When you have decided to file bankruptcy there are certain issues that need to be determined prior to your filing. As your Arizona bankruptcy attorneys, we will discuss the strategies involved in filing that will be of the most benefit to you and your spouse or family, if applicable. Should Both Spouses File Bankruptcy? […]The post Decisions Made in Setting up Your Bankruptcy Strategy appeared first on Tucson Bankruptcy Attorneys Trezza & Associates.

Can I leave one credit card out of bankruptcy? People ask me that probably twice a week.  The short answer, is, No, you can’t.  You can’t leave one credit card out of bankruptcy. Here’s the long answer. Travis, not his real name, did NOT ask his lawyer.  He just decided, on his own, to leave [...]The post Can I leave one credit card out of bankruptcy? appeared first on Robert Weed.

The honest answer is it depends.  You will certainly have the ability to keep your home provided that you make timely payments.  Allow me to explain.  One of the main benefits of filing Chapter 13 or the main reason why people file Chapter 13 is in order to save their real estate and other property. + Read MoreThe post Will I lose my house in Chapter 13? appeared first on David M. Siegel.

The first post in this series discussed successful and (largely) unsuccessful claims brought against mortgage servicers.   In Ashley Martins v. BAC Home Loans Servicing, LP, No. 12-20559 (5th Cir. 6/26/13)(also discussed in part 1 of this series) and Reinagel v. Deutsche Bank National Trust Company, No. 12-50569 (5th Cir. 7/11/13), which can be found here and here, the Fifth Circuit has an extensive discussion of standing to commence a foreclosure.   In this era of mortgage securitization and MERS, there are legitimate issues being raised about whether the party claiming the right to foreclose actually has the right to do so.  In this post, I will discuss the Fifth Circuit's rulings with regard to "robo-signing" in Martins and Reingagel.  Part 3 will examine issues relating to ownership of the note and deed of trust and chain of title.  Some Relevant FactsIn 2003, the Ashley Martins signed a note in favor of BSM Financial and executed a deed of trust naming  the Mortgage Electronic Registration System (MERS) as the beneficiary of the deed of trust and as nominee for BSM.  I have previously written about MERS here.   In November 2010, MERS assigned the deed of trust to BAC Home Loan Servicing (BAC) by way of an assignment recorded with the County Clerk.    The trustee under the deed of trust (or more likely the substitute trustee) gave notice of trustee's sale.    A foreclosure sale was conducted on April 5, 2011 and the Federal National Mortgage Association (Fannie Mae) purchased the property.   The Debtor alleged that the assignment of the mortgage from MERS to BAC had been "robo-signed."   In May 2006, the Reinagels signed a home equity loan in favor of Argent Mortgage Company.   Argent allegedly transferred the note to Deutsche Bank National Trust Company which contended that it was pooled in a mortgage securitization trust of which Deutsche Bank was the trustee.    Although the loan was allegedly transferred to Deutsche Bank in 2006, documentation of the transfer was not executed until January 2008.   At that time, a person purporting to act as the "authorized agent" of "Citi Residential Lending, Inc. . . . Attorney in Fact for Argent" executed an assignment of the deed of trust to Deutsche Bank and this assignment was recorded with Bexar County.    A second assignment was executed in February 13, 2009 which purported to transfer both the note and deed of trust.   The second assignment was once again signed by a person acting on behalf of Citi Residential Lending.   When the Reinagels defaulted, Deutsche Bank commenced a judicial foreclosure proceeding.   The state court approved the sale.   However, the Reinagels brought suit to enjoin the foreclosure and obtained a temporary injunction.   The case was then removed to U.S. District Court where the Court dismissed the complaint. What is Robo-Signing?In the Reinagel case, the Fifth Circuit described robo-signing as: "Robo-signing"is the colloquial term the media, politicians, and consumer advocates have used to describe an array of questionable practices banks deployed to perfect their right to foreclose in the wake of the subprime mortgage crisis, practices that included  having bank employees or third-party contractors: (1) execute and acknowledge transfer documents in large quantities within a short period of time, often without the purported assignor's authorization and outside of the presence of the notary certifying the acknowledgment, and (2) swear out affidavits confirming the existence of missing pieces of loan documentation, without personal knowledge and often outside of the presence of the notary.Reinagel, p. 5.  Robo-signing has a long history.   Thomas Jefferson complained that King Louis XIV "hunts one half the day . . . and signs whatever he is bid."    Letter from Thomas Jefferson to John Jay (Oct. 8, 1787), quoted in In re Obasi, 2011 Bankr. LEXIS 5011 (Bankr. S.D. N.Y. 2011).   While King Louis's blind signing was limited by his hunting schedule and the use of a quill pen, today's robo-signers, aided by technology, are able to execute hundreds of documents in a single day.Robo-signing allegations have led to enforcement actions brought by State Attorneys General among others.   In one case, Bank of America, Wells Fargo, Citigroup, JP Morgan Chase Bank and Ally Financial agreed to a $25 billion settlement with forty state A Gs.    Diana Olick, Forty States Sign on to Foreclosure "Robo" Settlement.   However, consumers have had a more difficult time advancing robo-signing claims as demonstrated by the Martins and Reinagel cases.  The Court's Rulings  The two courts each addressed different aspects of the "robo-signing" issue.   The Martins Court concluded  simply that "BAC has offered sufficient evidence through its recorded assignment, that it was the rightful holder of the mortgage, and Martins failed to present evidence creating a genuine issue of fact."   Martins, p. 3.    It dismissed the allegation that the assignment was "robo-signed" as "hardly sufficient to maintain a claim for fraud, much less to avoid summary judgment."  The Reinagel court offered a more thorough analysis.   The Debtors sought to challenge the two assignments that were filed.   They challenged the first assignment on the basis that it was executed on behalf of Argent by Dawn Reynolds, an authorized agent of Citi Residential Lending.   However, Citi's agent stated that she was attorney in fact for Argent.   Because the Debtors did not allege facts stating that the affiant lacked authority to act on behalf of either Citi or Argent, they did not state a claim that the assignment was unauthorized.   The Court rejected the notion that the Debtor raised a fact issue merely because a stranger to the transaction claimed to be the attorney-in-fact of the original creditor.    This presents a chicken and the egg problem.   To find out whether Citi Residential was in fact the power of attorney for Argent, it would be necessary to conduct discovery.   However, without specific facts establishing that Citi lacked authority, the complaint did not state a cause of action and it was impossible to conduct discovery. The Debtors did state specific facts with respect to the second assignment.    They alleged that Brian Bly, who signed the assignment on behalf of Citi Residential Lending, was actually an employee of a third-party contractor, Nationwide Title Clearing, and that his signature was scanned into documents and then notarized as an individual.   The court's opinion stated that even if Mr. Bly had fraudulently signed the assignment, this would make the assignment voidable at the election of the defrauded principal, but would not furnish a defense to the debtor.   "Bly's alleged lack of authority, even if accepted as true, does not furnish the Reinagels with a basis to challenge the second amendment."   Reinagel, at 14.The court also dismissed the argument that scanning a signature onto a document that was later notarized as an original document did not render the document "void" as a forgery.  This argument is a red herring. Texas recognizes typed or stamped signatures -- and presumably also scanned signatures -- so long as they are rendered by or at the direction of the signer, and the Reinagels do not allege that Bly's signature was scanned onto the document without his authorization. Moreover, acknowledgments are valid as long as they are made in the presence of the notary and meet certain other formalities the Reinagels do not challenge here; there is no requirement that the affiant affix his signature in wet ink. Finally, even if Bly's acknowledgment is defective counsel for the Reinagels conceded during oral argument "that there is no dispositive law that says [an assignment of a deed of trust] has to be a notarized document." While mortgage assignments must be acknowledged to be recorded, Texas's recording statute protects only subsequent purchasers for value and without notice. That is, while defects in the acknowledgment might prevent Deutsche Bank from foreclosing had a third party purchased the underlying real estate from the Reinagels without actual knowledge of the mortgage,they do not affect Deutsche Bank's rights against the Reinagels. Reinagel, pp. 15-16. In a concurrence, Judge James E. Graves, Jr. questioned this reasoning.  I do not agree that the Reinagels' forgery argument is a red herring. Acknowledging a document at a different time or place than what was in fact the case is included in the Texas Penal Code's definition of "forge." (citation omitted). And forgery makes an assignment void, not voidable. (citation omitted).  I disagree with the majority that, even if the acknowledgment was improper, it did not invalidate the second assignment because assignments  are not required to be notarized in Texas. This is immaterial--regardless of whether Bryan Bly was requiredto sign the original assignment in wet ink or to have his signature notarized, the Reinagels claim that his signature was notarized at a time or place different than where Bly actually was. This satisfies the definition of "forge" under the Texas Penal Code. The Reinagels, however, did not sufficiently plead or brief this argument, having raised it for the first time in their reply brief.  (citation omitted). Because the Reinagels have waived the argument, I concur in the judgment.  Reinagel, p. 24.   The majority opinion did wag a finger at potential robo-signers, letting them know that it was not giving carte blanche for bad behavior. Our holding is a narrow one: we merely reaffirm that under Texas law, facially valid assignments cannot be challenged for want of authority except by the defrauded assignor. We do not condone "robo-signing" more broadly and remind that bank employees or contractors who commit forgery or prepare false affidavits subject themselves and their supervisors to civil and criminal liability.  Reinagel, p. 21.The Significance of Robo-Signing As the Martins and Reinagel cases demonstrate, allegations of robo-signing are not likely to succeed when contesting a lender's chain of title.    As long as there is a chain of title (something that will be addressed in Part 3), the borrower cannot defeat that chain of title with allegations of robo-signing.     While robo-signing is a trendy buzzword, it is important to remember why it matters.   Robo-signing refers to the rote, mechanical signing of large quantities of legal documents without personal knowledge.    For purposes of transferring title, this might be acceptable, assuming that the party had authority to act on behalf of someone who had title to transfer.    After all, if one lender is transferring a thousand loans to another lender, does the person doing the signing really need to review each assignment to make sure that it was supposed to be included in the package?   If the affiant errs, the consequence is that his principal may have given away more than he meant to.    The more troubling circumstance appears where an apparent stranger to the transaction appears and inserts himself into the chain of title.   Would have the Fifth Circuit have been as sanguine if the assignment had been executed by Micky Mouse as attorney in fact for Argent?   What if a known fraudster, such as Bernie Madoff, signed an assignment to himself as power of attorney for the original creditor?   Would this overcome the presumption of facial validity?   Finally, what if Deutsche Bank, who was the assignee in this case, had signed an assignment to itself as power of attorney for the original creditor?   Under the Fifth Circuit's ruling, this would be facially valid in the absence of proof that Deutsche Bank did not actually hold a power of attorney.   Thus, if Deutsche Bank had acquired a portfolio of loans from Argent without obtaining proper assignments, there would be nothing to prevent Deutsche Bank from creating its own chain of title so long as it used the magic words "as attorney in fact for" and the original creditor did not object.   The facially valid rule limits the debtor to raising a challenge where the chain of title is broken or there are two competing parties.   In the Reinagel case, if Citi Residential had signed the assignements on behalf of Argent without adding "as attorney in fact" the chain of title would be broken, or to put it in the Fifth Circuit's terms, the assignment would be facially defective.   Additionally, if both Argent and Deutsche Bank were demanding payment and threatening to foreclose, then the borrower could complain.    It is important to remember that the robo-signing controversy arose from affidavits, not assignments.   When a robo-signer executes hundreds of affidavits without personal knowledge, he is committing a fraud upon the court.     As the Court in Midland Funding, LLC v. Brent, 644 F.Supp.2d 961 (N.D. Ohio 2009) stated:  In finding assertions in the affidavit to be false and misleading, this Court is not concluding that all the information in the affidavit is incorrect. Brent has provided no evidence that the amount of the debt, the fact that it is unpaid, or other vital account information, is false. As discussed infra, the actual account information is probably either correct or likely thought correct in good faith by Midland and MCM (and likely a bona fide error if so).   However, this Court finds that the affidavit as a whole is both false and misleading . . .  notwithstanding the fact that some of the data in it are correct. It is unclear to this Court why such a patently false affidavit would be the standard form used at a business that specialized in the legal ramifications of debt collection.  644 F.Supp.2d at 969.    The Court ultimately found that use of the affidavit was "false, deceptive and misleading" and a violation of the Fair Debt Collection Practices Act.    Id. at 970.This is the real danger of robo-signing. When a creditor requests relief from a court based upon an affidavit signed by a person who, in the Midland Funding case, pulled a stack of affidavits off the printer and signed them without reading them, the creditor is lying to the court.    The difference is that an affidavit made without knowledge or investigation is no better than an unsworn pleading, but has dressed itself up as something authoritative.  Fortunately, the courts do not apply the "facially valid" rule to affidavits.      

There are several things that you should not do if you are considering filing for bankruptcy under either Chapter 7 or Chapter 13.  One of the things that people do which is a prohibited act is repaying a family member or a friend within a year of filing for bankruptcy.  This is known as a+ Read MoreThe post Is there anything I should not do if I’m thinking of filing for bankruptcy? appeared first on David M. Siegel.

Here at Shenwick & Associates, we are seeing a significant uptick in reviewing and negotiating commercial leases. For those who have never leased commercial office space in Manhattan, you need to be aware that the market and leasing terms are unlike any other commercial real estate market in America. Here are seven provisions that all commercial tenants should request when negotiating an office lease in Manhattan. Failing to consider these points can cost a tenant a significant amount of money and aggravation.1. Request free freight elevator usage for move in and move out of the space.2. Make as few alterations to the space as possible. Let the landlord do as much work as possible and request that the landlord not charge the tenant for plan review of the initial alterations for the space. Remember that the sage advice "construction is never on time or on budget" also applies to leased spaces. Tenants also should have the right to make non–structural alterations to the premises without the consent of the landlord. 3. If the tenant alters the space with the landlord's consent, the tenant shouldn't be obligated to restore the space to its original use when the space is vacated.4. Assignment\Sublet. The standard for landlord approval should be "not unreasonably withheld," and the tenant should request the automatic right to assign or sublet the space if it sells the business, goes public, transfers its assets to a related entity or merges with another entity.5. Electricity. There are three ways that landlords charge for electricity in NYC–direct meter, sub-meter and rent inclusion. The cheapest and best option for the tenant is direct meter. 6. Security deposit. The tenant should ask if a Letter of Credit can be substituted for a cash security deposit. If the tenant is required to provide a cash security deposit, the landlord should represent in the lease how many days after the lease expires the security deposit will be returned to the tenant (e.g. 20 days). If the Landlord is asking for more than two months of security, then the tenant should request that if there are no monetary defaults under the lease, the security deposit is reduced to two months of fixed rent after the first year of the lease (this is known as "burn down.")7. The tenant should request the following representations from the landlord; (a) the electrical capacity for the space; (b) that the premises do not contain asbestos or hazardous materials; and (3) that the HVAC, plumbing, bathrooms, electrical and fire panels and sprinkler be in good working order at the commencement of the lease.The above are just a few points or provisions to consider when leasing commercial space, and tenants should always retain an experienced commercial real estate attorney before entering into a commercial lease. Please contact me with any questions. Jim

Chapter 13 bankruptcy can help you in a ton of ways if you are struggling financially.  The first way that Chapter 13 can help you is to save your house.  If you have fallen behind on your mortgage payments because of the loss of job or illness or just unexpected expenses, you can put what+ Read MoreThe post How Can Chapter 13 Bankruptcy Help? appeared first on David M. Siegel.

A creditors’ meeting is required under section 341 of the Bankruptcy Code.  In simple terms, it is a meeting of the minds between the parties present at the meeting.  The parties that will be present at the meeting will be you, the debtor; the debtor’s attorney, and a representative from the trustee’s office.  If you+ Read MoreThe post Information About Debtor’s 341 Meeting of Creditors appeared first on David M. Siegel.

What’s a credit report?  Where do they came from?  What’s a “credit file disclosure?” After bankruptcy, you want to make sure your credit reports will be right.  You want to make sure your discharged debts are showing discharged in bankruptcy; and it doesn’t look like some are still out there.  Having a bankruptcy on your [...]The post The Credit Report You Need is the “Credit File Disclosure.” appeared first on Robert Weed.

Ask a businessman or attorney outside of Wisconsin about Chapter 128. They will probably shake their head or look confused. But ask Milwaukee bankruptcy attorneys or lenders in Wisconsin, and they can tell how Chapter 128 can be a blessing for debtors and lenders. Chapter 128 Process for Businesses Chapter 128 contains two processes that are only found in Wisconsin. The first creates a receivership, with a party appointed (the receiver) to manage a business, sell its assets, pay the creditors, and ultimately liquidate the business or sell it outright. Like a bankruptcy, the filing creates an estate, the business’s assets and the right to receive funds. The receiver acts like a bankruptcy trustee and distributes payments to creditors based on the law’s order of distribution. Administration costs to run the estate; federal, state and local taxes; and employee wages get a higher rank than general creditors who are unsecured and have no liens. Chapter 128 Works for Individuals Too The second process creates a receivership for individuals with incomes. This “amortization of debts” by “wage earners” works like a Chapter 13 bankruptcy, with payments made to a trustee and paid to creditors. But it is limited to 36 months (3 years) and only applies to some debts. For instance, we routinely file Chapter 128 plans to pay credit card debt, medical bills, payday loans, deficiencies for surrendered cars, and old utility bills. Our Milwaukee bankruptcy attorneys at Lake Law advise that this would not be an appropriate way to pay on a car loan or a mortgage. So why choose a Chapter 128 over a bankruptcy? Our Milwaukee bankruptcy attorneys provide some reasoning: Businesses: Creditors can apply to have a debtor company placed into the receivership involuntarily, meaning against their will. They may prefer this to a bankruptcy and get a receiver they trust to get a business under control before the principals sell assets off. Also, the process can be cheaper than a bankruptcy filing. It may be a win-win for everyone, especially if there are only a few major creditors. It provides an orderly way to wind down and save expensive costs of a lawsuit. Individuals: For individuals, Milwaukee bankruptcy attorneys look for specific people to benefit from a Chapter 128. People who have repaid family members or friends over the last year and don’t wish to see that money returned to a trustee, people who have valuable assets they don’t want to surrender to the bankruptcy trustee for sale to the creditors, and people with little or no secured debt (or secured debts completely current) and willing to pay a monthly payment to only deal with specific creditors. As an example, we recently filed a Chapter 128 for a debtor who had paid a relative back for a loan. That relative would probably have been sued by a bankruptcy trustee to get that money back. Also, she had valuable equity in a home and other possessions. She would not have been a good candidate for a Chapter 7, and would have probably paid too much in a Chapter 13 bankruptcy because of her equity. So our Milwaukee bankruptcy attorneys advised her to file a Chapter 128 and pay plan with the most important and pressing creditors. Contact a Milwaukee Bankruptcy Attorney If You Need Clarification Chapter 128s don’t work for everyone. They don’t protect the debtor from all creditors and not every creditor understands what a Chapter 128 is, since it isn’t a bankruptcy. But it is often cheaper and more orderly than a bankruptcy or any other attempt to smoothly liquidate a business. Talk to the Wisconsin attorneys at Lakelaw to see whether a Chapter 128 petition is right for you or your business.