Introduction to Bankruptcy for Individuals in Phoenix and Tucson Bankruptcy is often a confusing subject. As with most issues involving the law, it can be hard to dig through all the legal jargon used. Especially when you’re feeling stressed about your finances, it can be even harder to understand the process. We’re here to walk [...]

Creditors Should Not Call Creditors should not be calling you after your bankruptcy case is filed.  In some cases, creditors just have not received the required notice under the Bankruptcy Code.  In some cases, notice has gone to the proper address, however, there is a collection firm involved now who did not have knowledge of+ Read MoreThe post Chicago Bankruptcy Attorney David Siegel Advises That During A Bankruptcy Case, Creditors Should Not Be Calling appeared first on David M. Siegel.

Here at Shenwick & Associates, our practice is limited to bankruptcy and real estate. So the intersection of the two, distressed real estate, is our specialty. Many homeowners are suffering from the triple threat of stagnant wages (or unemployment), depreciating home prices and burdensome monthly mortgage payments. Some homeowners have been fortunate enough to have their lenders restructure their mortgages. And others (who are not so fortunate) have had their homes foreclosed on, and have had some or all of their mortgage debt forgiven. But, as with most good things in life, there's a catch. Under § 108 of the Internal Revenue Code, debt relief is considered "relief of indebtedness income" and subject to taxation. In 2007, The Mortgage Forgiveness Debt Relief Act of 2007 (the "Act") was enacted, which generally allows taxpayers to exclude up to $2 million (jointly) or $1 million (if single or married and filing separately) of income from the discharge of debt on their principal residence. Both debt reduced through mortgage restructuring and mortgage debt forgiven in connection with a foreclosure qualify for the relief. The Act applied to debt forgiven in calendar years 2007 through 2012, and was due to expire on Dec. 31, 2012. As part of the negotiations to avoid the "fiscal cliff," Congress extended its provisions to debt forgiven in 2013. The Act doesn't apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home's value or the taxpayer's financial condition. The Act also doesn't apply to credit card debt or non–residential property. A Chapter 7 bankruptcy filing can discharge debt owed to taxing authorities due to relief of indebtedness income. For strategies on dealing with distressed real estate or avoiding the potential pitfalls associated with relief of indebtedness income, please contact Jim Shenwick.

The“Who’s On First” problem of lien strip service haunted my weekend at the Sacramento Bankruptcy Forum and the week that has followed back in the office. As one judge so kindly pointed out, if it turns out your service of the lien strip motion was inadequate, it will be the debtor’s attorney in the cross hairs. Thanks, judge. Where most bankruptcy issues are relatively small dollar value problems, second mortgages range from tens of thousands of dollars to hundreds of thousands of dollars. Get tagged with screwing this up and you (and your carrier if you have one) are toast. My game plan The unknowns, as I see it: 1) whether good service on the servicer binds the actual owner of the obligation;  and 2) how are you supposed to flush out who actually owns the note to serve them. Since only time and appeals courts will give us the answer to the first question, I’m tackling the second. Completed motions When a mortgage creditor files a proof of claim, you get some bread crumbs in the search for the note’s owner.  But pretty uniformly these days, we are expected to file motions to value collateral before the claims bar date passes. For the cases where I’ve gotten orders valuing collateral, I have some time. I plan to audit the claims register for any claims filed after my motion.  If new players turn up, I’ll serve them with the motion and order, and file a certificate of service. If it appears that it was a servicer who got the motion, I envision a Qualified Written Request . My experience with QWR’s has been that they are slow (60 business days for a response).  Finding the QWR address for the institution is only marginally easier than intuiting who holds the note.  And recipients have no commitment to being forthcoming. (Other than that, it’s a marvelous tool!) In the past, I have not served the beneficiary of the recorded security interest.  I am inclined to go back and do so.  I want to build the argument that if the true holder of the interest in real property can’t be bothered to make their interest part of the public record, why is that my client’s problem? And I’m considering recording the orders that come out of the motion to value, not because they are definitive, but again to trigger the laches defense, in the future. “The debtor’s attempts to void your lien have been public knowledge for X years, Mr. Holder.  Why aren’t you bound to defend your position if you claim to have had no actual notice?” Our Bay Area courts have sometimes taken the position that vesting at confirmation removes the debtor’s property from the estate and deprives the court of jurisdiction. Asked about going back and correcting lien strip errors, one judge suggested modifying the confirmed plan to revest property in the debtor, then bringing an amended motion. New cases Going forward, I plan on embracing Rule 2004 .  It’s hard to imagine language that is broader: On motion of any party in interest, the court may order the examination of any entity. I have some concerns about geography and the  need to get a subpoena from the court where the witness does business. My thought is to see if the court will make an order for either an  examination on a written interrogatory, or a production of documents by mail. I don’t want to be trekking to where ever the servicer is, or calling on friends in far off places to get the frigging banks to tell me who should care about my motion. I’ll report back on how it works. Judge Ludin reported that he was itching to be presented with a motion under §342(f),  seeking to require the banks designate an address for service within his district.  Anyone? Now, I’m for some shut eye. Image courtesy of DVIDSHUBS

This is the case of Michael Greer who comes from Park Ridge, Illinois seeking advice concerning debt.  Mr. Greer has never filed for bankruptcy before.  He is not a homeowner and he is currently renting from an individual on a month-to-month basis.  He has a 2004 Lincoln Navigator that’s worth approximately $12,000 and he owes+ Read MoreThe post Bankruptcy Attorney Recommends Chapter 7 For Illinois Man appeared first on David M. Siegel.

When you are struggling with your bills and in need of a bankruptcy attorney, where do you turn first?  For most people, they will search the internet to gather information.  There is a wealth of information available regarding the different Chapters under the bankruptcy code as well as a plethora of attorneys ready, willing and+ Read MoreThe post Choosing The Right Bankruptcy Attorney In Illinois appeared first on David M. Siegel.

Speak now or forever hold your peace. Or suffer in silence, is more like it. Comment period for the proposed new bankruptcy forms closes February 15th. That’s a week from tomorrow. Have you had your say? I’ve extracted the new I, J, and elements of B22  from the pdf on the court’s site to make them easier to find and analyze. Form 6 I Form 6 J Form 22 A 1 Form 22A 2 MT calc Form 22C-1 Form 22C-2 Submit comments The process for new forms includes an opportunity for public comment.  Everyone I have ever talked to who’s been involved in the process emphasizes how carefully comments are considered. You can submit your comments by email to [email protected] or by snail mail Committee on Rules of Practice and Procedure Administrative Office of the United States Courts One Columbus Circle, NE Washington, D.C. 20544 What do you think?  Are these forms an improvement? Or just a change? How would you do it differently? Image courtesy of Leo Reynolds.

This is the case of Randolph Booker who lives in Warrenville, Illinois, DuPage County Illinois.  Mr. Booker has never filed a bankruptcy before.  He is not a homeowner and he lives with family so technical no landlord/tenant situation.  He has a 2011 Nissan Pathfinder that is financed by Nissan Motor Acceptance.  He is current on+ Read MoreThe post Chapter 7 Bankruptcy Recommended For Randolph Booker appeared first on David M. Siegel.

There are several factors that can affect the cost to file for bankruptcy in Illinois.  The first factor is which Chapter of the bankruptcy code are you filing under?  If you are considering filing a Chapter 7, then you are going to have a fixed cost known as the filing fee.  At the time of+ Read MoreThe post What Is The Cost To File Bankruptcy In Illinois? appeared first on David M. Siegel.

Under either chapter 7 or chapter 13 bankruptcy, you must list all of the people that you owe money to.  This includes credit cards that you want to keep, friends that lent you money, family members that lent you money and anybody else that you owe.  The one exception to this would be with regard+ Read MoreThe post Do I have to list everyone that I owe money to? What if I want to keep a credit card? appeared first on David M. Siegel.