Under the BAPCPA (the 2005 Amendments to the Bankruptcy Code), to file Chapter 7 bankruptcy, a debtor must pass a test. The test is in some respects very simple, and in others very complex. The very first step (which can be relatively easy) is to compare a debtor’s income to the median income for the State in which they live. These “median income numbers” are published by the Federal Government, and are adjusted annually. Come November 1, 2009, for the first time since the law was implemented, the median income for most states is going down

With all of the bad news these days, I thought should look at some of the more positive little-known tips and tricks if you are negotiating the difficult waters of foreclosure and/or bankruptcy.

Did You Know . . .

An article written by Orlando Realtor® Judy Chapman on her “Orlando For Sale” blog caught my eye the other day. The article, which had a follow-on, described in the context of realistic appreciation expectations, how long a homeowner may expect it to take for their home’s value to return to the height of the market values. In the case of Orlando property, she projects that it could take more than 10 years for values to return to their high point from 2007. So, being curious, I performed the same little analysis on Orange County, California home values . . .

Of the inquiries we receive, I believe one of the more common questions starts something like this:

“I am a tenant renting a home, and today I received a notice from the bank that they are going to foreclose on the house. What is going to happen?”

The answer is a mixed bag of good and bad. At this point, a little background is important . . .

Earlier today I posted an article discussing Foreclosure and Tenants. I will re-post this article sometime tomorrow as recent Federal legislation was just brought to my attention which may substantially affect the rights of tenants in foreclosure. More to follow tomorrow.

David

Why the whales? After the day I’ve had, I need some serenity!
In the course of my practice, I have the opportunity to correspond with a lot of people. In our bankruptcy practice, most of those people are in dire financial situations. In what appears to be a rapidly growing trend, those in economic distress appear to be the target of more and more deceptive schemes and fraud than ever before. To this, one might respond “this isn’t new,” and of course you would be right. The news is rife with articles about people being ripped of. What I find scary these days, however, is that previously highly-regarded professionals are getting wrapped up in these schemes, and the scope of these schemes is growing exponentially every day . . .
*Image Courtesy of National Geographic – click photo to be taken to the original picture.

As a long-time bankruptcy attorney, I am as big a proponent of the bankruptcy system as anyone else. However, a line in a recent Time® Magazine article, a line comparing bankruptcy to Apple Pie really struck me as funny. The article was a brief “history” of bankruptcy, dating back to the Romans who would dismember debtors and distribute their limbs to the creditors (Yuck!). I’m not sure what one does with the arm of a person who owed you money, but it did illustrate the dramatic change in attitude in resolving debt. Bankruptcy laws are generally seen as a more empathetic, humane means of resolving debt . . .

Back in March I wrote a warning about Loan Modification companies, and how even the State Bar of California had issued an ethics warning for attorneys. That article can be found here. Well, guess what . . . now the office of the California State Attorney General has jumped into the fray in a very big way. If you are a consumer looking for a loan modification, or a company engaged in the business of Loan Modification, beware – Jerry Brown is gunning for you!

From time-to-time, we receive calls from clients and prospective clients about the dreaded “Three Day Notice.” While in theory its very simple, in practice the Three Day Notice tends to throw even the most experienced landlords for a loop. By way of background, the Three Day Notice is used, in the context of a residential tenancy, to get the tenant to perform an action that they are required by the lease to perform, but have failed to do . . .

Bankruptcy is a word that often evokes a lot of emotion from people. Fear, anger, loathing and a wide range of feelings are often associated with just the mention of bankruptcy. The truth is that bankruptcy is not something to be feared, looked-down-upon nor reviled. Common misperceptions lead people to reach for those fears, and in this article I hope to dispel a couple of these . . .

If, like many debtors I meet with, your car is underwater, then you will want to consider your options regarding retention or surrender of the vehicle. In a chapter 7 bankruptcy, this is a pretty easy decision – you can keep the car and continue making payments, or you can surrender the car and discharge any obligation for a deficiency. In chapter 13, however, there is a third option that might make sense . . .

The Associated Press yesterday released its findings on the recent surge in bankruptcy filings throughout the country. Despite a series of changes to the Bankruptcy Code in October of 2005 which were intended to make it harder for individuals to file bankruptcy and discharge their debts, the report finds that on the contrary, filings – particularly Chapter 7 filings – are on a dramatic rise across the country . . .

You hear it on the radio, see it on TV and read it in the paper – “Loan Modification”. If you’re not sure what it means: lenders in record numbers are re-writing loans for persons who are at risk of losing their homes in foreclosure. The Federal Government has implemented several programs, including a $75 million plan aimed at encouraging lenders to re-write millions of mortgages to slow the foreclosure crisis. The plan seeks to help 9 million Americans retain their homes . . .

The State Bar of California has issued an Ethics Alert in response to the sudden wave of companies offering services which include “Loan Modification” and “Foreclosure Consultation.” While the Ethics Alert is intended to give attorneys guidance on how to avoid the ethical traps that exist for attorneys in the field of loan modifications and/or consulting with persons in foreclosure, it contains some great advice for consumers who are in need of assistance with a pending foreclosure or loss of their home due to mortgage default.

In 2005, Congress enacted the “Bankruptcy Abuse Prevention and Consumer Protection Act” (“BAPCPA”), which by all accounts was a very lopsided piece of legislation. The bill was pushed heavily by the credit industry (yes, the same banks that are sucking billions of dollars from the U.S. Government in bailouts) as a means of preventing what the industry believed were “abusive” bankruptcy. In return, the bill also included some “consumer protection” measures which have resulted in very little benefit to the filing consumer. The entire piece of legislation has simply caused more work for attorneys, trustees and bankruptcy courts, but has done very little to satisfy the later-half of its title “Consumer Protection.” A new piece of legislation, the “Helping Families Save Their Homes Act of 2009” appears to be a large step in the right direction for consumers and debtors in bankruptcy, and for the first time in several years, actually appears to be headed towards passage.

In July of 2008, the California Legislature and the Governor put in place the first real legislative effort to help slow the rising tide of residential foreclosures. The measure was intended to force lenders and borrowers to put their heads together and discuss what options might be available to avoid a foreclosure. The measure has proven to be little more than a speed bump for loan servicers moving toward foreclosure . . .

President Obama has announced his support for several changes to existing bankruptcy law. These changes should assist those people who have been caught-up in the economic turmoil that is now referred to as “the Great Recession.” The changes are also aimed at stemming the tide of foreclosures throughout the country . . .

After I'm sure what was a firestorm (please excuse the un-intended pun) of calls, emails and correspondence from the Manufactured Housing industry on the proposed Emergency Regulations proposed by HCD . . .

The Steve Miller Band had it right - as if our industry – Manufactured Housing – wasn’t taking a hard enough beating lately, HCD recently sent Manufacturers, Dealers and Wholesalers a “NOTICE OF PROPOSED EMERGENCY ACTION”. On June 18, 2008, the Department notified all interested parties that it sought to implement new construction standards for manufactured homes . . .

This article is being prepared as a result of a number of recent inquiries from residents in corporate mobile home parks that we have converted to resident ownership.

The question, although phrased differently depending upon the park and the residents’ choice of language, can be easily phrased as . . .

The Windward Village Conversion Portal is up and running now. For our latest manufactured home conversion project, the Windward Village in Long Beach, CA we have created a resident portal on the internet for them to review draft documents, to communicate information . . .

There is some confusion surrounding the “subdivision” of a mobile home park.

A subdivision can take several forms, which include a cooperative (approved by the State and local agencies). This form of cooperative excludes the limited equity cooperative and the mutual benefit non-profit conversion which is often referred to as a cooperative . . .

A Resident Initiated Condominium Conversion refers to the subdivision of a mobile home park into individual units by the Residents of the park. As used in this article, the term “resident initiated” does not strictly refer to a condominium conversion started by the residents. Under California law, a “resident initiated” condominium conversion actually refers to any condominium conversion . . .

The concept of using a Limited Equity Cooperative (“LEC”) to convert a proprietary owned mobile home park to resident ownership is not new. The LEC has been used both in California, and throughout the United States in a number of mobile home park conversions. In some instances . . .

In order for residents to purchase the park in which they live and for park owners to sell the park to residents, a number of methods must be considered. Mutual Benefit Non-Profit Purchase During the 1980 time period, the conversion process was assisted by the passage of a number of statutory revisions and innovations. One of the earliest . . .

Residents of Palm Beach Park Acquire the Final Piece of the Puzzle with Counsel from The Gibbs Law Firm, APC. The residents’ acquisition protects a unique property located in the seaside community of San Clemente from almost certain closure. . . .

Conversion of a mobilehome park is generally referred to as resident ownership and has been available for close to thirty years. The process has matured over time, but it now seems to be more controversial because of what is perceived by some residents and some city officials as an attempt to defeat rent control . . .

Gerald R. Gibbs - In the News

In the September 2007 periodical, Mobilehome Parks Report ^tm Gerald R. Gibbs was recently interviewed by Thomas P. Kerr, editor of the Report, about pending legislation which will affect the manufactured housing conversion community . . .