Chapter 7 income eligibility got slightly easier April 1, 2025 If you are making less than the median income, you have income eligibility to file Chapter 7 bankruptcy. Those eligibility numbers adjusted up, April 1, 2025.  For Virginia, eligibility is automatic for singles under $77,420, family of 4 under $145,585. What if I’m over the median income? You can still pass the “means test.” You can still be eligible for Chapter 7 if you are over that median income cutoff.  But you have to pass means test.  The means test is a way of looking at your budget to see if you are legitimately broke. For the means test, you need to budget carefully. Here are some of the main budget items that can help you if you are over the median. Child care Help for elderly family members Medical expenses, co-pays, prescriptions, dental work, etc. Big car payment Big mortgage payment Living in a high rent county If you are over the median income, really, really careful budgeting is required to show Chapter 7 income eligibility on the means test.   Northern Virginia bankruptcy lawyer Robert Weed. Knowledgeable and kind; friendly service with a smile.   The post Chapter 7 income eligibility gets slightly easier appeared first on Robert Weed Bankruptcy Attorney.

4th Cir.: Koontz v. SN Servicing- FDCPA applies to debts discharged in bankruptcy Ed Boltz Fri, 04/04/2025 - 20:47 Summary: John Koontz received a Chapter 7 discharge,  including for his mortgage,  which was not reaffirmed.  Years later, SN Servicing Corporation (SNSC) sent two letters referring to his mortgage loan, which included past-due fees.   Koontz filed a putative class action, claiming violations of the FDCPA and West Virginia’s debt collection laws. The lower court dismissed the case, finding that Koontz was no longer a "consumer" with a "debt" under the FDCPA because of his bankruptcy discharge and accordingly, the letters were not debt collection attempts. The Fourth Circuit  reversed in part and remanded holding that Koontz remains a “consumer” with a “debt” under the FDCPA, even after a Chapter 7 discharge, because the mortgage lien survives in rem (against the property).   The letters constituted debt collection attempts, as they referred to the loan as a "debt" and requested payment of fees.  Koontz adequately stated a claim under § 1692f (unfair practices), particularly for charging late fees above the contractual limit,  but  did not sufficiently plead a claim under § 1692e (false or misleading representation). The state law claim was also wrongly dismissed, as it parallels the federal definitions and standards. Commentary: Nice win with NCBRC and NACBA as amici. Consumers can still be “obligated” on debts for purposes of the FDCPA even after bankruptcy, due to surviving liens.  Communications suggesting enforcement of a mortgage lien—even post-discharge—can be considered attempts to collect a debt under the FDCPA.  The decision clarifies that mortgage servicers must tread carefully in post-bankruptcy communications, particularly regarding fees and payment processing.   This fits neatly with Judge Beyer's recent opinion from In re Peach (summary forthcoming)  that bankruptcy  does not excuse compliance  with other state and federal laws. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document koontz_v._sn_servicing.pdf (151.87 KB) Category 4th Circuit Court of Appeals

Bankruptcy can be scary, especially when using Chapter 7.  This is known as “liquidation” bankruptcy, and it sounds like your money and assets all go away to pay off your debts.  In reality, there are exemptions that protect your money, though they are limited in how they protect your bank account. When filing for Chapter 7 in Pennsylvania, you can usually choose between state and federal exemptions.  The basic answer is that bank accounts aren’t explicitly protected under either set of exemptions, but your “wildcard” exemption can protect money in the accounts.  The protected amount is usually higher under federal exemptions. For a free review of your case, call the Pennsylvania bankruptcy lawyers at Young, Marr, Mallis & Associates at (215) 701-6519. Can the Bankruptcy Trustee Liquidate My Bank Account? When you file for Chapter 7 bankruptcy, the goal is to sell off property and assets to pay back your debts.  This process is known as liquidation, and it is overseen by a bankruptcy trustee.  This is the person who collects your assets – including accounts – and sells them or cashes them out as needed. People may have all sorts of accounts when filing for bankruptcy, from checking to savings to investment accounts.  Odds are that if you are using Chapter 7 and qualify under means tests, you do not have much to start with in these accounts. While the bankruptcy trustee can legally access and empty your accounts, it might not be worth it. Will Bankruptcy Empty My Bank Accounts? Bankruptcy trustees can access your accounts and take money out to satisfy your debts, but their practical ability to do so might be limited.  If you have only a few hundred dollars in the account, it might not be worth their time or effort. If you have a huge account, it will likely be targeted first because this cash is already liquid and can be spent instead of selling off property first. If you have enough money in your account and can pay down debts, you should likely consider this option before filing for bankruptcy in the first place.  By the time you get to bankruptcy, it is likely your accounts are strained and perhaps not worth liquidating. At the end of the day, you need a place to deposit your paychecks and an account to pay for groceries and other expenses.  Nobody expects you to turn to a cash-only life, and bankruptcy simply cannot take everything you have. Are Bank Accounts Exempt from Bankruptcy in Pennsylvania? When filing for Chapter 7, there are exemptions that take certain property (or certain amounts) out of the pool of what your trustee can liquidate.  This is intended to help you keep the things you need – your clothes, your car, your house, etc. Bank accounts are not explicitly covered, but it is vital to understand the exemptions you can take. Available Exemptions The most common exemptions people want are the homestead exemption to keep their house, a motor vehicle exemption to keep their car, and a “wildcard” exemption to cover miscellaneous things.  There are other exemptions – such as a “tools of the trade” exemption for work materials – that might apply to your given situation, so always work with a Pennsylvania bankruptcy lawyer who can determine what exemptions you need. None of these explicitly cover your bank account, so that usually goes under the wildcard exemption. State Exemption Amounts In Pennsylvania, you can choose between the set of state or federal exemptions, but you cannot mix and match. Pennsylvania has no homestead exemption or motor vehicle exemption, which often makes the federal exemptions better for your situation.  In Pennsylvania, the wildcard exemption is only $300, which would not protect much of your bank account. Federal Exemption Amounts Federal exemptions statutes list the base values, adjusted annually in the federal register. As of April 1, 2025, the exemptions are $31,575 for your house, $5,025 for your car, and $1,675 for the wildcard exemption.  If you don’t have a house, you can add on up to $15,800 of the homestead exemption you didn’t take for a total wildcard exemption of $17,475. Maximizing Exemptions The federal option is therefore the highest option for protecting your bank account.  If you do not have a house or other property to exempt, you can also protect far larger accounts under the federal exemptions. If you want to maximize your exemption for your bank accounts, this is the best option for that.  However, you should always talk to a lawyer to make sure there are no other drawbacks to taking the federal exemptions. Will Filing for Bankruptcy Freeze My Bank Accounts in Pennsylvania? There is nothing about the process of filing for bankruptcy that automatically freezes your accounts by law.  In fact, when you file, an automatic stay goes into place to freeze other people out of making claims on your accounts. At the same time, many people report that certain banks and credit unions have frozen their accounts when they filed for bankruptcy.  This is likely a policy of those institutions, not a bankruptcy rule. Talk to a lawyer before filing bankruptcy about where your money is, what types of accounts you have, and what institutions have those accounts.  It might make more sense to move your money or consolidate it when trying to pay off debts, let alone when actually filing for Chapter 7 bankruptcy. Can I Hide Bank Accounts in Bankruptcy? Trying to hide money from the courts or from the bankruptcy process is never a good idea.  Not only will this likely end your case, it might result in criminal fraud charges.  Any assets or bank accounts you have need to be properly disclosed. Call Our Bankruptcy Lawyers in Pennsylvania for Help If you are considering Chapter 7, call (215) 701-6519 for a free case review with Young, Marr, Mallis & Associates’ Montgomery County, PA bankruptcy lawyers.

 SBA DOES NOT ALLOW EIDL LOANS TO BE COMPROMISED THREW AN OFFER IN COMPROMISE   Many clients have contacted our law firm seeking assistance in settling their outstanding SBA EIDL loans through an offer in compromise (OIC). Unfortunately, the SBA's current position is that they do not allow EIDL loans to be settled through an OIC. While the OIC program is available for other types of SBA loans, EID Ls remain excluded from this option.  The options to settle SBA loans are provided below. 1. Hardship Accommodation Plan.  The hardship accommodation plan lowers monthly payments for 6 months, and then payments increase over a time.  2. Loan modification: Borrowers can request modified payment terms or extended repayment periods or negotiated repayment plans with the SBA. 3. Hardship deferment: Borrowers experiencing economic challenges may be eligible for temporary payment deferrals. 4 Full Loan Repayment from business or personal assets, if possible. 5 Liquidation of Business Assets: Close the business or sell business assets and pay off or pay down the SBA EIDL loan with the sales proceeds. The SBA loan documents require that any business assets sold and subject to an SBA loan must be paid to the SBA at the time of sale. However, the borrower will remain liable for any deficiency owing after the paydown. 6 Refinancing your existing SB Aloan with a private lender and use the loan proceeds to pay down or payoff the SBA. 7 File for bankruptcy. If the SBA EIDL loan exceeded $200,000 and an individual or entity guaranteed the loan, both the SBA borrower and guarantor may need to file for bankruptcy to discharge the SBA loan 8 Default on the SBA loan and engage in Asset Protection Planning in case of legal action by the SBA or the Treasury Offset Program.  Clients or their advisers with outstanding SBA EIDL loans who have questions about what they should do can contact Jim Shenwick, Esq to discuss their situation.   Jim Shenwick/Shenwick & Associates Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com  Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15min We help individuals & businesses with too much debt!

How To Join A Meeting On Zoom? | Quick Start Guide The bankruptcy trustee hearings are on Zoom. If you are not a regular Zoom user, this page shows you what to do. For the instructions on how to join a meeting with Zoom, just click on the link above.  Or click on the picture. How To Join A Meeting On Zoom? | Quick And Easy Guide How To Join A Meeting On Zoom? | Quick And Easy Guide The post How to Use Zoom with a Meeting ID and Passcode appeared first on Robert Weed Bankruptcy Attorney.

How To Join A Meeting On Zoom? | Quick Start Guide The bankruptcy trustee hearings are on Zoom. If you are not a regular Zoom user, this page shows you what to do. For the instructions on how to join a meeting with Zoom, just click on the link above.  Or click on the picture. How To Join A Meeting On Zoom? | Quick And Easy Guide How To Join A Meeting On Zoom? | Quick And Easy Guide The post How to Use Zoom with a Meeting ID and Passcode appeared first on Robert Weed Bankruptcy Attorney.

Mortgage foreclosure can feel like the beginning of the end of your homeownership dreams. However, you may be able to reinstate your mortgage under the right conditions. In Pennsylvania, homeowners have a right to cure the default right up until just before the sheriff’s sale. Curing the default involves paying all past due mortgage payments and various other costs. This can be expensive, but you have the right to cure the default if you have the means. Some people get financial help from their family or use financial windfalls like inheritance to cure their defaults. An attorney can help you negotiate with lenders to delay foreclosure or find another solution. Alternatively, you may explore other options for debt relief, including bankruptcy. Obtain a confidential, free case analysis from our Pennsylvania mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates by calling (215) 701-6519. Your Right to Reinstate Your Mortgage in Pennsylvania In Pennsylvania, homeowners in foreclosure have a legal right to reinstate their mortgage by curing the default, according to 41 Pa.C.S. § 404(a). This is rarely simple or easy, but it is possible if you can find the necessary financial resources. Under subsection (b) of the statute, to cure the default, you must first pay all past-due mortgage payments so that your balance is current. Next, you must perform any obligations you would have had to perform if not for the default. Third, pay any fees the lender incurred during foreclosure. Finally, pay the late penalties you might have incurred. You may cure the default up until 1 hour before the foreclosure sale. Curing the default restores the homeowner to the same position as before, as if the default had not occurred. How to Cure a Default on Your Mortgage Depending on how far behind you are on your mortgage, and other costs associated with foreclosure, you might require a significant sum to cure the default and reinstate your mortgage. Below are some common methods worth exploring with an attorney. Some receive financial help from family or friends. Parents, siblings, or other loved ones with greater financial resources might loan you the money to cure the default. Many would prefer to take a loan from family rather than a bank. Others use inheritance to cure the default. If a relative recently passed away and you are awaiting a significant inheritance, our Pennsylvania mortgage foreclosure defense attorneys might convince the lender to pause foreclosure proceedings to give you enough time to get the money. Alternatively, if relatives have established a trust fund in your name, you may be able to access the funds early. If you are able to cure the default, just not fast enough, we may be able to postpone foreclosure. If your payments are on track to catch you up – e.g., after getting a new job – the lender might agree to delay foreclosure, giving you the time needed. How a Lawyer Can Help You Reinstate Your Mortgage Your attorney can communicate with lenders about your mortgage and impending foreclosure. Your lenders may be more willing to listen and compromise if a lawyer contacts them on your behalf. Additionally, your attorney might have a better understanding of navigating confusing legal and financial matters. Your lawyer can review the pre-foreclosure requirements. For example, you should have received notice from the lender before they initiated foreclosure. An Act 6 notice is required by law and must inform you about the foreclosure at least 30 days in advance. It must also explain why foreclosure is happening, your right to cure the default, and other details about the foreclosure. If you did not receive this notice or it was inadequate, your lawyer can help you fight the foreclosure. Your attorney should make sure the lender follows all proper procedures. Federal law under 12 C.F.R. § 1024.41(f) states that a lender may not foreclose for late mortgage payments unless the homeowner is at least 120 days delinquent. If the lender attempts to foreclose prematurely, your lawyer can intervene. What to Do if You Cannot Reinstate Your Mortgage in Pennsylvania If you cannot cure the default to reinstate your mortgage, filing for bankruptcy might help you avoid foreclosure. Depending on how you file, you might be able to keep your home. Automatic Stay When you file a bankruptcy petition, the federal bankruptcy court will impose an automatic stay under 11 U.S.C § 362(a). When this happens, lenders and creditors may not take legal action against you for unpaid debts. If legal action is pending, like a foreclosure, it must stop immediately. While the automatic stay is in effect, lenders are prohibited from contacting you about payment. Chapter 7 Chapter 7 bankruptcy involves liquidating your property and assets, including your home. The proceeds from the liquidation are then used to pay outstanding debts according to § 726(a). If debts remain, they may be eligible for discharge, and you would not be legally responsible for payment. While Chapter 7 bankruptcy might not allow you to keep your home, it can help you avoid foreclosure. This might be a viable option if you have debts other than your mortgage that are causing you to struggle financially. Chapter 13 Chapter 13 bankruptcy does not involve liquidating your assets, but rather reorganizes your debts and finances. Under § 1322(a), you must design an aggressive yet feasible payment plan to regain control of your mortgage and other debts. Once the court, creditors, and lenders approve the plan, you must maintain it for about 3 to 5 years. Many people are able to catch up with their mortgage this way and keep their homes. Our Pennsylvania Mortgage Foreclosure Defense Attorneys Are Here to Help You Obtain a confidential, free case analysis from the Philadelphia mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates by calling (215) 701-6519.

WDVA: Goldman Sachs v. Brown- Denial of motion to compel arbitration in Bankruptcy Ed Boltz Mon, 03/17/2025 - 17:59 Summary: The U.S. District Court for the Western District of Virginia affirmed a Bankruptcy Court decision denying Goldman Sachs Bank USA’s motion to compel arbitration in a case involving alleged violations of the automatic stay in bankruptcy. Plaintiffs Rhea Ann Brown and Gregory Kevin Maze, who filed for bankruptcy under Chapter 13 and Chapter 7, respectively, claimed Goldman Sachs continued to send collection communications regarding pre-petition Apple Card debts despite the automatic stay. Goldman Sachs sought to enforce arbitration based on the Apple Card Agreement, but the Bankruptcy Court ruled that enforcing arbitration would conflict with the Bankruptcy Code’s objectives, particularly the court’s authority to enforce the automatic stay and provide a centralized forum for resolving debtor-creditor disputes. On appeal, the District Court reviewed the Bankruptcy Court’s decision de novo and found that arbitration of constitutionally core claims—such as enforcing the automatic stay—would inherently conflict with the purpose of the Bankruptcy Code. The court emphasized that the automatic stay is a fundamental protection for debtors, preventing collection efforts outside the bankruptcy process. Because compelling arbitration would undermine this protection and the Bankruptcy Court’s role in overseeing the bankruptcy proceedings, the District Court held that the Bankruptcy Court properly exercised its discretion in denying the motion. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document moodfabrics.com-mdf316-hana-pattern-letter-a4-tiled.pdf (940.67 KB) Category Western District

A short sale is when someone sells their home for less than they owe on the mortgage. This is not ideal, but it may alleviate significant debt. However, not everyone may go through a short sale, and you must prove that it is necessary for your situation. Many homeowners pursue short sales because they are in financial distress and need to relieve debt quickly to avoid foreclosure or bankruptcy. If you do not mind selling your home, this can be a viable option. However, the lender may pursue a deficiency judgment and demand that you pay the balance on the mortgage. As such, we must accurately evaluate the property to obtain the maximum sale price. Contact our Pennsylvania mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519. Short Sales in Pennsylvania A short sale is when a homeowner sells their home for less than the mortgage. Many homeowners may still owe money to the lender after the sale. This is not a great situation, but a short sale may help you avoid foreclosure. Not just anyone may execute a short sale. You may only do so with the bank’s approval, and our mortgage foreclosure defense lawyers will help you prove to the bank why a short sale is necessary. First, we must demonstrate your financial hardship with proof of your earnings. Pay stubs, tax returns, and bank statements may suffice. If you are unemployed, we may need to explain why. Perhaps you were suddenly laid off, and comparable work is unavailable. Maybe you are injured and can no longer work. We also need a comparative market analysis showing that there is very little chance of selling the property for anything close to the mortgage value. Often, sellers still owe money on their mortgage after a short sale, and lenders may pursue deficiency judgments to recover the difference. Why Homeowners Choose Short Sales Homeowners often pursue short sales to avoid foreclosure, which has a much harsher impact on a person’s credit than a short sale. Homeowners may prefer a short sale because they plan to obtain a loan to buy a different, more affordable home. Foreclosure might damage their credit to the point that obtaining a home loan is not possible for a long time. Economic conditions may also influence a homeowner’s decision to pursue a short sale. Changes in the neighborhood, job market, and overall economy may cause property values to plummet, making it harder for homeowners to afford mortgage payments. Homeowners may choose to go through a short sale because the lender is unlikely to pursue a deficiency judgment. In some cases, lenders may declare the debt paid in full after a short sale, which is much better for your credit. If the lender indicates that they will pursue a deficiency judgment that you cannot afford, you may consider other options, like bankruptcy. How an Attorney Can Help During a Short Sale in Pennsylvania First, your attorney can help you prove to the bank that you need a short sale. Remember, you cannot enter a short sale just because you want to. You need the lender’s approval and evidence to support your case. An experienced attorney should know how to obtain a comparative market analysis and prove your financial hardship to the bank. Second, your lawyer can help you convince the lender not to pursue a deficiency judgment. If the lender pursues a deficiency judgment, you must repay them the difference between the sale price of your house and what you owe on the mortgage. A lawyer may persuade the lender to take the money from the sale and let the rest go, especially if they can show there is almost no way you can pay. Next, your lawyer should compare your legal options. While a short sale can help some homeowners, it is not for everyone. If your financial problems go beyond your mortgage, something like bankruptcy might be a better option. Deciding Between Short Sales and Bankruptcy Whether a short sale or bankruptcy is more helpful depends on your situation and what you want. Both may help alleviate significant debt, but they have different impacts on your credit and future financial options. If you plan to buy a different home soon, a short sale might be a better option. Short sales tend to be easier on your credit, and you may be eligible for a new home loan in only a few short years. Alternatively, bankruptcy may remain on your credit history for 7 to 10 years, depending on which chapter you file. If you have large debts other than your mortgage that you cannot afford, a short sale might not be as helpful as you think. While it might help you with your mortgage debt, you must still handle your other debts. Bankruptcy might be more effective at wiping out your debt, giving you a fresh start. How to Prepare for a Short Sale in Pennsylvania Begin preparing for a short sale by contacting a lawyer. Your attorney should help you gather important legal documents, including your mortgage and any communications you have had with the lender. You should also gather information necessary to establish financial hardship. Next, prepare the property for sale. Is there anything you can do to improve the value? If possible, making repairs and improvements may increase your home’s value and get you a better sale price. Other factors, like neighborhood conditions and the overall economy, may be out of your control. With your lawyer, contact the bank about a short sale. If they are open to the sale and are not interested in a deficiency judgment, your lawyer can help you move forward. If a deficiency judgment seems more likely, we may want to pause and reconsider your options. Contact Our Pennsylvania Mortgage Foreclosure Defense Attorneys for Help Contact our Philadelphia mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates for a free case review by calling (215) 701-6519.

NC Ct. of App.: In re Godfrey- Ratification of Forged Mortgage Ed Boltz Thu, 03/06/2025 - 20:58 Summary: The North Carolina Court of Appeals reversed the trial court’s decision denying judicial foreclosure  which involved a home equity line of credit (HELOC) secured by a deed of trust executed in 2003 by Virginia Lee Godfrey and Harry Craig Dees II. The Trustee Services of Carolina, LLC sought foreclosure after Ms. Godfrey defaulted on the HELOC, but the trial court denied the foreclosure based on her claim that her signatures on the HELOC documents were forged.  The NC Court of Appeals  held that Ms. Godfrey's conduct conclusively ratified the HELOC, making her legally bound to the debt even if she did not sign it. Under the Ratification Doctrine a  person may become bound by a contract they did not sign if they later affirm or benefit from it knowingly. The court cited Goodwin v. Webb, which held that accepting benefits from an agreement with full knowledge amounts to ratification and found the following  actions by Ms.  Godfrey showed her ratification: Acknowledgement that the HELOC was a marital debt in a verified complaint during her 2018 divorce proceedings. Acceptance of sole responsibility for the HELOC as part of the equitable distribution judgment. Payments on the HELOC. Request that  subordination of the HELOC to refinance term mortgage loans in 2007 and 2013. Benefit from a previous HELOC payoff through the 2003 HELOC funds. Dissenting Opinion Summary: Judge Hampson dissented from the majority opinion, arguing that the trial court correctly found insufficient evidence to support ratification of the HELOC debt and deed of trust by Ms. Godfrey. He emphasized that the standard of review requires appellate courts to defer to the trial court’s findings if supported by competent evidence. Commentary: This is again why bankruptcy debtors are well advised to either list all debts in their bankruptcy petition as disputed or at least include some prophylactic language in the description of that debt that it is "Not Admitted",  since otherwise a creditor could assert that the mere scheduling of the debt was a ratification.  Similar language in  proposed plans,  such as  in the EDNC and MDNC  which state that "Confirmation of the plan shall not prejudice the right of the Debtor or Trustee to object to any claim." ,  should also be standard. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_godfrey.pdf (123.69 KB) Category NC Court of Appeals