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.

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New claims for unemployment aid reach 484K

 AP

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.

 

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.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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By MA Bankruptcy Attorney, Kara O’Donnell

O’Donnell Law Offices

857-526-1355

 

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.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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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

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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 Kara O’Donnell, Bankruptcy Attorney

(857) 526-1355       Quincy, MA
www.QuincyLegal.com

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.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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

www.QuincyLegal.com

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.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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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.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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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.)

By Bankruptcy Attorney Kara O’Donnell
QuincyLegal.com – O’DONNELL LAW OFFICES – 857-526-1355

As you debtors are probably already aware, debt collectors come in a variety of shades and colors. Sometimes the debt is still “in house” (meaning it is still within the company that issued the credit card or gave the loan). Sometimes the debt is with a collection agency or even with a law firm. Regardless of who owns the debt, there are laws which control any company whose business it is to collect a debt – i.e. DEBT COLLECTORS.

MASS LAW ON DEBT COLLECTION
In the Commonwealth of Massachusetts, the main debt collector law is MGL Chapter 93: Section 49.

Here are some highlights:
Subsection A: The collector can threaten to report the debt to a bureau. The collector may NOT reveal information about the debt to third parties, such as neighbors, employers, etc.

Subsection C: “The creditor communicates with the alleged debtor in such a manner as to harass or embarrass the alleged debtor, including, but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of violence, by use of offensive language, or by threats of any action which the creditor in the usual course of business does not in fact take.” This is a pretty broad prohibition. However, the Federal law (see below) outlines when those “reasonable hours” are and provides more clarification.

Subsection D: “The creditor communicates with alleged debtors through the use of forms or instruments that simulate the form and appearance of judicial process.” Creditors/collectors cannot send you documents appearing to be from the court or a lawsuit if, in fact, there is no suit pending.

If you have experienced any of the above, it “shall constitute an unfair or deceptive act or practice under the provisions of chapter 93A.” You may choose to contact an attorney who can file a “93A Complaint” for you.

FEDERAL LAW ON DEBT COLLECTION
The Fair Debt Collection Practices Act provides that any of the follwing acts is a violation:
-Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time.
-Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted.
-Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.
-Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer.
-Communicating with consumer after request for validation has been made but prior to the debtor receiving a response to the request.
-Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer.
-Threatening arrest.
-Threatening legal action that is either not permitted or not actually contemplated.
-Abusive or profane language used in the course of communication related to the debt.

If collectors have engaged in any of the FDCPA prohibited acts while trying to collect a debt from you, they you may wish to hire an attorney to file a FDCPA Complaint on your behalf. The collector can be subject to a $1,000 for each violation.

KNOW YOUR RIGHTS: you cannot be arrested, they cannot garnish your wages if you are not (or was not) in a lawsuit, they cannot call you at your employer if you tell them to stop (in MA it is only for 10 days but tell them anyway), and they cannot call you multiple times all day long.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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Well at least as it applies to the Creditors in bankruptcy cases. You know who Creditors are: banks, credit cards, auto finance companies, school loans, your match.com account (just kidding).

2 weeks ago a unanimous Supreme Court concluded that bankruptcy creditors ought to read their mail once in awhile. Perhaps even pay attention and act upon what they read there. Otherwise, they have only themselves to blame. Seems pretty straightforward, no?

This decision involved a rather straightforward case.

A man filed a Chapter 13 plan in 1993. He included a provision in this plan that would discharge the interest on his student loans — something that normally would require he prove undue hardship through an adversary proceeding. He mailed a copy of this plan to the lender. The lender filed a claim asking to be included in the case but did not object to the plan. So the court approved the plan. The consumer completed his plan, received his discharge and that should have been the end of it. He walks away and thinks all is fine.

But the student loan lender did not agree and sought a ruling from the courts that it should not be bound by the plan. It admitted it received notice of the case and a copy of the plan. It just apparently didn’t read the plan. So several years later, it wanted to go back and “fix” the problem. (NOTE: Does this seems fair to you? Yeah, me neither, but read on . . .)

The Supreme Court disagreed. It said, in effect, the federal rules allowing a party to a case to set aside “void” judgments or decisions should not be used in this way. And this is true, even where the debtor has included a provision in the plan which would normally not be allowed. If the creditors, the trustee and the court do not object, it will be binding on the creditors who receive actual notice and sleep on their rights.

Of course, for most people it doesn’t take the Supreme Court to tell you to pay attention to legal mail. Many children and most adults could grasp this simple logic. But the irony is that multi-billion dollar companies would prefer the courts change the rules so that carefully reading the fine print of documents sent by consumers is not required.

Now, the Chapter 13 trustee has to read the plan, so why wouldn’t the creditors try to get her to absorb the extra costs of objecting to “inappropriate” plans? Could it even happen?

In this case the non-readers Citibank, Chase and Wells Fargo got beat up in court by a single bankrupt consumer and his lawyer.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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By Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES 857-526-1355
Quincy, MA
http://www.QuincyLegal.com

Many who are considering Chapter 7 bankruptcy want to know how the process will go over the coming months, and how long it will take.
In many cases, you can expect to get your Order of Discharge within 4-6 months from the date your action is filed in the federal bankruptcy court.

Your case begins on the day you file it with the court and you get your case number. This is the day that the ‘automatic stay’ (temporary injunction) goes into effect. It prevents your creditors from contacting you or harassing you for payment.

In approximately one month, you attend the 341 meeting of creditors with your attorney which is held before the court appointed Chapter 7 trustee. In almost all cases your creditors will not even show up. You must bring your social security card (or a W-2, NOT a tax return) and a photo ID.

After the 341 meeting you have 45 days to complete a Financial Management Course, get the certificate AND file it with the court. Because it can take 2 hours to complete the course and a few days to get your certificate, it would be very unwise to leave this final act on your (the Debtor’s) part to the last week. Most responsible attorneys will start pestering their clients for it at least 2 weeks before it is due. Mess up this step and your case will be DISMISSED. No discharge of debts. Nada.

The Order of Discharge comes after the certificate is filed, and is usually 4 months or so after your date of filing.

If you live in Massachusetts and are considering bankruptcy, do your homework. Find an attorney who is experienced in bankruptcy, has years of law practice under his/her belt, has no record of discipline, and operates out of a real office and not a “virtual” or rent-by-the-day/hour office. [To check out MA attorneys go to http://www.massbbo.org.]

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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By Bankruptcy Attorney, Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES
Quincy, Massachusetts

A common question I am asked by bankruptcy clients (or potential ones) is whether they could a) lose their job if their employer learns they filed for bankruptcy or b) could they be discriminated against when they apply for jobs because of the bankruptcy filing?

11 U.S.C. Section 525 of the bankruptcy code prohibits termination or discrimination with respect to employment solely because the individual is bankrupt. However, it is difficult to prove that the bankruptcy is the “sole” reason for the termination or the discrimination.

It can be a rather high burden of proof to meet. Why? Because employers are reluctant to admit or put into writing that they terminated an employee (or refused to hire a candidate) solely because of a bankruptcy filing.

That being said, a bankrupt employee can take measures to protect himself. Keep track of downgrades in performance evaluations and other efforts that employers use to create a file on you to back up their termination. Employment discrimination is usually subtle and, in employment-at-will states, such as Massachusetts, employers can use just about any reason to terminate you (so long as it is not based upon protected classes ex: race, gender, religion, etc.)

Bankruptcy filers can keep records of their employers’ actions if they believe that a) their employer knows they filed for bankruptcy and b) they might get fired or demoted for it. If fired, contact an attorney.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

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Posted by Kara O’Donnell

In 2004 to 2005, word spread that a new bankruptcy law would soon go into effect.  The fear was that many, if not most, people would be prevented from filing Chapter 7 and getting a full discharge of debts. Because of this fear, the filings just prior to the BAPCPA law coming into effect hit over 2,000,000 for the year 2005!

2006 saw a much lower number, as many of those who had been considering bankruptcy for a few years decided to file before the new law came into effect. 2006 filings? A relatively low 573,151.

2007: Word was spreading that the revised bankruptcy law still allowed many middle to lower income people the help they needed and the number of filings again went up. 2007? 801,880.

2008: The U.S. slips into recession mode and unemployment is climbing. While many ran up credit cards in the mid-2000’s, they were now no longer able to make the minimum payments. Interest rates and late fees on those cards only added to the problem. 2008 filings? 1,060,061.

2009: 10% unemployment and no signs of job creation lead to an economic meltdown for millions of middle income families across the country. 2009 filings? 1,406,125.

Will we see total filings for 2010 hit TWO MILLION? It seems possible given the (still) high unemployment rate and lack of significant job creation.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

Help@QuincyLegal.com

Posted by Kara O’Donnell

The short answer – YES.  And NO.

  Chapter 7 bankruptcy has no limit on the total debt involved.

 As for Chapter 13 bankruptcy filings, since 2007 the limit of debt has been $1,010,650 in  secured debt, and $336,900 in unsecured debt.  But on April 1, 2010, those debt limits will increase in accordance with the Consumer Price Index increase which has occurred over the past 3 years.  The estimated new limits will be $1,081,500 for secured debt, and $360,525 in secured debt.  

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com

Help@QuincyLegal.com

Posted by Kara O’Donnell

By Massachusetts Bankruptcy Lawyer Kara O’Donnell

http://www.QuincyLegal.com

See my post below for more details . . .

by Attorney Kara O’Donnell
O’Donnell Law Offices
www.QuincyLegal.com

If you are under 21 and of limited income (i.e. most college students) you may only have a matter of days before you can obtain a credit card WITHOUT a co-signor.  See my recent blog post below for details of the CARD Act which goes into effect February 22, 2010.

Essentially, President Obama is on a mission to reduce the availability of credit cards to young consumers.  This is a direct response to the long-standing efforts of credit card companies to sign up jobless and naive college students.  The goal is to solve a problem that hurts so many college graduates – too much debt.

This is a summary of the “Youth and Credit” provisions of the Act:

  1.  Less Access to Credit Cards Before the Age of 21
    The CARD Act’s most significant rule is restricting the availability of credit cards to young adults thus preventing reckless spending.
  2. Credit cards will not be issued to anyone under the age of 21 UNLESS:
    (i) they have an adult (of at least 21 years of age) to co-sign the credit card agreement (this adult would, presumably have to have good established credit),  OR
    (ii) they provide proof that they are able repay the debt they incur (This most likely excludes the part-time workers).
  3. Pre-screened credit card offers cannot be available to consumers under the age of 21. 
  4. Joint credit card accounts can only have their limits increased with the permission of the adult accountholder.

An End to Visa Kiosks on College Campuses?
Kiosks offering free stuff in exchange for completed credit card applications (by poor jobless college students, of course) will probably cease to exist on  college campuses.  (NOTE: The Visa kiosks offering free blankets at Fenway to cold late-season Red Sox fans are sure to continue . . .)

Promotion for Financial Literacy
The CARD Act also proposes educating the young about the responsible use of credit.  While the plan is still in its formative stages, it will be interesting to see what becomes of it.  Will grade schoolers be forced to take classes in  math, reading, science, geography and Amex  vs. Visa?  Time will tell.

Kara O’Donnell, Esq. is a bankruptcy attorney in Quincy, MA. Call 857-526-1355 for help with your bankruptcy filing. http://www.QuincyLegal.com

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES
Quincy, Massachusetts
http://www.QuincyLegal.com
Help@QuincyLegal.com

Posted by Kara O’Donnell

By Boston Bankruptcy Attorney Kara O’Donnell, Esq.
(857)526-1355

In 2009, the Obama administration realized that unless the credit card companies were somehow reeled in, consumers would continue to be taken advantage of and, possibly, never get out of debt.  The result?  The Credit Card Accountability Responsibility and Disclosure Act of 2009  (also known as the CARD Act.)

Effective February 22, 2010:

  • Credit card issuers will not be able to increase interest rates on existing credit card balances unless the borrower is at least 60 days late on the account. This will eliminate the retroactive rate increases and the universal default clause where credit card issuers would periodically review an account holder’s current credit standing to determine changes in terms and annual percentage rates.
  • Credit card issuers will have to provide clear disclosure of account terms before a borrower opens an account. If the account provides a promotional interest rate period, the promotional interest rate will have to last a minimum of six months.
  • Credit card issuers will not be able to raise interest rates on new credit card accounts during the first year the account is opened. This rule will not apply if the borrower falls 60 days late on a credit card payment.
  • Credit card issuers will not be able to charge over-limit fees unless they obtain the account holder’s consent to accept and process over-limit transactions beforehand. If consent is obtained, the card issuer will not be able to charge more than one over-limit fee per billing cycle. Additionally, credit card issuers will not be able to charge an over-limit fee if interest charges or other fees are the sole reason for pushing the account holder over their limit.
  • Credit card issuers will not be able to charge additional payment penalties for accepting payments by mail, phone, electronic transfer, or any other means, unless the payment is processed through an expedited service processor.
  • Credit card issuers will face significant hurdles if they try to issue credit cards to consumers under age 21 without an “of-age” co-signer, unless they meet sufficient income requirements to independently repay the debt.
  • If a due date falls on a weekend or holiday, the credit card issuer will not be able to penalize mailed payments that are received on the next business day. Payments received by 5 p.m. must be credited the same day.
  • Double-cycle billing, a process where credit card issuers use the previous month’s balance to calculate interest charges for the current month, becomes illegal.
  • Credit card issuers will be required to apply any payment above the minimum amount due to the highest interest balance first.
  • Subprime or “fee harvester” credit cards will have fee limits. Fees on a credit card (other than late fees, over-limit fees, or insufficient funds charges) will not be able to exceed more than 25 percent of the credit limit when the account is opened.
  • Credit card issuers will have to include a minimum payment disclosure that explains how long it will take to pay off the existing balance and the total cost in interest fees if the cardholder paid only the minimum amount due. Additionally, card issuers will have to provide minimum payment details and the total cost in interest to pay off the existing balance within 3 years (36 months).
  • Card issuers will have to make account terms and cardholder agreements available to their cardholders on the Internet.

 WHAT THIS ALL MEANS TO THE AVERAGE CARDHOLDER:

The days of the credit card companies being in TOTAL control are GONE.  However, don’t be fooled.  If you are a person who charges frequently and only pays minimum monthly payments, the only difference is that the number of years/DECADES it will take to pay off your debt will be indicated right on your bill.  Under 21 card applicants will need a co-signer.  (Gone are the days of on-campus credit card kiosks where they solicited to student WITHOUT JOBS.)  Also, you will not be charged more than one over-the limit fee per month, and this seems to only be allowed on purchases you made and not because your account went over the limit last month due to interest or other fees.

Sure, the consumer receives additional protection from the CARD Act. However, if you are one of the many “only pay the minimum every month” or you are charging necessities every month (groceries, utilities, cash advances) then NOW is the time to take a second look at your overall financial health. 

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

Help@QuincyLegal.com

Posted by Kara O’Donnell

By Bankruptcy Attorney Kara O’Donnell

www.QuincyLegal.com

Quite often by the time a client comes to me to file bankruptcy he has already had months of being unable to meet the credit card minimum payments and is desperately in need of help.  However, many of these clients have used up assets to make these minimum payments even though a) those assets WOULD HAVE BEEN PROTECTED in a bankruptcy, and b) continuing to make minimum-only payments will get you nowhere in the long run.

There are some classes of assets that receive automatic protection in a Chapter 7 bankruptcy:  Retirement accounts, monies obtained from personal injury settlements, monies received from workers’ compensation accidents, alimony, child support, some life insurance policies, and veterans’ benefits.  In short, NONE of these types of funds should be depleted in efforts to make credit card payments.  WHY?  Because if you can’t afford the payments this month what makes you think you will be able to afford them in the near future?  And, once those assets are gone, you will have no emergency funds to continue making the minimum payments.  The end result will be that you will end up filing for bankruptcy anyway AND your emergency funds will be gone.  Not the best outcome.

A better outcome?  If you are having trouble meeting your credit card minimum payments consult with a bankruptcy attorney TODAY.  Most attorneys, including myself, offer a free consultation for bankruptcy clients and, by doing so, you can create a financial plan for your future which involves both 1) the fresh start that bankruptcy provides and 2) still keeping your retirement accounts or other protected funds outlined above.

The key to your bankruptcy filing? Filing sooner and not later.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com
Help@QuincyLegal.com

Posted by Kara O’Donnell