Good times, Bad times - How Does Cashflow Fair?

In June, the Wall Street Journal reported that household debt decreased and Americans witnessed a slight increase of worth by 1.2%. Even while overall household debt seems to be decreasing, First Data Corp. reported that there has been a 6.8% increase in the use of credit for everyday purchases, especially among lower-income households. The higher costs of food and gas, for example, create a cash-flow problem for lower-income families due to stagnant wages, or even decreases many Americans have seen in wages. A comparison was done between cards that are actually debit versus credit, and consumers are actually using credit, not debit cards. More and more households live paycheck to paycheck, it seems. Analysts in some sectors believe the use of credit demonstrates an increase in consumer confidence and spending. However, First Data Corp. believes the usage is due to a lack of cash-flow, not a purposeful increase in spending or the use of credit due to the nature of purchases on credit, such as gas and food.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

FHA and the Making Home Affordable Program Assists Unemployed

Some good news for the unemployed: the FHA extended forbearance for long-term unemployed people so that they may avoid foreclosure. The FHA and the MHA (Making Home Affordable) programs are extending this relief to unemployed homeowners out of work for over 27 weeks. Two funds are working to assist homeowners. One if the “Hardest Hit Fund” offering $7.6 billion and the Emergency Homeowner Loan Program (EHLP) that offers $1 billion toward assisting the long-term unemployed.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Revisiting the Rumor Mill and Bankrutpcy Filing

Back in April, I made a post about rumors and reality in bankruptcy law. Because my everyday experience with clients shows me that the rumor mill persists, I thought I'd revisit this issue. Whenever the phone rings, people call with questions about their financial situation and potential relief they might find from filing bankruptcy. Inevitably, these calls include questions about "something" the caller heard from a relative, a friend, a co-worker about the bankrupcty process. Typically, the information is entirely eroneous!

If you have questions about bankruptcy, call our office for real answers that are based on the law, not on heresay from a friend who had a friend who...you get the picture!

We're here to dispell myths and rumors and give you the facts so that you may make decisions that make sense for your situation.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Bankruptcy Filings Decline Overall for 2011 as of June

Through the period ending June 30, 2011, consumer bankruptcy filings fell 8% from 2010. The American Bankruptcy Institute credits consumer concentration on debt reduction with the decrease in filings. While the first half of 2011 witnessed this overall decrease, bankruptcies in June increased 4%.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Credit Card Demand Falls

In the first quarter of 2011, the Federal Reserve found credit readily available with applications for credit cards being approved. However, applications decreased 3%. The Fed inquired about extensions of credit on active accounts, and those increased by 16%. It seems consumers are not applying for new accounts, but rather seek more credit access on accounts they already have.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Consumer Bankruptcy Filings Decrease 16% in May 2011

According to the National Bankruptcy Research Center, bankruptcy filings are down 16% compared to May 2010. This finding is consistent with household debt falling over the past year, as well.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

"Good News" about Medical Debt

House Bill 2086, the Medical Debt Responsibility Act of 2011, has been proposed in this legislative session. The bill would provide an opportunity for consumers to either pay or settle debt related to medical expenses and to have credit reports reflect the positive outcome within a forty-five (45) day period. This would make the debts appear current and/or paid on a credit report, whereas in the past, medical debts have remained on a credit report just like other consumer debt, for a period of up to seven (7) years.

There are rampant errors in medical billing and collections, which is recognized across the industry and in the credit rating arena. These issues negatively affect consumer credit scores as well as the cost of obtaining credit. Additionally, until these issues are settled, which, in the case of an accident, for example, might be years, a consumer's credit rating might be devastated. This of course, limits economic growth when lending is curtailed or made more expensive for consumers due to old, mistaken or otherwise settled medical debt. Supporters of the bill cite that medical debt is not usually related to credit-worthiness, thus it should not negatively affect borrowing capacity.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Coming This Summer: Consumer Financial Protection Bureau

The Federal Trade Commission is presently tasked with handling consumer complaints about debt collectors and their tactics. As of July 21, 2011, the Consumer Financial Protection Bureau will begin oversight of consumer concerns, including debt collection practices. Especially with more debt collectors tapping into new ways of contacting debtors, the past year witnessed an increase in complaints about creditor collection practices.

Debt collection companies are using cell phones numbers and sending emails. Of course, upon an application for credit, this information is typically collected. Since the consumer provides the information, the debt collectors/creditors feel it is "fair game" to use these methods to make contact with debtors. The new Consumer Financial Protection Bureau will have the ability to establish rules about debt collection that address these newer technologies and the extent to which collectors can go when attempting to collect a debt.

In general, there are protections already in place to keep creditors from harassing you. For example, if you write a letter to a creditor and request that they cease calling you, they must comply with your request. That protection is already in place under the Fair Debt Collection Practices Act (FDCPA). However, even with this recent legislation, complaints by consumers have risen almost twenty percent over 2010 figures. Thus, the newly created Consumer Financial Protection Bureau will likely develop more definitive rules and regulations about collection practices upon its opening in July.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

The Cost Burden of Home Ownership

The Joint Center for Housing Studies of Harvard University released a report of the state of home affordability. Households making between $45,000 and $60,000 suffered the greatest cost burden. Home values, especially in middle-class and minority neighborhoods, continue to fall with at least fifteen percent of properties that are worth less than the mortgages they secure. While the overall picture appears to be improving, with a two percentage point drop in delinquent loans in 2011, there are definitely pockets across the country that continue to fall into severe-cost burden as jobs in these communities are not recovering and incomes continue to decline.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Greater Protections Against Foreclosure

On May 5, 2011, Representative Miller of North Carolina along with Mr. George Miller of California, Mr. Turner, Mr. Conyers and Mr. Al Green of Texas introduced a bill in the House of Representatives that serves to provide greater protection to citizens facing bankruptcy with regard to foreclosure on a home. The bill is intended to prevent foreclosure fraud. It will require mortgage servicers to remain current with homeowners insurance even if escrows are not available. The legislation will also provide for a clear path throughout the foreclosure process so that paperwork is handled by having adequate staffing in place in departments handling foreclosure and requiring an electronic record of each document received or issued throughout the process.

For instances when the mortgage is sold even while foreclosure or modification procedures are underway, the bill requires the new servicer assuming the loan to continue to move through the modification procedure or foreclosure at the same point at which it stood with the prior servicer. It also requires subsequent servicers to honor modification agreements created by the prior servicer.

When payments are received, subsequent requests for payment will be required to list all payments received and will detail how payments were applied, whether to fees, interest and/or principal due. If servicers change and payments are not credited, the new servicer is disallowed from marking the payment late or assessing late fees, which are merely the result of the transfer of the loan, as well.

Overall, this pending bill will require that the loan or mortgage servicer provides detailed paperwork and transaction information to consumers. It will provide for fair and transparent application of payments made and will protect homeowners from suffering the results of the sale of mortgages undergoing modification or foreclosure proceedings.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Bankruptcy Filings Up in March 2011

For the year-to-date, bankruptcy filings increased by 2.6% over the year from March 2009 to 2010. This information was provided by the Administrative Office of the U.S. Courts through the U.S. Court News.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

News on the Consumer Protection Front

The Consumer Financial Protection Bureau is scheduled to open in July. However, several Republican sponsored bills are pending that would already limit the powers and reach of the CFPB. Elizabeth Warren, a Harvard Law Professor, is being considered a candidate for the director's position, which would be eliminated under one of the proposed bills. Other consumer advocates, such as Ed Mierzwinski of U.S. PIRG, support Warren and the contention that the Bureau is being truncated before it even begins its work. Of course, any bill would need to be signed by President Obama, who introduced the consumer bureau as part of his goal to change financial regulation.


Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

The Rumor Mill and Bankrutpcy Filing

There are many rumors that surround bankruptcy filing. Consumers believe the bankruptcy court or trustee will show up at their homes, ready to conduct a sale of goods. Consumers worry about equity in their homes, if they have it, or losing a cherished family heirloom that ultimately has more sentimental value than monetary value that is attractive to the bankrutpcy trustee.

Discuss the valuables you own with an attorney who will run an analysis for you based on actual debts, actual income and actual values of items you own. There is usually a fee for this analysis, however, it will provide you with a clear picture of your options or pitfalls, which will tell you whether a bankruptcy filing is appropriate for your personal situation.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

New Homestead Information

March 21, 2011
A new Homestead Act became effective in Massachuestts. To view a my PowerPoint, which explains the update, see my website at:
http://michaelrileylaw.com/realestate.html
Click on the "PowerPoint" icon on the left of the screen!

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Americans Suffer Before Filing Bankruptcy

According to a study conducted by the Harvard Bankruptcy Data Project, Americans suffer greatly before filing for bankruptcy since BACPA, the Bankruptcy Reform Act. By the time people file for bankruptcy, they have more debt than before the reform.

If you find yourself in a situation where you wonder about options, it is a good idea to consult with a bankruptcy attorney sooner than later. Even if you decide not to file, or to wait to file, you will at least have some information that might ease your burden.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Consumer Bankruptcy Filings Increase in February 2011

According to the American Bankruptcy Institute, consumer bankruptcies witnessed an 11% increase in February of 2011. There were 92,669 filings in January and 111,693 filings in February. Of these, 30% were Chapter 13 filings.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

2010 Witnesses Increase in Bankruptcy Filings

The American Bankruptcy Institute released figures for 2010 bankruptcy filings, which increased by 8 percent over 2009 figures. Total filings were 1,593,081 for 2010. Since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, known as BAPCPA, became effective, bankruptcy filings have increased each year. 

For the full press release, see the ABI website: http://www.abiworld.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=63153


Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Even the States Face Financial Woes

When debt and financial obligations overwhelm us, we often feel as if we're quite alone in our predicament. Even if we search the "numbers" and see figures that show thousands of people filing for bankruptcy, we may not know anyone personally who has this situation to face. If someone does file bankruptcy, it is often information they keep to themselves.

In the current economy, states and municipalities face crippling debt and expenses, just like the every day person. Check out the Wall Street Journal article on this topic at the following link:

http://online.wsj.com/article/SB10001424052748704364004576132091316245506.html

So, if you are faced with debt and financial obligations, don't feel so alone. Your town or city might be in the same boat!

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Bankruptcy Blast Fact

In Massachusetts, in 2009, there were 20,613 bankruptcy filings. This represents a 6.5% increase over the 2008 figures.

82% of filings were Chapter 7 and 18% were Chapter 13.

(Information based on figures provided by the American Bankruptcy Institute.)

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Credit Counseling and Debtor Education

Many of my clients initially balk at the thought of taking a credit counseling course and debtor education as part of the bankruptcy filing process. They worry it will be a hassle or more of the pat advice you see for saving money as web homepage news article titles. After taking these two courses, many clients write or call to tell me how much they appreciated the classes, how the information was helpful and gave that it gave them hope for their future post-bankruptcy. The information presented will help you move through the bankruptcy process and come out the other side with a better handle on your bills, spending habits and thoughts about managing money and debt.

Most agencies providing these services are open to direct consumer clients as well as those who are working with an attorney. Visit the Department of Justice website below for more information about approved agencies: http://www.justice.gov/ust/eo/bapcpa/ccde/CC_Files/CC_Approved_Agencies_HTML/cc_massachusetts/cc_massachusetts.htm

Remember, if you do plan to file for bankruptcy, speak with an attorney before taking a course like this. There are completion date requirements set by the Bankruptcy Court that must be complied with for the counseling to be valid. In addition, your attorney may have a relationship with an agency he or she trusts so that copies of records that must be filed with the court go directly to his or her firm for prompt filing with the Bankruptcy Trustee.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Mortgage Defaults and Bankruptcy

There is little information available to homeowners facing possible foreclosure or attempting to renegotiate a mortgage as lender practices are individual. From my own practice, when I say individual, I do not mean from lender to lender, but borrower to borrower even within the same lender! There are no consistent policies, timelines or procedures despite legislation introduced to produce fair and equitable results for consumers. At the same time that information and consistency are lacking, misinformation abounds. You will hear things from co-workers, friends, family and even your mortgage company that may be entirely wrong, or possibly illegal.

Consult with an attorney if you have questions about steps you can take if you are behind on your mortgage.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Welcome!

I'm glad you found my blog. You will find posts here about twice a week that address topics related to filing bankruptcy. My practice is located in Framingham, MA. However, I serve clients in all Courts in Massachusetts.

Follow my blog for updates related to bankruptcy. As a potential filer, a past filer or for information sake if you work with people or have your own clients who might need a bankruptcy attorney, following my blog will give you a regular reminder of information in this legal practice area.

Of course, my legal disclaimer is that blog posts provided are for informational purposes only and do not constitute legal advice, nor establish a client-attorney relationship. Always consult with an attorney directly before taking action on information provided in this or any other blog or website.

Thank you!