01 May Are Consumers Really Being Protected
UPDATED. The U.S. House of Representatives Committee on the Judiciary’s Subcommittee on Commercial and Administrative Law scheduled a hearing on the second anniversary of the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 for 10:30AM Tuesday May 1st, 2007. The hearing topic is: Are Consumers Really Being Protected Under The Act?
This committee is charged with jurisdiction over bankruptcy law and bankruptcy judges. Information regarding the activity and membership of this committee is accessible on the Subcommittee website. The hearing will be broadcast live over the internet via this weblink.
The National Association of Consumer Bankruptcy Attorneys is reporting that its President, Henry Sommer, will testify, along with NACBA member Wayne Sigmon.
The committee requests witnesses prepare written statements in advance of the hearings. The committee is expected to take testimony from Shirley Jones Burroughs, a debtor from Gastonia NC; Steve Bartlett, CEO and President of the Financial Services Roundtable of Washington D.C.[The Financial Services Roundtable represents 100 of the largest financial services companies, managing $65.8 trillion in assets]; Yvonne D. Jones, Director with the G.A.O.; and NACBA President Henry J. Sommer.
The Other Guy Blinked. An interesting statement comes from Bartlett, who says Chapter 13 has been strengthened to help debtors save a delinquent mortgage from foreclosure. He says if lenders misapply mortgage payments they can be subject to punitive damages. This innocuous comment delves into the application of new Section 524i of the reform legislation, a provision debtor attorneys are inserting into chapter 13 plans at the urging of bankruptcy experts, John Rao and O. Max Gardner. Section 524i requires mortgage payments be applied according to the plan and not subject to the whims of the servicer. The penalty is a discharge violation. As creditor attorneys across the nation defend against the idea that mortgage holders and servicers now are subjected to the deemed current and cure provisions of a chapter 13 plan, Bartlett directly supports the position adopted by Rao and Gardner. Bartlett says “As lenders adjust to this new requirement, chapter 13 will be an even better option for saving the family.” This startling admission is sure to be cited in pleadings filed by debtor attorneys in chapter 13 mortgage cases. For further study of this issue, see “Challenging Mortgage Servicer ‘Junk’ Fees and Plan Payments Misapplication; Making use of the New Section 524(i)” in the January 2007 NCLC Reports Bankruptcy Issue.
You can read the full statement of prepared testimony of each of these witnesses by clicking on the name of the witness in the preceding paragraph. Further information on this topic will be available on the day of the hearing.
Andy Miofsky, Esq.
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