March 1, 2008
Addendum to Chapter 13 Plan from the Central District of California
Here in the Central District, emails and postings from consumer bankruptcy attorneys have been flying back and forth for the past few months regarding language that different attorneys are adding to chapter 13 plans trying to deal with problems homeowners are having with mortgage lenders during the plan. It seems that it is fairly common to have a debtor finish a chapter 13 plan, receive a discharge and a new notice of foreclosure saying that the debtor is behind on the mortgage x thousands of dollars because of charges incurred during the plan, unbeknownst to the debtor.
Eric Clark of Borowitz, Lozano & Clark, LLP in West Covina, spearheaded the effort to get standardized language that the courts here would agree to without the necessity of additional briefings, hearings and the like. He did a great job since the attorneys were adding a few paragraphs and the addendum is five pages.
The addendum requires the mortgage company to provide monthly statements (if it had been previously providing monthly statements) which contain a bunch of specified information including the telephone number and contact information the debtor may contact "to obtain reasonably prompt information." In addition, the mortgage company in every case must provide specified information to the debtor, "at least quarterly," including any "property inspection fees, servicing fees, or appraisal fees." If the mortgage company believes the debtor is in postpetition default, it must notify the debtor by letter "before taking any steps to modify the automatic stay." The information may be provided electronically.
The addendum provides that the automatic stay is modified to permit the mortgage company to speak directly to the debtor - circumventing a familiar excuse mortgage companies had for refusing to communicate with the debtor. It provides that the debtor may enforce the addendum by request for OSC but the debtor must wait for 60 days after the failure to act and must make a good faith effort to contact the mortgage company and determine the "cause of any non-compliance."
February 29, 2008
9th Circuit Court of Appeals to Hold Oral Arguments in Phoenix in March, 2008
The 9th Circuit Court of Appeals will hold oral argument in Phoenix from March 6 to March 12, 2008. Some of the hearings will be at the Sandra Day O'Connor College of Law at Arizona State University in Tempe and some of the hearings at the Sandra Day O'Connor Courthouse in Phoenix. The notice including the specific cases and times can be accessed here.
February 28, 2008
Sharper Image Professionals
Sharper Image filed its professional employment applications today. The Weil Gotshal firm disclosed that it received a $400,000 retainer of which about $376,000 was used up prepetition. (Sharper Image had $700,000 in the bank the day it filed the petition) The hourly rates for the Weil firm run from $650 to $950 per hour for partners and $355 to $595 for associates ($595 per hour for an associate?). The Wombie, Carlyle firm, the local Delaware lawyers, received a $40,000 prepetition retainer. The new chief executive, Robert P. Conway and his firm will receive $150,000 per month plus 1% of any new money or any sales of assets. Hearings on these applications are set for March 20, 2008. Conway's firm is entitled to retain its own counsel. The Creditor's Committee was appointed yesterday and it of course will require counsel.
February 27, 2008
William F. Buckley, Jr. 1926-2008
Bush Announces He Will Veto Mortgage Bill
According to the Washington Post today, Bush has announced he will veto the bills pending in Congress designed to allow homeowners to rewrite their home mortgages in chapter 13 cases. His announced primary concern is federal spending; he will not "risk tax dollars." He opposes legislation which "permits a select group of troubled borrowers" to rewrite their loans which will contribute to the troubles of the mortgage industry. He opposes bailing out the mortgage industry as well by, for example, having the federal government buy distressed mortgages. The article can be found here.
February 26, 2008
Informative Insight on Appellate Briefs
This is a very informative post I received in an email today from the LA County Bar Assoc. It is by Professor Scott Wood at Loyola Law School who questions a research attorney with 20 years experience with the California Court of Appeals. You can access the article here.
One great comment is that the appellant should concentrate on his best few arguments, (i.e., he says "how many errors can the trial judge make?), the respondent should make every argument possible since the court must affirm if any argument supports the result.
February 25, 2008
Student Loans - Get Help Before You File the Hardship Case in Bankruptcy
As you know, the third prong of the Brunner test is a good faith effort to resolve the student loan repayment issues before filing the hardship case in bankruptcy. A great way to start this is to request debt consolidation and even forgiveness. You can do this at http://loanconsolidation.ed.gov/.
I would appreciate anyone letting me know if they have had any success using this site. It was recommended to me by the U.S. Attorney in Los Angeles who handles the student loan cases.
Trying to Protect a Crook? File for the non-Crook Spouse
Here is the CDCBAA Newsletter for February, 2008. It has an article about this topic by Dennis McGoldrick, former chapter 7 trustee in Los Angeles. The subject is the little known and less understood "community property discharge" in Section 524.