May 2009

31 May Personal Bailouts – Should You Bailout A Friend or Relative?

In this era of corporate bailouts, it makes you wonder how many individual bailouts are happening, and, more importantly, is it the right thing to do?  Three times in the past week, a client has called to request that we close the file because they no longer have to file for bankruptcy.  While I love to hear this news, I have to stop and wonder why?  When this happens, I always look back at the person's intake to make sure we didn't recommend a bankruptcy where a bankruptcy was not necessary.  Each and every time a bankruptcy could have and should have been pursued.  
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30 May Experian Beats Lifelock In First Courtroom Battle

Over a year ago, I blogged on the lawsuit between Lifelock and Experian. Well, Lifelock is still in business and so is Experian. Both companies are making money, and both companies are still fighting in Court. Why? The bottom line is millions of dollars in profits. Whose profits? Both companies. After the lawsuit was filed, both companies went around beating their chests about who was right and who was wrong. Now, in the first major movement in the case, the Judge has granted a partial summary judgment for Experian stating that Lifelock was placing fraud alerts on credit reports illegally.
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30 May Resolving a Motion for Relief – A Costly Exercise

Many Chapter 13 cases arise from mortgage payment problems.  A significant number of Chapter 13 debtors enter into bankruptcy with a mortgage arrearage and they use the arrearage cure mechanism of Chapter 13 to stop the foreclosure process and to pay back the missed mortgage payments over time. Unfortunately many of the budget and cash flow problems that existed prior to bankruptcy may continue to exist after your Chapter 13 has been filed.  In my Atlanta bankruptcy practice I would estimate that more than half of my homeowning Chapter 13 clients fall with post-petition mortgage payments.  In other words, while they are curing their pre-petition arrearages, they fail to make all of their post petition mortgage payments.  In the Northern District of Georgia, by the way, mortgage payments are tendered directly to the lender, and are not paid through the Chapter 13 trustee. So what happens to a direct mortgage pay debtor who falls behind post-petition?  Frequently once the post-petition arrearage approaches 2 or 3 months, the mortgage lender will file a Motion for Relief from Stay - a pleading in which the mortgage company asks the judge to lift bankruptcy protection and allow the lender to proceed with foreclosure.
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