Los Angeles Bankruptcy Law Monitor : Los Angeles Bankruptcy Lawyer & Attorney : Christine Wilton Law Firm : Southern California Chapter 13 & Chapter 7 Bankruptcy, Foreclosure

Bob Lawless over at Credit Slips posted this blog article recently, Cultures, Attitudes, and Debt. What's great is that he focused more on asking questions of his readers, rather than providing his answers.  You'll have to check out the comments for yourself on this one as they're fantastic.

We each bring to the table of society, our judgments, opinions and circumstances about how others should live their lives and condemn those that live out of control. Addictions and debt uncontrolled will ruin families, communities and even countries as we are seeing.  Debt can be a good thing to help society progress, but when the lenders get greedy and set consumers up for failure, then what? Well, you have an economic crisis heard throughout the world with unstable markets and high unemployment.

I believe that we each do the best we can with what we have been dealt in life. We also have the ability to transform our circumstances with education. I also believe in sharing information to those who don't know and help them to make right choices for their lives financially.

What I don't get is that why do so many Americans believe in increasing the government's debt ceiling and allowing our country to fall further in debt? Even after this poor decision we still had our credit downgraded. How are average Americans supposed to live within their means and stay out of debt when the leaders of our free world think it's a good idea? What hypocrisy.

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It's that time of year again where I gaze longingly into my crystal ball and make my predictions for the future of the American Dream; America's fresh start; and the demise of our mountain of debts.  Despite the continued negative stigma of bankruptcy and it's "last resort" paradigm, bankruptcy filings in the U.S. continue to rise during this depressed economy. 

According to the statistics found at the Bankruptcy Court's website, total bankruptcy filings in the U.S. during the 12-month period ending December 31,  2009 totaled 1,473,675.  This year, the year hasn't ended quite yet, but we have the 12-month period ending September 30, 2010 and the numbers total 1,596,355 for all bankruptcy filings in the U.S.; an 8% increase in filings throughout the country.  The folks over at Credit Slips predict a slight decline according to their recent post, "Projected Filings for 2011."

In California, we will see the slippery banks unleash a flurry of foreclosures as investigations into their business practices continue to mount.  More consumers will fight back against their securitized mortgages through chapter 13 bankruptcy litigation.  Here in the Central District of California, we will continue to see an increase in filings as the state of California struggles with its deficit and government workers are forced to take pay cuts and furloughs.  I disagree with Credit Slip's comment about lending beginning to open and any talk about economic improvement in 2011 because we still have 95 million securitized mortgages that have yet to be dealt with and the modifications of American homes has failed. We won't see an economic turnaround until well into 2015. 

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Recently, Katie Porter, over at Credit Slips, reported that Bank of America (BOA) reached a settlement with the Federal Trade Commission regarding certain mortgage overcharges, including overcharges in bankruptcy once serviced by Countrywide. Henry Sommer joined the conversation, asking if the Bank of America Settlement is a sign of true progress.

After reading the consent judgment and order provided by Katie, followed with Henry's entertaining summary of the requirements set forth in that order that include BOA's agreeing to not lie, cheat, or steal from consumers, I am not getting that warm feeling like we've accomplished much.  Did I miss anything?

Those homeowners that can afford to make a mortgage payment seek Chapter 13 where they are given time to make up the arrears on their mortgage and get their finances back on track.  What has been happening though is that many receive their discharge only to be served a Notice of Foreclosure soon after for charges on their mortgage. I'm even seeing this when the servicer files their proof of claim, declaring that "hey, we're going to do this up front and charge attorneys fees and costs to even file this proof of claim."  They'll also usually include inflated arrears, inspection fees they did not conduct, and other fees and costs that are superfluous to your mortgage. 

It is imperative that debtor's counsel in chapter 13 practice, scrutinize every proof of claim in every case and hold these Creditors to account for their willful failure to follow the law.  If you're a homeowner seeking to stop a foreclosure and you know that you've been overcharged and your loan servicer adding charges incorrectly, don't file under Chapter 13 without a competent attorney that not only practices Chapter 13, but really understands this mortgage mess we're in. 

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