Thursday, December 31, 2009

Means Test Allows Vehicle Expense For Unencumbered Vehicles

Debtors seeking chapter 13 bankruptcy relief must propose and have confirmed a chapter 13 repayment plan. Debtors are subject to a “means test” if their household incomes are above the median income level for their state. Above-median-income debtors must proposed chapter 13 plans that devote all of their “projected disposable income” to the repayment of creditors. Problematically, the term “projected disposable income” is not defined by the US Bankruptcy Code.


In the case of In re Wisham, 416 B.R. 790 (Bankr. M.D.FL 2009), debtors were above-median-income earners who had proposed a repayment plan amount that was less than the amount the trustee believed was mandated by the Bankruptcy Code. Debtors had deducted from their “projected disposable income” calculation an amount debtors believed they were entitled to deduct pursuant to standards promulgated by the IRS for vehicle ownership.

The chapter 13 trustee objected to the plan’s confirmation alleging that the plan failed to provide the appropriate projected disposable income amount. Specifically, the trustee challenged debtors’ ability to take a vehicle ownership expense deduction for a motor vehicle that debtors owned free and clear of any liens. The trustee maintained that the projected disposable income amount provided in the chapter 13 plan should be increased by the amount of the deduction taken by debtors for the vehicle deduction.

The bankruptcy court rejected the trustee’s position and held that debtors could deduct a vehicle ownership expense when calculating the “projected disposable income.” The court allowed debtors to deduct the vehicle expense amount identified in standards promulgated by the Internal Revenue Service even though debtors owned the vehicle outright and had no lease or contract payments thereon.


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, December 8, 2009

Mortgage Lienstripping via Bankruptcy Returns as Part of Financial Regulatory Bill

The American Bankruptcy Institute is reporting as follows:

"House Judiciary Chairman John Conyers (D-Mich.) has submitted an amendment to the financial overhaul package that would allow a bankruptcy judge to modify the terms of a home mortgage, including reducing the principal, CongressDaily reported today. Fifty-four amendments were filed two hours before deadline submission yesterday, and the House Rules Committee will meet today to consider the parameters for floor debate and again Wednesday before issuing its rule. Debate on the legislation could start as early as Wednesday. Against massive opposition from the banking industry, the House passed similar legislation this year, but the Senate fell 15 votes short to enact cloture."




Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Treasury Summons Mortgage Lenders to Meet on Loan Modifications

The American Bankruptcy Institute is reporting as follows:

"The Treasury Department summoned Bank of America Corp., Citigroup Inc. and other mortgage servicers to Washington, D.C., yesterday to accelerate U.S. foreclosure prevention efforts ahead of a year-end deadline for some loan modifications, Bloomberg News reported yesterday. The banks, which also include Wells Fargo & Co., JPMorgan Chase & Co. and Morgan Stanley, face a Dec. 31 deadline to make permanent the trial refinancings and concessions they extended this year to about 375,000 homeowners at risk of default. Banks have blamed the shortcomings on borrowers failing to turn in all their paperwork and confusion about eligibility standards. Banks are rushing to meet a new Treasury deadline, announced Nov. 30, to permanently convert more than half of the 650,994 loans that were in trial modification plans at the end of October into permanent reductions by year’s end. The Obama administration’s $75 billion program to encourage banks to lower monthly mortgage payments and alter loan terms for those in need had permanently modified 1,711 loans through September, according to a congressional oversight panel. Of the 375,000 loans scheduled for conversion to permanent modifications, those that aren’t switched over by Dec. 31 may not be eligible for HAMP again in the future, the Treasury said."

Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Monday, November 30, 2009

Foreclosures Surpass 300,000 Monthly; Are Bankruptcies Far Behind?

Bloomberg.com reporter Dan Levy filed the following report that I thought may be of interest to you.  Can bankruptcy filings be far behind for these people being foreclosed?  Here is the article:


"U.S. foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc. said.

A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19 percent from a year earlier, Irvine, California-based RealtyTrac said today. One in every 385 households received a filing. The tally fell 3 percent from September, the third consecutive monthly decline.

“The foreclosure problem is still with us and will keep prices down,” Stephen Miller, chairman of the economics department at the University of Nevada at Las Vegas, said in an interview. “The real issue is we don’t know what inventory banks are holding that they have yet to put on the market.”

Distressed real estate transactions accounted for 30 percent of all home sales in the third quarter as the median price fell 11 percent from a year earlier to $177,900, according to the National Association of Realtors. U.S. unemployment surged to a 26-year high of 10.2 percent in October as payrolls fell by 190,000 workers, the Labor Department said last week.

Housing will reach a bottom by March 2010, with lower- priced properties recovering value more quickly than expensive homes, First American CoreLogic said last month.

“The fundamental forces driving foreclosure activity in this housing downturn -- high-risk mortgages, negative equity, and unemployment -- continue to loom over any nascent recovery,” James Saccacio, chief executive officer of RealtyTrac, said in the statement. “We continue to see foreclosure activity levels that are substantially higher than a year ago in most states.”

RealtyTrac sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.

Coming on Market

About 7 million properties likely to be seized by lenders haven’t yet hit the market, Amherst Securities Group Managing Director Laurie Goodman wrote in a Sept. 23 report.

Housing indicators that show price increases in some areas of the U.S. are being distorted by government efforts to reduce foreclosures, which are temporarily limiting sales of seized homes, said Scott Simon, managing director at Pacific Investment Management Co. in Newport Beach, California.

“Part of that is the back end of the foreclosure moratoriums and people trying to work through modifications” of their home loans, Simon said in an interview. “At some point, these have to come through the pipeline.”

Nevada had the highest foreclosure rate for the 34th consecutive month, with one in 80 households receiving a filing. The number of filings fell 4 percent from the previous year, the first year-over-year decrease since January 2006. The total declined 26 percent from September.

California, Florida

California ranked second, with filings for one in every 156 households. Florida was third, at one in 168, RealtyTrac said.

Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah rounded out the top 10 highest foreclosure rates.

California led in total filings, with 85,420, up 50 percent from a year earlier. Default notices in the most populous state more than doubled and auction notices rose 73 percent, according to RealtyTrac.

Florida ranked second with 51,911 filings, down 4 percent from October 2008, the first year-over-year decrease since July 2006. Filings fell 6 percent from the previous month.

Illinois was third at 19,946, up 57 percent year-on-year and 56 percent from September, making it the only state with a foreclosure rate in the top 10 to have a monthly gain in filings. The total for Illinois was the highest in RealtyTrac records dating to January 2005.

Michigan ranked fourth with 16,468, up about 45 percent from a year earlier, RealtyTrac said.

Nevada, Arizona, Georgia, Texas, Ohio and New Jersey completed the 10 states with the most filings.

East Coast

Filings fell 12 percent from a year earlier in New Jersey, which had the 13th highest rate. They dropped 26 percent to 2,306 in Connecticut, and rose 28 percent to 4,797 in New York.

Las Vegas had the highest foreclosure rate among metropolitan areas with populations of 200,000 or more. One in every 68 households got a notice, more than five times the national average. Even so, filings decreased 27 percent from September.

California had seven cities among the top 10. Vallejo- Fairfield ranked second and Modesto was third, both with a rate of one in 81 households. Riverside-San Bernardino was fourth and Bakersfield, Merced and Stockton ranked sixth through eighth, respectively. Sacramento came in 10th.

Cape Coral-Fort Myers and Orlando-Kissimmee, both in Florida, ranked fifth and ninth, respectively. "


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Bankruptcy Hits Middle Class

Bankruptcy is reaching middle-class Americans more and more.  Below is an article published by USA Today and written by Christine Dugas:

"Staci Schubert's career has taken her from New York to California, from graphic designer to website designer to sales executive. Most recently, she launched a business as a designer of handbags and accessories.


At 40 and with such accomplishments, Schubert is Middle Class America. She and her counterparts have long been the nation's backbone, because their steady jobs and purchasing power have helped drive our economy.

But Middle Class America has two faces, a new study shows. Schubert is that other Middle Class America, too.

After earning $275,000 annually, Schubert used most of her savings to start her business in 2003. The earliest days of the recession in 2007 slowed sales, and she fell behind on business and personal bills. Credit card debt reached $65,000.

She tried to find a full-time job without much luck, because the job market was saturated. Temporary freelance design work couldn't cover her bills.

So in January 2008, she filed for Chapter 7 bankruptcy, becoming one of nearly 1.1 million consumer filers that year.

A new study by Elizabeth Warren, Harvard Law School Leo Gottlieb professor of law, and Deborah Thorne, Ohio University associate professor of sociology, finds that personal bankruptcy has become a largely middle-class phenomenon led by filers who are college-educated and owners of homes. According to the study, "The Vulnerable Middle Class: Bankruptcy and Class Status," the shift occurred even before the Great Recession.

More than 100,000 middle-class families filed for personal bankruptcy every month in 2007, says the report, which was provided to USA TODAY but will be released in a book next year. Those who filed in 2007 were in worse financial shape than those who had filed in 2001.

"The bankruptcy filings are a warning about the risks now facing middle-class Americans," says Warren, chair of the Congressional Oversight Panel on the Troubled Asset Relief Program (TARP). No longer can they count on a college education, a good job and homeownership to protect them from financial collapse.

"It's horrifying for people who are not used to anything but an upward trajectory," says Bob Anderson, a bankruptcy lawyer in Wilmington, N.C. "They are used to calling the shots."

Schubert agrees.

"I'm a highly educated, middle-class woman," says Schubert, who is the single parent of a 2-year-old son, Lincoln. "Until now, I have never in my life been unemployed."

More filings ahead

In 2005, the bankruptcy law was changed to make it harder to file bankruptcy. After it took effect, filings dramatically dropped. But this year, filings are climbing and are expected to total 1.5 million, the level they were at before the tighter law took effect.

Warren and Thorne say their data show that the change in the law was not a scalpel that cut out only those deliberately not paying their bills. These days, it's ordinary middle-class Americans, not a marginalized underclass or high-stakes gamblers, who are most apt to experience financial failure.

Poor savings habits, health problems and excess spending have traditionally been causes of bankruptcy. But the study finds that college education and homeownership, the traditional strategies for wealth building, may not be enough to guarantee financial security.

"As these time-honored wealth-building strategies become higher-risk undertakings, the middle class may face even greater economic instability in coming years, suggesting that in the modern economy, the path to prosperity may be far more perilous than anyone imagined," the authors conclude.

The proportion of bankruptcy filers who have been to college, whether they dropped out or graduated, increased from 46.5% in 1991 to 58.9% in 2007, the study finds.

"The data was taken from the boom years," Warren says, noting that it takes a long time to analyze and produce it. "I'm almost afraid to look at the data now."

Instead of graduating from college with upward mobility, many Americans are overwhelmed with college debt and few job opportunities, according to the study.

Schubert, who didn't have college loans, thought she had it figured out.

"I graduated from a top art design school in the country," she says of the Rhode Island School of Design. "Opportunities always came."

After filing for bankruptcy in 2008, Schubert hasn't found a full-time job but has been doing freelance design work. She says she has designed a new handbag line and is looking for investors to help recharge her business.

Home, sweet ...?

Homeownership, like higher education, guarantees little, the study finds.

"For decades the middle class counted on homes as an economic lifeboat," Warren says. With a fixed-rate mortgage and a home that appreciated in value, families had a financial nest egg they could rely upon.

Now, homes are sinking families instead of stabilizing them, as home values plummet. When Diane and Nicholas Spano of Long Island, N.Y., ran into financial problems, they thought that the home they have owned for 29 years could save them.

Diane had a kidney transplant, and Nicholas temporarily couldn't work at the post office because of a back problem. Diane went back to work at a drug and alcohol center, but it closed.

They applied for a home-equity loan, without realizing that there was no way they could afford the payments. House payments totaled $3,200 a month, and Diane had $200 a month in medical bills.

This summer the couple, who are both 66, filed for Chapter 7 bankruptcy.

"I feel bad," she says. "But if we had not filed for bankruptcy, I don't know where we'd be."

The home went into foreclosure, but the Spanos are trying to work out a loan modification. Diane is working part time at CVS; Nicholas has retired.

"Carrying debt is like carrying a backpack full of bricks," says James Doan, a bankruptcy attorney in San Clemente, Calif. "It weighs people down. They feel like failures. The are embarrassed and ashamed."

The job-loss domino effect is catastrophic. In cities such as Boise, for example, the economy is dependent on the high-tech industry. Many of those workers have seen salaries shrink and bonuses disappear, while others were laid off.

"They were making good money, and now, many are working at Lowe's and Home Depot," says C. Grant King, a Boise bankruptcy lawyer. "Now, we're seeing a wave of people who never thought they'd be coming in here, filing for bankruptcy."

The housing market collapse, which devastated the construction industry, also brought in waves of filers. Builders, roofers, concrete workers, real estate agents and mortgage lenders are among bankruptcy filers now, King says.

Spend, spend, spend

During the boom years, many middle-class Americans lived beyond their means.

"People have been negligent with their finances," says Doan. "They've taken a lot of money out of their homes like it's an ATM."

Middle-class families were encouraged to spend. But that often turned into a disaster when their bills increased and wages dwindled.

"My wife and I were great at lubricating the economy," says Rock Macke, who lives with his wife and two children in Rancho Santa Margarita, Calif. "We loved to spend money, as is the middle-class thing to do."

Macke says a $400,000 tax bill related to stock from his now-defunct employer wiped out the couple's savings. He was able to keep working, but he says the couple lived paycheck-to-paycheck as debt mounted to about $225,000. They filed for Chapter 7 bankruptcy in March.

Since then, they've gotten rid of their expensive cars and downgraded. Macke takes care of the yard instead of paying for a gardener.

"I got wrapped up in materialism. But in a painful way, this reminded me of important things, like a healthy family, that you lose perspective on when you're trying to chase the American dream," he says."

Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, November 24, 2009

One in Four Home Mortgages Is Under Water

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23 percent, threatening prospects for a sustained housing recovery, the Wall Street Journal reported recently. Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real estate information company based in Santa Ana, Calif. Economists from J.P. Morgan Chase & Co. said Monday they didn't expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply. Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20 percent higher than their home's value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Wednesday, November 11, 2009

Student Loans Discharged or Eliminated by Filing Bankruptcy

I am frequently asked if student loan debt is dischargeable in bankruptcy. Many non-bankruptcy lawyers believe that the bankruptcy laws had been changed so that student loan is no longer dischargeable by filing bankruptcy. That is not true. Although Congress may have made it more difficult to eliminate student loan debt, discharging student loan debt in bankruptcy is not impossible.


I read a very interesting opinion that was rendered by a Minnesota bankruptcy judge that discharged over $310,000 of student loan debt from a person who had completed college, medical school, and graduate school... and was healthy... and married... to a husband who made over $67,000 annually!!!!

So, there is hope for other people who owe student loan debt and cannot afford to repay it. Please contact me to discuss this case and other issues relating to the elimination of student loan debt or see my website at http://www.schallerlawfirm.com/student_loan_discharge.html . Below is a summary of the case to which I referred.

In re Walker v. Sallie Mae Servicing, 406 B.R. 840 (Bankr. D. Minn. 2009). Debtor discharged over $310,000 of student loan debt that she incurred while earning a bachelor’s degree at the University of Illinois, a medical degree at University of Illinois College of Medicine, and a master’s degree at Governors State University. Debtor was healthy and able to work, but stayed home to rear five children. Debtor’s husband held a full-time job as a policeman and a part-time job as a security officer. Debtor’s approximate household income was $67,000 annually.

In addition, within a year of filing the adversary proceeding to discharge the student loan debt, debtor’s spouse purchased a $40,000 new vehicle by incurring a vehicle loan with a monthly payment obligation of $850. Plus, debtor’s spouse signed a $50,000 second mortgage to build a 22-foot deck off their home with a monthly payment obligation of $372.

Nevertheless, the bankruptcy court rejected the objections to discharge argued by the student loan creditors, finding that debtor had provided sufficient evidence that the repayment of the student loan debt would have been an “undue hardship” on debtor and debtor’s dependents. The Walker Court applied the 8th Circuit’s “totality-of-the-circumstances” test. The court made note that the health of debtor’s twin approximately 9-year old sons was a major factor in its decision. The twins suffered with a form of child autism and were receiving intensive therapy offered by the state government for children with autism.

Surprising, the court allowed the discharge finding that the debtor had overcome debtor’s burden of proving “undue hardship” without calling an expert witnesses for an opinion as to the sons’ status and prognosis from the perspective of medicine/psychology or education. Nevertheless, the $310,000 student loan debt was discharged.


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Young Lawyers Salaries Cut 20%

Do you hear the sound of newly minted lawyers crying? The Wall Street Journal is reporting that the sounds being heard by young lawyers are "cut, drop, slash." Unless you are practicing bankruptcy law, young lawyers need to adjust their expectations regarding professional compensation.


While bankruptcy law is booming, and bankruptcy legal training is available from National Bankruptcy College (see http://www.nationalbankruptcycollege.com/ ), non-bankruptcy areas of the law are struggling. This has a direct effect on compensation for newly minted lawyers.

I found the following report regarding the woes of young lawyers. I thought you would be interested. The Wall Street Journal On Line filed the following report:

"Cut, drop, slash. Those are the verbs emanating from Reed Smith, which on Tuesday announced it was slashing associate salaries and billing rates and dropping its associate hour requirements from 1900 to 1700 hours. (1700 hours! Reed Smith attorneys, time to take up a hobby!)

According to a press release, the firm will reduce its hourly billing rates by 20 percent and also cut annual salaries for first-year associates in 15 U.S. offices by 20 percent. These changes will apply to the 51 new lawyers joining the firm in January 2010.

"In response to our clients' feedback and concerns about driving down the cost of legal services, we wanted to send a clear message that we are listening. So, we have therefore reduced both the rates and the salaries of our incoming first year associates" said Gregory B. Jordan, Reed Smith's Global Managing Partner. "We have also launched a new competency based development program to better prepare our new lawyers to meet the needs of our clients."

Annual starting salaries for the new associates beginning in January 2010 will range from $130,000 in major markets such as New York City, Chicago, California, and Washington, D.C. (down from a high of $160,000 in 2008), to $110,000 in Pittsburgh, PA. These actions solely involve the new associates entering the firm's U.S. offices. Salary levels for 2010 newly qualifying lawyers in the firm's European, Middle Eastern and Asian offices will be determined in the normal course of business during 2010.

"Our new U.S. starting salaries represent a reasonable and appropriate reset based on today's economic environment," said Eugene Tillman, the firm's Global Head of Legal Personnel. "We believe this will put Reed Smith in a stronger business position in a changing marketplace while still providing fair compensation to our new associates."

In conjunction with the new compensation, Reed Smith has also reduced the first-year associate annual billable hour expectation from 1,900 to 1,700 hours, allowing additional time and opportunity to take advantage of the training and development programs associated with CareeRS, the firm's newly launched talent development initiative."
Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, November 10, 2009

Bankruptcy Jobs are Plentiful; Other Legal Jobs are Hard to Find

Except for bankruptcy jobs, 2009 was the worst year for legal jobs. Lots of lawyers lost jobs and many lawyers without jobs could not find jobs. The secret: look for bankruptcy jobs. Get bankruptcy training at www.nationalbankruptcycollege.com as soon as possible.


Below is an interesting article written by Leign Jones that was published in the National Law Journal entitled "2009 Worst Year for Lawyer Headcount in 3 Decades." The author stated:

"The United States' largest law firms this year suffered the deepest cuts in their attorney numbers since The National Law Journal began tracking their census figures more than 30 years ago.

The total number of attorneys working at the top 250 law firms plunged by 5,259 lawyers. Put another way, it's as if all of the lawyers working at two firms the size of Jones Day vanished in 2009.

The results of the 32d annual National Law Journal survey of the nation's 250 largest law firms provide a vivid picture of the toll that the economic recession exacted from law firms this year. The 4.0 percent decline in the total number of attorneys marked only the third time that the lawyer count among the group has dropped since the NLJstarted collecting headcount data in 1978. The last time totals backslid was in 1993, when they dipped by 0.9 percent. The first decline was in 1992, when they fell by 1 percent. The tally this year wipes away nearly one-third of the growth that firms made during the past five years and puts many of them well below levels they enjoyed in 2005.

The number of attorneys in 2009 sank to 126,669 lawyers, compared with 131,928 attorneys last year. In 2008, the number of attorneys increased by 4.3 percent.

Among the top 75 law firms on the list, 15 had reductions of more than 100 lawyers. Of the top 50, seven cut more than 200 attorneys. The firm with the largest percentage decrease was No. 95 Fried, Frank, Harris, Shriver & Jacobson, which declined by 26.4 percent to 468 attorneys from 636 in 2008. Last year, the firm held the No. 58 slot in the rankings. The firm losing the greatest number of attorneys was Latham & Watkins, which shed 444 lawyers. It had 1,878 attorneys this year, compared with 2,322 in 2008, for a 19.1 percent decline. It slid from No. 4 to No. 6 in the ranking.

Taking the No. 1 position on the NLJ 250 was Baker & McKenzie, which had 3,949 attorneys. The firm maintained that position from the NLJ 250's inception until 2007, when DLA Piper edged it out. DLA Piper took the No. 2 spot this year. Its lawyer population fell by 7.3 pecent, to 3,450 attorneys from 3,721 attorneys in 2008. Last on this year's list is newcomer Schwabe, Williamson & Wyatt, based in Portland, Ore. It reported 164 attorneys.

The greatest movement among the top 10 firms came from K&L Gates, which rose to No. 7 this year with 1,813 lawyers from No. 10 in 2008. It broke into the top 10 last year, when it had 1,726 attorneys.

ASSOCIATE WOES

Not surprisingly, associate ranks were hit hard by work force reductions. The percentage of those attorneys shrank by 8.7 percent, to 61,733 from 67,648 last year.

In addition to laid-off associates, the decline reflects would-be first-year associates whose start dates law firms deferred. Of the 250 firms on the list, 113 reported that they deferred a total of 2,784 associates. That figure represents 42 percent of the 6,636 law graduates who would have been in the incoming first-year associate class. The average number of associates deferred per firm was 25.

At the same time, partner employment, as a whole, remained unscathed. The number of partners in 2009 was 53,468, compared with 52,980 in 2008, an increase of 0.9 percent. Among the top 50 firms, 30 increased their partner totals. The results confirm that law firms' strategy in managing the downturn was to save the partners -- and partnerships. "The cuts made were done primarily to preserve workloads for partners," said Ward Bower, a consultant with Altman Weil. And perhaps troubling to clients, "it suggests that work done by partners is work that associates could do," he added.

Attorneys in the "other" category proved the most expendable. The category includes nonpartner, nonassociate lawyers, including counsel, of counsel, senior counsel and staff attorneys. That group nosedived by 8.9 percent to 11,433 from 12,547 in 2008.

The overall downturn in totals this year was partly a correction of the rapid growth that NLJ 250 firms experienced during the preceding five years. Between 2004 and 2008, firms added 21,948 attorneys. Many firms declined to near or below their numbers of five years ago. Latham & Watkins' total this year of 1,878 was just 38 attorneys more than it had in 2005. The firm announced in February that it was laying off 190 attorneys, a move that followed speculation about other unreported attorney reductions. Morgan, Lewis & Bockius, with 1,243 attorneys, fell below its 2005 number of 1,281. Other top firms with this year's totals lower than their 2005 results were Wilmer Cutler Pickering Hale and Dorr; McDermott Will & Emery; Shearman & Sterling; O'Melveny & Myers; Akin Gump Strauss Hauer & Feld; and Fulbright & Jaworski. "


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Bankruptcy Jobs are Booming

The secret is out. Bankruptcy jobs are booming. Americans are feeling economic pain. Jobs are being lost, pensions are being cut, credit card bills are mounting, and mortgages are being foreclosed. Who should these American turn to? BANKRUPTCY LAWYERS


Below is an interesting article authored by Debra Weiss of the ABA Journa Law News Now. The article is entitled "Bankruptcy Boutiques are Quietly Booming." I thought you would enjoy it. She writes:

"The declining economy is good news for boutique law firms handling business bankruptcies.

“Bankruptcy boutiques across the country have been quietly booming in this economy as bankruptcies and workouts soar,” according to Portfolio.com. “Unlike large law firms which have been pummeled by the recession, forcing them to fire lawyers and entirely rethink established business practices, these smaller bankruptcy shops say the current economy is actually an opportunity to shine.”

While most large law firms have bankruptcy practices, they are unable to handle some cases because they also represent large financial institutions, creating a conflict of interest, the story says.

Peter Roberts, a partner with 25-lawyer Shaw Gussis Fishman Glantz Wolfson & Towbin in Chicago, told Portfolio his law firm began to seeing more business about six months ago from financially troubled smaller and middle-market businesses. “The banks ... have turned their attention to the smaller loans in their portfolios,” he said.

Harold Murphy, the head of the bankruptcy and financial restructuring practice at 31-lawyer Hanify & King in Boston, said Chapter 11 filings are already up and will probably increase over the next year.

“Bankruptcies are a lagging indicator. They generally peak near the tail end of a recession, rather than leading the recession,” he told Portfolio.com.

The article says other bankruptcy boutiques include Craig & Macauley in Boston and Warner Stevens in Fort Worth, Texas."



Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Monday, November 9, 2009

Owners in Foreclosure Need Lawyers

Foreclosure is everywhere. Seeking solutions, some homeowners try "self help" while other homeowners turn to non-lawyer for-profit "loan modifiers" with no formal legal training. Some of these for-profit loan modifiers have been investigated by the Illinois Attorney General's office or the Federal Trade Commission.


Why do these homeowners shy away from seeking help from lawyers who concentrate their practice on helping such homeowners? Cost! Some homeowners have the misguided perception that a lawyer will cost more than a loan modifier. The old adage is still true: you get what you pay for.

Non-lawyer "loan modifiers" have no formal legal training, cannot represent a homeowner in court, are not trained to advise homeowners on foreclosure defenses, and may charge the homeowner without providing any benefit.

Lawyers on the other hand, have years of formal legal training and typically have many years more legal experience dealing with foreclosures and foreclosure defenses. In the end, I put my money on the trained and skilled lawyer to get the job done and not the "loan modifier" who operates out of the trunk of his car and meets you at the local McDonalds.

Below is an interesting article written by Rita Pearson and published entitled "Leading Illinois attorney offers foreclosure advice." I found the article enjoyable, I thought you would too:

"Homeowners facing foreclosure should call a lawyer for help, the head of the Illinois State Bar Association said Thursday during a trip to the Quad-Cities.

John G. O'Brien, new president of the state bar association, is a veteran real estate attorney from Arlington Heights. He also is founder and chairman of the Illinois Real Estate Lawyers Association, an organization dedicated to the interests of real estate attorneys.

As Mr. O'Brien travels around the state on ISBA business, he is stopping to talk with media about foreclosures and other real estate legal topics, and offers steps homeowners can take to avoid foreclosure.

Lawyers can help renegotiate the terms of their client's payment terms if the homeowner still has a job, Mr. O'Brien said.

Those who no longer have jobs -- hence the reason for falling behind on their mortgage payments -- may benefit from other strategies, such as a real estate short sell or a deed in lieu of foreclosure, he said.

In a short sale, the homeowner sells the property for less than they owe on it if the lender agrees and will accept the sale price. A deed in lieu of foreclosure is when the homeowner hands over ownership of the property to the lender before the property enters foreclosure.

No matter what, the goal for the homeowner is to come out with a full release from the bank or financial institution, Mr. O'Brien said. The property owner does not want to owe thousands of dollars on the original home loan that will follow him or her around later, he said.

Don't wait until the last minute to call for help, Mr. O'Brien said. The foreclosure process takes many months to complete. "You have time; use it wisely," he said, adding that a lawyer will help find the best solutiuon.

Mr. O'Brien founded the Illinois Real Estate Lawyers Association in 1996, covering 2,000 lawyers in Illinois. He said many real estate attorneys will work at no cost, or low cost, to help people who can't afford legal services.

Foreclosure actions in Illinois show little signs of letting up, he said. In September, 7,174 Illinois homeowners received default notices from their lenders. Mr. O'Brien did not have data on the number of defaults or foreclosure cases for Rock Island County.

The number of Cook County foreclosure cases so overwhelmed the court system last August that the court had to stop taking new cases for a time to allow the clerks to catch up with the processing, he said.

"We hope we've seen the worst, but we know we've not seen the end of it."

Mr. O'Brien was in Moline to attend the swearing-in ceremony of about 50 new Quad-Cities area lawyers with Illinois Supreme Court Judge Tom Kilbride presiding at the i wireless Center in Moline. Nearly 2,500 new Illinois attorneys were admitted for practice in similar swearing-in ceremonies statewide."


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Friday, November 6, 2009

Bankruptcy Jobs Available for Unemployed Attorneys

Although bankruptcy law is booming, other areas of law are suffering. An interesting article was published by Brian Baxer in The American Lawyer declaring that 5,800 legal jobs were lost in the month of October, 2008. After reading the article below, I urge you to consider contacting laid-off attorneys or attorneys who can't find a job after law school. Tell these attorneys to consider focusing on bankruptcy law. These attorneys can gain great bankruptcy training at http://www.nationalbankruptcycollege.com/

Here is Baxer's article:

"According to a monthly jobs report released Friday by the U.S. Bureau of Labor Statistics, the nation lost 190,000 jobs in October as the unemployment rate jumped to 10.2 percent, its highest point since 1983.

The legal sector wasn't spared. When data is seasonally adjusted, the legal field shed another 5,800 jobs in October. When not seasonally adjusted, the legal industry actually gained 1,500 jobs, but that’s likely a result of summer associates being weaned from law firm payrolls.

In September, seasonally adjusted BLS data showed the legal sector losing 2,000 jobs.

After flat-lining for a few months, law firm layoffs continued apace in October, with Cooley Godward Kronish getting things started by letting go of 58 staffers. That was followed by Foley & Lardner cutting 39 lawyers, Wilmer Cutler Pickering Hale and Dorr shedding 57 staff members, and Drinker Biddle & Reath letting go of 22 associates and switching to a merit-based compensation system.

Squire, Sanders & Dempsey also announced plans to let go of between 20 and 25 "timekeepers" as part of a firmwide austerity program. And according to a recent analysis by sibling publication Legal Times, New York firms operating in Washington, D.C., saw their overall headcount decrease by 2.8 percent between April 2008 and April 2009.

But before associates turn their attention to bonus season--click here and here for stories on Cravath, Swaine & Moore’s bonus season kickoff--some firms haven’t finished with year-end layoffs.

On Thursday Dickstein Shapiro announced a second round of layoffs affecting 3 percent of associates and counsel-level attorneys and 10 percent of non-lawyer staff. That equates roughly to six lawyers and 47 staffers. The firm previously let go of 10 associates last January."
 
Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Sunday, October 25, 2009

Bankruptcy Filings Top One Million

The Clerk of the US Bankruptcy Court has announced that more than 1 million consumer bankruptcy cases have been filed this year.  This is the first time since the 2005 bankruptcy amendments took effect that consumer filings have exceeded 1,000,000 cases.

The American Bankruptcy Institute, of which I am a member, reported that 1,046,449 cases were filed through the first nine months of the year.  That's the most filings for the first three calendar quarters since 2005, when there were 1,350,360 consumer filings through the first nine months of that year.

In September 2009, there were 124,790 consumer filings, a 41 percent increase from the 88,663 consumer filings in September 2008.  The September 2009 total also represented a 4 percent increase over the 119,874 filings in August 2009, and it is the fourth highest single month total since the 2005 amendments.

Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, October 20, 2009

Loan Modification Business Disappearing?

Are lawyers losing mortgage modification business to government supported non-lawyers? Read Cheryl Miller's interesting article below:


"Backers of a new law that bars mortgage modification services from charging up-front fees (pdf) say the rules will put scam artists out of business.

But mortgage lawyers like Paul Molinaro wonder whether the new regulations will really just drive honest attorneys out of the practice.

"I think you're going to see a lot of lawyers not doing this anymore," said Molinaro, a founding partner in the Corona, Calif., firm of Fransen & Molinaro. "It's just not worth it."

Gov. Arnold Schwarzenegger this month signed Senate Bill 94, a response to complaints from desperate homeowners who have paid thousands of dollars in fees to mortgage modification services, only to learn later that the business did little or nothing to save their homes from foreclosure.

The new law, which took effect immediately after Schwarzenegger signed the bill, bars anyone from charging fees for trying to modify a residential loan until that work is completed. It also requires those service providers to tell clients, in writing, that nonprofit groups offer free help for troubled mortgage-holders.

Consumer groups, community organizations and the State Bar endorsed the legislation. Even though many lawyers complained that the ban on up-front fees would make loan modification work impractical, Bar leaders said new rules were justified by shady practices that have led consumers to file hundreds of complaints with the Bar.

In some cases, foreclosure relief consultants, who are not allowed to take advance fees, teamed with lawyers who could collect up-front payments. Attorney General Jerry Brown has sued a handful of attorneys for allegedly working with these consultants but never performing any substantive work to lower consumers' mortgage payments. The Bar also took the unusual step last month of naming 16 attorneys under investigation for misconduct related to loan modifications.

"In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented," Interim Chief Trial Counsel Russell Weiner said in a prepared statement.

But real estate attorneys say the new rules have created a host of unanswered questions. Can a firm accept a litigation retainer and later secure an unanticipated loan modification? Can lawyers place fees in a trust and draw on them when they finish the work?

"There is a lot of discussion and concern regarding the application of SB 94," said Scott Rogers, the past chairman of the Real Estate Property Law Section of the State Bar.

Bar spokeswoman Diane Curtis said Bar attorneys are working on a document that will answer members' questions about the new law. The law calls for violators to face Bar discipline.

SB 94 author Sen. Ronald Calderon, D-Montebello, said his legislation shouldn't drive any legitimate attorney out of business.

"It's just a matter of certain attorneys are used to working a certain way in order to provide cash flow," Calderon said. Attorneys who don't think they can deliver better mortgage terms to their clients "shouldn't take the case," he said.

Calderon is chairman of the powerful Senate Banking, Finance and Insurance Committee. Banks, credit unions and lending industry groups have contributed more than $18,000 in contributions to his 2010 re-election campaign.

Critics say Calderon is being unrealistic. Lenders fight many loan modification efforts, they say, and they employ high-priced lawyers of their own. Nonprofit agencies are overwhelmed by homeowners seeking help, and by the time a client approaches a lawyer they've probably already tried that option and left disappointed, they add.

What's more, tough cases can last months -- even a year or more, real estate attorneys say.

"I'm not willing to wait 15 months for my money, and then have to fight my client for it," Molinaro said.

Molinaro said his firm now provides what he calls mortgage counseling. Clients pay a flat fee up front, which he holds in trust. For that, they get advice on their options, including bankruptcy, tax implications and short sales, and help with applications for a loan modification. If they want more help, say, talking to a lender on the phone, they can come into the office and pay his hourly fee for service.

Molinaro and other attorneys would rather see the Legislature, the Bar and the attorney general go after bad apples with laws already on the books."


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, October 13, 2009

Bankruptcy Boom Caused by Exploding Debt Load

Wow!!!! If there is ever an article that you must read to understand better the debt crisis that is behind the bankrutpcy boom, then here it is! You must read this fabulous article written by Mitra Kalita that was published in the Wall Street Journal entitled "The 'Democratization of Credit' Is Over -- Now It's Payback Time." Here is the article, please read....


"Karen King owes nearly $36,000, more than she's ever earned in a year.

All day long, bill collectors call. She hunts for a second job, sometimes skips meals, and stays with other family members at a grandfather's crowded apartment, trying to get out of debt and turn her life around.

She largely holds herself at fault. "Years ago, I lived for now. It was so stupid," the 28-year-old says. "It's depressing, but I can't live that life anymore." Now, she says, "I basically want to live for the future."

The recession has forced a financial reckoning for Americans across the income spectrum. The pressure is especially acute for the low-income Americans who relied on borrowing for daily expenses or to gain the trappings of middle-class life. Shifting credit practices over several decades had enabled them to live beyond their means by borrowing nearly as readily as the more affluent.

But the financial crisis and recession have reversed what some economists dubbed the "democratization of credit," forcing a tough adjustment on both low-income families and the businesses that serve them.

"We saw an extension of credit to a much deeper socioeconomic level, and they got access to the same credit instruments as middle-class and mainstream Americans," says Ronald Mann, a Columbia University law professor. Now, "it will be harder for families at the bottom of the income ladder to get credit cards," he says.

The financial crisis has forced lenders to be especially cautious with the riskiest borrowers, a category that low-income families often fall into because their debt tends to be higher relative to income and assets. The ratio of credit-card debt to income is 50% higher for the lowest two-fifths of Americans by income than for the top two-fifths, Federal Reserve data show.

For families with incomes between about $20,500 and $37,000, the ratio of debt to assets rose to 18.5% in 2007 from 14.4% in 1998 -- more sharply than the increase among the overall population -- according to the Fed's Survey of Consumer Finances. In addition, the chances of default and delinquency on home mortgages are higher among lower-income households, according to data from Equifax and Moody's Economy.com.

The democratization of credit began decades ago. Federal legislation in the late 1970s required banks to avoid discriminatory lending and meet the needs of local communities, spawning a wave of home buying and entrepreneurship in lower-income neighborhoods. The rate of homeownership in families with incomes in the bottom two-fifths rose to nearly 49% by 2001 from below 44% in 1989, according to Fed data analyzed by Mr. Mann at Columbia.

Credit-card borrowing took a similar path. One cause was a 1978 Supreme Court decision that let banks charge whatever interest rate was legal in the state where their card operation was headquartered. The ability to charge higher rates made it more profitable to offer cards to risky borrowers. Adding oomph to both credit-card and mortgage lending was the growth of markets where lenders could sell their loans.

By 2007, 35% of Americans in the bottom two-fifths of income had a credit card with a balance, up from just over 21% in 1989. And use of these cards increased. The median balance on the cards, adjusted for inflation, grew 180% over that period for people in the bottom fifth of income and 80% for those in the next higher fifth.

When the recession struck, banks that had eagerly wooed new credit-card customers reversed course. "Rather than keeping accounts that have high loss potential and limited revenue opportunity, the mission becomes to close out those customers' active lines and drive them off the books," said a report from TowerGroup, a research firm. By June 2009, banks were closing credit-card accounts at a rate of 14% or 15% annually, double the rate of a year earlier.
Government policy, in some ways, has reinforced lenders' business imperative to pull back. A new credit-card law limits banks' freedom to raise interest rates without 45 days' notice. Anticipating this and other changes, card companies took aim at delinquent accounts and shed customers deemed most at risk of default, says Chris Stinebert, president and chief executive of the American Financial Services Association, a trade group.

"Banks and credit issuers are looking at their own debt and trying to collect as much as they possibly can," he says.

Backers of the card legislation say one goal is to erect some obstacles to both the lending and the borrowing excesses of recent years. Treasury Secretary Timothy Geithner, testifying before Congress in July, said: "We now know that millions of Americans were...unable to evaluate the risks associated with borrowing to support the purchase of a home, a car or an education."

All this means a new reality for consumers like Ms. King. Most of the credit cards she had were maxed out by 2004. She would sometimes just let the bills pile up and not pay the minimum. "I would start paying it, and then my sister almost got evicted from her old apartment, or my grandfather decided he couldn't pay the rent. They needed help," she says.

Later, the store cut her work hours. As she fell further behind, issuers canceled her credit cards and handed the debts over to collectors. Ms. King's credit score slid to 576, a level that deems her a high-risk borrower.

Last fall, wanting to buy gifts for her mother and sister and clothes for a young niece, she applied for credit and was rejected at Macy's and Dress Barn, finally getting a card with a $250 limit at the Children's Place.

Her biggest chunk of debt, $26,000, stems from student loans to pay for her two-year associate's degree from a community college -- loans now in the hands of collectors. The remaining $10,000 or so includes old credit-card balances, debt to a store that rents furniture, utility bills and back taxes. Another obligation is $400 a month she contributes to the rent on her grandfather's two-bedroom apartment, where her mother, uncle and sister also live.

Ms. King's father died when she was four, and her mother reared her and two siblings. A basketball star in high school, she was the first in the family to pursue higher education. She got her first credit card when she began college and was working at a fast-food restaurant. But, she says, she never learned how to mind a budget.

Legislation passed this year will require that when banks issue a credit card to someone under 21, a parent or guardian must co-sign and have joint liability.

Out of college and working at the shoe store, Ms. King kept up a busy social life, eating out several times a week and going to movies -- even as the collectors called. But she lost the shoe-store job in January, and then learned that a prospective new employer had rejected her after running a credit check. Fearing that her credit record would trip her up again and again, she resolved to fix her financial mess.

Gone are dinners at Red Lobster and Olive Garden and purchases like new basketball shoes. She has a part-time job as a tour-bus driver that pays $13 an hour plus tips. She held a second part-time job, in telemarketing, for several months, but it was on suburban Long Island, and getting there, using both the subway and a commuter train, finally became too much. She now is looking for a second part-time job closer by.

One day, when the subway to her tour-bus job was rerouted, she had to take a taxi. She watched the meter anxiously the whole way, groaning when she had to hand over a $12 fare.

With the aid of a financial counselor provided by a nonprofit, Ms. King is applying triage to her debts. "First, I want to take care of all the little things," she says, "and then the student loans."

When a utility to which she owed $300 offered to settle for less, Ms. King says, she declined, because she was told an overdue bill takes longer to come off a person's credit report when it is settled for a partial payment.

She rejected any idea of a bankruptcy filing for the same reason. "It takes forever to come off" the credit report, she says.

To help people like her, several American cities have added financial-counseling centers. In New York, their clients' average debt is $18,000, and half have incomes under $10,000. Counselors work with families to follow a budget, imposing choices they may not have had to make in years.

On a warm day, Ms. King ducked into a bodega, H&M Madison Express. She allowed herself a bottle of water, skipping a snack, unlike in the old days.

Decisions like that add up, said the bodega's manager, Hekmat Mustafa. Until 11 months ago, he accepted credit cards, but with fewer customers using them he stopped, to avoid a monthly fee and small fixed fee on each tiny purchase.

"The rise I see now is in food stamps, even from teenagers," Mr. Mustafa said. The number of food-stamp recipients was up 22% in June from a year earlier.

As he spoke, two customers walked in, both to buy individual cigarettes for 50 cents. Not long ago, he said, they would have bought a pack, for $9.

At the other end of the retailing spectrum, Sears Holdings Corp. last year began promoting its layaway program to enable credit-deprived families to continue to shop.

In Ms. King's world, she says, "all of my friends are going through the same thing I am."

It looked that way at a cookout she held in late summer -- potluck, to save costs. Her younger sister, Janice, said she was also awash in debt, from medical expenses and a bad shopping habit. She has a part-time job at a supermarket. Their mother, also named Janice, left her apartment amid mounting utility bills and moved in with her father and daughters. She is trying to pay off $5,000 of debt so she can rebuild her credit and get an apartment of her own.

A 22-year-old friend, Norman Broggin, lost his job at the same shoe store as Ms. King in the spring. He said he had no money to socialize anymore. Looking around at the laughing group, he said it was the first time they had been together in a long while. Before, "we would hang out every weekend," he said. "Get a drink at a nice bar, eat dinner at a nice restaurant. We don't do anything anymore."

Some are turning to wherever they can for credit. A publicly traded pawnshop chain, EZCorp., reported a 37% rise in revenue in the second quarter. "With credit limited and other options disappearing, there are people looking for somewhere they can get emergency cash," said David Crume, president of the National Pawnbrokers Association.

Cash-strapped workers have long obtained advances through "payday loans," available at storefront lenders for fees that equate to high annual interest rates. Even that move is not so easy now.

"More customers are walking in the door, but turndowns are up," said Steven Schlein, a spokesman for the payday-loan industry's trade group, the Community Financial Services Association of America.

Federal Reserve data show that the use of credit cards has been eclipsed by use of debit cards, which don't entail a loan. A counselor advised Ms. King to use her debit card for purchases as she tries to rebuild her credit score.

Sometimes, in spare moments between work and commuting and budget calculations, Ms. King flips through a photo album that records her old life: house parties, birthdays, pro-basketball games.

"I was a social person. I had interest in a lot of things," she says. "I had dreams. Now I'm just paying off the past.""


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Avoiding Foreclosure By Filing Bankruptcy

Avoiding foreclosure is on the mind of nearly every homeowner who fears eviction. Many of these homeowners in foreclosure have attempted to modify their mortgage loans with the Obama plan called the Making Home Affordable program. Some of these homeowners have found the modification process frustrating and have turned to chapter 13 bankruptcies to stop a sheriff sale.


Below is an interesting article written by Renae Merle of the Washington Post entitled "Racing the Clock to Avoid Foreclosures: Bank of America Scrambles to Modify Loans Ahead of Government Deadline." The article discusses the efforts of certain banks to meet Obama's deadline regarding loan modification. The article concludes that some democratic senators have threatened new legislation to change the bankruptcy laws by allowing homeowners to modify loans in bankruptcy if the Obama plan does not work. Here's the article:


"Bank of America employees are reminded every day of how far they still have to go. Just outside the elevators of their vast third-floor command center, attached to the wall, is a cardboard thermometer that shows them inching toward their goal of signing up 125,000 struggling borrowers for a federal program to modify their mortgages.

The company faces many of the same challenges as other major lenders addressing the foreclosure crisis. But with weeks remaining to meet the November deadline set by the Obama administration, Bank of America is trailing well behind the other large banks, according to Treasury Department data.

The company's effort has been hamstrung by a staff shortage and by adapting its computer systems and even fax machines to the scale of the program, which began in March. The company was also slow out of the box because it initially took a more conservative approach than some other banks, requiring that borrowers document their income and complete other paperwork before granting preliminary approval for a modification. In August, Bank of America softened the requirement and began authorizing some modifications without getting all the documents first.

Adding to borrowers' difficulties was a letter sent this summer by Bank of America that mistakenly informed some of them that they did not qualify for the administration's foreclosure-prevention program because their loans were not backed by Fannie Mae or Freddie Mac, the government-controlled mortgage giants. "Bank of America is not actively participating in this program," the bank wrote to some borrowers, according to a copy of the letter obtained by The Washington Post.

After a reporter asked the company about the letter, Bank of America stopped sending it out. A company spokeswoman said the bank reviewed the cases of borrowers who received it, adding that she did not know how many there were.

Even as the administration urges lenders to do more to help homeowners, some Bank of America employees continue to express skepticism about whether all of those seeking assistance really need it. "There's a difference between hardship and entitlement," said Jerry Durham, Bank of America's vice president of home retention.

Stacking Up the Banks

Under the Making Home Affordable program, lenders are paid with taxpayer funds to reduce borrowers' mortgage payments by lowering their interest rates, for example, or by extending the terms of their loans

A progress report released last week by the Treasury Department showed that only 11 percent (about 95,000) of Bank of America's delinquent borrowers who were potentially eligible for the program had been given a loan modification. That compares with 27 percent, or 117,000, for J.P. Morgan Chase, and 33 percent, or 68,000, at Citigroup, the Treasury reported. The figure for Saxon Mortgage Services, which is owned by Morgan Stanley, is 41 percent, or 32,000.

"We're sure working hard," Ken Scheller, senior vice president for home retention at Bank of America, said when asked about his company's low ranking. "We don't want to be down there." He added that the bank had modified 215,000 mortgages outside the federal program this year, including some under the terms of a settlement reached with state attorneys general related to subprime loans issued by Countrywide Financial, which Bank of America bought last year.

Many of the 62 other mortgage lenders participating in the government program have also ramped up, industry officials said. Wells Fargo reported that call volume tripled after the program was announced in February, prompting the company to hire an additional 5,800 employees to address loan modifications this year. Citigroup increased its loss-mitigation department from 450 employees in early 2008 to more than 4,000. J.P. Morgan Chase switched from a paper fax system to an electronic one to handle the volume of documents being submitted by borrowers.

"I remember two years ago sitting at a table with lenders and asking, 'Are you guys staffed up for this?' And they were like, 'Yeah, we're prepared,' " said Mark A. Calabria, an expert in financial regulation at the Cato Institute. "This was a much bigger wave than the lending industry was expecting."

The problems are especially acute at Bank of America, partly because its mortgage portfolio more than doubled with the acquisition of Countrywide, analysts said. Countrywide had a loan portfolio heavy with risky mortgages and delinquent borrowers. Especially now, Bank of America is "like a big oil tanker, and it takes time for them to shift focus," said Guy Cecala, publisher of Inside Mortgage Finance.

Even after top Treasury officials called in industry leaders for a series of meetings on the program in July, chastising them for their poor progress, the foreclosure crisis continues to worsen. Borrowers are becoming delinquent on their mortgages at record rates, and rising unemployment rates are exacerbating the problem, economists say. Already, 4.4 million borrowers have lost their home since the mortgage crisis began in 2007, and another 2 million will this year, according to Moody's Economy.com.

On the Front Lines

Bank of America's complex of office towers on the outskirts of Dallas is at the center of its efforts to address the crisis. At a rectangular control center in the middle of an open floor, employees monitor computer screens reporting how long callers from around the country have to wait to talk to a representative. Overhead, large screens record in red when calls have been on hold for more than two minutes.

In a surrounding sea of cubicles, other employees dubbed home-retention specialists -- some completely new to the business -- tackle 40 to 50 calls a day. Clusters of work stations are demarcated with streamers, identifying teams that compete to help the most distressed borrowers and collect the most in delinquent payments. Executives say both are high priorities.

The telephone conversations illustrate the challenge that the government has set for Bank of America in identifying borrowers whose troubles are serious enough to qualify for the program.

On a recent morning, Tiffany Palmer was on the line with a frustrated borrower looking for help with his mortgage. He was $6,000 behind in his payments.

"Do you have a 401(k) or savings -- liquid assets that can be quickly converted into cash?" she asked him. He was going to have to come up with money for the mortgage. Because his monthly mortgage payments represented less than 31 percent of his income, he made too much to qualify for a modified mortgage under the federal initiative. "You will not be eligible for the program," she said.

The next caller was out of work. Palmer suspected that even with unemployment benefits, the borrower would not make enough to qualify for a loan modification.

"Do you have any job prospects, interviews lined up?" Palmer asked her.

Could she generate more income by renting out a room in her home? What about a garage sale? Could she skip her credit card payments, about $400 a month?

"I am only giving them suggestions, not telling them what to do," said Palmer, who previously provided telephone technical assistance for T-Mobile customers last year before being laid off and then hired by Bank of America.

A Fast-Paced Scramble

The number of employees handling loan modifications for Bank of America has doubled this year to 11,000, and the bank still has 240 openings. It plans to open another facility in Fort Worth by the end of the year staffed with 300 more employees, and then it would add yet another 300 by the middle of 2010.

Executives say frequent changes in the program required nearly constant retraining of employees. "It is a challenge to find folks and get them up to speed as quickly as we're moving," Scheller said.

There have also been technological challenges. The bank is developing software to help identify eligible borrowers faster. "You are dealing with such volumes, you have to have computers to do the decisioning," Durham said. "We had to build a machine to handle 14 million loans."

Even the fax machines have been an issue. Housing counselors and homeowners have complained that they are often forced to resubmit documents multiple times after being told the paperwork has been misplaced or never received.

Kevin McFarland, a former Marine Corps sergeant, said he has repeatedly submitted his documents since late last year when he began pressing for a mortgage modification. Several times, McFarland said, he was told the documents were nowhere to be found. After submitting the documents in August for a fifth time, McFarland is still waiting for a ruling.

Bank of America said it is still reviewing McFarland's case and has acknowledged problems with its faxing system.

Last month, the company added a bigger server for its digital fax machine and more employees to sort the documents.

Even as Bank of America triages thousands of loans, it is facing pressure from groups that own the mortgages the bank services on their behalf -- meaning it collects monthly mortgage payments for these investors. Most investors have agreed to allow Bank of America to modify mortgages in line with the administration program, but about 5 percent have refused and another 15 percent require the bank to get their approval on a case-by-case basis.

Meanwhile, in another setback, a federal judge this summer rejected Bank of America's argument that it was protected against lawsuits by mortgage investors unhappy with the modified terms given to borrowers.

Bank of America and other lenders have a lot riding on the foreclosure prevention program. The company stands to collect about $6 billion -- some of which will be passed on to investors -- of the $75 billion the administration has set aside for the Making Home Affordable program.

At the same time, the banking industry faces a threat from senior Democrats in Congress who may revive legislation allowing bankruptcy judges to modify mortgages if more is not done to help borrowers. Last week, Sen. Jack Reed (D-R.I.) introduced a bill allowing a borrower to fight a foreclosure in court by arguing that the lender did not offer a loan modification."
 
Some ask when will Congress determine that the voluntary program isn't working for millions of homeowners?  While others ask when will Congress pass bankruptcy reform to allow homeowners to modify mortgages inside a Chapter 13 repayment plan?  These questions have yet to be answered?
 
Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.