Be Informed. Missouri Legal News You Can Use.

Bankruptcy

• Proposed Bill to speed up the short sale process: Prompt Notification of Short Sale Act
  Feb 21, 2012

  
  A new bill was introduced which would require mortgage companies to respond faster to inquiries about a possible short sale: The Prompt Notification of Short Sale Act. Bankruptcy attorneys know about this issue: a client would like to avoid foreclosure by selling his house to a third party below the mortgage amount. The mortgage company would lose money through a short sale but might receive more money than through a foreclosure. However, the process takes often a long time. Even though someone from the mortgage company talks with the house owner about the short sale process, someone else at the mortgage company might start the foreclosure process. Every so often, we see that clients have to file bankruptcy to stop a foreclosure and have more time for the short sale process.
  
   
  
  The legislation is known as the Prompt Notification of Short Sale Act. It will require a written response from the mortgage company within 75 days after the house owner sends a request to the mortgage company.
  
   
  
  If the act becomes law, it will not change anything in my opinion because the bill requires only a response from the mortgage company. The response could be that the mortgage company needs more time to review the house owner's request. However, the mortgage company or better: the servicer of the mortgage company can extent the response deadline only once by 21 days.
  
   
  
  If the servicer does not respond within 75 days after receiving the written request, the buyer could receive $1,000 in statutory damages. That means the buyer does not have to proof any real damages. Reasonable attorney fees would need to be paid by the servicer as well.
  
   
  
  A short sale is favorable for two reasons, the seller avoids a foreclosure on his credit and a short sale is better for the neighborhood. A short sale does not bring down the value of other properties in the neighborhood as a foreclosure normally does.
  
   
  
  A short sale normally takes four to nine month to complete. This is not only too long for a potential buyer but it is sometimes too long for the mortgage company itself which might foreclose on the property before the short sale process is finished.
  
   
  
  Will the new bill be successful? A similar bill was introduced last year which required a response deadline of 45 days. The bill did not make it to a debate in the house....
  
  
  

• New Exemption bill introduced to Missouri Legislators
  Feb 09, 2012

  You find the new bill introduced by Senator Crowell here:
  
  http://www.senate.mo.gov/12info/pdf-bill/intro/SB683.pdf
  
   
  
  Among  other things, the new bill will include earned income credits as being exempt from creditors. This can be helpful in filing for bankruptcy when the tax refund comes in and someone has to turn over a portion of the tax refund to the trustee. The Earned Income Tax Credit will be exempt. The remaining part of the tax refund might be exempt by applying other exemption or by planning the time of the bankruptcy filing. 
  
   
  

• Car loan - Bankruptcy Seminar, Free
  Dec 22, 2011

  Car Financing Seminar
  
  This is a free seminar to help solve car financing problems because of a low credit score.
  Weiss Toyota, Prestige Financial, St. Louis Community Credit Union and the Licker Law Firm, will be present to answer all questions about how to optain a loan for car financing.
  
  Attendance is limited, please register by either calling (314) 644-9501 or online at: http://www.thecreditrepairman.net/home/free-seminar-to-help-solve-car-financing-credit-problems.html
  
  The seminar will be on Wednesday Evening, January 25, 2012, 6:30pm to 8:00pm at the Marriott Hotel, St. Louis Airport, 10700 Pear Tree Lane, St. Louis, MO 63134.
  
  
  Free Seminar to Help Solve Car Financing Credit Problems.
  Let Our All-Pro Team Show You How To Tag All The Bases As You Get Home SAFE And Score With A New or Pre-Owned Car!
  1st Base – Jimmy Kavadas, The Credit Repairman
  15-years of helping people with credit problems including bankruptcy. Testimonials at www.thecreditrepairman.net
  2nd Base – Attorney Tobias Licker
  A specialist in bankruptcy filing and client counseling.
  A good man! www.lickerlawfirm.com
  3rd Base – Christine Feeney – Prestige Financial
  A lender that specializes in helping people with credit problems
  and obtaining car financing now. https://www.gopfs.com/
  HOME – St. Louis Community Credit Union – Leonard Riley, Vice President,
  SLCCU helps consumers re-establish credit through an easy-to-understand program that helps with saving and paying on time. Welcome to the community.™ www.stlouiscommunity.com
  
   
  

• Lien Stripping in Chapter 13 without discharge
  Dec 03, 2011

  First, what is a chapter 20? One files first a chapter 7 to discharge all unsecured debt. After receiving a discharge which takes around 4 months, one can file a chapter 13 if it benefits the debtor. One benefit has been pointed out by the U.S. Bankruptcy Appellate Panel (PAP) of the Eight Circuit, on August 29, 2011. The panel pointed out that a debtor can file a chapter 13 after a chapter 7 to strip a wholly unsecured junior lien (meaning a second or third mortgage, the first mortgage would be older and higher in rank and would be senior) from his residence. The word "residence" is important, it cannot be a rental property, in order to strip off (meaning wiping out or eliminating) the second lien, the debtor must live in the property. The fact that the debtor does not receive a discharge in the chapter 13 (because one would have wait 4 years from after filing the chapter 7 in order to receive another discharge in a chapter 13) does not bar the effective lien avoidance. What happens if the case gets dismissed? Then, the lien would not be avoided even though the adversary proceeding was approved by the court, the plan must complete in order to avoid the lien. What does it mean if the lien is avoided? Who pays for the mortgage (lien) that is stripped off? Nobody, the mortgage company has the loss. The holder of the avoided lien is an unsecured creditor.

• Principal Paydown Plan- NACBA Petition to avoid foreclosures.
  Sep 23, 2011

  The National Association of Consumer Bankruptcy Attorneys created an online petition for the White House to reduce foreclosures. The plan is called Principal Paydown Plan (PPP). Someone in a chapter 13 bankruptcy case would apply all of their monthly mortgage payment towards the prinicpal of the loan and nothing towards the interest. This would greatly decrease interest payments and would lead to more equity for the houseowner. A mortgage loan that is underwater, meaning you owe more on your loan that the value of your house, would change to equity for the houseowner. The mortgage payment would be lower and it would be easier for the houseowner to refinance the loan to lower interest rates. If you want to support the petition follow the link below.
  
  https://wwws.whitehouse.gov/petitions/%21/petition/help-families-avoid-foreclosure-stabilize-housing-market-and-boost-economy-adopt-principal-paydown/Yj4rq2l8