M is for Modify in my Bankruptcy Alphabet. The Bankruptcy Code provides that a borrower can modify the terms of some secured debts, like car loans, judgment liens, and some mortgages. And in the midst of the current pandemic mess, the automatic stay can prevent foreclosure while a homeowner seeks a mortgage modification on their […]
Cramming Down Mortgage Liens: The Plot Thickens
Can you afford to cram down a mortgage when cram down is permitted? Mortgages on a debtor’s home are protected from cram down in Chapter 13 by 1322(b)(2). Mortgages on any other kind of real estate can be reduced to the value at filing of the collateral securing the debt as of the date of […]
Financial education program worthwhile
Stand by: I’m going to say something nice about BAPCPA, the bankruptcy “reform” law of 2005. The debtor education requirement that is a condition of getting a discharge is a good idea. Just this week, two clients have reported that they learned useful stuff from the required program. Filing bankruptcy is a teachable moment for […]
Another voice in the savings chorus
I am not alone! A Wisconsin judge allowed Chapter 7 debtors to contribute to retirement savings in the face of a means test challenge claiming savings was an abuse of the bankruptcy system. Hurray! Another in the small band of those touting savings. In the Mravik case, the debtor’s Chapter 7 means test, which does […]
Cash collateral in consumer cases
It works like this: a creditor with a lien on income producing assets has a lien on the cash that asset produces as well. But you don’t have to have a traditional business to have cash collateral, and the duties it brings, in a bankruptcy reorganization. Rents are cash collateral The issue usually arises with […]
Bankruptcy improves your credit score
To a distressing extent, people in dire financial straits still worry that escaping overwhelming debt via bankruptcy will destroy their credit score. This article in Smart Money shows why filing bankruptcy can improve the debtor’s credit score and offers tips to get the most improvement following bankruptcy. While I resist the growing importance of credit […]
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