DEBTOR IN BANKRUPTCY MUST HAVE RECENT CREDIT COUNSELING. QUESTIONS? CALL 235-1970

When you are involved in the bankruptcy process you are required to have recently completed credit counseling. We you do not follow the rules your case can be dismissed .
On January 20, 2012, Debtor filed a voluntary petition for relief under Chapter 13, and a
“Certificate of Counseling” (Docket # 5), which states that on June 3, 2011, Debtor received “an
individual [or group] briefing that complied with the provisions of 11 U.S.C. §§ 109(h) and
111.”

Debtor is not eligible to be a debtor in this case under 11 U.S.C. § 109(h)(1). That
section provides in relevant part, that
an individual may not be a debtor under this title unless such
individual has, during the 180-day period ending on the date of
filing the petition by such individual, received from an approved
nonprofit budget and credit counseling agency described in section
111(a) an individual or group briefing (including a briefing
conducted by telephone or on the Internet) that outlined the
opportunities for available credit counseling and assisted such
individual in performing a related budget analysis.
Debtor did not receive the required credit counseling briefing during the 180-day period
preceding the date of the filing of her petition. Debtor received the credit counseling briefing 231
days before her petition was filed. Accordingly,
IT IS ORDERED that this case is dismissed.
.
Signed on January 23, 2012,UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: Case No. 12-41245
SABRINA WADE, pro se, Chapter 13 , Judge Thomas J. Tucker

FLINT BANKRUPTCY LAWYER TERRY BANKERT 810-235-1970

Did you know that when a bankruptcy case is filed by or against a spouse while a divorce is pending, exclusive jurisdiction over the property of the debtor spouse (the bankruptcy estate) is automatically transferred to the bankruptcy court. See In re White, 851 F2d 170, 173 (6th Cir 1988).

Posted here by Flint Bankruptcy Attorney Terry Bankert 235-1970. See Http://www.attorneybankert.com

In the law of Bankruptcy all your possessions and debt become what is called an estate. The bankruptcy estate is created when the bankruptcy case is filed (whether filed voluntarily by the debtor or filed involuntarily against the debtor by creditors meeting the requirements of 11 USC 303). The bankruptcy estate consists of all property of the debtor. 11 USC 541 defines property of the estate very broadly; generally, it includes all property of the debtor “wherever located and by whomever held.” See 11 USC 541 discussed in §§17.5–17.6.

Family distress comes in many forms, financial and emotional.When a bankruptcy is filed by (or against) a spouse while a divorce case is pending in state court, the state court’s ability to take action against property of the debtor’s estate is automatically stayed or limited by 11 USC 362. There are some exceptions to the automatic stay pertaining to family law matters, which are found in 11 USC 362(b)(2).

see Michigan Family Law ch 17 (Hon. Marilyn J. Kelly et al eds, ICLE 7th ed 2011), at
http://www.icle.org/modules/books/chapter.aspx/?lib=family&book=2011553510&chapter=17
(last updated 12/16/2011).

BANKRUPTCY ELECTRONIC FILING IS NOT PERFECT

Did you know that with electronic filing the timing may cause a lack of notice to creditors and the court may try to discharge your  FLINT bankruptcy?

BANKRUPTCY FLINT ,ATTORNEY POSTING BY Flint Bankruptcy Lawyer Terry R. Bankert 810-235-1970.[Comments of Flint Bankruptcy lawyer Terry R.Bankert ,810-235-1970 ,in bracket or CAP headlines. If you have bankruptcy questions call today-trb.810-235-1970]
_________________________________/
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION,In re: Case No. 08-70062,JOHN S. WARD, Chapter 7
Debtor. Judge Thomas J. Tucker. Filed 03/16/11 13:47:45
_________________________________/
HERE IS AN ORDER DISSOLVING A SHOW CAUSE ORDER, BUT ALLOWING CREDITORS TIME TO FILE ADVERSARY PROCEEDING(S) OBJECTING TO DEBTOR’S DISCHARGE AND/OR SEEKING A DETERMINATION THAT A DEBT IS NON-DISCHARGEABLE UNDER 11 U.S.C. §§ 523(a)(2),523(a)(4), OR 523(a)(6), AND SETTING A DEADLINE FOR SAME

DEBTOR SHOW CAUSE ORDER

This case came before the Court for a hearing on March 16, 2011, on the Court’s showcause order entitled “Order Requiring Debtor to Appear and Show Cause

WHAT YOU MIGHT THINK IS A TECHNICAL GLITCH CAN GET YOUR CASE DISMISSED.

Why the Court Should Not Vacate the Discharge Order, Based on Debtor’s Incorrect Uploading of the Creditor Matrix ” (Docket # 31).

DID YOU KNOW YOU DO NOT HAVE TO ANSWER A SHOW CAUSE MOTION

Though not required to do so, the Debtor filed a written response to the showcause order, on March 8, 2011 (Docket # 32), which the Court has reviewed.

DEBTOR DID NOT SHOW UP FOR HEARING

Debtor failed to appear at the March 16 hearing, however, either in person or through his attorney. The Court is entering this Order for the reasons stated below.

I. Background

ELECTRONIC FILING OF PETITION

On December 9, 2008, Debtor (through his attorney) electronically filed a voluntary petition for relief under Chapter 7, initiating this case.

64 MINUETES LATER MATRIX FILED

Also on December 9, 2008, 64 minutes after filing the petition, Debtor’s attorney electronically uploaded the creditor mailing matrix for this case.

BETWEEN THE TWO AUTOMATICLY GENERATED NOTICE CREATED

However, in between the time of filing of the petition and the uploading of the creditor matrix (specifically, 44 minutes after the petition was filed, and 20 minutes before the creditor matrix was uploaded,) the Court’s CM/ECF system automatically generated and filed the notice entitled “Notice of Chapter 7 Bankruptcy Case, Meeting of Creditor, and Deadlines” (Docket #
2, the “Notice of Commencement” or “Notice”).

BANKRUPTCY NOTICING CENTER AUTOMATICALLY NOTICE WHAT IT HAD WHICH DID NOT INCLUDE CREDITORS

That Notice of Commencement was served by the Bankruptcy Noticing Center (“BNC”) by mail on December 11, 2008, but the BNC did not mail the Notice to any creditors. Rather, only the Debtor, Debtor’s attorney, and the Chapter 7
Trustee were served with the Notice. (See BNC Certificate of Mailing, Docket # 7, at 3).

COURT PROCEEDS AS IF CREDITORS HAD BEEN NOTICED

Despite this lack of notice to the creditors, on April 1, 2009, the Court entered an Order discharging Debtor (Docket # 24, the “Discharge Order”). Thus, no creditors were sent notice of this bankruptcy case, or the deadlines associated with this case, before Debtor obtained the DISCHARGE.

LATER CREDITORS GET NOTICE OF DISCHARGE

1 All creditors on the creditor mailing matrix were served by the BNC with a notice of the Debtor’s discharge, either by electronic transmission on April 2, 2009, or by mail on April 3, 2009. (See Docket # 25 at 3).

CREDITOR HAD NO OPPORTUNITY TO OBJECT BY FILING AN ADVERSARIAL PROCEEDING

Initially, and as stated in the Notice of Commencement, the deadline for any creditor to file an adversary proceeding objecting to the Debtor’s discharge under 11 U.S.C. § 727(a), and for any creditor to file an adversary proceeding seeking a determination of non-discharge ability under 11 U.S.C. §§ 523(a)(2), 523(a)(4), or 523(a)(6), was March 30, 2009. But no notice of that deadline was served on any creditor before the deadline expired, contrary to Fed.R.Bankr.P.
2002(f)(4) and (f)(5).

COURT SAID REMEDY MUST BE OFFERED TO THE CREDITORS

The Court has concluded that this notice problem must be remedied. Rather than vacating the Debtor’s Discharge Order at this time, however, the Court concludes that the relief provided below is appropriate and sufficient under the circumstances.
SHOW CAUSE DISMISSED CREDITORS MAY OBJECT
II. Relief
Accordingly, IT IS ORDERED that:
1. The show-cause order (Docket # 31) is dissolved, subject to the terms of this Order.

2. Any creditor in this case may file an adversary proceeding objecting to the Debtor’s discharge under 11 U.S.C. § 727(a). Any such adversary proceeding must be filed no later than May 17, 2011.

3. Any creditor in this case may file an adversary proceeding seeking a determination of non-dischargeability under 11 U.S.C. §§ 523(a)(2), 523(a)(4), or 523(a)(6). Any such adversary proceeding must be filed no later than May 17, 2011.

DEBTOR MUST NOW GIVE NOTICE TO ALL CREDITORS

4. No later than March 18, 2011, the Debtor, through his attorney, must serve a copy of this Order on all creditors on the creditor mailing matrix, and must file proof of such service.

5. If Debtor fails to timely comply with paragraph 4 of this Order, the Court may enter an order vacating Debtor’s discharge and dismissing this case, without further notice or hearing.

—END

If you have questions concerning bankruptcy call Flint Bankruptcy Attorney Terry R. Bankert 810-235-1970.
http://www.attorneybankert.com

.

Its No Joke Being Broke.com contact a FLINT BANKRUPTCY ATTORNEY.

Bankruptcy is there to help you get a fresh start in your life or time to get your economic house in order. For a Flint Bankruptcy Attorney Call 235-1970

In order to file a bankruptcy, a debtor must file a petition for relief with the United States Bankruptcy Court for the district in which he or she resides.
Most common bankruptcy types—Chapter 7 (individual liquidation), Chapter 13 (individual reorganization) and Chapter 11 (corporate reorganization or high-income individual reorganization).
What are the differences?

In a Chapter 7, a Chapter 7 Trustee is appointed to oversee the debtor’s case. This happens automatically from the panel of Chapter 7 Trustees maintained by the Bankruptcy Court. All of the debtor’s non-exempt assets are “pooled” and turned over to the Chapter 7 Trustee to be liquidated and distributed to creditors. Often, a Chapter 7 debtor has no assets to be liquidated, making the case a “no asset” case with no recovery by creditors. In a Chapter 7 case, the Chapter 7 Trustee is responsible for objecting to claims, filing adversary proceedings to challenge the status of security interests, recover “avoidable” transfers, and paying creditors.

In a Chapter 13, a Chapter 13 Trustee is appointed from the panel of trustees to oversee the debtor’s case. The debtor proposes a plan to repay his or her creditors a certain percentage of their debts over a period of time (usually 5 years). The debtor must devote his or her “disposable income” to the repayment plan. In a Chapter 13, both the Chapter 13 Trustee and the debtor can object to claims filed by creditors.

In a Chapter 11 case, there is no trustee. Instead, the debtor remains in possession of its business or assets and is called the “debtor-in-possession”. Most often used for businesses, high-income individuals can also use this process to reorganize their debts and pay creditors. A chapter 11 debtor also proposes a plan for repayment of creditors, and creditors vote on the plan to determine whether it will be confirmed (i.e., accepted) by the Bankruptcy Court. A Chapter 11 case is a powerful tool that permits a Chapter 11 debtor to, among other things, assume or reject leases and contracts, object to claims and recover avoidable transfers made before the case was filed.
Also Chapter 12 (family farmer) and Chapter 9 (municipality) cases—these are much less common.
Once the bankruptcy case is filed, the debtor must file its schedules of assets and liabilities and its statement of financial affairs, which lists various transfers made by the debtor within certain periods of time as well as other financial information
The schedules permit the Trustee and creditors to review the debtor’s assets and the debtor’s idea of what claims will be asserted by creditors
The statement of financial affairs allows the Trustee and creditors to determine if the debtor transferred any assets to insiders within 1 year of the bankruptcy, paid any creditors within the 90 days before the bankruptcy, and gives a general picture of the debtor’s financial situation, including the last several years of income.

HAMP, FAILING OR JUST MISUNDERSTOOD?

Home affordability modification Program failing horribly this 75 billion dollar program was planned to help 5 million home owners and it has not. What happened? What is HAMP discussed here.

The $75 billion Home Affordability Modification Program designed by the Obama Administration to help struggling homeowners by lowering borrowers’ monthly payments with mortgage rate reductions and extended loan terms. HAMP originally promised to help four to five million homeowners.[4]

TOTALS OF A REPORT HAMP MODIFICATION ACTIVITY BY SERVICER.
This program report through July 2010.
Total estimated eligible 60+ day delinquent borrowers 1,456,363
Trial Plan offers extended 1,553,925
All HAMP trials started 1,307,489
Active trial modifications 255,934
Permanent modifications 421,804
[5]

This site at https://dumpmycreditors.wordpress.com/2010/11/17/hamp-failing-or-just-misunderstood/

LOCAL PRACTITIONER DISCUSSION
Terry Bankert a Flint Bankruptcy Attorney attended a professional workshop , Birch Run 11/17/10, on the problems of HAMP (Home Affordable Modification Program). This Huffington article was the foundation of the discussion that “the best in the field” made top flight comments and recommendation. Here it is morphed with other material to inform. [trb] This article is SEO to explain this, Terry Bankert a Flint Bankruptcy Lawyer 810-235-1970

BANKS HARRASS HOME OWNER

Wells Fargo put an Illinois woman though a “nightmare of harassment, frustration, and relentless stress” when she tried to apply for a mortgage modification under the Obama administration’s Home Affordable Modification Program, according to a lawsuit filed in federal court this week. From the Huffington Post updated story 11-12-2010.
http://www.huffingtonpost.com/2010/11/12/wells-fargo-makes-it-near_n_782634.html
[1]

The Mortgage default risk is no longer limited to the “subprime” sector. Delinquencies on mortgages held or sold by Freddie Mac and fannie Mae have also mushroomed. Fannie Mae delinquencies have increased to 4.72 percent from 1.72 percent a year ago. Delinquencies in Freddie Mac’s portfolio increased to 3.72 percent from only 1.52 percent last year.[3]

WHAT IS HAMP

On March 4, 2009, the U.S. Department of the Treasury (Treasury) announced details of the Home Affordable Modification program (HAMP) as part of the Making Home Affordable Program. HAMP is a loan modification program designed to reduce delinquent and at-risk borrowers’ monthly mortgage payments. Freddie Mac is pleased to play a leadership role by implementing this program.[2]

[This program]…designed to encourage lender to modify mortgages in order to reduce monthly mortgage payments for borrows. Under the program sevicers and lenders would receive compensation from the Department of the treasury for agreeing to modify mortgages. [3]

HAMP FOR THOSE 31 DAYS DELINQUENT

HAMP is effective immediately for mortgages originated on or prior to January 1, 2009, and will expire on December 31, 2012. Servicers must solicit eligible borrowers who are 31 or more days delinquent for a modification under HAMP, but cannot solicit borrowers for this program who are current or less than 31 days delinquent.[2]
HAMP establishes a step by step process to reduce payments.[summarized here]
1.Is the debtor eligible?
2.Calculate the debtors gross monthly income
3.Capitalize the arrearage
4.Reduce the interest rate to reach the target payment
5.Re-amortize the loan
6.Principal forbearance
7.Compensation to the lender and Service [3]

HAMP APPLICATION CAN CAUSE SOME TO LOSE THEIR HOME
It’s a familiar nightmare to many lured by HAMP’s promise of reduced monthly payments. More people have been bounced from the program than have received “permanent” five-year modifications, and federal auditors say the program sometimes actually causes borrowers to lose their homes.[1]

[Upon receiving a request from a servicer]..even where the information is unidentified the service can effect a modification …for a three-month trial period….If the borrowed makes the three payments during this 90 day trial period and submits all the documentation the modification become permanent.[3]

BOGUS BANK EXPLAINATIONS BOUNCES HAMP?
Therese Crowley of Deerfield, Ill., facing reduced income because of health problems and less demand for her broker services, first asked for a HAMP application in April 2009. Wells Fargo allegedly dragged its feet for four months before it sent one along, then denied the application in October and gave her bogus explanations when she called to complain. [1]

A TRAIL OF TEARS
In November, Wells Fargo told Crowley to apply again, then denied her again the following month. A week later she called the bank and spoke to a woman named Paula, who “determined that Wells Fargo had erroneously overstated Crowley’s income by $2,800,” the complaint alleges. “Also, the file erroneously indicated that Crowley owed $2,381.07 per month on a credit card debt which in fact had been paid off in 2002. Paula agreed that with the correct information (information that Wells Fargo had during this entire process), in her opinion Crowley qualified for a HAMP loan modification.”
Crowley applied again and was denied again in March. She called to complain, and was once again told she qualified. Then Wells Fargo allegedly put her in a “special forbearance period” during which she made reduced payments for three months while continuing to pursue a HAMP modification.[1]

CATCH ALL REJECTION JUSTIFICATION NPV
One day, she’d be told she didn’t qualify because of her income, another she’d be told she failed HAMP’s opaque “Net Present Value” test.[1]

WHO KNEW?
In August, she allegedly received the following from a Wells Fargo executive: “As indicated, your income doesn’t have anything to do with why you were actually denied for HAMP. You were denied for Net Present Value, at the time of the denial for NPV, we had been instructed to not use that as the reason because we were not prepared to explain Net Present Value denials.” [1]

40% MAKE IT

Crowley’s putative class action complaint is just one of many moving through courts across the country reflecting widespread frustration with HAMP. President Obama said the program would allow three to four million homeowners to modify their mortgages and keep their homes by 2012. So far, 466,708 are in active permanent modifications, while more than 700,000 have had their modifications canceled.[1]

The bankruptcy community has been disappointed with the failure of the Bankruptcy Code to deal with the mortgage payments that are out of reach of financially strapped debtors. Debtor attorneys should at least attempt to work servicers to modify mortgages under the HAMP program while a debtor is in a chapter 13 case. If so, many debtors might actually obtain a permanent modification, a family home can be saved, and a mortgage creditor can avoid a crushing loss.[3]

MAGIC NUMBER 31% SAVES $500 PER MONTH TO HOME OWNER
Eligible borrowers are supposed to have their monthly payments reduced to 31 percent of their monthly income, usually saving $500 a month. If they make the reduced payments for three months, the modification is supposed to become permanent.[1]

BANK MUM, EMAIL LYING?
Wells Fargo declined to comment on Crowley’s HAMP lawsuit (banks generally don’t discuss individual customers) but said in an email to HuffPost that 92 percent of its mortgage customers are current in their payments as of the second quarter of 2010 and that less than two percent of its owner-occupied servicing portfolio has gone to foreclosure sale on an annual basis.[1]

AVERAGE LOSS TO BANK $54,000
“Wells Fargo has led the real estate lending industry with more than $3.4 billion in principal forgiveness for customers facing financial hardship, permanently erasing on average 13 percent of the principal owed, which equals more than $54,000 per loan for more than 65,000 customers,” said a spokeswoman. [1]

FORECLOSURE
“Foreclosure is a last resort after all available options for maintaining homeownership have been exhausted.”[1]

PERGATORY
As for Crowley, she “hangs in limbo somewhere between loan modification and foreclosure,” according to the lawsuit.[1]

HARRASSMENT,FRUSTRATION, RELENTLESS STRESS, THANK YOU HAMP
“I am not just fighting for myself,” said Crowley in a statement. “I want to make sure other people won’t have to endure the same nightmare of harassment, frustration, and relentless stress that I have suffered.” [1]

An attorney assisting a borrower struggling financially and seeking relief under chapter 13 should examine the debtors mortgage to determine whether a HAMP modification might be possible. Obviously if a debtor’s mortgage payments can be reduced, chapter 13 becomes feasible. By performing an initial HAMP calculation an attorney can identify whether a mortgage payment target is possible……documenting the information necessary to support a HAMP modification is a task often beyond most debtors….The official document known as a Request for Modification and Affidavit (RMA) is a three page document that makes it relatively simple for a chapter 13 debtor to request a modification. The supporting documents are more challenging.[3]

[At the end of the day]…the lenders net present value analysis of the prospective modification vis a vis foreclosure. Simply stated the lender must make a mathematical determination as to whether there there is a greater value to the loan as modified than there is pursuing a forclosure.[3]…from all appearance the NPV test is based on faith.[3]

[1]
http://www.huffingtonpost.com/2010/11/12/wells-fargo-makes-it-near_n_782634.html

[trb]
This cite and CAP headlines by Terry Bankert 1000 Beach St, Flint MI 48503, 810-235-1970, http://attorneybankert.com

[2]
http://www.freddiemac.com/singlefamily/service/mha_modification.html

[3]
HAMP and your Chapter 13 practice ABI Journal 2/12/2010 article by Henry E.Hildebrand III Office of Chapter 13 Trustee Nashville Tenn. Hank13@ch13nsh.com

[4]
http://agentgenius.com/real-estate-news-events/home-affordability-modification-program-failing-horribly/
[5]
Making Home Affordable Program Servicer Report through July 2010