Cramdown Bill Fails in the Senate
I previously wrote here about a proposed bill that would have allowed bankruptcy judges to modify mortgages in a Chapter 13 bankruptcy. Yesterday, in light of strong opposition from the banking industry lobby, the bill failed to muster enough votes to make it through the Senate. President Obama pledged to sign the bill into law […]
Consumer Bankruptcy Basics
Today’s L.A. Times has a great article on consumer bankruptcy, which discusses the basic distinctions between a Chapter 7 bankruptcy and a Chapter 13. It’s a good read for anyone with substantial debts and questions about how the process works. Generally speaking, a Chapter 7 — often called a “liquidation” bankruptcy — is for people […]
A Change is in the Works?
The Helping Families Save Their Homes Act of 2009 [H.R. 1106] passed the House of Representatives on March 6, 2009. The Act will allow U.S. Bankruptcy Court Judges to modify mortgages on primary residences in certain types of bankruptcy proceedings by reducing the balance of the mortgage to the fair market value of the house. […]
What is a “Cramdown”?
If a person filing a Chapter 13 bankruptcy owns a house which is worth less that the mortgage on that house, Section 1322(b)(2) of the bankruptcy code gives the court the ability to reduce the balance of the mortgage to the fair market value of the house. This so-called “cramdown” has two main benefits: It […]
Loan Modifications: Don’t Be Scammed
On April 6, 2009, U.S. Attorney General Eric Holder announced the formation of a multi-agency task force to shut down so-called “loan modification” scams. Federal and State agencies nationwide have brought civil cases and criminal charges against several companies that purport to specialize in “loan modifications.” Attorney General Holder cautioned homeowners not to pay up-front […]