4th Cir.: Trantham v. Tate- Nonstandard Chapter 13 Bankruptcy Provisions Ed Boltz Sat, 11/02/2024 - 18:51 Summary: The Fourth Circuit Court of Appeals reversed the decisions by the  bankruptcy and district court decision that rejected Trantham's proposed Chapter 13 bankruptcy plan, which allowed for property to vest in her at the plan’s confirmation rather than at the final decree, as mandated by the local form. The lower courts had required adherence to the local form's default vesting provision for consistency and efficiency, despite finding that Trantham's plan was "not contrary to" the Bankruptcy Code. The appellate court emphasized that the debtor has the exclusive right to propose a plan, including its vesting terms, as long as it adheres to the Bankruptcy Code. Since the Code allows property to vest in the debtor upon plan confirmation (with that actually being the express Congressional default), the court ruled that the local form’s default provision could not override this right.   If the trustee objects, it is the Trustee  who bears the initial burden of “going forward with evidence as to [her] objection.” Commentary: A really great victory by Todd Mosley, with assistance from Richard Cook and NCBRC. Vesting Provisions The specific nonstandard provision in this case concerned when  assets of the estate would revest in the debtor,  with the option generally either being at confirmation or discharge.   Some commentators have  fretted or threatened vesting assets in the debtor at confirmation would allow creditors to  enforce their liens when the debtor defaults in making the payments post-confirmation  without seeking relief from the automatic stay.  And while some sections of 11 U.S.C. § 362(a) only prohibit actions against "property of the estate", (a)(5)  in contrast prohibits "any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title...." (Emphasis and color added.)    Mortgage servicers,  who nearly always bring foreclosures against the named owners of the property and not in rem,  would also be restricted by (a)(1) in the "commencement or continuation ... of [an]  action or proceeding against the debtor."  The same would hold for pre-petition judgment creditors under (a)(2).  It would be surprising to learn that in the 7th Circuit,  where, following  In re Cherry, 963 F.3d 717, 718 (7th Cir. 2020),   it seems like it is the unbreakable "norm" that property vests in the debtor at confirmation, creditors are completely unfettered by the automatic stay.   The Fourth Circuit did clearly reaffirm that  when a debtor experiences a “substantial and unanticipated” change of income from selling property that vested in him at plan confirmation, the trustee maintains the ability to seek to modify the debtor’s plan  so that unsecured creditors can recoup such income. See Murphy v. O’Donnell (In reMurphy), 474 F.3d 143, 154 (4th Cir. 2007) Many Chapter 13 Trustees nonetheless seem terrified (and elation by some debtors attorneys ) that if assets vest in the debtor at confirmation,  the power and information asymmetries will allow debtors to sell assets and quickly and quietly make final payments under their plans,  such that the Trustee will not have an opportunity to discover and recover any appreciation in those assets and seek a modification under 11 U.S.C.  § 1329 to modify the dividend to unsecured creditors.   Those  fears (and giddiness) are undercut by the simple fact that most such sales  will still involve lenders, either being paid off and/or providing financing,  who will continue to insist on obtaining bankruptcy court approval.  Explicitly placing an obligation of disclosure to the Trustee of direct payments (other than as provided in the plan) on creditors in Local Rules  would bolster this further. These scales can also be further rebalanced if more bankruptcy trustees take a page from the long-standing practice in the Middle District of North Carolina of recording a notice of bankruptcy  with every County Registrar of Deed where a debtor owns real  property.  That would put real estate attorneys and title insurers on notice of the bankruptcy and even an obligation to disclose a sale,  since apparently those parties are unable to otherwise spend 10¢ on a PACER search. General Provisions More important,  however,  than the vesting question (which tends to occupy the attentions of both  judges and debtor's attorneys most noted for their intransigence),  Trantham stands for the proposition that Chapter 13 debtors have the "exclusive right to propose plans"   that include any "provision [that] is consistent with the Code and isn’t otherwise proposed in bad faith or forbidden by law, the   bankruptcy court “shall confirm” the plan with that tailored provision."  Confirmation with such provisions is permitted even over the objection of a creditor if the Disposable Income test and Hypothetical Liquidation Requirement are satisfied. Too often Chapter 13 Trustees and bankruptcy judges insist that all consumer cases must be cookie cutter versions of each other (while at the same time bemoaning that kind of representation by consumer debtors' attorneys), making  “efficiency and consistency”  for administration by  the Trustee essential.  The sort of bespoke plan provisions that are approved de rigueur in Chapter 11 plans  are then rejected out of hand.  See, e.g. ,  In re Parkman, 589 B.R. 567 (S.D.Miss.  2018.)   That pearl clutching aside,  attached is also a set of potential non-standard plan provisions,  drawn from many of Buzzy Stubb's individual Chapter 11 cases and the wisdom of Max Gardner,  which do not violate the Bankruptcy Code and  would often greatly benefit Chapter 13 debtors .  The Buchanan provisions,  allowing participation in Income Driven Repayment plans for student loans during  Chapter 13 are another example  of the creativity and flexibility that Trantham now clearly allows.   Similarly,  an "estimated duration" plan,  which allows the debtor can request discharge,  as soon as she satisfies her priority and secured obligations and any required dividends to unsecured creditors, regardless of the number of estimated months the plan was proposed and anticipated to last,  was favorably cited to by the 4th Circuit here from  In re Sisk, 962 F.3d 1133 (9th Cir. 2020).  Whether the plan could require the Trustee, rather than the debtor herself,  to  move for plan completion and discharge would again now depend on if shifting that obligation was contrary to the Bankruptcy Code,  not just burdensome to the Trustee. Concurrence: Judge Wilkinson's concurrence is as important as the gravemen in this case-    The absolutist positions taken by the district court and the debtor here both neglect an essential ingredient in the bankruptcy process: “[N]egotiation and collaboration among numerous parties.” In re Ottawa Bus Serv., Inc., 498 B.R. 281, 288 (D. Kan. 2013). The principle of collaboration was lacking in this case. (Emphasis added.) This absolutist  lack of collaboration (which could  also be imputed to the Chapter 13 Trustee and the bankruptcy court)  was and unfortunately can be particularly problematic in Chapter 13 cases  where overzealous and obdurately stubborn parties stake out doctrinaire positions  with little interest or incentive to seek accommodation.  Hopefully Judge Wilkinson's admonition for "negotiation and collaboration" to us "soldiers on the ground"  will be heeded by all sides. Prudential Standing for Appeal While leaving a full decision of this "open question"  for another day,  the 4th Circuit,  relying on In re Sisk, 962 F.3d 1133 (9th Cir. 2020),  also expressed skepticism regarding an overly strict application of prudential standing "when the appellant is the party below and remains integrally connected to the issues on appeal.”    This could mean that debtors have the right to object to claims even when the lack of a pecuniary interest might make them a "person only slightly aggrieved." Additional Commentary: NCBRC:  Debtor’s Right to Propose Chapter 13 Plans Affirmed by Fourth Circuit: Flexibility Over Local Form Defaults ABI Journal:  Rules Are Made to Be Broken ... if in Conflict with the Code Rochelle's Daily Wire:  Revesting on Discharge in Chapter 13 Can’t Be Mandated, Fourth Circuit Says Seymour, Jonathan, The Limited Lifespan of the Bankruptcy Estate: Managing Consumer and Small Business Reorganizations (January 1, 2021).  With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document trantham_v._tate_4th_cir_opinion_rev_dist_court.pdf (270.73 KB) Document non-standard_provisions_2017.12.20_1.pdf (77.98 KB) Category 4th Circuit Court of Appeals

Genetic Testing Company 23AndMe Expected To Declare BankruptcyThere are certain types of companies that you almost expect to go under with the economy’s current state. Brick-and-mortar retailers and fast casual restaurants seem to be dropping left and right. But a well-known company in the biotech sector now appears to be on the brink of collapse, and experts predict that it will soon file for bankruptcy. This isn’t just a chilling indicator of how the American economy is doing. Millions of customers have trusted their most personal information- their DNA- with 23AndMe over the years. And if 23AndMe is required to sell its assets due to a bankruptcy filing, customer information could be sold to advertisers and researchers. Millions of people have used 23AndMe’s services over the years, with a valuation of $3.5 billion when the company went public in 2021. But by 2023, the company reported a net loss of over $300 million, and its shared fell below $1. In October 2023, the company was rocked by scandal when hackers gained access to almost 7 million customers’ private information. Upon first reading, it may seem like the information obtained from 23AndMe’s genetic tests should be protected by HIPAA, or the Health Insurance Portability and Accountability Act. This law protects the privacy of medical patients’ health data, which can be used by major corporations for a variety of purposes. However, 23AndMe is considered a direct-to-consumer company rather than a traditional healthcare provider. That means that HIPAA doesn’t protect the data that 23AndMe has collected from its customers over the years. So if you’ve done a 23AndMe test in the past and start seeing advertisements that seem eerily perfect for you, it may not be a coincidence. 23AndMe’s user agreement gives the company the right to retain its customers’ information for “as long as necessary.”Rumors of 23AndMe’s downfall have been swirling for months, as the company began laying off employees last year. In September 2024, it shut down its internal research group, only contributing more to suspicions of an imminent bankruptcy. Some blame the company’s struggles on the fact that it is a one-time service. While 23AndMe has offered a subscription-based model in the past, most people simply want the results of their DNA test and to be done with the company. However, it also issued an announcement last month that it would be offering a subscription service of semaglutide injections. This is the active ingredient in medications like Wegovy and Ozempic which are becoming increasingly common weight loss treatments. In October 2024, all seven of 23AndMe’s independent directors resigned from the board. They blamed the exit on CEO Ann Wojcicki’s business strategies and work towards making the company private. This kind of mass exodus can be devastating to a company that is already floundering. Many expect that 23AndMe will soon declare bankruptcy.Considering your own bankruptcy filing in Phoenix or Tucson, Arizona? Our team makes it easy with skillful representation and flexible payment plan options starting at zero dollars down. For more information, call 480-470-1504 for your free consultation. Bankruptcy For 23AndMe Versus An Average DebtorDespite never being a profitable company, 23AndMe once held a high valuation and was considered a leader in genetic testing. Corporations like 23AndMe are ineligible for chapter 13 bankruptcy, which is the second most common form of personal bankruptcy. The first most common, chapter 7, can also be used by businesses struggling with debt. Businesses (and under some rare and limited circumstances, individuals) can also use chapter 11 bankruptcy to address debt issues. If 23AndMe files for bankruptcy, it will most likely be a chapter 11 case. Chapter 7 requires a corporate debtor to close its business, and can be infeasible for companies with complex debt structures. Most of the time, when you hear of a company declaring bankruptcy in the news, it is a chapter 11 bankruptcy filing. Chapter 11 bankruptcy creates an opportunity for the company to stay in operation. How does a business get to avoid financial responsibilities yet stay running with a chapter 11 bankruptcy filing? Upon filing for bankruptcy, a business, or any other type of debtor, becomes protected from creditors by the automatic stay. One of the most useful protections from the automatic stay is that it freezes lawsuits and prevents creditors from filing new ones while the bankruptcy is in good standing. This is usually one of the first steps that a creditor will take to collect an unpaid debt. It can be a huge distraction and drain of resources if a company is already struggling to stay afloat. It can also stop creditor actions like repossessions, which make it more difficult for a company to continue conducting business in order to earn income and pay their debts. The protections from the automatic stay can be crucial to a company’s ability to survive a bankruptcy case. Once under the shield provided by the automatic stay, the chapter 11 bankruptcy debtor can make proposals to a committee of its creditors on how it can emerge from debt. This could be converting debt into equity, downsizing the business, selling assets, shifting business strategies, finding new investors, or finding a buyer for the company. There is no set path for a business to follow if it files for chapter 11 bankruptcy. The committee will vote to approve or deny any proposals made by the debtor. If the committee denies a proposal by the debtor, they can also come up with and submit a proposal to rid the company of its debt. As one can imagine, it can take quite a while to get the debtor and committee to reach an agreement, and would generate more significant legal fees the longer it takes. There are special provisions available for small business chapter 11 bankruptcy debtors that take away the requirement that a creditor committee be formed. The company generally must have less than $7.5 million in debt to qualify as a small business for chapter 11 bankruptcy purposes. Chapter 7 For Small BusinessesFiling for chapter 11 bankruptcy is often beyond the needs (and means) of small business owners looking for a clean slate. Chapter 7 can be used to discharge unsecured debts and allow the business owner to open a similar venture, if they wish. If the business assets are covered by bankruptcy exemptions or easy to replace, the debtor can open up a new business after closing their first one through chapter 7 bankruptcy. The bankruptcy can clear credit cards, personal loans, and other unsecured nonpriority debts, as well as personal debts- the most common in the United States being medical bills. Chapter 7 bankruptcy is much more uniform than chapter 11 bankruptcy. It is typically completed within 6 months, but cases are often discharged in as few as 3 months. A trustee is assigned to each case and will inform the debtor of any additional information that is needed. The debtor will attend a 341 Meeting of Creditors, which is generally held 4-6 weeks after filing. Creditors can attend the hearing or have 60 days after the hearing to object to their debts being discharged. Debtors must meet certain requirements to qualify for chapter 7 bankruptcy, with income being the most common factor causing ineligibility. Want To Learn More About Your Arizona Bankruptcy Options? Schedule Your Free Consultation With Our Firm TodayThe failure of big companies like 23AndMe just go to show that anyone can end up filing for bankruptcy. Whether you own your own business or earn your living some other way, bankruptcy can address debts and keep creditors at bay. Our Phoenix and Tucson bankruptcy team has represented clients just like you and can present you with reasonable expectations about your potential filing. We also understand just how difficult it can be to pay for bankruptcy while dealing with debt, so you can also check to see if you qualify for our zero down payment plan option. To get started today for free with your consultation, call 480-470-1504. MY AZ LAWYERS Email: info@myazlawyers.comWebsite: www.myazlawyers.comMesa Location1731 West Baseline Rd., Suite #100Mesa, AZ 85202Office: 480-448-9800Phoenix Location343 West Roosevelt, Suite #100Phoenix, AZ 85003Office: 602-609-7000Glendale Location20325 N 51st Avenue Suite #134, Building 5Glendale, AZ 85308Office: 602-509-0955Tucson Location2 East Congress St., Suite #900-6A Tucson, AZ 85701Office: 520-441-1450Avondale Location12725 W. Indian School Rd., Ste E, #101Avondale, AZ 85392Office: 623-469-6603The post Genetic Testing Company 23AndMe Expected To Declare Bankruptcy appeared first on My AZ Lawyers.

Genetic Testing Company 23AndMe Expected To Declare Bankruptcy There are certain types of companies that you almost expect to go under with the economy’s current state. Brick-and-mortar retailers and fast casual restaurants seem to be dropping left and right. But a well-known company in the biotech sector now appears to be on the brink of collapse, and experts predict that it will soon file for bankruptcy. This isn’t just a chilling indicator of how the American economy is doing. Millions of customers have trusted their most personal information- their DNA- with 23AndMe over the years. And if 23AndMe is required to sell its assets due to a bankruptcy filing, customer information could be sold to advertisers and researchers.  Millions of people have used 23AndMe’s services over the years, with a valuation of $3.5 billion when the company went public in 2021. But by 2023, the company reported a net loss of over $300 million, and its shared fell below $1. In October 2023, the company was rocked by scandal when hackers gained access to almost 7 million customers’ private information. Upon first reading, it may seem like the information obtained from 23AndMe’s genetic tests should be protected by HIPAA, or the Health Insurance Portability and Accountability Act. This law protects the privacy of medical patients’ health data, which can be used by major corporations for a variety of purposes. However, 23AndMe is considered a direct-to-consumer company rather than a traditional healthcare provider. That means that HIPAA doesn’t protect the data that 23AndMe has collected from its customers over the years. So if you’ve done a 23AndMe test in the past and start seeing advertisements that seem eerily perfect for you, it may not be a coincidence. 23AndMe’s user agreement gives the company the right to retain its customers’ information for “as long as necessary.” Rumors of 23AndMe’s downfall have been swirling for months, as the company began laying off employees last year. In September 2024, it shut down its internal research group, only contributing more to suspicions of an imminent bankruptcy. Some blame the company’s struggles on the fact that it is a one-time service. While 23AndMe has offered a subscription-based model in the past, most people simply want the results of their DNA test and to be done with the company. However, it also issued an announcement last month that it would be offering a subscription service of semaglutide injections. This is the active ingredient in medications like Wegovy and Ozempic which are becoming increasingly common weight loss treatments. In October 2024, all seven of 23AndMe’s independent directors resigned from the board. They blamed the exit on CEO Ann Wojcicki’s business strategies and work towards making the company private. This kind of mass exodus can be devastating to a company that is already floundering. Many expect that 23AndMe will soon declare bankruptcy. Considering your own bankruptcy filing in Phoenix or Tucson, Arizona? Our team makes it easy with skillful representation and flexible payment plan options starting at zero dollars down. For more information, call 480-470-1504 for your free consultation.  Bankruptcy For 23AndMe Versus An Average Debtor Despite never being a profitable company, 23AndMe once held a high valuation and was considered a leader in genetic testing. Corporations like 23AndMe are ineligible for chapter 13 bankruptcy, which is the second most common form of personal bankruptcy. The first most common, chapter 7, can also be used by businesses struggling with debt. Businesses (and under some rare and limited circumstances, individuals) can also use chapter 11 bankruptcy to address debt issues. If 23AndMe files for bankruptcy, it will most likely be a chapter 11 case. Chapter 7 requires a corporate debtor to close its business, and can be infeasible for companies with complex debt structures. Most of the time, when you hear of a company declaring bankruptcy in the news, it is a chapter 11 bankruptcy filing. Chapter 11 bankruptcy creates an opportunity for the company to stay in operation.  How does a business get to avoid financial responsibilities yet stay running with a chapter 11 bankruptcy filing? Upon filing for bankruptcy, a business, or any other type of debtor, becomes protected from creditors by the automatic stay. One of the most useful protections from the automatic stay is that it freezes lawsuits and prevents creditors from filing new ones while the bankruptcy is in good standing. This is usually one of the first steps that a creditor will take to collect an unpaid debt. It can be a huge distraction and drain of resources if a company is already struggling to stay afloat. It can also stop creditor actions like repossessions, which make it more difficult for a company to continue conducting business in order to earn income and pay their debts. The protections from the automatic stay can be crucial to a company’s ability to survive a bankruptcy case.  Once under the shield provided by the automatic stay, the chapter 11 bankruptcy debtor can make proposals to a committee of its creditors on how it can emerge from debt. This could be converting debt into equity, downsizing the business, selling assets, shifting business strategies, finding new investors, or finding a buyer for the company. There is no set path for a business to follow if it files for chapter 11 bankruptcy. The committee will vote to approve or deny any proposals made by the debtor. If the committee denies a proposal by the debtor, they can also come up with and submit a proposal to rid the company of its debt.  As one can imagine, it can take quite a while to get the debtor and committee to reach an agreement, and would generate more significant legal fees the longer it takes. There are special provisions available for small business chapter 11 bankruptcy debtors that take away the requirement that a creditor committee be formed. The company generally must have less than $7.5 million in debt to qualify as a small business for chapter 11 bankruptcy purposes.  Chapter 7 For Small Businesses Filing for chapter 11 bankruptcy is often beyond the needs (and means) of small business owners looking for a clean slate. Chapter 7 can be used to discharge unsecured debts and allow the business owner to open a similar venture, if they wish. If the business assets are covered by bankruptcy exemptions or easy to replace, the debtor can open up a new business after closing their first one through chapter 7 bankruptcy. The bankruptcy can clear credit cards, personal loans, and other unsecured nonpriority debts, as well as personal debts- the most common in the United States being medical bills.  Chapter 7 bankruptcy is much more uniform than chapter 11 bankruptcy. It is typically completed within 6 months, but cases are often discharged in as few as 3 months. A trustee is assigned to each case and will inform the debtor of any additional information that is needed. The debtor will attend a 341 Meeting of Creditors, which is generally held 4-6 weeks after filing. Creditors can attend the hearing or have 60 days after the hearing to object to their debts being discharged. Debtors must meet certain requirements to qualify for chapter 7 bankruptcy, with income being the most common factor causing ineligibility.  Want To Learn More About Your Arizona Bankruptcy Options? Schedule Your Free Consultation With Our Firm Today The failure of big companies like 23AndMe just go to show that anyone can end up filing for bankruptcy. Whether you own your own business or earn your living some other way, bankruptcy can address debts and keep creditors at bay. Our Phoenix and Tucson bankruptcy team has represented clients just like you and can present you with reasonable expectations about your potential filing. We also understand just how difficult it can be to pay for bankruptcy while dealing with debt, so you can also check to see if you qualify for our zero down payment plan option. To get started today for free with your consultation, call 480-470-1504.  MY AZ LAWYERS Email: info@myazlawyers.com Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 Glendale Location 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: 602-509-0955 Tucson Location 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: 520-441-1450 Avondale Location 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: 623-469-6603 The post Genetic Testing Company 23AndMe Expected To Declare Bankruptcy appeared first on My AZ Lawyers.

When written properly and containing the appropriate information, hardship letters can stop or pause foreclosure. To write a hardship letter on your behalf to stop foreclosure, our lawyers must identify the specific reason why you defaulted on your mortgage and offer a solution that convinces the lender to agree to mortgage forbearance or loan modification. Examples of undue financial hardships include job loss, illness, and divorce. Because we must offer supporting documents alongside hardship letters and borrowers have little time to respond to notices of intent, it is important to have our lawyers start drafting this letter as soon as possible. Suppose the lender refuses to entertain your hardship letter. In that case, our lawyers may be able to convince the judge assigned to your case that you are experiencing undue financial hardship, and the bank may not foreclose on your home. For a free case assessment from our Pennsylvania mortgage foreclosure defense lawyers, call Young, Marr, Mallis & Associates today at (215) 701-6519 or (609) 755-3115. How to Write a Hardship Letter to Your Lender to Stop Foreclosure By clearly explaining a difficult financial situation due to a recent life change or another major event, our lawyers may convince your lender to agree to forbearance or loan modification to stop foreclosure. Much of the introductory information in a hardship letter should include the borrower’s personal information, such as their name and contact information. This allows the bank to easily identify you and your loan after receiving the hardship letter. Our mortgage foreclosure defense lawyers will then discuss the specifics of the undue financial hardship that has caused you to default on your loan. Being diagnosed with a serious illness or condition that makes you unable to work or perform at the same earning capacity could qualify you for forbearance. This would temporarily pause your mortgage payments, giving you time to get your finances in order before they resume. Whatever the cause of your financial hardship, whether it is a recent divorce, the death of a borrower, job loss, illness, a natural disaster, or unforeseen expenses, our lawyers must expressly explain the situation in the letter. We will also propose our solution to the situation and your specific goals. For example, many borrowers wish to stop foreclosure to keep their homes, so our lawyers may propose a loan modification in the hardship letter after thoroughly reviewing the current mortgage terms and your financial limitations. Hardship letters that are incomplete or fail to explain the situation to banks may be somewhat ignored by lenders, who may want to proceed with foreclosure. Lenders do not have to agree to forbearance or loan modification unless compelled by a judge, even after being informed of a borrower’s undue financial hardship. How Long Do You Have to Stop Foreclosure with a Hardship Letter? After you get a notice of intent to foreclose from your lender, you will only have a short period to explain your current financial difficulties and get the bank to agree to an alternative solution before it can file a foreclosure petition in court. Because of this, it is crucial to have our lawyers quickly assess your finances, write a hardship letter, and negotiate with your bank. Banks can typically file mortgage foreclosure petitions in court 30 days after sending a notice of intent to foreclose to a borrower. As soon as you get this notice, explain the reason why you defaulted to our lawyers, and we can confirm whether or not it is considered an undue financial hardship and proceed accordingly. Offering supporting documents alongside hardship letters can increase the likelihood that the bank will take our requests for forbearance or loan modification seriously. For example, if a sudden job loss made you default on your loan, our lawyers may provide income and bank statements to confirm your lack of income and strengthen your hardship letter. If a recent medical diagnosis contributed to your defaulting, we may offer medical statements so the bank appreciates the severity of the situation. Having time to organize this supporting evidence is important, so take the notice of intent seriously after you receive it in the mail. Can You Convince a Judge to Stop Foreclosure Because of Financial Hardship? Suppose your lender refuses to consider your hardship letter and wants to proceed with a judicial foreclosure to get paid faster. In that case, our lawyers can explain your challenging financial situation to the judge assigned to your case, who may agree that the bank cannot take your home. This is only possible if you live in a judicial foreclosure state that requires cases to go through the courts, like Pennsylvania and New Jersey. For this to happen, our lawyers must present evidence of your undue financial hardship. Judges may be more likely to delay foreclosure because of financial hardship if it is temporary. For example, suppose you recently lost your job because of company-wide layoffs. In that case, our lawyers can demonstrate that you are actively seeking reemployment to convince the judge that your current situation is temporary and you will be able to satisfy the loan terms shortly. Though judges do not always dismiss foreclosure complaints because of undue financial hardship, they might oversee loan modification during the judicial foreclosure process, especially if homeowners are struggling financially. Not every homeowner defaults on their mortgage because of exceptional financial hardship, which can put them in a difficult situation should their lenders initiate foreclosure proceedings. In these instances, our lawyers may suggest filing for bankruptcy. Because of the automatic stay associated with bankruptcy, lenders cannot continue with foreclosure after borrowers file. Instead, they will be repaid during the bankruptcy case, which a judge will also oversee. Call Our Lawyers for Help Stopping Mortgage Foreclosure For help with your case, call Young, Marr, Mallis & Associates’ Philadelphia mortgage foreclosure defense lawyers at (215) 701-6519 or (609) 755-3115.

USA Today has an article on why so many businesses are closing or filing for Bankruptcy. At Shenwick & Associates we seeing an increase in small businesses either closing or filing for  Bankruptcy. https://www.usatoday.com/story/money/2024/09/29/small-businesses-inflation-struggles/75405075007/?gnt-cfr=1&gca-cat=p 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/15minWe help individuals & businesses with too much debt!

Owning a home is often more difficult than many people realize. Not only are you responsible for upkeep and maintenance, but you must always stay on top of mortgage payments. If you have fallen behind and are afraid that foreclosure is on the horizon, talk to our legal team about entering loss mitigation. This legal process might help you negotiate with lenders or creditors so that you can avoid foreclosure. Loss mitigation is available in New Jersey to those facing foreclosure. It allows you to meet with creditors and negotiate the terms of your mortgage so that, hopefully, foreclosure can be avoided. While loss mitigation is not successful in every case, it has helped many people in debt keep their homes. To be eligible, you must file for bankruptcy under Chapter 11, 12, or 13, and the property involved must be real property. Loss mitigation may allow you to modify your loan or work out some other agreement with your creditor. Your first step is hiring an experienced attorney to help you negotiate. Get a free case evaluation from our New Jersey mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates when you call (609) 755-3115. How Loss Mitigation May Affect Foreclosure in New Jersey New Jersey’s loss mitigation program may be available to certain people filing for bankruptcy and is designed to help people avoid losing real property, such as their home. Essentially, the program allows debtors and creditors to arrange formal meetings or hearings to discuss the terms of the debtor’s loan or mortgage and hopefully work out an agreement that allows creditors to get the money they are owed and debtors to keep their homes and avoid foreclosure. Whether or not loss mitigation can help you prevent foreclosure depends on your unique circumstances and what happens during negotiations. Perhaps our New Jersey mortgage foreclosure defense lawyers can help you rework your mortgage terms so that you can better afford payments. Maybe the creditors will accept a smaller lump sum payment instead of the total value of all your missed payments. It all depends on whether the parties can reach an agreement. Remember, loss mitigation is about give and take. While you might be able to avoid foreclosure, the creditor in your case will be looking to get what they want, too. If you have missed far too many mortgage payments or there is simply no way for you to catch up on payments, loss mitigation might not be of much help. The best way to find out is to ask your bankruptcy attorney. Who Can Participate in New Jersey’s Loss Mitigation Program? To participate in the loss mitigation program, you need to meet certain eligibility requirements. These requirements are not incredibly strict, and many people in debt or facing foreclosure of real property may be eligible. Even so, you should speak to an attorney about the program and whether you can participate as soon as possible. First, you must be a debtor filing for bankruptcy under Chapter 11, 12, or 13. If you are in debt and worried about the future of your home and mortgage but have not filed for bankruptcy, you might not be able to engage in loss mitigation. Talk to a bankruptcy attorney about how to get your case started and whether loss mitigation might be available. Second, the property at the heart of your case must be real property in which you hold an interest. Loss mitigation does not apply to personal property such as vehicles, furniture, jewelry, or other valuables. Because of this, loss mitigation might not work well for people facing bankruptcy but who do not actually own property. For example, if you are a renter filing for bankruptcy, the loss mitigation program might not be very useful. Third, the debt in your case should involve some kind of loan or line of credit. A mortgage, lien, or other credit secured by property usually suffices. Creditors may also participate or even initiate loss mitigation proceedings. You may be eligible to participate if you are a co-debtor or even a third party as long as your participation is necessary or desired by the main parties involved. Possible Outcomes of Loss Mitigation for People Facing Foreclosure in New Jersey The loss mitigation program is not foolproof, but it can help people in debt come to agreements with creditors and avoid foreclosure. One possible outcome is that you and the lender on your mortgage may agree to modify the terms of your mortgage. This might mean reducing monthly payments to something more affordable. Another possibility is that your lender or creditor may agree to allow you to enter a forbearance period. No payments need to be made when a mortgage or loan is on forbearance. This period may help you get your finances in order and hopefully resume mortgage payments after the forbearance period. You might also work out an agreement to extend payment deadlines. If you are past due on payments or are very close to being past due, the lender or creditor, in your case, might be persuaded to adjust these dates so you have more time to get the necessary funds. Still, you might avoid foreclosure without keeping your home. For some, keeping their home is simply not a realistic possibility. To avoid foreclosure and the associated hit to your credit, you might agree to a short sale or otherwise sell the home without a foreclosure. How a Lawyer Can Help You During Loss Mitigation and Foreclosure in New Jersey While loss mitigation might not take place in a courtroom, you should still have an attorney to help you. Remember, you typically can only participate in loss mitigation if you have also filed for certain bankruptcy chapters, meaning you should already be working with a bankruptcy attorney who can assist you with loss mitigation. The whole purpose of the loss mitigation program is to work out agreements with lenders and creditors, and a great deal of negotiating is involved. Negotiation can be difficult, and it is best to have an attorney with strong negotiation skills. Your lawyer can also assess the situation and advise you on the realistic possible outcomes of loss mitigation. This way, you know the best and worst possible outcomes for your specific situation and can make stronger plans to hopefully get what you need. Call our New Jersey Mortgage Foreclosure Defense Attorneys for Assistance Get a free case evaluation from our Trenton, NJ mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates when you call (609) 755-3115.

It is common for homeowners to miss one or two mortgage payments. Sometimes, this is a minor clerical error that can be quickly corrected. Other times, the homeowner is having financial troubles and cannot keep up with their mortgage. The bank may foreclose if you are delinquent on mortgage payments for too long. Recovering from this process takes work, and it might take years. Recovery from foreclosure can begin before foreclosure is even complete in your case. Your attorney might help you mitigate the effects of foreclosure and save some of your assets. After foreclosure, you should focus on finding a new home. For many, this means renting rather than owning a home. For others, staying with loved ones might be the next best option. Next, you should start rebuilding your credit. This means strict budgeting and using lines of credit more strategically. You should also adjust your monthly budget to live below your means, allowing you to save more and stay ahead of your debts. Call our New Jersey mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates at (609) 755-3115 and get a free review of your case. Mitigating the Consequences of Foreclosure in New Jersey You can and should think about how you will recover from foreclosure before the foreclosure process is over. One possibility is to enter New Jersey’s loss mitigation program with our New Jersey mortgage foreclosure defense lawyers. Some people use the program to negotiate with lenders and creditors and avoid foreclosure. Even if you cannot avoid foreclosure, you might minimize its impact on your life. For example, you might come to agreements with lenders regarding late fees or other costs that you cannot afford so that you can save some money throughout the foreclosure process. You should also consider filing for bankruptcy. Some people can save their homes by filing for bankruptcy. Others might only slow the process down a bit. Even if bankruptcy cannot stop the foreclosure, it might help you reduce or wipe out some of your debts so you will be better able to get a fresh financial start when everything is over. Finding a New Home After Foreclosure in New Jersey Can you buy a new home after foreclosure? The odds are not good. Most of the time, people who have gone through foreclosure must wait about 3 to 7 years before they can even apply for a conventional loan. As such, buying a home might not be an option. Instead, renting might be the way to go. However, even renting can be difficult after foreclosure. The recent foreclosure and its impact on your credit score might prevent you from renting a decent home or apartment. This may depend on numerous factors, including the landlord’s preferences, the cost of renting, and even the neighborhood you want to live in. If renting or owning a new place is impossible, staying with loved ones might be your next best option. Do you know someone with extra space or a spare room? Maybe someone in your family owns a rental property and can work out a good rent price. While accepting favors from loved ones is not always ideal, it can help you save money while repairing your credit so that one day, you can move into your own home again. Repairing Your Credit After Foreclosure in New Jersey Do you have any existing lines of credit? If you do, keep your balance low for as long as possible. Generally, keeping usage below 30% is ideal. It might be difficult to open new lines of credit right after going through foreclosure, as creditors might not extend lines of credit to people who have experienced financial hardship. You likely cannot repair your credit if you do not have credit. For some, their first instinct is to cut up their credit cards to prevent themselves from falling into debt again. However, this is not always a good idea. If you only use cash to pay for everything, your credit score may not improve much. Building credit is all about having debt, managing it well, and paying it off promptly. In a way, you need to have at least a little bit of debt in order to repair your credit after foreclosure. If you have too many credit cards or other lines of credit, you might want to consider scaling back. This may remove the temptation to spend. A good strategy is to have only a few credit cards, maybe only two or three. Use one for ordinary daily expenses, one for emergencies, and one for something like rent or car repairs. Take a step back, examine your spending habits, and consider how many credit cards you need to survive. How Budgeting Can Help You Repair Your Credit After Foreclosure in New Jersey To effectively fix your credit after foreclosure, you must analyze your spending habits and make adjustments. It is wise to reduce spending in this situation, even if your income can support greater spending habits. A good rule of thumb is to live below your means after foreclosure and work to build healthy savings. Take stock of necessary expenses you cannot cut back on and make sure your budget and income cover them. Rent, utilities, credit card payments, and other important bills must always be paid every month. Figure out the total value of these costs and always make sure that money is set aside. Sometimes, this might leave little money for luxury costs, like dining out or engaging in hobbies. Reduce unnecessary spending as much as possible. If you like to go out to eat, take vacations, go to concerts, or spend money on other fun experiences, you should cut back. Although it might be unpleasant, avoid doing these things for a while, or at least do them sparingly. If you cannot live without these things, plan for them in your budget. For example, each month, you can set aside some money for something fun. You can use that money for a vacation or an expensive concert once a year. Use credit cards carefully. Plan to pay off the entire balance of your credit cards each month. If you overspend, you might be unable to pay off the whole balance, and you might slip back into old, bad habits. Contact Our New Jersey Mortgage Foreclosure Defense Attorneys to Talk About How to Recover From Foreclosure Call our Newark, NJ mortgage foreclosure defense lawyers with Young, Marr, Mallis & Associates at (609) 755-3115 and get a free review of your case.

Book: Liebenthal, Ryann- Unburdened: Student Debt and the Making of an American Crisis Ed Boltz Sun, 10/06/2024 - 19:22 Follow the author on Twitter @ryannliebenthal   Available for free* to the first person that asks for my copy     or for purchase at: https://www.harpercollins.com/products/burdened-ryann-liebenthal?variant=41472117669922 Summary:   College costs more today than ever and is worth less. Tuition at public colleges has more than tripled in the past 50 years. Over the same period student debt has grown from virtually nothing to more than $1.7 trillion, second only to home mortgages. Skyrocketing student-loan burdens are leading an entire generation to put off the traditional milestones of adulthood: buying homes, getting married, starting families, and saving for retirement. The burden weighs heavier on women and black Americans, and with almost 10 percent of student debtors now over the age of 60, it is a crisis no longer limited to the young. Ryann Liebenthal’s Burdened tells the maddening story of how the power plays of legislators and presidents, the commodification of higher ed, and the rapacious practices of for-profit colleges and private lenders have created today’s student-debt lava pit. As the notion of student-loan cancellation percolates into the political mainstream, Liebenthal offers a deeply researched, sweeping narrative of our broken system. Rather than give in to despair, she boldly charts a way out, offering hopeful solutions to this seemingly unfixable problem.   Commentary:   As an incredible bankruptcy nerd,  I do feel a little disappointed that Ms. Liebenthal's book was perhaps the last best opportunity for an investigative journalist to find out what happened to Marie Brunner after she became the poster child for the draconian and cruel undue hardship test in bankruptcy.   Other than that minor quibble,  this is really the best history of student loans that I have read and is also a searing criticism of how both parties have repeatedly failed not just student borrowers but also our country.   With proper attribution,  please share this post.    *You do have to promise to read the book and pass it along to someone else. Blog comments Category Book Reviews

Losing your home is not the only negative consequence of mortgage foreclosure: your credit score might drop by 100 points if the bank takes your case. Credit scores typically take a long time to improve after foreclosure proceedings, which remain on credit reports for about seven years. Rebuilding your credit after foreclosure is difficult, especially if you must find a new place to live and have other expenses or creditors to satisfy. While bankruptcy also affects credit, the recovery process is often more manageable, as debtors can rebuild credit while remaining in their homes. Before your credit score improves, you might be denied new mortgages or credit cards, and our lawyers can help you avoid such stress by identifying your way out of foreclosure, whether that is by defending your case in court, renegotiating the contract with your lender, or filing for bankruptcy in Pennsylvania. Call Young, Marr, Mallis & Associates at (215) 701-6519 to get a free case review from our Pennsylvania mortgage foreclosure defense lawyers today. How to Recover from Mortgage Foreclosure and Mitigate its Effects in Pennsylvania If your lender successfully takes your home through foreclosure, your credit score might drop by 100 points or more after already suffering because of missed mortgage payments. While you can improve your credit score after foreclosure, its negative effects may linger, impacting your ability to find new housing, which is why our lawyers will prioritize you keeping your home despite facing foreclosure. Make a Plan to Improve Your Credit Score If foreclosure goes through, you may have to find a new place to live, and banks or landlords will likely consider your credit score when evaluating you as a prospective buyer or tenant. Unfortunately, foreclosures severely affect credit scores, so planning to improve your credit afterward is important. An alternative to foreclosure is bankruptcy, which similarly affects credit scores. That said, bankruptcy requires debtors to first take credit counseling courses before filing and lets debtors keep their homes, meaning they will not have to seek new housing. If you were to lose your home and apply for a new loan or an apartment lease, your credit might be under considerable scrutiny. Missing mortgage payments will adversely affect your credit, so you might already face credit issues before foreclosure. These issues can prevent you from improving your credit since you may be denied requests to open new credit cards, which is typically how people build credit: by paying their credit cards off on time. When preparing your case, whether we identify a defense against foreclosure or file a bankruptcy petition, we can review your financial situation and help you identify how you can work to better your credit score after your case is resolved. Prioritize Keeping Your Home and Stopping the Sheriff’s Sale The primary consequence of mortgage foreclosure is not necessarily the impact on one’s credit but the fact that they lose their primary residence. Mortgage foreclosure can make it difficult for individuals to find new housing, get a new loan, open new credit cards, and rebuild their financial stability. Throughout your case, our attorneys can prioritize maintaining ownership of your home. There are many routes to resolving foreclosure proceedings without sheriff’s sales, and our Pennsylvania mortgage foreclosure defense lawyers may begin by approaching your lender with alternative loan terms that convince them not to continue with the case. Many lenders are open to renegotiating mortgage contracts, which might save them time and resources associated with judicial foreclosure proceedings. Bankruptcy can help you avoid some of the long-term consequences associated with foreclosure, as it provides a pathway to addressing all debt, not just mortgage debt. If you cannot make your current mortgage payments, you might also have difficulty paying off credit cards or car loans, and bankruptcy can help you address those debts. In fact, bankruptcy might erase some of them, like credit card or medical debt, giving you the relief you need to focus on repaying your mortgage lender while remaining in the home. How Long Will Your Credit Score Take to Recover from Foreclosure in Pennsylvania? Generally speaking, mortgage foreclosures remain on credit reports for seven years in Pennsylvania, meaning any future lender or creditor can see them during that period. Though that does not mean it will necessarily take that long for your credit score to recover, it does emphasize the importance of finding a solution to foreclosure for homeowners. The most traditional way to build credit is by opening a credit card and paying it off on time. Reassessing your finances and being intentional about the purchases you make moving forward can help you steadily rebuild your credit over time. If you have other loan payments or financial responsibilities that threaten your ability to rebuild your credit after foreclosure, our lawyers can help you address them during bankruptcy, which can also put a stop to foreclosure proceedings because of the automatic stay it affords most debtors. Most people cannot afford the time it takes to substantially improve their credit after foreclosure while also having to find a new place to live that is within their current budget. Recovering from a major financial event like foreclosure is typically a years-long process, during which people might face future issues with other creditors they may have. Because of the difficulties associated with making meaningful improvements to your credit after foreclosure, it is important to prioritize your case and take your lender seriously if they have notified you they intend to proceed with foreclosure. If you do not respond promptly, your case might proceed uncontested, leaving you with a poor credit score and without a place to live sooner than you anticipated. Call Our Pennsylvania Lawyers for a Free Case Review Call Young, Marr, Mallis & Associates at (215) 701-6519 to discuss your case for free with our Pennsylvania mortgage foreclosure defense lawyers.

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