Source: http://shenwick.blogspot.com/2017/06/
Timestamp: 2019-04-25 20:08:28+00:00

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Many clients have contacted us regarding serial bankruptcy filers-people who filed for bankruptcy two or more times. Since 1984, Congress has been attempting to deal with debtors who took advantage of the automatic stay while making few or no payments to their creditors. This month, we’ll look at how the Bankruptcy Abuse and Creditor Protection Act of 2005 (BAPCPA) enhanced penalties for serial filers.
Under Section 362(c)(3) of the Bankruptcy Code, if you filed bankruptcy under chapter 7, 11 or 13 and then file another bankruptcy under any chapter of the Code within one year of the dismissal of the first case, there is a presumption that you filed the second case in bad faith, and the automatic stay will expire after only 30 days.
Under § 362(c)(4)(A)(i) of the Bankruptcy Code, if you filed two or more bankruptcies in the previous year, and then file a third bankruptcy, the same presumption of bad faith exists, and the automatic stay will not take effect at all upon the third filing (the “Three Strikes and You’re Out” rule). This limitation does not apply to a chapter 11 or chapter 13 case filed after the dismissal of a chapter 7 case for abuse under 11 U.S.C. § 707(b). You may file a motion with the court and ask for the automatic stay to be imposed, but you must present clear and convincing evidence that you filed the most recent bankruptcy in good faith.
Under § 362(c)(4)(D)(ii) of the Bankruptcy Code, if a creditor filed a motion for relief from stay in the prior case that was pending or had been resolved by terminating or limiting the stay, the new case is presumptively not in good faith as to that creditor. Under Section 9011 of the Federal Rules of Bankruptcy Procedure, the Court may impose sanctions against the debtor or the debtor’s attorney for bad faith filings.
Under § 362(d)(4) of the Bankruptcy Code, on request of a party in interest and after notice and a hearing, the Court shall grant relief from the stay by terminating, annulling, modifying, or conditioning the stay with respect to a stay of an act against real property by a creditor whose claim is secured by an interest in the real property, if the Court finds that the filing of the petition was part of a scheme to delay, hinder, and defraud creditors that involved multiple bankruptcy filings affecting the real property.
Although the Bankruptcy Code does not per se prohibit serial filings, it does condition the ability to obtain a discharge based on a subsequent filing within certain time limits, as discussed below.
Successive chapter 7 cases: Under § 727(a)(8) of the Bankruptcy Code, if you received your first discharge under a chapter 7, you cannot receive a second discharge in any chapter 7 case that is filed within eight years from the date that the first case was filed.
A chapter 13 case and a subsequent chapter 7 case: Under § 727(a)(9) of the Bankruptcy Code, if your first discharge was granted under chapter 13, you cannot receive a discharge under any chapter 7 case that is filed within six years from the date that the chapter 13 was filed, unless payments under the plan in such case totaled at least 100 percent of the allowed unsecured claims in such case; or 70 percent of such claims; and the plan was proposed by the debtor in good faith, and was the debtor’s best effort.
A chapter 7 case and a subsequent chapter 11 or chapter 13 case: Under § 1328(f)(1) of the Bankruptcy Code, if your first discharge was granted under chapter 7, you cannot receive a discharge under any chapter 11 or chapter 13 case that is filed within four years from the date that the chapter 7 was filed.
Successive chapter 13 cases: Under § 1328(f)(2) of the Bankruptcy Code, if you received your first discharge under chapter 13, you cannot receive a second discharge in any chapter 13 case that is filed within two years from the date that the first case was filed.
If you’ve previously filed for bankruptcy and are contemplating filing again, or if you’re a creditor with a claim against a serial filer, please contact Jim Shenwick.
your house as collateral by taking out a second mortgage.
late payments on 140,000 accounts with balances of up to $50,000.
Pioneer of acting in “clear violation” of the tax code.
are using illegal and abusive collection tactics.
debtors use 401(k) funds, home loans and credit cards to pay off their overdue taxes.
collecting the tax debts as intended under the law,” said Cecilia Barreda, an I.R.S.
ask their family, friends and employers for money.
long as they were approved by the agency.
monitor payment arrangements between five and seven years,” Ms. Barreda said.
The I.R.S. is owed about $138 billion, a sum that lawmakers are eager to reduce.
hound them for payments they cannot afford.
permitted to place them into installment plans that will fully resolve their debt.
goes, when taxpayers wind up on public assistance from settling overdue tax bills.
were taxpayers with incomes of less than 250 percent of the poverty level.
their other debts to pay their taxes.
Financial Protection Bureau, which said it “systematically misled” borrowers.
For its part, the I.R.S. said that it supported its private collectors’ tactics.
response to questions about the call scripts. “How they pay is a personal choice.
payments,” both of which they said violated the I.R.S. code.
government millions more than it actually recouped from taxpayers.
highway funding bill, that required the agency to outsource some of its collection.
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negative information about borrowers: tax liens and civil judgments.
saddle them with higher borrowing costs.
information removed from their files.
but next month’s changes will have the broadest effects yet.
the frustration of trying to fix errors. False matches have been a common problem.
public records information at least once every 90 days.
show that a tax lien had been satisfied.
appear more creditworthy than they actually are.
Consumer Data Industry Association, which represents credit reporting companies.
that the predictive value was almost identical.
of other credit blemishes,” said Ethan Dornhelm, Fair Isaac’s principal scientist.
marketing its own Liens and Judgments Report to lenders.
around 1 percent, he said.
sometimes-lengthy process of sorting out health insurance reimbursements.
full name, address, birth date and Social Security number in their reports.
paying off her car loan.
mother who lives in the Bronx, to go on public assistance to support her two sons.
“How am I still paying for a car I don’t have?” she asked.
their cars have been repossessed.
what remains — even 13 years later.
high-interest loans to Americans on the financial margins.
no way to get to work or to doctors.
worried how the strain of these loans will spill over into the broader economy.
consumer lawyer with the New York Legal Assistance Group.
are becoming flooded with such lawsuits.
pennies on the dollar — bring their own cases, breathing new life into old bills.
$411,000 just a year earlier.
new home in 2009, Ms. Jawad took out a loan for $5,900 and bought a used car.
repossess it when Ms. Jawad, 39, fell behind on payments.
lot. In the subprime market, however, the value of the cars is often beside the point.
different car from the lot.
into repairs, Ms. Robinson defaulted.
from babysitting her grandson to cover her loan payments.
the lawsuits only after a judge has issued a decision in favor of the lender.
judgments they can use to garnish wages.
legally owed. They also argue that subprime auto lending meets an important need.
amount of loans it makes, but what it expects to collect on the debt.
Volkswagen Tiguan for $22,149, according to Kelley Blue Book.
what she still owed. Last year, Credit Acceptance sued her for $15,755.
Credit Acceptance did not respond to requests for comment.
she explained that her only income was about $722 from Social Security.
“S.S.I.,” and her income was put at $2,750, court records show.
Citing continuing litigation, U.S. Bank declined to comment about Ms. Pearson.
financial crisis. It now stands at more than $1.1 trillion.
remain a sought-after investment on Wall Street.
Arena, a hedge fund that has avoided subprime auto investments.
debt, there is no end in sight.
seeking to collect about $6,500.
“It’s been a nightmare,” she said.
payments for far longer and would ultimately owe the bank much more.
to the home loans without such approval, according to the lawsuits.
for customers to meet sales quotas.
and damaged the bank’s reputation.
at least 25 borrowers’ loans since 2015.
homeowners’ insurance costs that are folded into monthly mortgage payments.
bankruptcy rules and puts the bank at risk of court sanctions and federal scrutiny.
modifications “really cause havoc to a debtor’s reorganization,” he said.
procedures to prevent future violations — affected 68,000 homeowners.
they emerge from bankruptcy with clean slates and their homes intact.
parties can imperil borrowers’ standing with the bankruptcy courts.
the existing loan, their court filing shows.
Instead, Wells Fargo did “a total end run” around the process, said Mr.
Bartholow, of Kellett & Bartholow in Dallas. The Cottons declined to comment.
Notices sent to the bankruptcy courts,” he wrote by email.
Fargo filed the routine payment change notification.
Fargo put through an improper change to their payment plan last year.
was $95,317, records show, so they had substantial equity.
the plan for early November.
asked his lawyer to investigate.
bankruptcy court, their complaint said.
extra $40,000 in interest, the legal filing said.
were unable to make up the difference.

References: § 362
 § 707
 § 362
 § 362
 § 727
 § 727
 § 1328
 § 1328