Monday, November 23, 2009

Court to Hear Student Loan Bankruptcy Case
United Student Aid Funds, Inc. v. Espinosa, Argument Preview

Below, Stanford Law School’s Bryan Henderson previews United Student Aid Funds, Inc. v. Espinosa, one of two cases to be heard by the Supreme Court on Tuesday, December 1. Check the United Student Aid Funds (08-1134) SCOTUSwiki page for additional updates.

On Tuesday, December 1, in United Student Aid Funds, Inc. v. Espinosa (No. 08-1134), the Court will construe the Bankruptcy Code for the third time this Term. The question before the Court in Espinosa is whether a bankruptcy court’s orders confirming a debtor’s plan and, subsequently, discharging the debtor’s student loan debt are valid when the debtor has not demonstrated undue hardship. The court may also consider whether the due process standard established in Mullane v. Central Hanover Bank & Trust (1950) is met when a debtor fails to meet the heightened notice procedures mandated by the Federal Rules of Bankruptcy Procedure.

During 1988 and 1989, respondent Francisco J. Espinosa obtained four federally guaranteed student loans totaling over thirteen thousand dollars. In 1992, Espinosa filed for Chapter 13 Bankruptcy, identifying the student loans as his only debt. In his bankruptcy plan, which he mailed to petitioner United Student Aid Funds (“USAF”), the holder of his loans, Espinosa proposed to repay only the principal owed on the loans.

USAF filed a proof of claim in the bankruptcy court for $17,832.15, representing both the principal and the accrued interest on the loans. The bankruptcy court, however, entered a confirmation order approving Espinosa’s plan as submitted – that is, requiring him to repay only $13,250. The court did not make an undue hardship finding as required by the Code, nor did Espinosa initiate an adversary proceeding as required by the Rules. Instead, the bankruptcy trustee sent USAF a form notice indicating that the repayment amount approved by the court differed from the amount that USAF had claimed.

After Espinosa completed the payments required by the plan, the bankruptcy court entered a discharge order that enjoined Espinosa’s creditors from attempting to collect on his debts – again, without any finding of an undue hardship with regard to his student loans. Three years later, USAF indirectly sought to collect the additional money owed to it by Espinosa by garnishing Espinosa’s federal income tax refunds.

Espinosa subsequently reopened his bankruptcy case, seeking an order that would prohibit creditors from collecting his discharged debts. USAF then sought relief from the original confirmation order, arguing that it had been entered in violation of the Code and Rules and was thus void. The bankruptcy court ruled in Espinosa’s favor, but the district court reversed. It held that the confirmation order was void and remanded the case for an adversary hearing to determine whether Espinosa faced undue hardship.

After an initial remand, the Ninth Circuit reversed and remanded. In its view, USAF’s argument that the violation of the Bankruptcy Code and Rules rendered the confirmation and discharge orders void was foreclosed by its 1999 decision holding that a discharge is a final judgment which can only be challenged on direct appeal. It also rejected USAF’s alternative argument that Mullane’s requirement of “notice reasonably calculated under the circumstances” was not satisfied absent service of a complaint and summons.

After its petition for rehearing en banc was denied, USAF filed a petition for certiorari in which it argued that review was warranted because the Ninth Circuit’s decision allowing “discharge by declaration” both conflicted with the decisions of other circuits and directly contradicted the Court’s acknowledgement in dicta in Tennessee Student Assistance Corp. v. Hood that the Code’s undue hardship provision is “self-executing” – that is, unless a debtor secures a hardship determination, a discharge order cannot include student loan debt. The Court granted cert. on June 15, 2009.

In its brief on the merits, USAF relies on the text of the Code and the Court’s acknowledgement in Hood that student debt is non-dischargeable absent an undue hardship determination, which must in turn be obtained through an adversary proceeding. Because the court’s confirmation of the plan including student debt exceeded the authority granted to it by law, its judgment was thus void and could be attacked under the Federal Rules of Civil Procedure. USAF argues that neither the confirmation nor the discharge order is res judicata because the Code’s finality provision—§ 1327(a)—does not apply to provisions that are contrary to law. The statutory construction principle that the specific governs the general supports this proposition, as construing the finality provision to trump the limitations on discharge would render those limitations partially ineffective.

USAF also argues that the undesirable effects of the Ninth Circuit’s rule would not be limited to the student loan context; rather, the rule would – in conflict with Congress’s express judgment that some debts are nondischargable – allow other debts, such as debts from unpaid taxes and customs, certain torts judgments, and fines included in criminal sentences, to be discharged “by declaration.” Finally, USAF argues that due process demands compliance with heightened procedural requirements – such as the requirement that an undue hardship declaration be obtained only through an adversary proceeding – and that Espinosa’s failure to follow the Rules renders the confirmation order void.

Espinosa (as well as his amici, Chapter 13 Trustees) counters by emphasizing the important reliance interest of trustees and creditors in the finality of confirmed plans and arguing that the Code’s finality provision precludes USAF’s attack on the confirmation order. Espinosa relies on Traveler’s Indemnity Co. v. Bailey, in which the Court recently held that plaintiffs could not bring suit twenty years after the bankruptcy court issued an injunction even if the bankruptcy court exceeded its jurisdictional power in so doing. Espinosa also dismisses the textual argument, made by the U.S. in its amicus brief, that student debt simply cannot be discharged without an undue hardship determination as not properly before the Court. Finally, Espinosa argues that USAF’s due process argument fails because heightened procedural requirements can be waived, and the actual notice which USAF undisputedly received meets the constitutional minimum.

In its reply brief, USAF adopts the argument, made by the United States in its amicus brief, that Congress created a tripartite ordering of debts under the Code: debts that are fully dischargeable, debts that are dischargeable unless the creditor objects, and debts that are excluded from discharge. Absent a hardship determination, student loan debt falls into the third category. Funds notes that Traveler’s and the other cases on which Espinosa and his amici rely prohibit collateral attacks on a judgment, not direct attacks on a judgment – attacks not barred by res judicata. Finally, USAF reiterates that requiring creditors to object to the inclusion of nondischargeable debts in a Chapter 13 plan would result in “thousands upon thousands” of pro forma objections, leading to additional expenses for both creditors and debtors.

How Flexible is Chapter 13 Bankruptcy?

One of the most common questions about Chapter 13 bankruptcy is what happens if your financial situation changes during the duration of the plan? After all, a Chapter 13 plan runs from between three to five years and a lot of life can happen in that period of time. What happens if you or your spouse lose a job, get sick or in an accident and incur medical expenses, or have a change in family size?

Fortunately, Chapter 13 bankruptcy does have a great deal of flexibility in case of a change of income or expenses during the duration of the plan. Many times the court can agree to modify your plan to make it work. This often involves a lowering of monthly payments which debtors are obligated to pay.

Other times, the changes may need to be made even before a first payment is sent. Sometimes debtors are still unable to pay their mortgage even with the restructuring of their debt in Chapter 13. In cases such as this, modification is necessary. If the situation that you are experiencing is only a short term problem, the court may grant a moratorium in payments if it will allow you an opportunity to recover from an illness, one-time expense, or some other temporary cash flow problem.

If your situation changes significantly, Chapter 13 has what is called a “hardship discharge”. This happens when a Chapter 13 plan is confirmed but circumstances come up that prevent the debtor from completing the plan. However, there are stipulations to a hardship discharge which make it available only if: the failure to pay comes from circumstances beyond the debtor’s control, creditors have received at least as much money as they would have received under Chapter 7 where assets are liquidated, and if modification of the plan is impossible.

If you are seriously considering bankruptcy and you live in New York or Pennsylvania, you need to consult with a New York or Pennsylvania bankruptcy lawyer. While the process is complicated, they will be able to help you understand your options and help you avoid making bad decisions that you could later regret. If you are over-burdened with bills and cannot see any light at the end of the tunnel, bankruptcy may be the best option to help you get that much needed fresh start and allow you to rebuild your future. The law offices of Vern Lazaroff ,Esq. specialize in New York and Pennsylvania bankruptcy and exclusively represent debtors in Consumer and Small Business Bankruptcies. For a free consultation call:845-856-5335.

Effect of Foreclosure, Short Sale, and Bankruptcy on Your Credit Score

Posted by: Vern Lazaroff, Esq.
www.vernlazaroff.com

Have you ever wondered what kind of impact a foreclosure, short sale, or bankruptcy would have on your credit score? Well, wonder no more…
According to a recent report from VantageScore Solutions, which is a credit scoring company created by the “big three” (Equifax, Experian, and TransUnion), here’s what you can expect:

  • Short sale = 120-130 points
  • Foreclosure = 140-150 points
  • Bankruptcy = 355-365 points

Apparently loan modifications, where late payments and penalties are rolled into the mortgage balance, can actually have a small beneficial impact on your credit score.
Note that your VantageScore isn’t the same as your FICO credit score. VantageScores range from 501 (subprime) to 950 (superprime), whereas FICO scores range from 300-850.
Despite these differences, the numbers above can give you an idea of the relative impact of the different scenarios. Moreover, your VantageScore is being used by an increased number of lenders, particularly large mortgage lenders.

FindLaw KnowledgeBase


Published: 2009-11-23

The Loan Modification Process

There are so many homeowners that have been pinched by the simultaneous collapse of the housing market and the economy in the past year, that the federal government and banks launched several mortgage modification programs to help stem record amounts of foreclosures.

A loan modification is much like a mortgage refinance in that the objective is to find you a more affordable mortgage payment. The main difference is that instead of looking for a "new" loan, in most instances, you will just simply "modify" the terms of you existing mortgage. Refinancing your existing mortgage to obtain a more affordable mortgage payment could still be an option if you are unable to afford your existing mortgage loan. However, for an increasing percentage of homeowners, it is not possible to refinance due to decreasing home values and the tightening of loan requirements. Although you can seek to modify your mortgage without representation, you can also retain a reputable and experienced company or law firm to represent you through this process.

In almost all cases, a loan modification is recommended to homeowners who are experiencing a financial hardship that is preventing them from making their monthly mortgage payments. Your eligibility to modify your mortgage and the rate of success depends on several factors.

First, you need to prepare the appropriate document. If applicable, you will need to make copies of two months of bank account statements, two months of pay stubs, a home appraisal, a recent tax return and a financial hardship letter. The hardship letter is very important. It is your chance to explain your financial hardship any why you believe that without the modification, you will not be able to afford your mortgage payment. You also need to prepare a monthly budget (your monthly income and your monthly expense) and show that you have had a material (significant) change in your financial circumstances. For example, you would need to show that your income is currently less or that your necessary expenses are higher.

Second, you need to demonstrate to the bank that you are able to pay on the new modified loan terms and that the bank would be better off modifying your loan. Banks, like other businesses, are in the business to return a profit. Consequently, your objective in presenting your loan modification request is to show that it is in the best interest of the bank to modify your loan. So, if you have a very high amount of equity in your home or if your income is so low that you would not be able to afford even a reduced mortgage payment, then you have a small likelihood of successfully modifying your mortgage loan.

Today, almost every major bank has a mortgage modification or ?loss mitigation? department to handle a record amount of modification requests. If you are over 60 days late on your mortgage or if you are facing a significant financial hardship, you owe it to yourself to at least learn more about government-backed or private mortgage modification programs that will help you stay in your home and avoid a possible foreclosure. Because of the size of the mortgage crisis and the impact it is having on the economy the government has decided to act by budgeting billions of dollars to assist struggling homeowners. This money is a part of the greater recovery package that has been on going.

Recently, our government set up the Home Affordable Refinance Program, or HARP, and the Home Affordable Modification Program, or HAMP. If you are behind in your monthly payments and think a mortgage refinance or loan modification would help you should contact your lender and enroll in one of these programs. Since the programs are being administrated by lenders directly they have all the information regarding eligibility and application procedures. They can help you find a mortgage relief option.

To qualify for refinance or modification you would need to speak to your lender who will review your borrowing situation and current mortgage agreement to determine what options are available to you. Many lenders who would not otherwise offer assistance to anyone are currently doing so as a result of the government programs.

To qualify for the HARP program and refinance your mortgage, you must be the owner of a one to four unit property. The mount you owe on your mortgage compared to the value of your home is also important. If your home is worth at least 125% of the outstanding balance of your home you could be eligible. Your current mortgage payment status is also important for a mortgage refinance.

Again, considering the enormous number of mortgage modification applications currently pending and considering the complexities of certain aspects of the mortgage modification process, it may be best to seek an experienced professional to assist you in this process.

Refinance Second Mortgage Provides You Numerous Profits

Monday, October 19th, 2009

Having your own home can have many benefits. Apart from having a roof over your head to save yourself from getting burned under the scorching sun or from being washed away from the rain, owning any type of property would mean that it could be used as collateral during an emergency.

It could just so happen that you got yourself into some financial trouble and is in need of additional funds. If for example, your credit score has gone from bad to worse, borrowing the additional money you need from a bank could be a problem. This is where having your own home can be an asset. When a person has already mortgaged the house and is finding themselves in deeper trouble, then the best option would be to get a refinance second mortgage.

Why would anyone want to get a refinance second mortgage when their house is already on a mortgage? Wouldn’t it be an additional burden to be paying more monthly payments on higher interest rates? These are some questions that are usually frequented among many who are faced with such situations. The fortunate truth is that a refinance second mortgage comes with its own set of benefits.

With too many bills to pay, and expenses building up, paying more on a mortgage wouldn’t save you from destruction. But when a person gets a refinance second mortgagewould be benefited by having to pay a lesser amount on a lower interest rate.

A refinance second mortgage is based on one’s home equity, meaning as a home owner, the funds you need will be readily available. A refinance second mortgage is a secure loan, very much different from other loans and comes with a low interest rate, and is tax deducible, making it feasible for the applicant.

The financial market has many lenders today who have come forward in offering different types of mortgage loans to their clients. As the choices vary, it is best to enquire about each before making a hasty decision. It should be kept in mind that it is your house that will be on line. A bad decision can end up unfavourably. Getting more information about lenders and mortgage companies gives you the ability of selecting the best.

Getting a refinance second mortgage can be extremely beneficial if you are in need of funds for school tuition, home renovations, vacations, etc. The reasons for getting a refinance second mortgage can differ from person to person. Understanding this and determine if it’s worth to get a second mortgage loan against your home.

The author of this article is a writer who does not only write about economy but also other topics. If you want to get more examples about his articles, you can check out websites on barcode scanner reviews where you can find psc barcode scanners there.

Mortgage Refinancing - Introduction

Friday, October 16th, 2009

Refinancing is an option many people may consider when they are apply for a new home mortgage. Refinancing your home simply means that you are finding a new lender to lend you the money for your house, When refinancing it is possible to adjust the equity, length of the loan and interest rates. The most common reason for refinancing a property is to benefit from reduced interest rates, however it can also be used to release some of the equity in your home for whatever reason. Extending the term of your loan or changing the interest rate can save you shed loads of money. Spend time looking at how refinancing deals work so that you can reduce your monthly outgoings.

Cost - If you do decide to refinance your home mortgage, you should discuss it with your original lender first, and you will have to go through a credit check and verification of employment as well. If you are comparing different lenders then request a written estimate so that you can compare easily. Make sure that you understand all of the costs involved in refinancing so that you don’t get caught out, after all refinancing is supposed to save money. There will be refinancing costs which the lenders will charge. You must make sure that the savings you make are greater than the costs that you have to stump up.

Interest Rate - It is essential that you compare the interest rates of different plans, if you are staying with your current lender then find out if there are any special deals which apply. Although interest rates are important you must also understand the importance of other fees, try and compare the real total cost of the loan. Spend time comparing the interest rates and the specifics of the loans to make sure you’re getting the best deal.

Pay off - In the end, you should assess whether or not refinancing your home mortgage will pay off, and you should always make sure that the rate should at least be 2% lower than what you are paying now, and also remember that if you pay a lower interest rate, that you will have less interest deducted from your income tax.

With this in mind, visit this website and get questions like: “Explain refinancing a home” answered.

Refinance 2nd Mortgage: Why You Have To Get It?

Friday, October 16th, 2009

If you require info on anything on this world, you had better make a search on the World Wide Web which houses a plethora of webs that would find you what you’re looking for. If you are contemplating to refinance 2nd mortgage, you would be wondering where to go or whom to turn to. The webs on the Net will provide you with extremely educational and useful articles pertinent to the issue which will give you an insight into the advantages and disadvantages of refinancing. They will give you the necessary advice and instructions on how to go about the refinancing in a way that will accrue all the benefits to you.

It is most desirable to familiarize yourself with the advantages and disadvantages of a move to refinance 2nd mortgage loan before you really take the plunge. If executed wisely, the resulting benefits will ease your financial encumbrances to a great extent. If done badly, it may aggravate your financial burdens. The time of refinancing is of essence if you are to gain some sort of benefit from refinancing. If you are uncertain, consult a dependable mortgage lending specialist for opinion.

Refinance 2nd mortgage becomes a good option in the context of several reasons. If you think of combining your 1st mortgage loan with your 2nd mortgage loan so that they become a single loan, it is good to refinance 2nd mortgage. This paves way for a single payment. To avail yourself of a better rate of interest is another good reason to go for refinance. When the interest rate has become lower in the financial market than what you are paying at present, then it is time for refinancing.

Every precaution must be taken when deciding to refinance your existing mortgage. Base your decision totally on your individual situation and personal wants. When making up your mind to refinance 2nd mortgage, give some thought to the terms and conditions, refinance expenses and the reasons for refinance. If you are in doubt, use a mortgage calculator found on certain webs.

Since refinance 2nd mortgage will be of benefit to you in the long term, you do not have to rush things. Look around until you find the most suitable mortgage lender who promises the best terms and conditions that commiserate with your financial position.

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All Info You Have To Know about Refinance Mortgage Loans

Thursday, October 15th, 2009

Want to have a better lifestyle? Too much money going into monthly mortgage payments? Refinancing mortgage loans works well when it comes to helping people improve their standard of living. At the time of purchasing your home, several aspects may have controlled your mortgage interest rate. These may have included your income, your credit background, the down payment that could be afforded by you and most importantly, the existing interest rates in the market.

Even though you are committed to a high mortgage rate, it does not mean that you have to stick with it till you pay it off. Since interest rates are always fluctuating, smart people refinance their mortgage loans to a lower mortgage rate, when the interest rate in the market lowers down to the point where it becomes profitable for them. In this way, you can reduce your monthly mortgage payments and use the cash for something that you have always desired. Occasionally, people are satisfied with the mortgage payment they make on a monthly basis but they may want to lower the time period they are bound by the mortgage. At this point, refinance mortgages could be ideal as well.

Refinance mortgages are effective only under certain fundamental conditions and these are when you could secure a lower interest rate than your original mortgage and secondly, if you can end up paying less to the lender on the new mortgage. Before, evaluating the different lenders that provide refinance mortgage loans, it is important that you make a decision on the number of years you are planning to stay in the property. Once your requirement is clear, be in touch with your original lender to seek the options they have on offer. If those do not cater to your financial needs, then it is fine to look outside.

In the mean time, you should be clear about the type of refinance mortgage you are looking for and you should also be knowledgeable about the different factors such as your credit background, the loan amount etc. that will influence your credit interest rate. Appraise all interest rate quotes that you receive against your original mortgage rate. when every other concern is cleared out, it is time to calculate the monthly mortgage rate with the new lender and come in to terms with how to pay back.. Considering the savings you make and how it will effect your monthly budget are two important points to consider before a refinance mortgage. Also note that it is important that you evaluate the loan costs on such refinance mortgage loans.

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How to Decide the Greatest Refinance Mortgage Loan for Your Demands

Tuesday, October 13th, 2009

If you have already taken out a mortgage loan that has become a burden to you, getting away from it can be a lifesaver. If you want to relax and enjoy the privilege of paying the loan quickly and also save up cash for additional things, then getting a refinance mortgage loan would be the best option. A refinance mortgage loan can help you save money easily without having to pay monthly instalments like before at a much lower interest rate.

What really happens when getting a refinance mortgage loan is that the present loan that you have already got will be replaced with a different deal, with different conditions and of course at a much lower interest rate. With a refinance mortgage loan, the benefits are endless. One such benefit is the decrease of the total payment on the mortgage value. It also helps in releasing some of the equity built in a lump sum payment or in instalments.

If you have a bad credit history, don’t let that be an obstacle in getting a refinance mortgage loan. The financial market is full of lenders today who acknowledge the fact that you are a person who has had bad luck with credit and hence are ready to offer different solutions to assist you financially.

A refinance mortgage loan can vary according to the way the interest rates are calculated. These loans can be any of the following;

A refinance mortgage loan with a fixed rate which usually means that the interest on the base amount would be the same throughout the the duration the loan has to be paid. The rate generally wouldn’t change over time.

Next in line is the refinance mortgage loan with an adjustable rate. For loans like this the interest would usually change depending on the financial market conditions. The norm would be to first have an introductory interest rate. This introductory rate is used for around 3 or 5 years. Once the introductory stage has passed, the interest will keep fluctuating, depending wholly on the rates of the market.

Another type of refinance mortgage loan is the fully-amortizing loan. When this type of loan is obtained, the monthly payments tend to change with the interest rates. A balloon home loan type of refinance mortgage loan has an interest rate which will be fixed for a particular duration and then move on to an adjustable interest rate.

If you have enough equity on your home, then applying for a home equity loan would be the best option as it would leave you with enough of funds to pay off the previous loan as well as use the additional money for something else.

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Friday, January 30, 2009

Hillman v. Patrakian

I emailed Motion 2 Pub & Aff of Unknown Whereabouts with questions. The investigator Aff of Due Diligence was done prior to filing complaint. I don't have any info if it was given to Sheriff for service. No mailings done.

Monday, January 26, 2009

Sunday, January 25, 2009

Hillman Quiet Title

Nestor

what to do? file or refuse case?

Green, R

Waiting for IME report 1-25-09

Fitzpatrick

Need to do assets list.
Need to pay out the rest of the money

McCrory

Need to get helicopter bill covered. Call McCrory 1-25-09 VL

James Wright

What is new?