Some Relief For Those Repaying Student Loans

June 29, 2009 · Posted by Alex

From Yahoo news:

“Repaying a student loan could soon be a little less painful.

Starting this week, anyone with a federal student loan can apply for a program, run by the Department of Education, that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.

Eligibility for income-based repayment (IBR) is determined by a person’s income and loan size. A calculator at http://www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.

‘It’s a way to borrow for college without going to the poor house,’ said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.

The program stems from the Education Department’s College Cost Reduction and Access Act, signed in 2007, which authorized the creation of a new income-based repayment plan for both Federal Family Education Loan (FFEL) and Direct Loan borrowers on all Stafford and graduate PLUS loans.

Monthly payments would amount to less than 10 percent of income for most of the estimated 1 million people expected to enroll, experts say. Payments would never exceed 15 percent of any income above about $16,000 a year (or 150 percent of the poverty level).

Those who earn less than $16,000 would not have to make any monthly payments.”

Debtors in Orange County often seek out a bankruptcy attorney to discharge student loans, only to find that many do not qualify to have their student loans discharged in a Chapter 7 bankruptcy.

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Ultra Stores, Inc. Files for Chapter 11 Bankruptcy

April 10, 2009 · Posted by Alex

A jewelry retailer with a store at the Block in Orange and another store inside the Burlington Coat Factory in Huntington Beach had it’s bankruptcy attorney file for Chapter 11 bankruptcy on Thursday on its behalf.

From the OC Register online:

“The company said in the court document that sales at stores open at least a year fell 10.8 percent for the fiscal year ended Feb. 1, including a decrease of 18.9 percent from November to December 2008. Ultra said it experienced weakness in December 2007 that continued through the first half of 2008 and its sales, like those of most other retailers, declined precipitously as macroeconomic conditions worsened during the second half of the year.

Ultra, formed in 1991, said it is one of the country’s leading off-price retail jewelers with 181 locations nationwide. In addition to its stores, Ultra operates jewelry counters at three discount retail department store chains: Burlington Coat Factory, Filene’s Basement and Daffy’s.”

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Bankruptcy Cramdown Bill Hits Snag in House

March 2, 2009 · Posted by Alex

Orange County homeowners seeking relief from bankruptcy judges to modify their mortgages for them and save them from foreclosure are holding their breath, as Congress debates who deserves to receive this kind of help from bankruptcy judges.  Whether or not a bankruptcy attorney has another tool to help Orange County residents save their homes from foreclosure hinges on the outcome of this debate.  Whether you own a home in Irvine or a condo on the beach in San Clemente, this legislation may affect you.

From Yahoo news:

“A dispute among House Democrats stalled legislation Thursday to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners.

The measure, backed by President Barack Obama, is the most controversial part of a broader housing package that had been expected to pass the House this week.

It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill it.

This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes.

But banks want to go much further, restricting the bill only to subprime or other exotic loans.

Centrist House Democrats who have been working in tandem with the financial services industry to scale back the bill balked at supporting it on Thursday after a news report suggested that Sen. Dick Durbin, D-Ill., the lead sponsor of the bankruptcy measure in the Senate, was willing to limit it only to subprime mortgages. The Senate is expected to take up the legislation within two weeks.”

For More Information, click here

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Obama’s New Housing Plan Doesn’t Address Bankruptcy Law

February 18, 2009 · Posted by Alex

Although President Obama’s new housing plan may be “loaded with incentives for homeowners, mortgage servicers, lenders and banks” to modify the loans that are leading so many Orange County residents to foreclosure and bankruptcy, what the plan does not do is address the so-called “cramdown” proposal — that Bankruptcy judges be allowed to modify home loans. This change in bankruptcy law would be a boon for the clients of Orange County bankruptcy attorneys; it would help many Chapter 7 bankruptcy clients keep their Orange County homes. This is not only an issue for homes in lower income Orange County areas like Santa Ana, but also in areas like Irvine and Newport Beach, where homes with outrageously high mortgage payments have been forcing even high income earners into seeking a bankruptcy attorney or leading to foreclosure. The best that can be said about this housing plan, at least with regard to bankruptcy law, is that it does not “rule out” the possibility that a future bill might tackle this issue.

Orange County has been waiting for such a bill for a long time and it looks like the wait shall continue…

For More Information about the New Housing Plan, click here

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Couple That Struck It Rich In Real Estate Files For Bankruptcy

February 11, 2009 · Posted by Alex

Mr. and Mrs. Robert Dyson have been forced into bankruptcy. According to their bankruptcy attorney, the real estate market’s dismal state during this economic crisis was the culprit. As news about record foreclosures and Orange County bankruptcy cases filed (along with other southern California counties), it is not too surprising that the real estate market that had given this couple so much, ended up taking away as much as it gave.

From the North County Times online article:

“A couple who made a name and fortune in high-class coastal real estate have crashed into bankruptcy and are asking a court to erase more than $40 million in debt, including $625,000 that stemmed from alleged misuse of a helicopter loan.

According to court filings, property records and interviews, the couple, Robert and Loraine Dyson, shut down their Solana Beach real estate brokerage, an affiliate of Sotheby’s International Realty, in October. They also filed for personal bankruptcy and have apparently scotched plans to develop an equestrian resort and estates in central Riverside County…

The Dysons’ financial unraveling was as spectacular as their ambition. The couple own a $7 million estate in Rancho Santa Fe and —- until recently —- several other residences in the most exclusive areas of the Southern California coast and the San Jacinto Mountains.

Press releases from their real estate agency reported billions of dollars of annual sales. Their charitable foundation parceled out tens of thousands of dollars.

The Dysons’ slide into bankruptcy followed an attempt to transform themselves from high-end real estate agents into high-end developers at what may have been the worst possible time.

They put some $30 million into property in the foothills of the San Jacinto Mountains starting in late 2005, with plans for equestrian estates that would eventually ramble over nearly 2,500 acres…

They filed for Chapter 7 bankruptcy on Oct. 30, estimating their debts at $50 million to $100 million and their assets at $1 million to $10 million. A debtor who qualifies for Chapter 7 can usually keep a car and other necessities, subject to limits on their value; other assets are sold off to cover portions of the debt, and the remaining debt is wiped away.

The trustee supervising their bankruptcy recommended in December that the couple abandon the Rancho Santa Fe home that they bought in June 2005 because debt and liens account for nearly its entire $7 million value. A later filing by the trustee recommended they give up a $90,000 leased Porsche sports car and their $3.2 million home in Palm Desert, which is in foreclosure…”

Although this couple’s real estate woes lay outside of Orange County, many cities within Orange County such as Santa Ana, Irvine, and Rancho Santa Margarita, are seeing increased foreclosures and Chapter 7 bankruptcies as well.

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