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Student Loan Debt Received Priority Treatment – Chapter 13

March 27, 2017

Background:

  • A Chapter 13 Plan proposed to pay student loan debt ahead of other general unsecured creditors.
  • Trustee objected to the payment priority proposal with the premise that the student loans were being given favored treatment of student loans and was unfair discrimination.
  • Debtor proposed to pay nearly $5,000 per month through the plan and treated two student loan claims which totaled $65,000 with a separate class.

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Debtors Need Their Monthly Bills from Creditors

March 15, 2017

Background:

  • Most banks will no longer send monthly statements to the debtors when debtors are in bankruptcy.
  • Debtors must call or contact the bank if they want to find out the monthly amount owed.
  • Creditors/banks must notify the debtors only if there is a change in the monthly payment.
  • Debtor filed a Chapter 13 Plan and added in the Plan that the creditor was to continue with monthly statements to the debtors.
  • HSBC objected on the basis that it would be a violation of the automatic stay and create a logistically burden to the bank.
  • HSBC stated that adding the clause requiring statements, the Plan was unconfirmable.

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Chap. 13 Case Dismissed – Adversary Proceeding Must Stop

March 13, 2017

Background:

  • Debtor (attorney) and his wife filed for Chapter 13 Bankruptcy.
  • Prior to filing for Bankruptcy, Debtor was convicted of stealing money from elderly clients.
  • Complaint was filed by Debtor’s victim that the restitution could not be discharged in bankruptcy.
  • Adversary proceeding was started.
  • Debtor’s wife severed the joint bankruptcy.
  • Debtor eventually voluntarily dismissed his case shortly thereafter.
  • Debtor’s victim wanted the adversary proceeding to continue in Bankruptcy Court so this claim could never be included in another bankruptcy and Exempt from Discharge.

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Liquor Store Owner Sentenced to Prison-False Statements

February 19, 2017

Background:

  • Small business owner sentenced to prison.
  • Filed Chapter 7 Bankruptcy.
  • Owner of a liquor store.
  • When the small business owner sold the liquor store for $171,000, he had his parents deposit the proceeds in their bank account.
  • Parents paid his expenses and gave him cash on a regular basis from the funds.
  • This income/profit was never recorded in the Bankruptcy Petition.

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Loan Modification – Ocwen Did Not Follow HAMP

February 10, 2017

Background:

  • Loan was acquired through a divorce and the wife remained in the home after divorce.
  • Wife had previously filed for a Chapter 7 bankruptcy; Ocwen did not allow Wife to apply for a loan modification.
  • Before assuming the mortgage, wife applied for a loan modification from Ocwen Loan Servicing.
  • Debtor participated in good faith to apply for the loan modification.
  • Ocwen presented that the Debtor was not acting in good faith since she did not want to assume the mortgage before applying for a loan modification.

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Attorney Cannot Keep Ferrari & MG from Debtor Client

January 22, 2017

Background:

  • Attorney was a debtor’s business attorney.
  • There was a long-standing personal relationship between the debtor and the attorney.
  • Even though the debtor had no funds to pay the Attorney, the attorney continued to provide legal services for the debtor which resulted in $70,000.00 outstanding.
  • Debtor filed for Chapter 7.

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Used Car Dealer False Statements – Deceived Bank

January 7, 2017

Honesty includes disclosure of all facts –Used Car Dealer Misrepresents Intent to Bank.

Background:

  • Debtor owned a used car dealership and began to have financial problems with his business debts.
  • Debtor using an auction sale contract purchased a 2007 Mercedes-Benz for $19K.
  • Car had a book value of $30K
  • Debtor represented that the car was purchased for a personal vehicle and approached the bank for a loan.

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Dining Out – Effect on 2017 Budgets and Waistlines

dining-outDecember 13, 2016

I read something interesting today:   Dining out is the No. 1 item that Americans blow their budgets on, according to the Principal Financial Group’s annual Financial Well Being Index, which was released in December 2016. The company surveyed more than 1,100 employed American adults.

Besides your Budget – eating out has these effects:

  • tend to consume 200 more calories than when they eat at home
  • eat more or eat higher calorie foods
  • obesity and higher body fat

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Discharging of Student Loans – 46 yr. old Pilot – Denied

plane-crashingDischarging of Student Loans – 46 year old Pilot – Denied

I have covered before the Brunner test, to determine if you can meet the undue hardship requirement for student loan discharge.   Here we have a case wherein a pilot is seeking the court to discharge his student loans. Continue reading…

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