Press Release on the HAMP Program

July 26th, 2009, 7:23 am

The United States Treasury Deptartment published a press release in March of this year that details the new Home Affordable Modification Program (”HAMP”).  I have written many blog posts with respect to this program and have personally been able to use this program to help many clients.  I thought it would be a good idea to post the link on the Massachusetts Bankruptcy Blog to this Press Release: http://www.treas.gov/press/releases/reports/modification_program_guidelines.pdf

 If you have any questions, you can always contact a bankrutpcy attorney in your area to discuss HAMP.

If you have filed for bankruptcy and one of your creditors or the Trustee has filed a complaint alleging you are not entitled to a discharge of your debts, there are certain defenses that you want to raise. The two most basic defenses with respect to an adversary proceeding (the name of the proceeding to challenge a debtor’s ability to discharge debt) are to ensure the Creditor has a right to challenge. This is called standing. The second key defense you may want to raise is to ensure the Creditor has put forth actual facts that are supported by evidence, and not simply a theory that you may have done something wrong.In Bankruptcy law, “[t]he burden of persuasion rests with the party either opposing a discharge in bankruptcy under Bankruptcy Code…” Commerce Bank & Trust Company v. Burgess, 955 F.ed 134, (1st Cir. 1992). “Moreover, the statutory requirements for a discharge in bankruptcy are ‘construed liberally in favor of the debtor’ and ‘’[t]he reasons for denying a discharge … must be real and substantial, not merely technical and conjectural.’” Id

In order to have standing, the plaintiff “must demonstrate that it has suffered a concrete and particularized injury that is either actual or imminent, that the injury is fairly traceable to the defendant, and that it is likely that a favorable decision will redress that injury.” Massachusetts, et al v. Environmental Protection Agency, et al, 549 U.S. 497, 509 (2007)(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560- 561). For example, if the party challenging your bankruptcy contends that you transferred, hid or mutilated property of the bankruptcy or other assets, ensure that that party has an ownership stake in those assets. One such example would be if you were holding property of a third party and that property were not yours to begin with, then no one can ever claim you must turn that over to a Creditor, without a Court Order.

It should be noted, that this article is not intended as legal advice for any specific adversary proceeding. If you find yourself faced with such a proceeding, it is always best to speak to an experienced bankruptcy attorney in your jurisdiction.

Ripple Effects of Bankruptcy

July 6th, 2009, 2:23 pm

In our current economy, there is a lot of talk about how your personal finances can permeate into your personal and professional lives. When you file bankruptcy, it is well known that your credit report will be severely impacted and that negative information will last for years. Although you might hit a roadblock in terms of borrowing in the immediate aftermath of your bankruptcy, your life will not wait.

One of the most fundamental needs a person can have is housing and after bankruptcy or foreclosure is housing. Many companies or landlords from whom you may wish to rent will conduct background checks that will include a criminal and financial check. If you’ve filed for bankruptcy, especially if it was relatively recent in the last 2 or 3 years, you might have difficulty getting someone to rent to you. One way around this is to rent with individual landlords who are more likely to have the latitude to account for your individual story once they meet with your personally. Apartments managed by a company are more likely to impose their set standards and not rent to you or be unwilling to consider your personal circumstances. Lastly, when looking for your first rental post-bankruptcy, air on the side of fiscal conservativeness and look for a very affordable unit to start. Once you build a strong post-bankruptcy rental history, it will likely over time open more options for you with future landlords.

Another area that can be affected by filing bankruptcy are services that many take for granted including insurance, cell phones, and home data information including cable, phone and internet. Many of these service providers require credit checks before they begin to offer services and if your history is unsatisfactory based on their standards, you may find yourself seeking other avenues to secure these services. If you find yourself in this position, you can expect two distinct possibilities, paying larger deposits if you are allowed to contract for these services or having to prepay for the services. Many companies will require you to pay for the services before you receive them via these larger deposits or limits on your service like prepaid cell phone plans.

Employment is a crucial aspect of anyone’s livelihood and is especially important to discuss in terms of seeking post bankruptcy employment. Potential employers will often conduct credit checks especially if the position entails handling money or other valuables. The best solution to this is to just be aware of the possibility and be certain when applying for jobs.

A final major area to expect to be drastically affected after bankruptcy is clearly the ability to be issued credit either as loans, mortgages or credit cards. Anyone who does extend credit to you will likely impose very high interest rates and severe terms. Be cautious when attempting to borrow by borrowing conservatively and being sure to account for the interest rates when you consider repayment. With credit cards, a new product has recently entered the market in the form of prepaid credit cards. Although these prepaid credit cards have “Mastercard” or “Visa” on them, they are not credit cards and are not subject to credit checks or reports to a credit bureau. Furthermore, since they are nothing more than a debit card, if they’re lost or stolen you are subject to actual cash losses and they are harder to dispute. The issuers of prepaid cards also generally impose more strict rules regarding lost or stolen cards including a requirement to report it within 48 hours or you’ll begin to bear the burden of the monetary loss.

In Massachusetts, if you find yourself facing discrimination from an existing relationship (service provider, employer etc.) after you’ve filed bankruptcy you may be able to be protected under M.G.L. Ch. 151B § 4 §§ 4A that prohibits such retaliation. Bankruptcy is a constitutionally protected act and it is illegal to retaliate against such a protected act. In any aspect of your life post-bankruptcy, the best tool you can have is knowledge so that you are not caught off guard and always have multiple options left available to you so that in the end all of your needs can be met to provide for yourself and your family.

The foregoing article was drafted by Justine Medina, for the Law Office of Goldstein and Clegg, LLC