U.S. home repossessions spiked in August to highest level since the start of the U.S. mortgage crisis. The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday Sept. 16, 2010.

In a not-so-stunning report, RealtyTrac has reported tht banks repossessed 95,364 properties in August, which is up 3% from July. August 2010 numbers are an increase of 25% from August 2009. August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. Banks have been stepping up repossessions to clear out their backlog of bad loans.

With such growing numbers of foreclosure, the housing market recovery could stumble given the continuing high rate of unemployment, the sluggish economy and lack of consumer confidence. Additionally, home sales nationwide have collapsed since the federal homebuyer tax credits expired in April.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s mortgage-relief program have fallen out.
The program, known as Making Home Affordable, has provided permanent help to about 422,000 homeowners since March 2009.


On August 4, 2010, Senator Debbie Stabenow (D-MI) introduced the Americans Want to Work Act. This legislation would create an additional tier (Tier 5) of unemployment benefits for those (known as the 99ers) who have exhausted their unemployment insurance benefits. The bill is cosponsored by Senators Charles Schumer (D-NY), Harry Reid (D-NV), Dick Durbin (D-IL), Carl Levin (D-MI), Bob Casey (D-PA), Chris Dodd (D-CT), Sherrod Brown (D-OH), Jack Reed (D-RI), and Sheldon Whitehouse (D-RI).

If passed The Americans Want to Work Act will provide 20 additional weeks of unemployment insurance for individuals in states with an unemployment rate of 7.5% or higher. This new Tier 5 would benefit people who have exhausted their weeks of all available benefits. In high unemployment states such as Massachusetts the limit is 99 weeks. In order to receive this tier, individuals would still need to meet regular unemployment insurance law requirements.

In a strong economy, state governments provide layoff victims 26 weeks of benefits. In normal recessions, states and the federal government partner to provide an additional 20 weeks. To fight the worst recession since the Great Depression, Congress in 2008 and 2009 passed several measures to provide up to 53 additional weeks (for a total of 99 weeks) of federally-funded benefits, broken into four “tiers.”

The National Employment Law Project applauded Stabenow’s bill. “NELP commends Senator Stabenow and her co-sponsors of the Americans Want to Work Act both for being champions of those hardest hit by the recession, but also for keeping the focus on the most important thing — getting those who have exhausted their benefits back to work,” said NELP’s Judy Conti in a statement to HuffPost. “We need to support these workers and their families both in their efforts to stay afloat while unemployed through no fault of their own, but equally importantly, in their efforts to find work and rebuild their lives after the devastation of such prolonged unemployment.”

The best course of action to help get Tier 5 unemployment benefits passed is to contact your elected officials and ask them to support a long term extension of unemployment benefits.

You’ve probably read that you should pay off high interest rate credit card debt first. From a financial standpoint, that’s true. It costs more to carry a balance on a high interest rate credit card. The longer you take to pay off the card, the more money it costs you. Paying off high interest rate debt saves you money and usually lets you pay off the debt faster.
Here’s an example to demonstrate:

Let’s say you have two credit cards.

1.Credit Card A has a $3,000 balance and a 22% interest rate.
2.Credit Card B has a $1,500 balance and a 12% interest rate.
Let’s also assume you can spend $150 a month toward these debts. If you pay off Credit Card A first, you’d pay a total of $1283 in interest and it would take 39 months to become debt free. On the other hand, if you paid off Credit Card B first, you’d pay a total of $1764 in interest and it would take you 42 months to become debt free.

Paying off the high interest rate debt saves you $481 in interest and you’ll pay off the debt 3 months sooner.

Notice I said paying high interest rate debt makes sense from a financial standpoint. Dave Ramsey, millionaire-gone-bankrupt-turned-millionaire, suggests paying off smaller debts first regardless of interest rate. He argues that when small debts are paid off sooner, you remain motivated to pay off the next debt and the next, until you’re debt free.

It’s true that the smallest-balance-first method let’s you pay off some debts sooner in the beginning. In our example above, under the highest-interest-rate-first method, you’d have the first card paid off in 31 months. Under the smallest balance first method, you’d have the first card paid off in 14 months. But remember, it takes you longer to pay off the debt completely under the smallest-debt-first method.

When you’re ready to pay off your debts you have to decide if you need the motivation from paying off smaller debts at the expense of spending more money on interest.

A lender in a foreclosure is the entity holding a borrower’s mortgage loan and will most times want to foreclose on a property to protect its own interest. If the borrower falls behind on payments, a foreclosure sale will sometimes allow the lender to recoup some of the credit that they extended to the borrower.

The lender is obliged by law to inform the borrower of their intent to conduct a foreclosure sale on the property. The lender’s role in the foreclosure is to track your timely payments on your mortgage, and contact you should you fall behind. The lender involved in the foreclosure will have the information on what is due in order to stop the foreclosure process. If you receive a foreclosure notice from your lender (or someone acting on your lender’s behalf), you should call your lender right away. The longer you wait, the more your options diminish and the closer you get to losing your home.

The further along the foreclosure goes; the lender will also be the person to inform you of the pending sale date. They will do this themselves or, more typically, through a trustee.

New claims for unemployment aid reach 484K


WASHINGTON — New applications for unemployment insurance rose last week to their highest level in almost six months, the latest evidence that some employers are still cutting their staffs.

First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. Analysts had expected a drop. That’s the highest total since February.

Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.

The prospects of more layoffs added to this week’s grim outlook for the economy, which began Tuesday when the Federal Reserve lowered its assessment of the recovery.

Economists closely watch weekly claims, which are considered a gauge of the pace of layoffs and an indication of employers’ willingness to hire.

Other recent reports indicate that private employers are hesitant to add new workers. The government’s July jobs report, released Friday, showed that the economy lost a net total of 131,000 jobs last month. Excluding the impact of the elimination of 143,000 temporary census jobs, the economy added a meager 12,000 positions, as layoffs by state and local governments almost canceled out weak hiring by businesses.

Thursday’s report on jobless claims indicates that trend may not change soon. Claims fell steadily last year from their peak of 651,000, reached in March 2009. But they have mostly leveled out this year at or above 450,000. In a healthy economy with rapid hiring, claims usually drop below 400,000.

Still, layoffs in the private sector have fallen back to pre-recession levels, at least as of June, according to a separate government report released Wednesday. Some economists speculate that many census workers whose jobs are finished are requesting unemployment benefits.

Claims could also be rising because of large job cuts by state and local governments, which are struggling with unprecedented budget gaps. State and local governments cut 48,000 jobs in July.

Another possibility is that small companies, facing tight credit, are still reducing their staffs, even as larger corporations slowly resume hiring.

The total number of people receiving benefits dropped to 4.45 million, the department said. But that doesn’t include another 5.3 million people receiving extended benefits paid for by the federal government, as of the week ending July 24, the latest data available.

Some companies are still cutting workers. Medical products manufacturer CareFusion Corp. (California)  said Wednesday it plans to eliminate 700 jobs, saving the company up to $120 million a year.


Bankruptcy Filings Up 25% Over Last Year, Many Consumers Struggling With Job Loss(Massachusetts)
The Patriot Ledger ^ | Jul 23, 2010 | By Jon Chesto

The number of bankruptcy filings in Massachusetts surged by 25 percent in the first six months of the year, as many consumers struggled with job losses, changing credit card terms and foreclosures.

The Warren Group reported Thursday that through June 30, 11,847 filers statewide sought protection through Chapter 7, Chapter 11 or Chapter 13 of the federal bankruptcy code.

That figure, which includes businesses and individuals, represents a 25.2 percent increase from the same January-June period in 2009. The sharp rise could put the state on track to surpass the rush of bankruptcies in 2005, before strict limits took effect.

“It’s telling the story that people are absolutely at their wit’s end,” said Vincent Valvo, group publisher for the Boston-based Warren Group’s real estate and financial publications. “It also tells the story of how overextended folks got.”

The most common bankruptcy filing is Chapter 7, which can completely erase many kinds of loans. The number of Chapter 7 filings in the state rose to 9,142 in the first six months of 2010, up 17.6 percent from the same period in 2009.

But the use of Chapter 13 rose dramatically, with 2,586 Chapter 13 filings in the first half of the year, up 62 percent from the same time in 2009. Chapter 13 filings can be used to work out payment plans to prevent foreclosures.

Winchester lawyer Nina Parker said many of her clients come to her office after lenders fail to offer permanent loan modifications to keep borrowers in their homes.

“People are feeling defeated,” said Parker, co-chairwoman of the Boston Bar Association’s bankruptcy section. “They do everything they can to comply with the (loan modification) programs, but the lenders don’t follow through.”

Richard Gottlieb, a bankruptcy lawyer in Boston, said high unemployment – the state’s jobless rate has been at 9 percent or above since September – has made it tough for many people to make ends meet. Many dual-income households struggle when one of the wage-earners lose a job unexpectedly.

“I’ve never seen it this bad,” Gottlieb said. “I’ve never seen this level of misery. … It’s an incredibly small distance (for many people) between being able to make your bills and get on in life and becoming operationally insolvent.”

Kara O’Donnell, a lawyer with offices in Quincy and Hingham, said some of her bankruptcy clients pursue Chapter 13 filings as a way to keep their homes after lenders stymied loan modification efforts. But she said the vast majority pursue Chapter 7 filings, partly because they can be used to discharge credit card debts. She said Chapter 7 can’t be used to wipe out secured debt, such as a home loan.

Many consumers were caught off guard when credit card companies changed their policies during the past year. In some cases, O’Donnell said, a minimum monthly payment would jump from $200 to $400 or $500. Interest rate hikes for missing payments also skyrocketed, she said.

For most of her clients, bankruptcy is a last resort.

“They don’t just lose their jobs and go out the next day and file for bankruptcy,” O’Donnell said. “Most people will exhaust every last resource they have. … Some of them will totally empty out their IRAs and borrow money from their families because they think it’s a temporary situation. But for most people, it’s not a temporary situation.”

Good News.  The House passed the bill late today and it should make it to the President’s desk to be signed very soon.  Also good news is that it IS retroactive to the date your checks stopped.  Thus lump sum checks will, in theory, arrive from the MA U.C. office in the near future.  WHEN the checks will actually roll out is anyone’s guess.

The Bad News.  The additional $25 included in your check every week will be gone. Also the federal tax credit to the first $2400 of your compensation will no longer be in place.  Also bad?  There is no help for the people who had already maxed out their benefits – definition being those who were unemployed for over 90 weeks and collecting.

For more info read below:

House Votes 272-152 To Pass Extension Of Unemployment Benefits

7/22/2010 2:29 PM ET

(RTTNews) – After finally clearing the Senate on Wednesday, a bill to extend unemployment benefits for millions of workers was approved by the House of Representatives on Thursday and is on its way to President Barack Obama’s desk for his signature.

The House voted 272 to 152 to pass the bill, which retroactively extends the Emergency Unemployment Compensation program that expired at the end of May through November 2010.

As was the case in the Senate, the vote largely came down along party lines. Republicans were largely opposed to the bill because it adds to the deficit.

The Senate passed the bill by 59 to 39 late Wednesday, with Sens. Olympia Snow, R-Maine, and Susan Collins, R-Maine, the only Republicans to vote in favor of the bill. Sen. Ben Nelson, D-Neb., was the only Democrat to vote against the bill.

While Democrats managed to invoke cloture on the bill on Tuesday, the final vote was delayed until Wednesday night, as Republicans chose to use all 30 hours of debate.

The move was the latest in a series of delay tactics by the GOP, who argued that the bill’s $34 billion price tag should be offset by cuts in other areas.

Obama was critical of Republican’s efforts to block the bill in a statement released after the Senate vote, saying, “Americans who are working day and night to get back on their feet and support their families in these tough economic times deserve more than obstruction and partisan game-playing.”

The president also called on Congress to act on more proposals to support the economic recovery, including providing aid to states and support to small businesses.

Meanwhile, in a statement on the Senate floor on Thursday, Senate Minority Leader Mitch McConnell, R-Ken., accused Democrats of not prioritizing providing relief to small businesses.

“In the middle of a debt crisis, Democrats can’t seem to pass trillion dollar spending bills fast enough,” McConnell said. “And in the middle of a jobs crisis, they continue to push one bill after another containing job stifling taxes, new rules and regulations, and government intrusion into business.”

Referring to the bill extending unemployment benefits, he said, “Their signature piece of jobs legislation appears to be a bill that borrows $34 billion from our grandchildren to help folks who can’t find a job in the environment Democrats have created over the past year and half.”

   By Jared A. Favole    Of DOW JONES NEWSWIRES 

WASHINGTON (Dow Jones)–President Barack Obama on Monday urged Congress to extend unemployment insurance and lambasted Republicans for blocking the legislation three times.

Obama, speaking in the White House Rose Garden, said unemployed Americans are being held hostage by Washington politics and aren’t getting the jobless benefits they need.

“We’ve got a lot of work to do to make sure we’re digging ourselves out of this tough economic hole,” he said.

Obama has pushed Congress to extend federal jobless benefits to help the millions of Americans who are still unemployed. The legislation has been blocked in the Senate several times. Republicans said they support extending unemployment insurance, but are concerned about the deficit. The bill would cost an estimated $33 billion.

“The president knows that Republicans support extending unemployment insurance, and doing it in a fiscally-responsible way by cutting spending elsewhere in the $3 trillion federal budget,” said House Republican Leader John Boehner (R., Ohio) in a statement. He added, “The American people are asking ‘where are the jobs?’ and President Obama continues to offer only disingenuous attacks, not answers.”

Another vote on the legislation is expected for Tuesday, and it’s expected to pass with the arrival of Carte Goodwin, who is taking the Senate seat of the late Sen. Robert Byrd (D-W.Va.).

The legislation would increase an earlier extension of unemployment assistance for the hardest-hit states through November. Democrats estimate that since the extension expired June 2, 1.3 million long-term unemployed Americans have exhausted their benefits.

-By Jared A. Favole, Dow Jones Newswires; 202.862.9256; jared.favole@dowjones.com

From the Huffington Post:

Bush Tax Cuts For Wealthy Even If They Add To Deficit♦



Top Senate Republican Jon Kyl (R-Ariz.) insisted on Sunday that Congress should extend the Bush tax cuts for the wealthiest Americans regardless of their impact on the deficit, even as he and other Republicans are blocking unemployment insurance extensions over deficit concerns.

“[Y]ou should never raise taxes in order to cut taxes,” said the Arizona Senator during an appearance on Fox News Sunday. “Surely Congress has the authority, and it would be right to — if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.”

White House aides immediately seized on the comments. Press Secretary Robert Gibbs wrote on Twitter, “Kyl says wealthy need big Bush tax cuts while middle class families are on their own to fend for themselves as a result of Bush economy.”

In private, administration officials say that the framing of the argument couldn’t be more advantageous: “It’s cutting taxes for the wealthy and letting the unemployed to fend for themselves,” said one White House ally.

“If all of this has a familiar ring to it, it’s because unpaid for tax cuts for the rich at the expense of working people is the same backward policy Republicans used to put the nation in this hole, and it’s the same policy they promise to return to if put in a position of power again,” added Hari Sevugan, press secretary for the Democratic National Committee.

Asked to expand on his tweets, Gibbs declined comment, save to clarify that “the question [host Chris] Wallace specifically asked Kyl was [about] the upper end of the Bush tax cuts (above $250,000).”

But the politics already are fairly obvious. For the past few months, congressional Republicans have demanded that any additional spending be offset by budget cuts or revenue increases elsewhere. Also on Sunday, White House senior adviser David Axelrod blamed deficit concerns for the difficulty in finding a 60th vote in the Senate for unemployment benefits even though, as of Friday, 2.1 million people have not received checks that they were expecting in June.

And yet, Kyl is now suggesting that the same budget rules shouldn’t apply with respect to tax cuts for the wealthy, which are set to expire unless Congress acts to renew them. As Steve Benen at the Washington Monthly notes:

It’s quite a message to Americans: Republicans believe $30 billion for unemployment benefits don’t even deserve a vote because the money would be added to the deficit, but Republicans also believe that adding the cost of $678 billion in tax cuts for the wealthy to the deficit is just fine.

Kyl is one of the most prominent members of Congress to advance the argument that jobless benefits make people not want to look for work, a position disputed by economists across the political spectrum. Unemployment insurance “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Kyl said last March on the Senate floor.



By Bankruptcy Attorney, Kara O’Donnell
Quincy and Hingham, MA

Because my last two blog entries on this have been so frequently viewed, I’ve decided to provide more information about H.R. 5618: Restoration of Emergency Unemployment Compensation Act of 2010.

Within the past two weeks, over a million of long-time unemployed (those over 33 weeks) unexpectedly lost perhaps their only source of income – their unemployment check. With just the quick stroke of a pen, the Republicans defeated the bill that could have extended (once again) the program to allow families to continue to put food on their tables and stay out of foreclosure. Luckily, a second “stand alone” bill was introduced. This stand alone bill was dedicated to the topic of unemployment benefits without being weighed down by the multiple other issues regarding banks, hedge fund manager regulation, etc.


Senate Debating Unemployment Benefits Extension Now: Call Now
13 Jul 2010 The U.S. Senate reconvened at 1 pm Eastern Time Monday, and H.R.5618, the Restoration of Emergency Unemployment Compensation Act of 2010 is on the list of things to vote on.

The Washington Post says Senate Republicans have said they would not vote for stimulus bills that included unemployment extensions, saying any new spending must be offset by cuts elsewhere. With the extensions expired at least temporarily, more than 2 million Americans have lost their unemployment benefits, according to the Economic Policy Institute.

One site notes, “As of now, about 2.5 million unemployed citizens will be without basic unemployment assistance, which averages just about $300 a week and equates to 74 percent of the poverty level for a family of four people. Congress, in passing H.R. 5618, reiterated the depressing statistics: for every available job, there are five unemployed people who need work. A crisis of this proportion has not been seen in the United States for over 50 years.”

Please keep the pressure on and call the Congressional Switchboard is (202) 224-3121. Please call now and tell your senators to vote YES on the extension! Massachusetts: SCOTT BROWN and JOHN KERRY.

If you are a person who sees no way out of your credit card problems, a Chapter 7 bankruptcy might be right for you.  Call Massachusetts Bankruptcy Attorney Kara O’Donnell for a free consultation at (857)526-1355.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES                    (857)526-1355
Quincy, Massachusetts


Posted by Kara O’Donnell

H.R. 5618 Unemployment Extension Cleared the House
July 2, 2010

Washington, D.C. – Yesterday, the House passed the latest version of an unemployment extension bill, H.R. 5618 Restoration of Emergency Unemployment Compensation Act however, the Senate was attending memorial services for Senator Robert C. Byrd, and did not have a chance to act on the measure.

The bill would extend the unemployment extensions until the end of November without the additional $25 per week (FAC) from the Stimulus fund. It would pay retroactive benefits for claimants that had their benefits expire June 2 due the Republican Party filibuster against their own bill H.R. 4213.

The bill passed the House last evening with a vote of 270 to 152 with 10 Representative abstaining. Joining the Democratic Leadership in attempting to provide for America’s jobless were 21 Republican Congressional members.

Representative McDermott (D-WA) a long time supporter of America’s middle class and unemployed along with Chairman Levin (D-MI) of the Ways and Means Committee sponsored the bill currently titled, Federal Employment Programs.

Currently the funding of the Bill is labeled an emergency under the PAYGO rules and will in all likelihood face the same opposition in the Senate as the current stalled bill. Nonetheless, unemployed American’s will be facing another national holiday, our “Independence Day” without help from the nations Party of NO, the Republican Party that had numerous chances over the past 6 months to provide for America’s unemployed and chose once again not to.

The Republicans have chosen to remain loyal to their rich campaign donors while leaving nearly 2 million American families without, by blocking passage of any additional emergency aid to the nations unemployed.

The GOP appears to be gearing up with a hidden agenda to allow their rich friends, and recipients of TARP monies for a round two of splurge of wealth by benefiting from the resale of the millions of homes that face foreclosure now along with, the many foreclosures the Republican Party is creating in the near future.

Since, the Republicans realize that stalling and forcing families out to the streets, homes will in fact foreclose. This will allow their rich campaign donors to swoop down and scoop up properties that have lost value, and essentially paid for via interest payments on existing mortgages, only to dump them back out on the market for “round two” of the Wall Street “Dash for the Cash” .

Once again, it becomes intuitively obvious that the Greedy Old Party has found a way to make cash during this, the worst recession in the nation’s history. In the 80’s it was narcotics, laundering cash wherever they could now, it has become a streamlined process. A reduced risk of losing capital in the market by simply making a trillion dollars available to their rich friends, ignore the middle class and siphon as much cash as possible in interest payments from the “second-class citizens” dump them on the streets by cutting off their cash flow, and sell the product (real estate) again. What a brilliant swindle, and apparently being kept legal by the GOP at the same time.

Meanwhile, the jobs numbers are out and surprise, the number of people collecting long-term unemployment has fallen. Another great way of making the GOP looking great for this Novembers mid-term elections although, the job ratio is still out there in many places as 5-to-1 that is, 5 unemployed looking for the same job. Overall, the recession does appear to be stabilizing with the number of jobs lost almost halved since the Bush administration took their permanent vacation versus the temporary vacation they were on for ten years, and left Washington, D.C.

All this, and the unemployed will be left waiting an additional 10 days not knowing how to feed their families, keep a roof over their head, and pay those mounting bills. The question is; will H.R. 5618 simply become another stalled bill in the Senate thanks to the Republican Party, or will this bill provide the relief millions of American families so desperately need?

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

By MA Bankruptcy Attorney, Kara O’Donnell

O’Donnell Law Offices



Your Rights Under the Fair Credit Reporting Act

The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Here is a summary of your major rights under the FCRA. For more information, including information about additional rights, go to http://www.ftc.gov/credit or write to: Consumer Response Center, Room 130-A, Federal Trade Commission, 600 Pennsylvania Ave. N.W., Washington, D.C. 20580.
You must be told if information in your file has been used against you. Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment – or to take another adverse action against you – must tell you, and must give you the name, address, and phone number of the agency that provided the information.
You have the right to know what is in your file. You may request and obtain all the information about you in the files of a consumer reporting agency (your “file disclosure”). You will be required to provide proper identification, which may include your Social Security number. In many cases, the disclosure will be free. You are entitled to a free file disclosure if:
a person has taken adverse action against you because of information in your credit report
you are the victim of identity theft and place a fraud alert in your file;
your file contains inaccurate information as a result of fraud;
you are on public assistance;
you are unemployed but expect to apply for employment within 60 days.

In addition, by September 2005 all consumers will be entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. See http://www.ftc.gov/credit for additional information.
You have the right to ask for a credit score. Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. You may request a credit score from consumer reporting agencies that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for free from the mortgage lender.
You have the right to dispute incomplete or inaccurate information. If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous. See http://www.ftc.gov/credit for an explanation of dispute procedures.
Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.
Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.
Access to your file is limited. A consumer reporting agency may provide information about you only to people with a valid need — usually to consider an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for access.
You must give your consent for reports to be provided to employers. A consumer reporting agency may not give out information about you to your employer, or a potential employer, without your written consent given to the employer. Written consent generally is not required in the trucking industry. For more information, go to www.ftc.gov/credit.
You may limit “prescreened” offers of credit and insurance you get based on information in your credit report. Unsolicited “prescreened” offers for credit and insurance must include a toll-free phone number you can call if you choose to remove your name and address from the lists these offers are based on. You may opt-out with the nationwide credit bureaus at 1-888- 567-8688.
You may seek damages from violators. If a consumer reporting agency, or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to sue in state or federal court.
Identity theft victims and active duty military personnel have additional rights. For more information, visit www.ftc.gov/credit.

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

Congress Intros Bills to Extend Unemployment Benefits
Washington, D.C. (June 29, 2010)

By WebCPA Staff

After the Senate failed three times last week to pass the mammoth tax extenders and unemployment benefits extension bill last week, the House and Senate have introduced stand-alone bills to extend unemployment benefits.

House Ways and Means Committee Chairman Sander Levin, D-Mich., and Income Security and Family Support Subcommittee Chairman Jim McDermott, D-Wash., introduced H.R. 5618, the Restoration of Emergency Unemployment Compensation Act, on Monday to extend unemployment insurance benefits to millions of Americans.

However, the bill was defeated later in the day with Republicans opposing the bill. “We will persevere,” said Levin. “We will bring this bill up again under regular order and it will pass. Today’s vote should make it abundantly clear to the American people that the Democratic majority in Congress remains committed to providing the benefits and assistance families need while we continue efforts to recover from this recession.”

The Senate was unable to pass the American Jobs and Closing Tax Loopholes Act of 2010 last week after three attempts to overcome a Republican filibuster (see Senate Again Fails to Pass Tax Extenders Bill). The legislation extended about 50 expired tax breaks, including the research credit and the ability to deduct state and local sales taxes. It also would have extended unemployment benefits through the end of November and provided aid to states facing cuts in Medicaid funding, among other provisions.

However, the bill also contained controversial provisions raising taxes on the carried interest of hedge fund managers and private equity firm partners, as well as on certain types of professional services firms set up as S corporations and on multinational corporations using foreign tax credits to shift income abroad. Republicans argued that the bill was not fully paid for and would add $33 billion to the deficit.

The new bill introduced in the House would not include the tax provisions but would extend benefits for the long-term unemployed as emergency spending. An estimated 1.7 million workers will have lost their unemployment benefits by the end of this week as a result of the failure to extend benefits.

    “This is an emergency,” said Levin. “I really can’t believe that Republicans are going to come here and vote ‘no.’ They’re voting ‘no’ for millions.

They’re voting ‘no’ for what I think is best for the United States of America. We are a community of people. When people lose their jobs and can’t find them, we don’t simply stand idly by. This is the time for Republicans to stand up, and the only way to stand up is to vote ‘yes.’ I plead on behalf of the millions of people in this country out of work looking for jobs that Republicans stand with us to provide the unemployment insurance that Americans have worked for and that should be provided. Don’t turn your backs on them. In the end there will be no excuse.”

H.R. 5618 would extend the Emergency Unemployment Compensation and Extended Benefits programs through Nov. 30, 2010. The legislation would retroactively restore benefits to recipients who may have started losing their benefits as early as the end of May.

The bill also includes two beneficiary protections: the continuation of a rule that conditions state eligibility to offer federal unemployment benefits on an assurance that the state is not cutting the level of regular unemployment benefits; and a safeguard included in a jobs package already passed by the House that prevents Emergency Unemployment Compensation claimants from having their benefits cut if their intermittent earnings re-qualifies them for regular state unemployment benefits, which may provide lower payments because the claimant’s more recent wages were lower.

Unlike the House jobs package, however, the legislation does not include an extension of the Federal Additional Compensation program, which increases all unemployment insurance benefits by $25 a week.

In the Senate, Sen. Debbie Stabenow, D-Mich., also introduced legislation Monday to extend unemployment benefits. The bill, S.3520, the Unemployment Insurance Extension Act of 2010, is co-sponsored by Sen. Sherrod Brown, D-Ohio; Al Franken, D-Minn.; and Sheldon Whitehouse, D-R.I. It includes the $25 supplement and extends unemployment benefits through the end of the year.

The bill could attract support from at least two Republicans, Olympia Snowe and Susan Collins of Maine.

Another Senate bill to extend unemployment benefits was introduced Tuesday evening by Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont. It would extend the Emergency Unemployment Compensation program through November.

The bill also contains a provision extending the closing date for the Homebuyer Tax Credit for buyers who entered into a binding contract by April 30, 2010 and close on the home by Oct. 1, 2010. A similar provision passed in the House on Tuesday (see House Extends Deadline for Homebuyer Tax Credit).

If you are a person who sees no way out of your credit card problems, a Chapter 7 bankruptcy might be right for you.  Call Massachusetts Bankruptcy Attorney Kara O’Donnell for a free consultation at (857)526-1355.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES                    (857)526-1355
Quincy, Massachusetts


Posted by Kara O’Donnell

By MA Bankruptcy Attorney, Kara O’Donnell

O’Donnell Law Offices   (857) 526-1355

Last week, the Senate rejected a jobless aid bill, despite President Obama’s push for more spending to bolster the economy.

Emergency jobless benefits, which provide up to 99 weeks of income support, expired June 2. Since then, more than 1.2 million people have had their checks cut off, according to estimates by the Labor Department. That number is expected to rise to more than 2 million people.

White House press secretary Robert Gibbs said the president would not give up on the measure. “The President will continue to press Congress to pass this bill and bring this relief that’s critical to our economic recovery,” Gibbs said in a statement.

Advocates for the unemployed vowed to continue fighting for an extension, saying it makes no sense to abandon people when the unemployment rate is 9.7 percent — far higher than the cutoff points for emergency unemployment benefits after previous recessions.

“We’ve never come close to doing anything like this in the postwar period,” said Andrew Stettner, deputy director of the National Employment Law Project. “This is going to cut . . . consumer spending. If they want to cut short the recovery, this is the best way to do it.”

“I frankly hope when Republicans go home . . . will scratch their heads and say: ‘What were you thinking?’ ” said Sen. Sheldon Whitehouse (D-R.I.), where the jobless rate stands at 12.3 percent, one of the highest in the nation. If Congress fails to extend emergency benefits, Whitehouse said, “It would be pretty bad.”

If you are a person who sees no way out of your credit card problems, a Chapter 7 bankruptcy might be right for you.  Call Massachusetts Bankruptcy Attorney Kara O’Donnell for a free consultation at (857)526-1355.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES                    (857)526-1355
Quincy, Massachusetts


Posted by Kara O’Donnell

By Bankruptcy Attorney Kara O’Donnell
“Chapter 20”

A “Chapter 20” bankruptcy occurs when a Chapter 7 bankruptcy is filed to discharge unsecured debts then a Chapter 13 bankruptcy is filed. This is often done to allow the debtor to catch up on mortgage payments.

If you file a Chapter 7 and get a discharge, three years must pass before a Chapter 13 filing. Whereas if you filed for 13 previously, you must wait 2 years before filing another 13 petition.

However, if you are in the process of a Chapter 7 bankruptcy, you may CONVERT your 7 to a Chapter 13. However, the Supreme Court has held that the right to convert is NOT absolute and may be denied for bad faith. (Marrama v. Citizens Bank of MA)

By Massachusetts Bankruptcy Attorney, Kara O’Donnell, Esq.

What Are Their Rights?

Last year, Federal legislation (signed in May 2009) gave important rights to tenants whose landlords have lost their properties through foreclosure.

When the landlord defaults on a mortgage, the mortgage holder, often a bank, either becomes the new owner or sells the property at a public sale. (Or BOTH, if the mortgage holder simply buys its own property back at auction.) If the bank becomes the owner, it may pay a servicing company to handle the property. Tenants will then pay rents to the servicing company, but any maintenance needed will probably not be attended to as servicing companies are notorious for being elusive, absentee landlords.

Even before the foreclosure an investment trust can move in and buy the property. These investment trusts specialize in buying the defaulted loan directly from the bank, then foreclosing, evicting, and selling.

Many tenants face a situation where the new owners (after the foreclosure sale) refuse to be landlords, never making repairs or even paying utility bills. Because the banks are stuck with more and more foreclosed properties that they can’t sell, they do not maintain the properties and the tenants will suffer the consequences of lack of maintenance until they are evicted.

***Renters in Foreclosed Properties No Longer Lose Their Leases***
Before May 20, 2009, renters lost their leases upon foreclosure. But on that day President Obama signed the “Protecting Tenants at Foreclosure Act of 2009” which provided that leases would actually survive a foreclosure — meaning the tenant could stay at least until the end of the lease. Month-to-month tenants would be entitled to 90 days’ notice before having to move out.

The exception to this law is that if the property is sold to an actual person who intends to live on the property. Then, the buyer may terminate a lease with 90 days’ notice. The law also provides that any Massachusetts legislation that is more favorable to tenants will not be preempted by the federal law.

Does It Make Sense to Evict Tenants?
While some new owners choose to pay lawyers to start eviction procedures others will pay a fee to a management company to collect rent and manage the property.

“Cash for Keys”
To encourage tenants to leave quickly and save on the court costs associated with an eviction, banks offer tenants (or their landlords) a cash payout in exchange for their rapid departure. Thinking that they have little choice, many tenants take the deal.

With the 2009 federal legislation, most tenants with leases will keep their leases, and month-to-month tenants will have at least 90 days to relocate. Tenants with leases have no legal recourse against their former landlords, because they are in the same position with the new owner as they were with the old – the lease survives and ends as it would had there been no foreclosure.

However, a lease-holding tenant whose rental has been bought by a buyer who want to move in to the property ends up less fortunate as he may lose his lease with 90 days’ notice. Normally, the new owner has to wait until the lease ends.

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

By Kara O’Donnell, Bankruptcy Attorney

(857) 526-1355       Quincy, MA

In a bankruptcy filing, debtors have the right to claim a generous amount of property as exempt.  (Exempt property is NOT allowed to be taken by the Trustee and sold to pay the creditors.) 

While most debtors choose to use the Federal exemptions,  debtors who have a large amount of equity in their home most often prefer to use the Massachusetts property exemptions instead.  Consult with a bankruptcy attorney to determine which plan of action is right for you.

While there is a set dollar amount of property that can be exempted in Federal exemptions, there also exists ADDITIONAL exemptions to protect almost all of your retirement funds in bankruptcy. This is a very broad protection that applies to all types of plans including 401(k) plans and 403(b) plans. IRAs and Roth IRAs are protected but only up to the amount of $1,000,000.  (There are some exceptions as to rollovers – consult with a qualified bankruptcy attorney.)  

And as mutual funds are not retirement funds, they would be subject to the exemptions mentioned at the beginning of this post.

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

By Kara O’Donnell, Bankruptcy Attorney in Quincy, MA


In one of my previous posts, I addressed a widely used banking practice of the “Automatic Overdraft Protection.” View here https://quincylegal.wordpress.com/wp-admin/post.php?post=143&action=edit

The problem was that the banks, without even requiring your approval, would allow you to withdraw funds from the ATM or make charges to your debit card and then HIT YOU WITH AN OVERDRAFT FEE. Remember the old days? When if you didn’t have enough money in your account, the ATM would say DECLINED? Those days are long gone and have been for quite a while.

BUT NOW, there are new Federal regulations coming into play – finally! Score one for the consumer!! It seems new laws now require the banks to decline the ATM withdrawal or debit card transaction UNLESS you opt in. (Note: Do NOT opt-in. You will forget you have done so then regret it later when you see 3 overdraft charges on your account for one day of buying coffee, lunch and dinner.)

Below is a notice I just got on my Sovereign/Santander account.

Important Changes to Your Account.
Under new federal regulations that will take effect this summer, Sovereign will no longer authorize overdrafts* on your checking or money market savings accounts for the following transactions**, unless you authorize us to do so by opting-in to our overdraft program:

ATM withdrawals and transfers
One-time debit card transactions

If you opt-in and one of these transactions overdraws your account, Sovereign may pay the transaction. If we do so, we will follow our standard overdraft policy*. If you do not opt-in to this program, and you try to make transactions when you do not have sufficient funds, we generally will decline the transaction.

Learn more about ATM and Debit Card Overdraft Elections.

To opt-in, call 877-SOV-BANK (877-768-2265) or visit your local branch today.

* An overdraft on your checking or money market savings account occurs when you do not have enough money in your account to cover a transaction, but the transaction is still processed by Sovereign. Under Sovereign Bank’s standard account overdraft practices, a fee of up to $35 will be charged for each overdraft on your account. If your account is overdrawn for 5 or more consecutive business days, an additional $5 per day will be charged. There is a limit of 9 fees per day for overdrawing your account.

** Sovereign will continue to authorize overdrafts for checks and other transactions made using your account number, automatic bill payments, Online Banking payments and transfers, and recurring debit card transactions. Overdrafts are always paid at our discretion, and we do not guarantee we will always authorize and pay any type of transaction. If we do not authorize and pay an overdraft, your transaction will be denied.

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

A decision to file for bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial problems.

Many were under the impression that the 2005 change in bankruptcy laws now prevent many individuals from filing bankruptcy. While bankruptcy has become a bit more complicated, at least for the attorneys preparing the filing, most people still find themselves eligible to file and obtain the fresh start that bankruptcy offers.

What Is Bankruptcy?
Bankruptcy is a legal proceeding in which a person who can not pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. In Massachusetts, these courts are located in Boston, Springfield and Worcester. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

What Can Bankruptcy Do for Me?
Bankruptcy may make it possible for you to:
– Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
– Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
– Eliminate a 2nd mortgage but only a) in a Chapter 13 filing and b) if your first mortgage is already MORE than your house is valued.
– Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
– Restore or prevent termination of utility service.
– Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

If you are considering filing for bankruptcy and you live in Massachusetts, contact Bankruptcy Attorney Kara O’Donnell at 857-526-1355.

Kara O’Donnell, Esq.
Quincy, Massachusetts


Posted by Kara O’Donnell

By Kara O’Donnell, Bankruptcy Attorney

Occasionally people with credit card debts (who are usually past due) will get notices in the mail from a collector which offers to settle a credit card debt. Sometimes these offers are for 50% of face value of the debt. But there are 2 problems:

1) You will only get this notice if you are already past due on your credit cards minimum payments. And if you cannot afford the minimums how will you settle for 50% of the bill, especially when they want the payments in a lump sum?

2) Your balance is $20,000 but the collector is offering to settle for $10,000. Sounds great? Maybe you sell a car to get the money or borrow from a relative, but then comes the surprise sometime around tax season . . . a 1099-C form for $10,000. The 1099-C form is for cancelled debt and you must file it with your return. The IRS will treat that $10,000 as taxable income – same as if you got a bonus from a job or gambling winnings. Depending on your income tax bracket that $10k “gain” that you got (from the written off/cancelled debt) will be subject to 25-40% in taxes.

HOWEVER, while cancelled debt may create an income tax liability, discharged debt does not. Under the U.S. Bankruptcy Code, if a debt is discharged in a bankruptcy case, it does NOT count as taxable income. Bottom line? In a Chapter 7 bankruptcy, you will get your unsecured debts, such as credit cards, discharged and NO 1099-C will show up at tax time.

This is just another reason why the decision to use a debt management company needs to be very carefully considered prior to giving them any money whatsoever. They cannot prevent the IRS from knocking on your door wanting to tax you on the cancelled debt.

Is it possible for a bankruptcy filer to get a 1099-C for discharged debt?
This has occasionally been known to happen. (Those creditors are sneaky!) However, the filer needs only to know the law is on his side and to file IRS Form 982. This will exclude the amount of discharged indebtedness from your gross income. (Remember – there is a very big difference between cancelled income and discharged income.)