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;

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 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 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 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
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

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