Bad faith in a Bucks County Bankruptcy

I have represented many people in Bucks County who have filed bankruptcy more than once.  Due to significant life changes (i.e. death of a spouse, divorce, loss of job), individuals turn back to bankruptcy for relief. 

In a Bucks County Chapter 13 case, an individual may have multiple filings.  Sometimes, the Trustee will request a "Consent Order", which an individual would sign that acknowledges that any future filings must be granted by a bankruptcy judge. 

Tomorrow, I am appearing in court for an individual where the Trustee is requesting a Consent Order.  I have advised my client to not agree to signing the order.  As an advocate for my client, I have to make sure that the client does not waive certain rights.  In this case, I don't want my client to "handcuff" their future if this bankruptcy goes through.  As a Bucks County Bankruptcy lawyers, we have to make sure they are put in the best position to protect their financial future. 

Of course, you have to know the case law surrounding "what is bad faith" in refiling a bankruptcy.  The seminal case in the matter in the United States Bankruptcy Court Eastern District of Pennsylvania is In re Richard Legree.  Legree involves a debtor with a history of at least 10 prior filings over 18 years.

The court indicated that many factors must be weighed under the "totality of the circumstances", including:
 

• The nature of the debt.
• The timing of the petition.
• How the debt arose.
• The debtor’s motive in filing the petition.
• The effect on creditors.
• The debtor’s treatment of creditors pre- and post-petition.
• Whether the debtor has been forthcoming with the bankruptcy court. 
• The length of time between the prior cases and the present one.
• Whether the successive cases were filed to obtain favorable treatment afforded by the automatic stay.
  The effort made to comply with prior case plans.
• The fact that Congress intended the debtor to achieve its goals in a single case.
• Any other facts the court finds relevant relating to the debtor’s purposes in making successive filings.
• Was there a material change in the debtor’s circumstances since the previous filing that warrants a fresh start?
• Can the debtor show a confirmable and feasible Chapter 13 plan?
• Does the debtor’s history of past filings reflect an intent to abuse the bankruptcy process through a strategy of successive filings without any real reorganization effort?

The judge in Legree prohibited the debtor from filing a bankruptcy for one year.  In my case tomorrow, my Bucks County client's specific history indicates a tremendous lack of bad faith.  As such, after weighing his case against Legree, I am confident we will prevail. 

Big News: New Firm, Same Results

As of April 22, 2013, I will be departing my current firm and moving to Gallant & Parlow, PC, a highly-rated Bucks County law firm that is home to some Super Lawyers. I will continue as a Bucks County Bankruptcy lawyer.  As the years continue on, I am so happy to look back and see all the lives that I have changed for the better through bankruptcy. 

As I tell most of my clients, "No one ever wants to see me."  But, the power of bankruptcy can fix a major source of frustration for people:  debt.  It can get rid of oppressive debt that impacts marriages, one's health, sleep, children, and work.  I am honored to proved a "fresh start" through a Bucks County Chapter 7 or 13.  As I receive thank you cards and holiday cards, it makes me proud to make a difference in so many people's lives.  Thank you for choosing me and thank you for inviting me into your lives during your most difficult times. 

Very Honored with My New Award - Client's Choice Award

Lawyer Paul Lang | Lawyer Bankruptcy

Lawyers in "Hot Water" over mortgage modifications

A few years ago I looked into offering mortgage modification services to my Bucks County bankruptcy clients.  Frequently, my clients were attempting to modify their mortgages, but either had a poor experience with a company or lawyer who assisted them or they were unable to achieve a modification on their own. 

I knew there were some snake-oil salesmen promising modifications and I thought there could be a better way.  What I learned after exhaustively researching mortgage modifications, was that there is limited benefit a service or lawyer can provide.  Essentially, as one U.S. Trustee mentioned to me when I was representing a Bucks County Chapter 7 client, "It comes down to diligence and persistence."  She was right. 

My determination is that if someone needs their hand held through the process to meet deadlines and submit paperwork, then they should use a company for their modification.  But, they can easily do it themselves if they are diligent and persistent.  What this means is that a person must submit timely documents to the mortgage company (i.e. paystubs, bank statements) and follow-up with their point-of-contact.  Paperwork seems to get lost frequently during modifications, so the follow-up is key. 

This all leads me to the article in today's Wall Street Journal.  "Lawyers Land in Hot Water" highlights the alleged fraud lawyers have been committing in over-promising and fraudulently marketing mortgage modifications.  The article states that there are approximately 11,000 mortgage complaints involving attorneys received from California's bar since early 2009.  And that's in California only! 

The takeaway from all of this is:  Buyer Beware.  Mortgage modification is hot.  Homes are underwater and unemployment is high.  This makes for a perfect storm for people to seek some mortgage relief.  But, remember that it may be best to pursue this avenue on your own, rather than rely on the promises of a company or an attorney. 

Fees in a Bucks County Bankruptcy - Chapter 7

The credit to this picture comes from a bankruptcy listserv of which I am a member which then attributes the picture to Reader's Digest.  

Attorneys fees should always be discussed with your Bucks County bankruptcy attorney at the first consultation.  The filing fee is $306 for a Chapter 7 bankruptcy in Bucks County, which is set by the U.S. Trustee. 

After discussing legal fees, a client must understand that those fees must be paid prior to the filing of the Bucks County bankruptcy.  A Bucks County attorney cannot be considered a "creditor" under bankruptcy law.  Therefore, any payment plan arrangements must be satisfied prior to filing the Chapter 7 bankruptcy in Bucks County. 

Finally, each Bucks County attorney is required to file a statement with the bankruptcy petition outlining the legal fees (not including the filing fee) received from the client.  This is to ensure ethical behavior and transparency in the attorney. 

Bucks County Bankruptcy and Student Loans

I recently blogged about student loans and bankruptcy.  It appears that the NY Times is becoming the "voice" for individuals burdened with tremendous student debt against the "accounts receivable management" industry, aka ARM.

Specifically, this Sunday's Times tackles the collection efforts (and bounties) companies are seeing through student loan collections.  Here's the most shocking number,

As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years.

In all, nearly one in every six borrowers with a loanbalance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials.

 The secret gem in the article, highlights a little-known secret for those in default on student loans and for those who a Bucks County bankruptcy is not an option:

Introduced in 2009, income-based repayment was supposed to help change that by allowing borrowers with high levels of debt but modest incomes to make relatively small payments over a long term. But many borrowers were never told about the income-based option, and many others have been frustrated by the onerous requirements. So far, 1.6 million borrowers have applied for income-based repayment; 920,000 are active participants and another 412,000 applications are pending.

 Thus, it makes sense to consider requesting an income-based repayment plan if the creditors are hounding you.  It is not as lucrative for the "sponge-squeezing" collectors, but that's their problem.

Frequently, student loan debt and inability to repay such debt coincides with credit card debt and/or mortgage foreclosure in Bucks County.  If you need Bucks County bankruptcy help, please do not hesitate to contact me for a free consultation.

Will getting a cosigner for a loan help my credit rating after a Bucks County bankruptcy?

Once someone has completed their Chapter 7 or Chapter 13 Bucks County bankruptcy, credit repair is on everyone's mind.

One major way to improve your credit score is to get a cosigner for a loan.  If you get a cosigner and make your loan payments on time it will certainly improve your standing with the credit rating companies.  But the larger problem is asking someone to cosign with you as that person becomes equally responsible for the loan, even if the intent is that you alone will make the payments.  Many a friendship has been lost over cosigning after credit reports start suffering.

Consider what will happen if something unfortunate occurs and you are unable to make the payments.  Your cosigner then needs to step forward, even though  that was never the original intention. His or her credit rating is in jeopardy if he/she doesn’t make the payments in addition to your credit rating.  Think of the long term consequences very hard before deciding on a cosigner. After you finish your bankruptcy with a Newtown, PA bankruptcy lawyer, you should make a list of potential cosigners and determine your debt capacity to make sure everyone is satisfied.