Chapter 13 Practice Tips from Aki

By | December 6, 2012 | Chapter 13 | No comments

Practice tip:  If your employed client shows fluctuations in pay, please always conduct a year to date analysis using your client’s most recent paycheck stub to determine your client’s average monthly income.  If the year to date analysis would not be an accurate calculation of your client’s projected income, please indicate on Schedule I why this is so.

Practice tip:  In paragraph II(A)(2) of the mandatory chapter 13 plan, please always show the percentage at 100% as this tells our office how much of the plan payment we can use to pay your fees.

Practice tip: If you have a married couple filing bankruptcy and one of the spouses is a homemaker, please indicate homemaker in the employment section rather than indicating “unemployed.”  If you indicate unemployed, our assumption will be that the unemployed spouse is seeking employment and our line of questioning at the 341(a) will follow this assumption.

Aki Koyama
Staff Attorney to Kathy Dockery, Chapter 13 Trustee

Immigrants, minorities especially vulnerable to bankruptcy scams

By | December 5, 2012 | Chapter 7, Judges Corner | 6 Comments

Hi everyone,

Attached hereto is a link to the story we worked on with KPCC to highlight both the identity theft in the bankruptcy court and “bankruptcy hijacking.” It came out yesterday.

Have a great week!

Maggie Bordeaux

Public Counsel Press Clips – December 4, 2012
Ajamu Azibo realized he had a problem when someone filed a bankruptcy in his name. Then he became a victim of another scam: it’s called “bankruptcy hijacking,” and it’s a problem we’re seeing more and more these days. Public Counsel’s Magdalena Reyes Bordeaux, who directs our Debtor Assistance Project, calls Azibo’s case a prime example of how creative some notarios, or fake lawyers, have become. “I think for many individuals, they are intimidated by the legal system generally, and there’s a lot of advertising out there by notaries…It’s only compounded by the fact that a lot of these individuals are friends, maybe friends of family, and so they trust them sometimes more than they trust the legal system.”

Immigrants, minorities especially vulnerable to bankruptcy scams

Ruxandra Guidi with Take Two | December 4th, 2012, 9:08am

Software systems engineer Ajamu Azibo seems to have it all. He’s young and healthy, with a great job at UCLA, a happy marriage, and dreams of owning a house someday.

Read more…

CM/ECF Maintenance Scheduled for Saturday, December 8, 2012

By | December 4, 2012 | Court Clerk Information | 1 Comment

The Court will be performing CM/ECF maintenance on the above date starting at 7:00 a.m.  As a result, the following electronic systems will not be available:

CM/ECF Live System
LOU

Please note that you may access PACER for the purpose of querying CM/ECF.  Meanwhile, the Court will make every effort to restore the system as soon as possible.  You will be notified as soon as the system is again available for your use.

We apologize for any inconvenience this may cause.

Best regards,
ECF Support
(213) 894-2365

Bankruptcy Highjacking on NPR

By | December 4, 2012 | Judges Corner | No comments

I heard this story on KPCC while returning from court this morning. It features Judge Tighe of CDCA and Maggie Bordeaux from Public Counsel.

Though we all deal with these issues regularly, thank you for bringing this matter to light for others.

http://www.scpr. org/programs/ take-two/ 2012/12/04/ 29526/immigrants -minorities-especially- vulnerable- to-ban/

Desiree Causey, Esq.

Two Week Moratorium on Foreclosures (Some)

By | December 4, 2012 | Current Events | 1 Comment

From the Chicago Tribune:

Fannie Mae and Freddie Mac said on Monday they would provide a break for borrowers facing foreclosure to ensure those having problems making monthly mortgage payments will remain in their homes during the holidays.

Fannie Mae said its eviction moratorium would apply to single-family homes and two- to four-unit properties from December 19 through January 2, 2013. Freddie Mac said it would offer the suspension from December 17 through January 2, 2013.

See the criticism of Prof. Adam Levitin on Credit Slips. 

“I’ve got a beef with this foreclosure moratorium.  It captures everything that is wrong with how the GSEs and FHFA have handled foreclosures.”

Court Closures for Friday, December 7, 2012

By | December 4, 2012 | Court Clerk Information | 1 Comment

The Court will be closed on Friday, December 7, 2012, except for emergency filings in Los Angeles and Riverside divisions.  All automated systems will be operational.  Click for more information http://go.usa.gov/gBHW

When the Bank Won’t Accept the Surrender – A Great New (Possible) Solution

By | December 2, 2012 | Chapter 13, Chapter 7, Current Events | 1 Comment

Question:  The Debtor surrendered the property in the plan and moved out.  No one foreclosed.  Is the Debtor still liable for the HOA fees?

“The First Circuit has held that ‘surrender’ only means that the collateral is made available to the creditor, but the creditor is not required to accept the property.  See In re Pratt, 462 F3d 14 (1st Cir. 2006).  I think that ‘surrender’ is not effective until the debtor actually vacates the property since so long as the debtor has actual possession, it isn’t really ‘available’ because the creditor/HOA would have to do an eviction case or take some other affirmative step to obtain actual possession.

“I think the better way to handle this is to provide in the chapter 13 plan that upon confirmation, the property will vest in the mortgagee or HOA (as the case may be), in accordance with §§1322(b)(8) and (9).  See In re Bryant, 323 BR 635 (Bkrtcy.E.D.Pa. 2005).  I did this in a plan recently, for the first time, and somewhat to my surprise, no one blinked, much less objected, so the plan was confirmed.  I will record a copy of the Confirmation Order at the Registry of Deeds, and that will take the debtor off the title.”

David Baker
Boston

Additional comment for 9th Circuit readers (subtitle – “there’s always another side”):

You’ll want to do research in your jurisdiction to determine how the courts treat post-petition dues in a 13.  Here in the 9th circuit, lower courts are leaning towards treating the dues as obligations that run with the land and are the personal obligation of the debtor despite the bankruptcy or inapplicability of 523(a)(16). See, e.g., In re Foster, 435 B.R. 650; 2010 Bankr. LEXIS 2468 .

I would caution trying to transfer title as part of a bankruptcy order.  Transfer of title is a matter determined by state law and it’s unlikely the bankruptcy court has the authority/jurisdiction to do what you’ve proposed.  Most HOA CC&R’s and most deeds of trust have attorneys fees provisions, so if you end up in court over it, your client may end up paying a lot more than they would have.

Stephen M. Smith
Seattle, WA

Fighting Predatory Mortgage Scam Artists – Notes from Public Counsel

By | December 2, 2012 | Community, Current Events | 2 Comments

Hi everyone,

The California Department of Corporations (DOC) and the California Department of Real Estate (DRE) are providing assistance to financially stressed homeowners who are often targeted by predatory mortgage scam artists. The DOC and DRE license and regulate a variety of entities involved with the mortgage process.  Helpful referrals below:

1)      Before hiring anyone to help modify a loan, anyone may contact the DRE at (877) DRE-4LIC.  Their website is www.dre.ca.gov.

2)      To file a complaint against a mortgage loan modification consultant, you may contact the Attorney General’s Office, Public Inquiry Unit at (800) 952-5225.  Their website is www.oag.ca.gov.

3)      To verify the license of someone servicing or negotiating terms of your mortgage loan, you may contact the DOC at (866) ASK-CORP.  Their website is www.corp.ca.gov

Also, the Foreclosure Reduction Act will be effective starting Jan. 1, 2013.  The Act accomplishes four main goals:

1)      Prohibits “dual tracking” that occurs when a mortgage loan services initiates the foreclosure process on a homeowner who is still negotiating a loan modification;

2)      Provides a homeowner with a single point of contact to assist them throughout the loan modification process;

3)      Requires mortgage services to review competent and reliable evidence to substantiate their right to foreclose; and

4)      Creates a remedy for borrowers to seek legal action against their loan services for material violations of the law.

I have attached a flyer with additional information.

Have a great weekend!

Best,

Maggie

Magdalena Reyes Bordeaux
Senior Staff Attorney
Public Counsel
Consumer Law Project & Debtor Assistance Project

Revised Fee Guidelines for “Large Cases”

By | December 2, 2012 | Chapter 11 | No comments

The US Trustee is not backing down on its revised guidelines for fees in large cases.  Large means $50 million or more in assets and $50 million or more in debt.  The guidelines will go into place early next year.  The comments of national director of the US Trustee’s Office, Clifford J. White III, are attached here.  The proposed new guidelines are here.  The comments of the National Bankruptcy Cnference to the latest iteration of the guidelines are here.   

Proposed New Rules and Forms

By | November 28, 2012 | Current Events, Legislation | 1 Comment

The 458 page report of the Advisory Committee on Bankruptcy Rules can be accessed here.  A proposed new Chapter 13 plan form can be found at page 186.  The proposed new forms begin at page 215.  I understand that these forms are getting pretty close.  The proposed new rules will be “published” in August 2013.  According to a press release:

These are going to be the most important changes to Chapter 13 practice and procedure since the enactment of BAPCPA.  PLEASE take time to read the Draft Form and Working Group comments below.  Send your suggestions and comments to: Troy McKenzie at troy.mckenzie@nyu.edu and/or Hon. Eugene Wedoff at eugene_wedoff@ilnb.uscourts.gov.

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