HAMP Denial May Mean Lawsuit

Under the Home Affordable Modification Program (“HAMP”), an underwater homeowner may request that a lender modify his or her home mortgage. Typically, a request is made after the homeowner has missed payments and needs the modification to eliminate negative equity, reduce monthly payments (and interest in some cases), and bring the mortgage current. If the homeowner meets certain eligibility requirements, …

Flagstar Bank Penalized for Mortgage Servicing Violations

The Consumer Financial Protection Bureau (CFPB) announced that it has reached a consent agreement with Flagstar Bank to settle accusations that the bank delayed or prevented thousands of homeowners from obtaining mortgage relief and avoid foreclosure. The agreement calls for Flagstar to pay $27.5 million to the roughly 6,500 consumers whose loans were serviced by the bank. The bank will …

When State Law Conflicts with Federal Law, Bankruptcy Debtors May Lose

The United States is a nation of laws. Many, many laws. We have city laws, county laws, state laws, and federal laws. The enforcement of each law is constrained by a jurisdiction. Federal laws typically apply everywhere within the United States; state laws only within the state borders. So, what happens when a state allows certain conduct within its borders …

Bankruptcy Dishonesty Means No Discharge and Worse

Overwhelming debt causes a great deal of stress. You may lose sleep, become angry, or get scared. Fortunately, the federal bankruptcy laws can restructure your debts, provide a fresh start and alleviate your stress. However, it is critical that you play by the rules. A man in Tama County, Iowa, recently discovered the importance of honesty and fair dealing during …

Rental History Useful for Rebuilding Credit

The average American’s FICO credit score hit an all-time high this past April, nosing in at 692. FICO scores range from 300 to 850. Although judgment of credit scores is often in the eye of the beholder, anything between 700 and 749 is considered a good score, with the best scores ranging 750 and higher. Debtors emerging from bankruptcy are …

Filing Chapter 7 after a Chapter 7 Discharge

Bankruptcy is meant to provide debt relief to honest, but unfortunate individuals. For some, bad luck seems to hang around a while. For others, bad luck seems to have moved in permanently. Unfortunate individuals with continuing or reoccurring debts may find relief through the federal bankruptcy laws which can provide a third, or even fourth opportunity to start fresh. Eligibility …

Courts Relax Rules for Bankrupting Student Loans

You can’t discharge student loans in bankruptcy. Everyone knows that. Nevertheless, recent federal court decisions indicate that restrictions on discharging student loans during bankruptcy are relaxing. Most public and private student loans are excluded from discharge unless the bankruptcy debtor can show that repaying the loan would “impose an undue hardship on the debtor and the debtor’s dependents.” Because Congress …

Buying a Vehicle before Filing Bankruptcy

While having reliable transportation is important for most American families, it can be critical for a debtor in Chapter 13 bankruptcy. The average Chapter 13 case lasts three to five years, and during that time the debtor is prohibited from incurring additional debt without court approval. While it is possible to get court approval for a different vehicle during the …

Should You Change Banks When Filing Bankruptcy?

Every night, while the rest of the country sleeps, Wells Fargo Bank cross-checks all newly filed Chapter 7 bankruptcy petitions against its list of account holders. If a Wells Fargo account holder has filed bankruptcy, the bank may place a “temporary administrative pledge” (a “hold”) on the debtor’s account(s). This hold is a certainty if the debtor has a bank …

How Having a Car Loan Can Help in Bankruptcy

The U.S. Supreme Court in Ransom v. FIA Card Services instructs that above-median debtors can take a vehicle ownership deduction of around $500 on the Means Test when calculating Projected Disposable Income, but only if there is a lien on the vehicle at the time the bankruptcy case is filed. Ransom gives debtors a great incentive to ensure there is …