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Adequate Protection Payments Need Only Be Designated for Vehicle Creditors?

By Jonathan on November 28, 2006

Adequate protection payments to secured creditors in a Chapter 13 plan are only required if the collateral involved is a motor vehicle. This is what I am hearing from attorneys who populate the 341 hearing rooms. As a debtor’s attorney, this means that I do not have to calculate a specific monthly payment for furniture, jewelry or appliance creditors – instead these creditors will be paid pro rata by the Chapter 13 trustee.

If this scuttlebutt is true, it would be a benefit to Chapter 13 debtors since we could designate more of the monthly trustee payment to a mortgage arrearage or to an objecting vehicle creditor. One less thing for a Chapter 13 debtor and his attorney to worry about.

[tags] adequate protection payments, secured creditors in bankruptcy, northern district of georgia [/tags]

AT&T Long Distance Customer Service Hell

By Jonathan on November 17, 2006

As a consumer bankruptcy lawyer, I hear stories all the time from clients about harassing bill collectors and unresponsive customer service representatives. After a while, most of these stories lose their impact because I hear them so often. Recently, however, I was treated to my own experience in customer service hell courtesy of the good folks at AT&T long distance.

I wish I had recorded my half hour plus conversations with the eight customer service representatives I spoke to. At least two were in India or Pakistan and each time one of the reps realized that he or she could not help me, I was transferred to an automated attendant where I had to enter my account number.

What was the problem? I have two phone lines coming into my house – one is my residential line and the second is a DSL line. Each one apparently has AT&T as the long distance carrier. Last month, I paid the bill for line 2 and AT&T applied the payment to the account for line 1. Line 1 now has a credit balance and line 2 has a balance due of $32.40.

I started getting collection calls from AT&T last week, even though my online access showed that $32.40 had been cashed. The collection rep insisted that I mail (not fax or email) a copy of my canceled check to some special address that I would have to call yet another number to get. Since my bank no longer returns my calcelled checks I had to order a copy.

When I called this morning to find out where to mail the check, I discovered what had happened and I asked if AT&T could transfer $32.40 from account 1 to account 2.

30 minutes and 8 representatives later, I have come to the conclusion that AT&T does not have the technical wherewithal to transfer $32.40 from one account to another.

My solution – I mailed AT&T $32.40 (to clear account 2) and I am going to cancel my service with AT&T. Will any other vendor be any better? Probably not. But given the incompetence I experienced this morning, I am going to have to try.

[tags] AT&T customer service, poor service AT&T, AT&T phone service [/tags]

Tips on Stopping Damage Caused by Identity Theft

By Jonathan on November 14, 2006

The Texas law firm Peterson & Swearingen posted a helpful article about what you should do if you discover that you have been a victim of identity theft on its BrazosLawyers.com blog. Identity theft is a growing problem and I have represented bankruptcy clients who ended up filing partially because of fraudulent debt (usually there were other, legitimate debts as well, but the fraudulent debt made the situation unworkable).

I think that a real key to avoiding damage caused by identity theft is your speed in recognizing that there is a problem and your speed in closing your bank account and canceling your credit cards.

More recently, I have heard of a scam in which a crook claiming to be a representative from the Social Security Administration calls to “verify” your personal information and asks to record your confirmation.

Be assured that no one from the Social Security Administration will ever call you to request personal information. Almost all of your dealings with Social Security or the IRS or any federal agency will be through the mail so if you should get a phone call, your suspicions should be raised. Further, if you get a letter from a federal agency, do not assume that the phone number or email address on the letter is legitimate. Look up the agency in the phone book or on-line. Just because a phone number or email address is printed someplace does not make it legitimate.

Unfortunately, there is no comprehensive federal law that offers any protection to consumers in the form of a credit freeze. Some States have enacted credit freeze laws, although Georgia has not. A credit freeze puts a hold on any third party access to your credit file, meaning that identity thieves cannot use stolen information to apply for new credit.

Who Reads This Blog Anyway?

By Jonathan on November 13, 2006

Having maintained this blog for well over a year, I sometimes get the question – “do you know if anyone is reading what you are writing? What I do know from my statistics program is that I get between 15 to 30 unique visitors a day. I also get enough questions from readers through the “contact Jonathan” button that people are reading my posts.

I also feel strongly that my blogging about consumer bankruptcy has made me a better lawyer. If a reader is nice enough to send me a question, I will make every effort to provide an accurate answer. Also, this blog is a place where I can comment about new developments in the law – and you have to understand what is going on before you can comment intelligently.

Additionally, because I publish this blog, I have become much more aware of other bankruptcy blogs out there in the “blogosphere.” Scott Riddle’s Georgia Bankruptcy Blog and Kevin Churn’s Bankruptcy Lawyers Blog are two regularly updated blogs that I subscribe to (I use my Google home page as an RSS reader) and read regularly.

I am also always on the lookout for new bankruptcy related blogs. There are surprisingly few out there. For my money, blogs are much more relevant than static web sites because they are current. As people become more comfortable with blog formats I can see the day when the blog format outpaces the traditional web site format. I am fairly active updating both my blogs and my web sites and I can say without hesitation that updating a blog is significantly easier and more user friendly than updating a web site.

Blogs and traditional web sites do have one issue in common – if you want high search engine rankings for your blog or web site, you need references or links from other blogs and web sites. For those not aware, the search engines operate in a manner similar to academic papers or court cases. If your paper or case is very important a lot of other people refer to it in their papers. The referred to paper or case gains authority with each referral or link. For example, if I said “Roe vs. Wade” you would immediately think of the term “abortion.” On the Internet, if I type in the term “news” the home page for CNN comes up first. If I type in the term “sports” the ESPN web site comes up first, and so on.

Woudn’t it be nice if this blog or one of my sites came up at the top of the search engines for any number of bankruptcy terms like “Chapter 7” or “Chapter 13,” or “bankruptcy?”

The only way for this to happen would be for a lot of other web sites and blogs to refer to my blog or any of the posts on their web sites or blogs. If you are reading this and own a blog or web site, I would be happy to speak with you about mutual references. Besides building link presence through individual contacts, there are number of services out there that purport to automate or even monetize this process. For example a new service called ReviewMe is something I am testing. At ReviewMe, bloggers like me register our blogs and identify our topics. For example, the topic of this blog is law, consumer bankruptcy, Chapter 13, Chapter 7, repossession and foreclosure.

Should a blogger with a related site want me to write a post about their site (kind of like this “review” of ReviewMe) then I would do so for a small fee. In this case, the reviewee would pay ReviewMe $40 for the review – I would get $20 and ReviewMe gets $20. I am, in fact, receiving $20 for this review of ReviewMe.

One nice thing about ReviewMe’s service – there is no requirement that any review I write must be positive. On the negative side, I could lose credibility if my blog becomes cluttered with topics other than consumer bankruptcy in Georgia.

If I chose to “buy” a review of my blog, then I would, in theory, create more links back to my site, thereby increasing its search engine position. I have not yet bought any site reviews – if I do, I will post about my experiences on my Internet Marketing blog.

Finally, if you do read my bankruptcy blog regularly, please fell free to email me a question or comment – feedback does serve as greatly appreciated reinforcement.

A Review of Mortgage Foreclosure Laws in Georgia – How a Bankruptcy Filing Stops Foreclosure

By Jonathan on November 10, 2006

The threat of a mortgage foreclosure serves as a prime motivating factor for many Chapter 13 bankruptcy filings. As an attorney who practices in this area, I sometimes forget that frightened, stressed out homeowners who are actually facing foreclosure may not realize exactly how or why a Chapter 13 can save their home. Therefore, in this post, I would like to review a little about foreclosure law in Georgia and discuss the strategy of using Chapter 13 to stop the foreclosure and reinstate the mortgage.

Georgia law provides for something called a “non-judicial” foreclosure. This means that a foreclosing lender in Georgia does not need to go to court to get a judge’s permssion to take title to a home through a foreclosure. Instead, the lender is required to fulfil various contractual and legal requirements to pursue a foreclosure.

First, the lender must declare the loan in default. When you purchased your home, you signed a number of binding legal documents, including a promissory note and a deed to secure debt. In these documents you borrowed a certain sum of money in exchange for which you promised to pay a specified mortgage payment to the lender each month. The documents you signed also provided that the mortgage loan was secured by specific collateral – usually your home. In the event that you fail to pay the installment note as agreed, the note goes into default, triggering a number of consequences.

The most important consequence is some called “acceleration,” which means that the entire balance due on the mortgage comes due. Typically, mortgage companies assert their right to accelerate a mortgage after you are three or four months behind – although technically, they could accelerate if you were one day late.

Once your loan is accelerated, you will find that most mortgage lenders are unwilling to reinstate the loan voluntarily. I suspect that mortgage lenders do not want to be bothered with monitoring numerous repayment agreements in loans that have gone into default. Sometimes mortgage lenders will work with private companies who promote their services as “mortgage savers,” although these home saving programs do not always work as advertised. Some lenders will not commit to a repayment plan but keep the homeowner hanging on until literally the day before foreclosure before deciding not to cooperate. If you choose to use one of the mortgage saver services, pay attention to your costs and do not pursue relief in this manner unless you can be assured of a decision well before the last minute.

Once the loan has been accelerated per the loan contract, the lender must abide by Georgia State law in terms of giving you proper notice about the pending foreclosure. Besides notifying your by mail, the lender must advertise the property for sale in the legal newspaper in the county where the property is located.

The legal newspaper for your county is not the Atlanta Constitution. Instead the legal newspaper may be a paper unknown to you. For example, the legal newspaper in Fulton County is the Fulton County Daily Report. In Dekalb County, it is The Champion Newspaper and in Gwinnett County it is the Gwinnett Daily Post. A complete list of the legal newspapers for every county in the State of Georgia may be found by clicking the link. If this link does not work, you can search for the list of legal organs in Georgia at the Secretary of State’s web site.

The pending foreclosure sale must be advertised for four consecutive weeks preceding the sale. Foreclosure sales are only allowed on the first Tuesday of each month.

If the lender has given you proper notice and has advertised the sale as required by law, on that first Tuesday, on the courthouse steps, an attorney for the foreclosing lender will auction your home to the highest bidder.

The winning bidder must satisfy the foreclosing lender’s mortgage obligation, after which he takes title to your house. Technically, at the minute of the foreclosure sale, you no longer own your house. There other types of foreclosure sales like tax sales that give you a right of redemption, but mortgage foreclosure sales do not give you any such rights.

The filing of a bankruptcy serves to stop the foreclosure process at any point during that process. If your house is scheduled to be sold at 10am on the first Tuesday of the month, and you file your bankruptcy at 9:59am, any foreclosure sale will have no legal effect.

Now, obviously, from the perspective of a bankruptcy lawyer, I would not advise you to wait until the last minute. If the Bankruptcy Court Clerk’s computer system should go down, preventing an electronic filing, you would be out of luck. Additionally, if the mortgage company goes through with the sale (not knowing about your bankruptcy filing) they may as the Bankruptcy Judge to validate the foreclosure because of your inability to pay, your failure to maintain insurance or for several other reasons.

In addition, under the current bankruptcy law you cannot file without going through a credit counseling course and obtaining a certificate. Often credit counseling organizations get very busy during the days prior to foreclosure, and there is some case law out there to suggest that you may not obtain your credit counseling the same day as you file your bankruptcy case.

The filing of a bankruptcy stops a foreclosure because your bankruptcy filing creates something called an “automatic stay.” The automatic stay is the most powerful element of any bankruptcy in that it stops most creditor actions. Be aware, however, that under the new bankruptcy laws, the automatic stay may not apply in refiled cases. If you have filed before, make sure to tell your lawyer.

If you are facing a mortgage foreclosure, you should be very careful not to fall prey to scam artists who will take your money with false promises of special deals or secrets to stop foreclosure. A bankruptcy filing is the only absolute method to stop your foreclosure and even a bankruptcy may not help you in every circumstance. Most bankruptcy lawyers – myself included – will chat with you at no charge on the phone to discuss whether bankruptcy is something for you to consider. Many of the non-attorney paralegal services out there do not have the skills or knowledge to properly advise you. You most defintely get what you pay for.

My advice to anyone facing foreclosure is to seek legal counsel with an experienced and licensed bankruptcy lawyer as soon as you realize that you are in trouble and will not be able to make your mortgage payments. Second, if bankruptcy is an option, get your credit counseling certificate sooner rather than later. Third, be very hesitant to trust what anyone tells you about stopping a foreclosure. Do your own research and ask a lot of questions.

Fine Print of Credit Card Agreements May Contain Terms Not in Your Best Interest

By Jonathan on November 6, 2006

Professor Elizabeth Warren has written a revealing article on the Credit Slips blog about arbitration clauses in credit card agreements. It seems that many credit card agreements contain provisions that require arbitration in the event of any lawsuit by a consumer. Further, the credit card user agreements often contain a waiver of the consumer's right to participate in a class action.

It turns out that the credit card companies have manipulated the system by choosing only arbitrators who rule their favor. Arbitrators who ruled against the credit card company were not chosen for any cases.

The class action waiver provision greatly benefits the credit card issuer by creating a barrier to a special kind of lawsuit known as a "class action." Class actions are usually put together by lawyers who have identified improper activity by a defendant that has affected thousands or millions of plaintiffs. Since each individual plaintiff may have only suffered a small amount of damages (perhaps only a few hundred dollars each), it is unlikely and impractical for these consumer plaintiffs to file an individual lawsuit.

I suspect that someone will challenge these waivers as being unenforceable. However, if the courts agree with the credit card issuer and stop class actions from going forward, then there is no practical restraint upon overreaching behavior by credit card issuers.

In the meantime, be aware that the fine print in those credit card applications may contain language that can negatively impact your interests.