File Bankruptcy and Sleep Better

Posted by Robert Weed / in Blog, Weekly Posts /

People who file bankruptcy sleep better.

Ninety four percent of people surveyed said they slept better after filing bankruptcy.

That’s the result of a 2019-2020 study taken through SurveyMonkey.com of former clients who filed bankruptcy with us three or four years before.  One hundred four people participated in the survey.     

Getting good sleep is very important for good health. 

People who get enough sleep are less stressed.  And less stress helps people sleep. It works both ways.

While people discuss the financial benefits of filing bankruptcy, the enormous health benefits can be overlooked.  

We did similar survey in 2011 and got almost the same answer.

In 2011 88% said they slept better after filing bankruptcy.

Lack of sleep increases your risk of cancer and heat disease and affects your mental and physical abilities.  

Rosalind, from Leesburg, said this:  I was depressed and very stressed when I came to Mr. Weed due to my illness and with mounting medical debts. I now sleep better, my stress level is down and I feel so much better.

Here’s Contrell, of Woodbridge.  Mr Weed is hands down the best bankruptcy lawyer in the DMV. I sleep well at night. I thought with my income it was impossible to achieve a debt free life style again within 6 months my credit score was in the 700’s.

Next is Betsy, from Sterling: Thanks for everything.  I can sleep better now.

 

 

 

Forbearance Might Not Mean Deferment

Posted by Robert Weed / in Weekly Posts /

A Mortgage Forbearance Might Not Get You a Mortgage Deferment

A mortgage forbearance under the CARES Act is NOT the same as a deferment.

At the end of a mortgage forbearance, you are behind by the exact number of payments they allowed you to skip.  A deferment means you are not behind.

Mortgage companies are handing out forbearance agreements left and right, to allow people to skip some house payments because of the covid crisis. The mortgage company agrees in November 2020 (for example) that you don’t need to make a payment until May 2021. So far that’s a forbearance.

When May 2021 comes, they can say, ok now you are six months behind!  What?

When the mortgage company gives you a forbearance they agree they won’t pester you for a payment.  But you still owe those payments!

They Are Supposed to Work With You to Change the Forbearance into a Deferment

Back to the CARES Act.  The mortgage company cannot demand the whole six months all at once.

But the burden is on you to “make arrangements” to pay.

What kind of arrangements?

If you are still struggling financial, you can ask for a loan modification.  You can ask for lower payments, based on lower interest rate, or stretching the loan out longer. They don’t have to give you a modification, but you can ask.

A deferment means they take those six months you skipped and put them on the end of the loan.

A repayment plan might be something like this: since you skipped six months, we want double payment for the next six months.

This is all new

Since this is all new, nobody knows whether the mortgage companies will be reasonable when these mortgage forbearances run out.  Congress, when they passed the CARES Act, expected them to be reasonable. And the mortgage companies learned something from the housing crisis.   Looking back to 2007 and 2008, the mortgage companies probably hurt themselves by forcing foreclosures instead of working with people.  (Obviously, they hurt the homeowners way more than they hurt themselves.) They started to figure that out in about 2010.  So we can hope they will work with you, but there’s no guarantee.

How the Problem Pops Up in Bankruptcy

The reason that people ask for a forbearance can be the same reason they need to file bankruptcy: not enough money.

And when people file bankruptcy in the middle of a forbearance they think they are current on their mortgage–and shocked to find out they are NOT. Unless the forbearance has been turned into a deferment, those months you skipped under the forbearance are now months you are behind. So, you’re behind on the mortgage and now filing bankruptcy? The mortgage company can start to panic.

Bankruptcy Strategies

If people can wait, I suggest we hold off filing bankruptcy until the forbearance has definitely been turned into a deferment.  Or a loan mod.

If we can’t wait, you need to plan a full court press on the mortgage company as soon as the bankruptcy is filed. It’s vital to let them know you are NOT giving up the house (unless you are) that you want a deferment or a loan mod, and that you’re glad to send them whatever papers they need to approve you.

It is vitally important to stay in touch.

 

Chapter 7 Trustee Donald F King

Posted by Robert Weed / in Blog, Chapter 7 Bankruptcy, Virginia Bankruptcy /

Chapter 7 Trustee Donald F King

Donald F King is one of the four Chapter 7 trustees in the Alexandria Virginia Bankruptcy court. When you file a bankruptcy case in Alexandria, the computer assigns you to one of the four trustees.

Lawyers are appointed Chapter 7 trustees as a part-time assignment.  He’s a partner in the law firm of Odin Feldman & Pittleman PC, located in Reston. King and is head of that firm’s bankruptcy and creditors rights practice.

When he was younger, he was a NCAA Football official.  During the 2012 NFL referee strike/lockout, he was a replacement referee in one game and umpire in three.

As a Chapter 7 Trustee, he has two sets of bosses.  The US Justice Department, through the Office of the United States Trustee.  And the two Bankruptcy Judges here, Judge Brian F. Kenney and Judge Klinette H. Kindred.

We paid a $338.00 filing fee when we filed your bankruptcy case. Sixty dollars of that went to Trustee King. For each case, including yours, he is paid an additional $60.00 that is indirectly collected from Chapter 11 bankruptcies. (Congress thinks the bankruptcy courts to raise enough in fees to pay for themselves.  No other part of the federal court system does that.)

As your Chapter 7 Trustee, Donald King is in charge of your bankruptcy hearing, which is called the “meeting of creditors.” There are very, very rarely any creditors at the meeting of creditors.  So the Chapter 7 Trustee asks the questions. (Because the trustee is not a judge, he should be called “sir” not “your honor.”)

The bankruptcy court computer schedules fourteen hearings an hour.  That’s just over four minutes per case.

For now, bankruptcy hearings in Alexandria are by telephone. For the Donald King hearings, you should call (877) 953-3011 using the code 1445548.

Donald King is a stickler on paperwork and deadlines.  We are required to send in bank statements for each of your accounts one week before your hearing is scheduled.  If we are a couple days late on that one week requirement, Trustee Donald King will most likely make you, and me, come back two weeks later.

We’re Zooming Virtual Bankruptcy Consultations

Posted by Robert Weed / in Blog, Virginia Bankruptcy, Weekly Posts /

We’re Zooming Virtual Bankruptcy Consultations

We’ve been Zooming–doing virtual bankruptcy consultations–since April 2020. We’ll continue through 2021.

We stopped in-office consultations with the March 2020 pandemic lock down.  (I first heard of Zoom when my church started using it. We’re a small congregation and can see everybody on screen.) 

Since April 2020 I’ve Zoomed bankruptcy consultations probably five hundred times.

There are three advantages I’ve seen in doing virtual bankruptcy consultations.

First, it saves travel time.  The pandemic is still raging.  But the traffic in Northern Virginia is as bad as it’s ever been. It takes too long to get anywhere.

Second, people are more comfortable.  Especially on the initial contact–what I call the Quick Call–it works out well. I’m at my own computer, where I can access all my info. And you are at home–or wherever–more comfortable and maybe more open than you’d be in an unfamiliar office.

I didn’t expect that. But I often feel we cover more ground and clear up more concerns with a virtual consultation.

Third, safety is most important. Sitting across the desk with the same person for an hour, passing papers back and forth, that’s a risk we don’t need to take.

Alexandria Bankruptcy hearings are telephonic.

Hearings at the bankruptcy courts are virtual, zoom and telephonic–until 60 days after the President declares an end to the emergency.  We’ll keep Zooming at least through the end of 2021.

Documents can be a problem.

After our quick call, I invite you to fill in my Be Happy form.  That’s here on my website.  Then we’ll send you a password and links to upload the required documents. Transferring documents can be the hardest part of the virtual consultation.

You likely already have some of the documents in pdf.  You can take a photo on your phone for the required ID.  Having access to a scanner can be helpful.  Usually we can find a convenient solution.

 

 

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“Have You Sent Us a Bank Statement for Every Account?”

Posted by Robert Weed / in Weekly Posts /

The Hardest Question You’ll Get Asked at Your Bankruptcy Hearing

Like most people, you will be stressed when you get ready for your bankruptcy hearing. People are worried they’ll be asked “How did you get into this mess?” Actually, that almost never comes  up.

The hardest question that always comes up is this one: “Have you sent us a bank statement for every account.” 

This is a hard question because many people have far more open bank accounts than they actually are using.  So, what’s the single best thing you can do to make your bankruptcy hearing go smoothly? Close those bank accounts you are not using.

Close those unnecessary accounts.

Do you still have $5.00 in the credit union at your old job? Close it. Do you have $11.00 in a Paypal account?  Close it. Do you have $31.00 in Bitcoins?  Close it.  Have a six dollar savings account from your hometown bank where you went to high school? Close it!

Close those unnecessary bank account. When it’s time for your bankruptcy hearing, you’ll be glad you did.

Chapter 7 Trustee Janet Meiburger

Posted by Robert Weed / in Weekly Posts /

Chapter 7 Trustee Janet Meiburger

Janet Meiburger is one of the four Chapter 7 trustees in the Alexandria Virginia Bankruptcy court. When you file a bankruptcy case in Alexandria, the computer assigns you to one of the four trustees.

Lawyers are appointed Chapter 7 trustees as a part-time assignment.  Janet Meiburger has her own law firm in McLean, VA where she handles her own bankruptcy clients, plus business law, commercial law and civil litigation. She is the newest of the trustees here.

As a Chapter 7 Trustee, she has two sets of bosses.  The US Justice Department, through the Office of the United States Trustee.  And the two Bankruptcy Judges here, Judge Brian F. Kenney and Judge Klinette H. Kindred.

We paid a $335.00 filing fee when we filed your bankruptcy case. Sixty dollars of that went to Trustee Meiburger.  Since her hourly rate is $450.00 an hour, that $60.00 would be her fee for eight minutes.  (A recent study suggested $120.00 for Chapter 7 trustees would be better.)

As your Chapter 7 Trustee, Janet Meiburger is in charge of your bankruptcy hearing, which is called the “meeting of creditors.” There are very, very rarely any creditors at the meeting of creditors.  So the Chapter 7 Trustee asks the questions. (Because the trustee is not a judge, she should be called “ma’am” not “your honor.”)

For now, bankruptcy hearings in Alexandria are by telephone. For the Janet Meiburger hearings, you should call (866) 652-2725 using the code 5661649.

The bankruptcy court computer schedules fourteen hearings an hour.  That’s just over four minutes per case.

Since she’s only been paid to spend a total of eight minutes on you, you might guess Janet Meiburger would rush through her cases.  But she doesn’t.  She is very thorough in her questions.

Every trustee is supposed to ask, “Did you sign the papers your lawyer sent to the court?” And “Did you read them or have them explained before you signed them?”  Trustee Meiburger goes two steps further, asking “Did your lawyer give you a copy? And did you review that copy before the hearing today?”

So be sure to look at your papers again before your court date. If there’s a mistake, we want to correct it.

 

UPDATE  The Bankruptcy trustees get their raise.

The Chapter 7 bankruptcy trustees did get their fee increase from $60.00 to $120.00 per case.  Congress passed it in December and the President signed January 12, 2021.  

It was the first raise for Bankruptcy Trustees in nearly 30 years.

Until the Buffalo Squeals

Posted by Robert Weed / in Weekly Posts /

Hold on to the Nickel until the Buffalo Squeals

They stopped making the Buffalo nickel in 1938, long before I was born. But I saw plenty of them when I was young. 

I also heard plenty about them from older folks who had lived through the Depression. “Hold on to the nickel until the buffalo squeals.”

A nickel doesn’t buy a Hershey bar any more. And the Jefferson nickel is all you see. But in tough times “hold on to the nickel until the buffalo squeals” can still be good advice.

When to Stop Paying? It’s different for everybody

There’s no specific advice I can give you on when to stop paying your credit cards. Certainly as long as you can foresee a day when they will be paid off, you may want to keep paying. But is continuing to pay just putting off the inevitable? Will your savings run out long before the debts are paid off? Paying the car, the rent or mortgage, electric bill−those are more important than keeping the credit cards current.

 

Chapter 7 Trustee Jason Gold

Posted by Robert Weed / in Virginia Bankruptcy, Weekly Posts /

Chapter 7 Trustee Jason Gold

Jason Gold is one of the four Chapter 7 trustees in the Alexandria Virginia Bankruptcy court. When you file a bankruptcy case in Alexandria, the computer assigns you to one of the four trustees.  

Being a Chapter 7 Trustee is a part time job for lawyers. Gold is a partner in the Nelson Mullins law firm, where he heads up the bankruptcy and financial restructuring group.  That means he does complicated business and real estate bankruptcy work.

As a Chapter 7 Trustee, he has two sets of bosses.  The US Justice Department, through the Office of the United States Trustee.  And the two Bankruptcy Judges here, Judge Brian F. Kenney and Judge Klinette H. Kindred.  

Out of the $335.00 filing fee that you paid to the court when we filed your case, $60.00 of that went to Trustee Gold.  Since his regular hourly rate is $580.00 an hour, that $60.00 would be his fee for 6 minutes 12 seconds.  (A recent study suggested $120.00 for Chapter 7 trustees would be better.)

As your Chapter 7 Trustee, Jason Gold is in charge of your bankruptcy hearing, which is called the “meeting of creditors.” There are very, very rarely any creditors at the meeting of creditors.  So the Chapter 7 Trustee asks the questions. (Because the trustee is not a judge, he should be called “sir” not “your honor.”)

NOTE for call-in hearings. During the covid emergency, the bankruptcy hearings are telephonic. The telephone number for the Gold hearings is (877) 973-4749 using the code 9974082

The court’s computer here schedules fourteen hearings an hour.  That’s just over four minutes per case.  

The fast schedule, and the low fees, give the  Chapter 7 trustees an incentive to move through the cases quickly. To keep his cases moving, Gold has a form we fill out before your hearing.  If there’s nothing unusual about your case, he asks his questions straight from his form.  Here it is.

To Keep his Cases Moving, Jason Gold uses this form.

 

 

 

 

 

UPDATE  The Bankruptcy trustees get their raise.

The Chapter 7 bankruptcy trustees did get their fee increase from $60.00 to $120.00 per case.  Congress passed it in December and the President signed January 12, 2021.  

It was the first raise for Bankruptcy Trustees in nearly 30 years.

Chapter 13 Trustee Thomas Gorman

Posted by Robert Weed / in Virginia Bankruptcy, Weekly Posts /

Chapter 13 Trustee Thomas Gorman

Thomas Gorman is a lawyer. He’s the Chapter 13 Trustee for the Alexandria VA Division of the US Bankruptcy Court. That’s a full time job. He was appointed in 2009.

He runs your Chapter 13 bankruptcy hearing, called the “meeting of creditors.” Creditors hardly ever attend the meeting of creditors. Gorman asks you the questions.

Here’s the call-in info for your bankruptcy hearing with Trustee Thomas Gorman.  (866) 630-6853 using the code 6786636.

Here’s What to Expect on your Meeting with Chapter 13 Thomas Gorman

More than any other trustee in Alexandria VA, Gorman looks for opportunities for humor.  When these hearings are in person, he does things like make fun of the lawyer’s ties. (Sometimes I wear and ugly tie just so he can make fun of it.)  That’s harder with phone meetings, but if something comes up that he can turn into a joke, he does.  I think that’s a good thing. It helps everyone relax.

One thing does make him mad.  He asks everyone if you have filed bankruptcy before. If the answer is Yes, but you say No, he hits the ceiling. So you do not want to make that mistake. You don’t want the person in front of you to make that mistake, either. He stays crabby even when he’s on to the next person.

He usually does NOT ask about any unusual calculations we make. Some people’s budget will have higher average medical expenses or help for elderly parents.  Typically he will NOT ask about them during your hearing. But then…

Expect an objection in the mail in a couple weeks

When he goes back to his office, he looks over your papers very, very closely, looking for things to object to. When he was first appointed, the judge told Trustee Gorman to bring close questions into court, instead of settling them himself. That’s what he does. He finds something to object to in almost every case.

The friendly, funny Trustee Gorman who did your hearing turns mean in writing a couple weeks later.  He says he doesn’t like this, you didn’t explain that, and your lawyer made a mistake about this other thing.  He asks for your case to be dismissed.

People who read those written objections freak out. But that’s just the way it works in the Alexandria VA bankruptcy court. 

Trustee Gorman thinks it’s his job to squeeze a little more money out of everybody. Working out Gorman’s objections is just next step in the process of getting your case approved.  

Reminder: Here’s the Chapter 13 Mailing Address

There’s a bank in Memphis that handles the payments for most of the bankruptcy courts in the country. (They have different PO Boxes for the different Chapter 13 trustees.)

Here’s the payment address for Thomas Gorman, the Chapter 13 Trustee in Alexandria VA.

 

                                               Thomas Gorman, Trustee
                                               P.O. Box 1553 
                                               Memphis, TN 38101-1553

Be sure to put your case number on your check. Otherwise it could go into  the account of another person with a similar name. And don’t bounce your checks.

 

 

 

 

We Stop Navy Federal Trying to Pull a Fast One

Posted by Robert Weed / in Chapter 13 Bankruptcy, Weekly Posts /

We Stop Navy Federal Trying to Pull a Fast One

This is a story of Navy Federal trying to take unfair advantage of a disabled vet; and how we were able to stop them.

Harry is the disabled vet. He wasn’t able to quite make ends meet when he filed Chapter 7 Bankruptcy in 2015, even though he was working. His biggest creditor then was Navy Federal.  He had a credit card, a personal loan, and a car loan with Navy.  He gave up the car—it was a 2007 with 131,000 miles.

Three years later, his health got worse. He lost his job and with it part of his income. Then, this year he go behind on his mortgage, talked to me, and we put him in a Chapter 13 payment plan, so he could catch the house up.

Up pops Navy Federal, demanding to be paid.  Demanding to be paid on the car he gave up in his 2015 bankruptcy, and the personal loan he cleared; and the credit card he cleared.

Navy Federal demands to be paid on debts that were cleared in bankruptcy five years before.

That set off the Chapter 13 Bankruptcy Trustee.  Not at Navy Federal; the trustee went off at Harry.  “You were supposed to list everybody you owed money to and you left Navy Federal out. Why’d you do that?”  The trustee asks the judge to toss out Harry’s payment plan, saying Harry had lied to the court.

My first job as a lawyer was to calm the trustee down. Harry could lose his house if his payment plan got tossed out.

Now, Navy had to know about the bankruptcy. Because if they’d been asking for payment during these five years, we’d have set them straight. They never did. they didn’t say anything until the slip their paper—called a proof of claim—into the bankruptcy court.

Maybe it’s an honest mistake.

They Probably Broke No Rule

The odd thing is there’s probably no rule broken here.  Even if they did it on purpose. In a case called Midland Funding v Johnson, the Supreme Court looked at the word “claim.” When creditors want to be paid in a bankruptcy, they file a paper called a Proof of Claim.

According to the Supreme Court, there’s nothing that says the “claim” has to be enforceable, it just has to be a claim. The burden is on Harry—and me, his lawyer—to catch them when they try to pull a fast one.  This time, we did.