee is to make sure that you are Honest, and that you are following the rules of Bankruptcy.

Bankruptcy Trustees are highly intelligent and sophisticated people. So don't try to pull a fast one over them. For example, if you live in a home that is worth $500K, and you state in your bankruptcy schedules that you household goods are worth $500..you need to be prepared for an home inspection by the Trustee or one of his staff.

Likewise they will catch you if you have transferred assets before the filing of your bankruptcy. Trustee's don't do all of this stuff from the goodness of their heart. They have a great incentive in finding assets in your bankruptcy...they get a commission based on the value of the assets they are able to collect from your bankruptcy estate. All of the above relates to Chapter 7 liquidation bankruptcies.

In Chapter 13, 12 & 11, the Chapter 13 Trustee does not want of take any of your assets. All the Chapter 13 Trustee does is object to the Confirmation of the Chapter 13 Plan, and that forces you to come up with a value of your own non-exempt, transferred, or undervalued assets, and then pay that much amount through a Chapter 13, 12 or 11 Plan. If you fail to do so, the Trustee can and will ask the Court to dismiss your Bankruptcy.

The moral of the story: In Bankruptcy you are given a "fresh start" not a "head start." A discharge is granted to only the honest but unfortunate debtor. Bankruptcy is also an "equitable" process when the rights of creditors and interested parties are as important as the rights of the person or business filing for bankruptcy. It is a two-way street..give and take.

Your Bankruptcy Attorney is constantly dealing with the whims and fancies of the Court appointed Trustees to make sure that your rights are protected, and that you accomplish your goals through Bankruptcy.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.DsouzaLegal.com. 954-358-5911.