Posts Tagged ‘Bankruptcy Attorney’

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Some Relief For Those Repaying Student Loans

Monday, June 29th, 2009

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

Friday, April 10th, 2009

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

Monday, March 2nd, 2009

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

Wednesday, February 18th, 2009

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

Wednesday, February 11th, 2009

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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House Passes Stimulus Bill, But Without Bankruptcy Provisions

Thursday, January 29th, 2009

The House of Representatives passed the $819 billion stimulus bill on Wednesday, a monster bill that allots money towards major infrastructure, education, health care, & unemployment concerns. One concern it does not address, however, is stemming the tide of foreclosures. From the Colorado Independent:

“Congressional Democrats hoping to use the economic stimulus package to force lenders to refinance troubled mortgages have met an unlikely opponent: President Barack Obama.

Many Democrats, including Obama, have long-supported the strategy of empowering bankruptcy judges to alter the terms of primary mortgages to prevent foreclosures. But White House officials have said they don’t want the bankruptcy provision in the stimulus bill for fear of alienating Republicans, most of whom oppose the change…Housing advocates have long-pushed to empower bankruptcy judges to reduce, or “cram down,” the balance of primary mortgages, as well as other terms of the loans, to keep homeowners from suffering foreclosure. That legal avenue is currently available for loans on commercial property, yachts, vacation homes — almost anything but primary mortgages, which were singled out for exception under bankruptcy law.”

Although both President Obama and Speaker of the House Nancy Pelosi have made it known that bankruptcy reform is a priority, and that they will make sure to attach bankruptcy reform provisions to a bill that is a “sure-fire” pass, it is unclear how many homes will foreclose in the meantime — and how many more residents of Orange County will seek a bankruptcy attorney because of it.

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Citigroup, Senators in Talks to Let Bankruptcy Judges Modify Mortgages

Thursday, January 8th, 2009

From DSnews online:

“New York-based Citigroup Inc. endorsed the proposed Senate bill that would give bankruptcy judges the power to modify mortgages with so-called ‘cramdowns,’ to force lenders to lower the burden on homeowners on Thursday, according to a story in The Wall Street Journal.

The “Helping Families Save Their Homes in Bankruptcy Act” was reintroduced to the Senate earlier this week by Illinois Democrat Sen. Dick Durbin, the Senate’s second-ranking Democrat. Durbin’s been working on the legislation for more than a year.

The deal, Senate staffers told The Wall Street Journal, is likely the first of several measures being crafted this year that propose to trim the principal owed by homeowners underwater on their mortgages.

‘This is the breakthrough we’ve been waiting for, to have a major financial institution support this legislation will create an incentive for others to come our way,’ Durbin told the Journal. ‘I want to congratulate Citi for being open-minded about this [and] playing a major leadership role.’

As written, the bill would allow judges to:

– Extend the length of repayment to lower monthly payments
– Replace variable interest rates with fixed rates
– Waive the bankruptcy counseling requirement for homeowners facing foreclosure to get homeowners in court faster
– Allow judges to waive prepayment penalties
– Maintain debtors’ legal claims against predatory lenders while in bankruptcy

A new component, added as a concession to lenders, would eliminate consumer loan forgiveness for lenders who have violated the Truth in Lending Act during bankruptcy proceedings, and would only subject lenders to fines.

Now that Citigroup has endorsed the deal, lawmakers hope other financial institutions will also offer their support. According to the Journal, some banks have indicated they would support the bill, marking a change of position for the industry, which previously argued cramdowns would raise the cost of mortgages for all buyers and overwhelm bankruptcy courts.”

Bankruptcy judges, and every bankruptcy attorney worth his salt, are hoping this measure passes, for the sake of millions of bankruptcy mortgage holders, thousands of whom live in Orange County. As Orange County bankruptcy attorneys can attest, the Santa Ana Bankruptcy Courthouse has seen it’s fair share of cases that could have been helped by this legislation. Here’s hoping Citibank leads the charge to finally get it done, and finally stem the tide of foreclosures in Orange County and across the country.

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