Feb 19
Bankruptcy GuideUncategorized
Client’s mortgage company (M1) went bankrupt and was bought out by new mortgage company (M2). Client’s last payment to M1, right before C got notice of the transfer to M2, has been tied up in the BK process for 6 months. Apparently M2 cannot access records showing that this payment was made and received until the bankruptcy is settled or progresses. C has been getting notices of deficiency for the missed payment, but the letters also say that this won’t be reported to credit bureaus and that once M2 gets access to all records and payments M1 received, any errors will be corrected. Yet the deficiency letters keep coming. Start by sending a Qualified Written Request under RESPA. If no response within the statutory timeframes, debtor has a cause of action regardless of servicer’s problems with its records. Failure to credit a payment may be a violation of state collection practices or unfair and deceptive acts laws. C has canceled checks or other solid evidence that the lost payment was made. What’s strange is that M2 recently sent a letter offering to correct statements mailed out showing interest payments (for tax purposes) if C could present certain types of evidence that the statement was incorrect. No such offer has been made on the mortgage payment itself. M2 has simply said it will be corrected once it can access M1′s records.
Feb 13
Bankruptcy GuideUncategorized
The reality is that most court clerks won’t know what to do with a stay notice from the bankruptcy court unless it specifically has the caption of the state court case with the case number and proof of service to the other parties in the action. I’ve had this discussion with local state court clerks and the refuse to speculate whether or not bankruptcy stay notice applies to a particular case and I can see their point. If someone named John Smith files for bankruptcy, I don’t necessarily think they need to look up every single lawsuit filed by John Smith to see if the stay applies. One case in particular is tricky and, for a number of reasons, I want to not only give stay notice but also file a suggestion of bankruptcy. (Opposing counsel doesn’t “get” the importance of the stay but it isn’t in my client’s best interest to hit opposing counsel over the head right now so I want the District Court judge to be made aware of the bankruptcy.) I think the “suggestion of Bankruptcy” form is really a matter of local practice. When I encounter such a situation I simply mail the court a letter referencing the case before it, giving the filing info(date filed, docket #, chapter)and stating that the civil matter is stayed pursuant to 11 USC 362 withj cc top opposing counsel.
Feb 11
Bankruptcy GuideUncategorized
I have a PC who was sued years ago for a car accident he was involved in. The other driver ended up dying and the PC was sued for wrongful death. Long story short, the insurance company disclaimed and the PC defaulted and a judgment in the amount of a few million was entered against the PC. PC has no assets and very little income. He wants to file for bankruptcy. As long as PC was not intoxicated and it was not an intentional act, it can be discharged with the bankruptcy filing. Drunk driving judgments are in the same category as tax debt and student loans with regard to dischargeability in bankruptcy.
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