If you have a psychological or physical condition that prevents you from working, you may be eligible for Social Security Disability Insurance (SSDI) benefits. Contrary to common assumptions, your financial resources are not considered when determining eligibility. If you happen to receive a monetary gift from a friend or loved one, your SSDI case will likely remain unaffected. However, things might not be so simple and easy, and you should speak to an attorney. A monetary gift might affect benefits such as Supplementary Security Income (SSI), but it should not affect your eligibility to receive SSDI benefits. SSDI benefits are largely determined based on three factors: your work history, your disability status, and your inability to work. Your financial resources, including cash gifts, are not a factor in determining SSDI benefits. However, if you receive a monetary gift while your application for SSDI benefits is pending, it might raise some red flags with the Social Security Administration (SSA). You should be prepared to prove to the SSA that the monetary gift was not earned income. Remember, if you can earn income, you might be ineligible for SSDI benefits. For a free and confidential review of your situation, call Young, Marr, Mallis & Associates at (215) 515-2954 and speak to our Pennsylvania disability attorneys. How Cash Gifts Might Affect Your Disability Benefits in Pennsylvania Financial benefits or forms of assistance are often complicated. Determining whether you are eligible can be challenging, and many eligible people have a hard time getting approved. While some forms of assistance or benefits are tied to the beneficiaries’ financial situation, like SSI, others are not. If you are applying for SSDI benefits or have been approved for SSDI benefits, your case should not be affected by something like a monetary gift. SSDI benefits are largely based on your work history and disability status, not income or financial resources. Even if you have plenty of money in the bank, you might still be eligible for SSDI benefits. A friend or family member could give you a large monetary gift, and your benefits would likely remain the same. On the other hand, SSI and similar benefits are affected by your access to financial resources, and a monetary gift could impact your eligibility for such programs. This is not an unusual situation. People often receive monetary gifts while their SSDI applications are pending, but they are unable to work. Friends or family might choose to help by giving cash gifts to help pay for ordinary living expenses. Be sure to inform our Philadelphia disability attorneys about any monetary gifts so that we can make sure there is no confusion from the Social Security Administration (SSA). How Eligibility for Disability Benefits is Determined Whether someone is eligible for disability benefits depends on how long they have worked and paid into Social Security, their mental or physical condition, and their inability to actually work. Income and financial resources are not a part of the equation unless they are from earned income. However, if you are applying or SSI, monetary gifts may be a factor in determining eligibility, even if they are just gifts. As such, a monetary gift should not affect your SSDI benefits, but you should be prepared to prove that the money was a gift and not income. Work History First, eligibility for SSDI benefits is based substantially on your work history. According to 20 C.F.R. § 404.130, you must have a sufficient number of “quarters of coverage,” which may be obtained by having employment. How many quarters of coverage you need depends on your age, but people typically need about 40 credits, which account for 10 years of working. However, these credits do not have to be consecutive, but you must have at least 20 from the past 10 years. Cash gifts do not impact how work history is determined. Disability Status Next, the government will consider your disability status. Not every medical condition that gets in the way of working may be considered a disability, at least not for purposes of applying for SSDI benefits. According to § 404.1505(a), your disability must be a condition that prevents you from performing “substantial gainful activity” and is expected to last for at least 12 months or end in death. Put another way, your condition should stop you from working and be long-term. Short-term injuries or illnesses are not disabilities for SSDI purposes. If you are unsure about your disability status, check your condition against the list of qualifying conditions maintained by the Social Security Administration (SSA). There are separate lists for adults and children, and they are quite extensive. These lists cover a broad range of physical and psychological conditions that are considered disabilities. Whether or not someone has a disability is purely a medical determination. How much money you earn or the existence of monetary gifts does not affect your disability status as determined by the SSA. In fact, many people living with disabilities receive monetary gifts from family or friends to help them pay for treatment. Inability to Work Finally, the government must consider your inability to continue working. Specifically, you should be unable to perform substantial gainful activity (SGA). According to § 404.1572, SGA includes work that is both substantial and gainful. Put another way, the work should require mental or physical effort to perform that is done for profit. The work does not have to be particularly difficult. Additionally, profits do not even have to be realized for work to count as SGA. This is where monetary gifts might cause some complications. You must be unable to work in order to qualify for SSDI. If you receive a large monetary gift, or perhaps someone sends you money regularly to help you, you should be prepared to show that this is not earned income. If the SSA thinks you are earning money, your claim might be in jeopardy. For Help Now, Call Our Pennsylvania Disability Attorneys For a free and confidential review of your situation, call Young, Marr, Mallis & Associates at (215) 515-2954 and speak to our Quakertown, PA disability attorneys.

Law Review: Hannah L. Fink, Penalizing Compliance: The Case for Paying Chapter 13 Trustees in the Event of PreConfirmation Dismissal, 41 EMORY BANKR. DEV. J. 105 (2024). Ed Boltz Tue, 02/11/2025 - 15:42 Available at:   https://scholarlycommons.law.emory.edu/ebdj/vol41/iss1/3 Abstract: Standing trustees provide a critical function of fairness in chapter 13 bankruptcy, but a jurisdictional split regarding their fees means that trustees in multiple circuits are not paid for a large percentage of their work. Under Ninth and Tenth Circuit precedents, standing trustees may not collect the percentage fee when the debtor’s case is dismissed before confirmation. This creates a different result for standing trustees as opposed to single-case trustees, hurts debtors and creditors, creates adverse incentives, and even constitutional conundrums. Permitting some debtors to enjoy the benefits of chapter 13 without paying their fair share creates a system where standing trustees must work on their cases, potentially for extended periods of time. Further, trustees risk going uncompensated if the debtor decides he wants to leave chapter 13 or refuses to propose a viable plan for confirmation. When these debtors do not pay the trustee fee, the trustee must find another source to fund her office operations.  Thus, trustees resort to increasing their percentage fee to compensate for these losses, meaning other debtors must pay more to use chapter 13 and unsecured creditors get a lower payout.  The Ninth and Tenth Circuit approaches further create nonsensical incentives where debtors are motivated to draw out the confirmation process as long as possible with no intention of confirming their plan to avoid paying the trustee fee. It also creates an incentive for trustees to confirm plans regardless of their feasibility, working counter to their role as a keeper of fairness in chapter 13. Additionally, by only awarding trustees their fees in the event of  confirmation, a constitutional issue arises due to the trustee’s role as a quasi-judicial officer. This Comment untangles the various approaches courts have taken in awarding trustee fees in the event of pre-confirmation dismissals and delves into the harmful consequences of the Ninth and Tenth Circuit precedents. This Comment argues that standing trustee compensation in chapter 13 should not be denied merely because a debtor’s proposed plan does not pass confirmation muster. Such an approach creates absurd and undesirable outcomes across the board in the chapter 13 system. Rather, courts should endorse the approach of other bankruptcy and district courts that allow for payment of standing chapter 13 trustee fee awards regardless of plan confirmation status. Even better, Congress should settle the issue by crafting a simple amendment to the Bankruptcy Code that resolves this issue entirely.   Commentary: While it certainly would be inaccurate or even absurd to assert that that the failure  to confirm a Chapter 13 never is the fault of the consumer debtor,  it is just as equally flawed to believe that overweening demands, requirements and expectations (occasionally exceeding any statutory requirement) by Chapter 13 Trustees never lead to the dismissal prior to confirmation of cases that would otherwise have been successful.   Perhaps by being mindful of their own pecuniary interests,  Chapter 13 Trustees  would negotiate with an eye towards confirmation,  including the costs and risk of litigation.  Chapter 7 Trustees,  clearly motivated by their own bottom line together with their statutory obligations,  routinely settle matters with debtors,  creditors and third-parties  for less than the maximum potential recovery (but more than the minimum potential recovery),  without an implication that such somehow corrupts or distorts their duties.   Chapter 13 trustees are,  as human beings,  no better or worse than Chapter 7 trustees (or even debtors)  in this regard. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document penalizing_compliance_the_case_for_paying_chapter_13_trustees_in_the_event_of_pre-confirmation_dismissal.pdf (915.96 KB) Category Law Reviews & Studies

4th Cir.: Modern Perfection v. Bank of America- Fourth Order Arbitration Disputes Ed Boltz Tue, 02/11/2025 - 15:40 Summary: Several small  businesses had entered into two separate agreements with Bank of America—one for deposit accounts (which contained an arbitration clause) and one for Paycheck Protection Program (PPP) loans (which did not). When the businesses sued over handling of the PPP loans by Bank of America,it moved to compel arbitration based on the deposit agreements. The district court ruled that the deposit agreements contained a valid delegation clause, requiring an arbitrator to decide the arbitrability of the dispute. On appeal, the Fourth Circuit rejected the businesses' arguments that the arbitration clause was unclear and that the PPP loan agreements negated arbitration.  Under Coinbase, Inc. v. Suski, there are four orders of disputes regarding arbitration: A “first-order dispute” is  a contest over the merits of the dispute whose resolution depends on the applicable law and relevant facts. A “second-order dispute” involves whether the parties agreed to arbitrate the merits of their underlying dispute.  A “third-order dispute”  involves who should have the primary power to decide the second matter—the court or an arbitrator.  A "fourth-order dispute" arises when the parties have multiple agreements that conflict as to the third-order question of who decides arbitrability. The Court of Appeals  ruled that the businesses had not properly raised a fourth-order dispute, which would have required the court to decide which contract governed arbitration. Instead, the businesses' arguments focused on whether their claims fell within the deposit agreement’s arbitration clause, an issue that had been properly delegated to the arbitrator. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document modern_perfection_v._bank_of_america.pdf (154.68 KB) Category 4th Circuit Court of Appeals

Some bankruptcy chapters are more effective than others when tackling certain kinds of debt. If you have defaulted on your mortgage and are facing foreclosure, is there a specific kind of bankruptcy that would best suit your situation? The best type of bankruptcy to stop foreclosure for consumers in Pennsylvania is Chapter 13. This will give you the ability to follow a court-approved repayment plan over three to five years, during which period your lender cannot foreclose. Chapter 7 is generally not nearly as effective in stopping foreclosure, as you might have to liquidate your home to repay the bank what you owe. Even with Chapter 13, indefinitely stopping foreclosure is not guaranteed. Our attorneys will ensure we promptly file disclose all debts, and comply with all the rules associated with a bankruptcy case so you are able to prevent foreclosure and keep your home. For a free and confidential case assessment from our Pennsylvania bankruptcy lawyers, call Young, Marr, Mallis & Associates now at (215) 701-6519. Do All Types of Bankruptcy Stop Foreclosure in Pennsylvania? Different bankruptcy chapters address your debt differently, meaning not all suit debtors facing foreclosure. In fact, filing Chapter 7 might keep your home in jeopardy, forcing you to give it up through liquidation so that you can repay your lender in Pennsylvania. We can ensure you file the appropriate chapter for your situation so that bankruptcy solves your problem and does not exacerbate it. Chapter 13 Chapter 13 bankruptcy is relatively effective in helping homeowners keep their houses while repairing their relationships with their lenders and repaying them. Generally speaking, only debtors who pass the means test qualify for Chapter 13, meaning their income is about the average or higher for a household of similar size in Pennsylvania. Once we confirm you qualify for Chapter 13, we can submit your bankruptcy petition to the court closely followed by our proposed repayment plan. This plan may span three to five years and will be based on your total outstanding mortgage payments, income, current mortgage payments, dependents, and all other expenses. Chapter 13 is effective because it enables debtors to keep their assets, including homes at risk of foreclosure. Chapter 7 On the other hand, Chapter 7 is for debtors whose incomes aren’t high enough to repay creditors, even with the help of court-approved repayment plans, automatic stays, and being given several years to settle debts. Often, Chapter 7 is used for those with mostly unsecured debts, like credit card debt. The court erases dischargeable debts during Chapter 7 bankruptcy cases, but secured debts must be repaid. Because Chapter 7 filers don’t have the necessary income to repay secured debts, they identify assets for liquidation. Unfortunately, most debtors’ main assets are their homes, meaning Chapter 7 may not be the answer to your situation if you are facing foreclosure in Pennsylvania. How to Use the Right Type of Bankruptcy to Stop Foreclosure in Pennsylvania If used effectively, Chapter 13 bankruptcy can stop foreclosure. However, if you wait too long to file your case, fail to list all creditors and debts, or don’t follow the rules of the repayment plan, the case might be unsuccessful, leaving you once again at risk of foreclosure in Pennsylvania. File Promptly In stopping foreclosure, one of our goals, in addition to keeping your home, is ending the harassment associated with debt collectors and banks seeking repayment. The sooner you file for bankruptcy after identifying it as the solution to stopping foreclosure, the more time and resources you can reserve. While filing bankruptcy will stop foreclosure proceedings already in progress, our attorneys can prevent those proceedings from ever beginning by quickly filing your bankruptcy petition after you get a notice of intent to foreclose from your bank. Pennsylvania does not have a right of redemption following sheriff’s sales, so do not wait to file if one is imminent. Disclose All Debts Even if your primary concern is your mortgage debt, disclosing all debts when filing bankruptcy is important so that you get the appropriate discharges during your case. Omitting creditors from your bankruptcy case could lead to issues with it completing down the line. If you do not finish the repayment plan or the case is dismissed before repayment is finalized, your home could still be in jeopardy of foreclosure and a sheriff’s sale. Follow the Repayment Plan Stopping foreclosure indefinitely with bankruptcy is predicated on whether or not you satisfy the requirements of your Chapter 13 repayment plan. Because this is so important, our Philadelphia bankruptcy lawyers will spend the appropriate time writing the plan and arguing why its terms are fair based on the size of your debt, your income, and your expenses. If repayment plans are infeasible from the get-go, debtors might not have any hopes of adhering to them. Keep in mind that you will still have to stay on top of your current mortgage payments as well as past-due ones. Not doing either could give your lender reason to ask the court for foreclosure, even during your bankruptcy case. Suppose the case is dismissed because you do not follow the repayment plan. In that instance, foreclosure proceedings might resume again, and our attorneys can help avoid this by tailoring the repayment plan to your specific situation. Comply with Bankruptcy Rules Bankruptcy is a very complicated legal process that navigating alone could cause issues for debtors. The bankruptcy court might dismiss your case for not filing certain paperwork, not paying filing fees, not attending credit counseling courses, or even making clerical errors. We can ensure debtors comply with all rules of the bankruptcy process so that it ends up being a successful tool to help stop foreclosure in Pennsylvania. Call Our Pennsylvania Bankruptcy Attorneys for Help Today Get a free case review from our Springfield, PA bankruptcy lawyers when you call Young, Marr, Mallis & Associates at (215) 701-6519.

Can I Keep My Car in Chapter 7 and Change My Mind Later? Here’s one of the big advantages of Chapter 7 bankruptcy. You can keep paying on your car now, but then change your mind and give it back later.  You can give it back later without hurting your credit; and without owing any money. Why Would You Do That? I see a lot of people who are in terrible car loans. They had to buy a car for some reason after they had already wrecked their credit, and the car loan is 22.9% up to maybe 29.9%. Terrible. But right now that terrible car loan is for the car that’s the only way to get around. For now, keeping that car is better than walking to work. (I always encourage people to consider whether they can borrow a car, or save and buy a hoopty.) In two or three years, you’ll have much better credit and can get a much better car. In two or three years, you’ll have good credit.  Much better credit than you had when you bought that last car.  You can give back the car with the bad loan and go buy a newer car with a much better interest rate. The same strategy would apply if in a few months, or years, a family member or friend makes a car available.  Or the car you got breaks down and you have to do something. Why does this work? When you file Chapter 7 bankruptcy,  you don’t have to pay the car loan. Now you don’t get a free car–the car still has to pay, but you don’t have to. That puts you “in the drivers seat.” You want to keep paying as long as that car is worth that payment. But once you stop, the bank can’t come after you; they can only repo the car. (Now that’s the rule unless you reaffirm the car loan. There are sometimes good reasons to reaffirm if the car is with Ford Credit or with your credit union. But Ford Credit and your credit union would not be where you are getting a 29.9% car loan.) How Long does this Apply? What’s My Deadline for Giving Back the Car? Once the car is paid for, you can’t give it back. That’s your only deadline. The post Can I Keep My Car in Chapter 7 and Change My Mind Later? appeared first on Robert Weed Bankruptcy Attorney.

Research Study: Center for Responsible Lending- Under the Radar: Evidence of Prohibited Vehicle-Title Loans Made in 23 States Ed Boltz Fri, 02/07/2025 - 16:12 Available at:   https://www.responsiblelending.org/research-publication/under-radar-evidence-prohibited-vehicle-title-loans-made-23-states Executive Summary: Vehicle-title loans are high-cost loans with little or no underwriting that are secured by a borrower’s car title. While the borrower of a vehicle-title loan keeps possession of the car and can continue to drive it if they make payments, the lender can threaten repossession or actually repossess the vehicle with no legal process since they are in possession of the title and, sometimes, the keys. Title lenders charge fees and interest as high as 300% Annual Percentage Rate (APR)1 and put borrowers’ important assets—their cars—at risk of repossession. Broadly, lending can occur in one of two ways: the lender can extend credit under their own name, or the lender can make an arrangement with an out-of-state bank to be the lender of record. In states where vehicle-title prohibitions exist, some high-cost lenders improperly claim the latter arrangement excuses the lender’s evasion of rules and laws made to protect the finances of state residents. High-cost vehicle-title lending is currently prohibited in 33 U.S. states and the District of Columbia.2 Notwithstanding this widespread body of state law, the Federal Deposit Insurance Corporation (FDIC) found in their 2021 National Survey of Unbanked and Underbanked Households that residents of all but three states had used  consumer vehicle-title loans in that year.3  Important details about lender practices and impacts are not fully transparent to the public, despite  the high costs and stakes involved with these loans.4 To add to the body of information available about  vehicle-title lending, CRL commissioned BSP Research to survey 7,115 Americans in July 2024, assembling  a sample of 400 respondents who had taken out vehicle-title loans in the past 24 months.5 Respondents described the circumstances, duration, amount, terms, and impacts of their borrowing. CRL identified the following important findings from the survey responses. Key Findings Include:  Vehicle-title loans are very expensive, often unaffordable, and can lead borrowers into a debt trap.  • Nearly two-thirds of borrowers (64.5%) were unable to make all their loan payments on time and  reported paying late at least once.  • 84.5% of respondents reported a title loan being flipped at least once.  • About half of borrowers (49.0%) reported a single title loan being flipped twice or more.  • About half of borrowers (49.0%) reported having taken two or more separate loans in the past two years.  Vehicle-title loans have onerous consequences.  • Among borrowers with at least one late payment, 40.7% reported incurring one or more of the following  severe penalties as a result: car repossession, being sued for the debt, or wage garnishment.  • More than one in five (22.9%) of late-paying borrowers reported their car was repossessed due  to late payments.  • Among respondents whose car was repossessed, the median loan amount was reported to be  between only $1,000 and $2,000, a tenth or less of the median repossessed car value, which was between  $20,000 and $30,000.  Vehicle-title loans are being made in states that prohibit vehicle-title loans. • Borrowers residing in 20 of the states, or the District of Columbia, where vehicle-title lending is  prohibited, reported having active vehicle-title loans taken out in person in their home states.  • Borrowers residing in 14 of the states, or the District of Columbia, where vehicle-title lending is prohibited,  also reported taking out vehicle-title loans online, which circumvents laws in their home states. Commentary: Unsurprisingly,  as the Center for Responsible Lending is proudly located in Durham,  this study kicks off by showing examples of  title loans made by TitleMax  to North Carolina residents-  loans that likely were illegal and usurious in North Carolina and twenty other states.   As these borderline title lenders,  which line the borders,  are often the last stop for consumers before filing bankruptcy,  it is disappointing that Chapter 13 Trustees  do not appear to take any systematic approach to objecting to the claims filed by TitleMax and others,  using their avoidance powers to attack these pernicious actors and complying with their statutory duty to assist the debtor in performance under the plan.  With proper attribution,  please share this post.  Blog comments Category Law Reviews & Studies

4th Cir.: Alig v. Rocket Mortgage- Concrete Harm required for Class Action Standing Ed Boltz Thu, 02/06/2025 - 15:12 Available at:  Summary: The Plaintiffs brought a class action lawsuit against Rocket Mortgage (formerly Quicken Loans) and its affiliate, Amrock, LLC (formerly Title Source, Inc.), regarding mortgage appraisals used in refinancing transactions, alleging  that the defendants influenced home appraisals by transmitting homeowners' estimated property values to appraisers, thereby rendering the appraisals “worthless” and violating West Virginia consumer protection laws. The court ruled that the class members lacked Article III standing under TransUnion LLC v. Ramirez (2021), which requires each class member to demonstrate concrete harm.  The plaintiffs failed to show that all class members received biased or inaccurate appraisals, only that they paid for appraisals they later argued were "worthless."  Because standing “is not dispensed in gross” in class actions, every class member needed to demonstrate actual harm. Judge Floyd dissented from the majority’s decision to decertify the class, arguing that unnamed class members also have Article III standing because they suffered concrete financial harm due to Quicken’s appraisal practices, as each  plaintiffs had actually paid for independent appraisals (averaging $350 per person) but did not receive truly independent valuations due to defendants' interference. Commentary: Appraisals  of this sort frequently occur  in bankruptcy, where valuation is frequently an issue, with the parties, whether the debtor, trustee or secured creditor seeking professional appraisals to support their positions regarding the value of assets. As providing advance estimates is "explicitly forbidden- and viewed as unethical" parties should not only refrain from providing those estimates, which would include details in the bankruptcy petition, but also, since appraisers are sophisticated professionals, amounts owed on liens, etc., as those could point the appraiser in the desired direction. Appraisers should be questioned about what information was provided in advance, since that can not only indicate a predetermined bias, but undermine the ethics and competence of the appraiser.   Further,  when mortgage servicers conduct   BP Os and then seek  to pass those costs along to the homeowner,  it is questionable whether those fees are reasonable  if advance estimates were provided. For a summary and commentary on the previous decision by the 4th Circuit in this case,  see : Alig v. Quicken Loans- Improper Value Disclosures with Appraisal Requests With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document rocket_mtg.pdf (178.69 KB) Category 4th Circuit Court of Appeals

Law Review: Pang, Belisa and Jiménez, Dalié and Bruckner, Matthew A., Full Discharge Ahead? An Empirical First Look at the New Student Loan Discharge Process in Bankruptcy (December 15, 2024). Ed Boltz Tue, 02/04/2025 - 20:09 Available at: https://ssrn.com/abstract=5081782 or http://dx.doi.org/10.2139/ssrn.5081782 Abstract: The legal framework for discharging student loan debt held bankruptcy filers cases changed in November 2022 with the Biden Administration’s Department of Justice issuing its “Guidance for Department Attorneys Regarding Student Loan Bankruptcy Litigation,” fundamentally altering the legal framework for discharging student loan debt in bankruptcy cases. The Guidance aims to enhance consistency and equity by (1) ensuring transparent and consistent expectations, (2) reducing the burden on debtors, and (3) making it easier for DOJ attorneys to recommend discharging a debtor’s student loans. The DOJ has touted the new Guidance as having “made a real difference in borrowers’ lives,” comprehensive analysis has been lacking. This Article begins to assess whether the Guidance has achieved its objectives by analyzing student loan litigation in bankruptcy. Our findings reveal that, 23 months after the Guidance was announced, 2,514 new student loan adversary proceedings (SLA Ps) were filed—a 330% increase compared to a similar period before the Guidance—with a third of these proceedings stemming from prior bankruptcies. Despite this significant increase, we find that this still means that fewer than 1% of bankruptcy filers with student loans seek to discharge them in bankruptcy. Notably, borrowers with smaller student loan debts become more likely to seek relief, indicating the Guidance may have lowered barriers for this group. Additionally, the increase in SLAP filings is regionally concentrated, suggesting that certain courts or consumer bankruptcy attorneys are “early adopters” of the new legal regime. Case processing times were initially slower but are returning to historical levels. Our data suggests that while the Guidance has positively impacted the willingness of borrowers to seek the discharge of their student loans once in bankruptcy, overall use of this relief remains negligible relative to the total number of bankruptcy cases, indicating that additional efforts are needed to enhance access and awareness. Until Congress amends the Bankruptcy Code by removing Section 523(a)(8), the new Guidance serves as a beacon of hope for struggling borrowers seeking relief through bankruptcy. Commentary: These findings,  which are encouraging,  but hopefully modest enough not to draw such ire of the current administration to result in the guidelines being rescinded (particularly as the genesis for stipulated discharges began during President Trump's first administration with Sec. DeVos's 2018 call for a re-examination of the Brunner test)  were extensively discussed at the recent NACBA Webinar  with Belisa Pang,  one of the authors. That webinar is available here:  NACBA Week Day 2: Student Loan Forecast and Predictions See also commentary from:  Recent Study of New Student Loan Discharge Process Shows Increase in Loan Litigation in Bankruptcy by Scott Waterman at considerchapter13.org With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document full_discharge_ahead_an_empirical_first_look_at_the_new_student_loan_discharge_process_in_bankruptcy_compressed.pdf (941.42 KB) Category Law Reviews & Studies

With foreclosure imminent, it’s important to know all the tools you can use to stop it. While bankruptcy can stop foreclosure, it matters what chapter debtors file and whether or not they see their cases through to the end. Of the bankruptcy chapters typically filed by consumers in New Jersey, Chapter 13 is the most effective at stopping foreclosure. Rather than requiring debtors to liquidate their assets, Chapter 13 uses a repayment plan that spans a period of three to five years. Any foreclosure proceedings are put on pause after filing, whether the debtor files Chapter 13 or Chapter 7. Unfortunately, Chapter 7 is not as effective at stopping foreclosure indefinitely. While homeowners might get a temporary pause with the automatic stay, lenders might start looking at their major assets for liquidation to get repaid, like their home, which we can help avoid by ensuring you file the appropriate chapter for your situation. Discuss your case for free with our New Jersey bankruptcy lawyers by calling Young, Marr, Mallis & Associates today at (609) 755-3115. Does Chapter 13 Bankruptcy Stop Foreclosure in New Jersey? Homeowners facing foreclosure could avoid it by filing Chapter 13 bankruptcy in New Jersey. Our lawyers can explain how debtors to use this legal process to keep their homes despite falling behind on their mortgages. Chapter 13 bankruptcy is generally the ideal chapter for debtors struggling with secured debts, like mortgage payments, who also want to keep their assets. If your primary lender is your mortgage lender, filing Chapter 13 will let you address your debt with them through a repayment plan. Our attorneys write this plan and submit it for court approval based on your specific financial situation. We will consider your total owed amounts, income, dependents, and expenses so that the resulting repayment plan is feasible for you and allows you to pay both current and past-due amounts. While your bankruptcy case is in progress, the bank cannot continue with any mortgage foreclosure proceedings, even if they have already begun. Your bankruptcy case might trump a foreclosure petition filed by the bank. Many debtors who file for bankruptcy are immediately eligible for an automatic stay. This prevents debt collection tactics, such as harassing phone calls and asset repossession, which extends to foreclosures and sheriff sales. If the focus of your repayment plan is settling mortgage debt, our Passaic, NJ bankruptcy lawyers can write it so that your debts are settled after three to five years of payments under a lower interest rate. We may also be able to use your bankruptcy case as an opportunity to negotiate loan modification to prevent similar situations in the future. Does Chapter 7 Bankruptcy Stop Foreclosure in New Jersey? While homeowners often use Chapter 13 bankruptcy to stop foreclosure, Chapter 7 doesn’t necessarily have the same effect. Though an automatic stay will still kick in during Chapter 7, this is a liquidation bankruptcy, meaning filing it could leave your home at risk. Generally, Chapter 7 is for debtors with dischargeable debts who are okay with potentially liquidating some of their assets to address any secured debts they might have. If your primary goal is saving your home from being foreclosed on and sold at auction, Chapter 7 wouldn’t eliminate that risk. While New Jersey lets bankruptcy petitioners choose federal liquidation exemptions that can help them shield their car or home, liquidating assets is how secured mortgage debts are repaid under Chapter 7. If you do not have any assets you are comfortable parting with, your lender could still seek your home during bankruptcy. So, the automatic stay that comes with bankruptcy might delay foreclosure of your home under Chapter 7, it may not stop it indefinitely if you must liquidate assets to repay your mortgage lender. Because of this, Chapter 7 is typically not the ideal bankruptcy chapter to file if your goal is stopping foreclosure so you can continue owning and living in your home in New Jersey. For How Long Does Bankruptcy Stop Foreclosure in New Jersey? Even though Chapter 13 can be the solution homeowners need to stop foreclosure, they must finish their repayment plans to see the desired results. Otherwise, banks might seek foreclosure approval from judges during bankruptcy cases in New Jersey. It is crucial to stay on top of your new repayment plan, and our lawyers can ensure that it is written so that you can also make current payments. Chapter 13 bankruptcy only stops foreclosure indefinitely once cases are complete. If you fall behind while you trying to follow your repayment plan, your bank could petition the court to let it foreclose or dismiss the bankruptcy case so that it can file a foreclosure complaint against you and restart the process. Our lawyers can help you prepare your bankruptcy petition, put you through the means test to confirm your income supports a Chapter 13 case, handle all necessary filings, and keep you aware of mandatory court appearances. If you have other debt on top of your mortgage debt, we can make sure that is also factored into your repayment plan or gets forgiven if it is dischargeable. While there is nothing preventing homeowners from falling back into mortgage debt after Chapter 13 bankruptcy cases are over, debtors in New Jersey must take credit counseling courses before filing, in which they learn useful money management and budgeting tools they can take with them in the future to avoid getting back into a difficult financial situation. Modifying your previous mortgage contract, such as by extending it in favor of smaller monthly payments, could help you avoid falling behind after completing your repayment plan. Our attorneys may also negotiate this with your bank to reduce the risk of foreclosure in the future. Call Our Attorneys in New Jersey About Your Bankruptcy Case Call the Paterson, NJ bankruptcy lawyers of Young, Marr, Mallis & Associates at (609) 755-3115 for a free case analysis.

Keeping Your House as a Widow Filing Bankruptcy in Virginia One of the tragedies of being a widow is this: You lose the protection for your house that Virginia law gives a married couple filing bankruptcy. After losing her husband, a widow under Virginia law can easily lose her house to her creditors. Bankruptcy is set up by the Federal government, but each state sets its own rules on keeping your house if you file Chapter 7.  Virginia gives great protection for houses owned by a married couple for the debts of only one. That’s called tenants by the entirety. A widow, now single, after losing her spouse, is in danger of losing her house. Virginia law allows a single person to protect $50,000 in real estate equity.  That’s up from $5,000 a few years ago, But it’s still very low compared to most states. It doesn’t go ver far in Northern Virginia. Can Bankruptcy Law Help a Widow Cleasr Her Debts and Keep Her House? I’ve had two different widows contact me in January 2025.  Through creative use of the bankruptcy law, it looks like both will be ok.     The post Keeping Your House as a Widow in Bankruptcy appeared first on Robert Weed Bankruptcy Attorney.