Bankruptcy Blogs

For the Servicers: Is It Better to Rob Peter or Paul?

04/27/11

The U.S. mortgage servicing industry is in deep doo-doo. To foreclose on a mortgage, you must own the note and the mortgage. That's a lot of paperwork to keep track of, especially when you're trying to package as many mortgage loans into as many securitizations as you can before the market dries up. If we have learned nothing else in the past four years, it is a lot to ask Wall Street to make sure they get things right when there is money to be made.

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What are Bankruptcy Exemptions?

04/26/11

Exemption laws protect your property from creditors inside and outside of bankruptcy. In bankruptcy, exemption laws dictate what property you can keep and what property is subject to sale by the trustee. It is because of bankruptcy exemptions that many are able to eliminate debt in bankruptcy without losing any of their stuff. Exemptions vary [...]

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The Costs of Regulating Derivatives

04/26/11

So the outgoing chair of ISDA complains that banks will have to pass on the costs of Dodd-Frank to end users of derivatives. Undoubtedly the usual crowd -- primarily the WSJ op-ed page -- will run with this evidence of yet another hit to American competativenes coming out of Dodd-Frank.

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The Morality of Strategic Default

04/25/11

Professor Curtis Bridgeman (FSU College of Law) has an article on The Morality of Jingle Mail:  Moral Myths About Strategic Default.  I have a fundamental philosophical disagreement with the article, but it's got a lot of very good, clear analysis of arguments about strategic default, including a very useful typology of argument.  

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Take Me to the River (Road): The Seventh Circuit Prepares to Weigh In On Credit Bidding

04/25/11

The U.S. Court of Appeals for the Seventh Circuit has taken under advisement the latest case involving the now contentious issue of credit bidding. 

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Take Me to the River (Road): The Seventh Circuit Prepares to Weigh In On Credit Bidding

04/25/11

The U.S. Court of Appeals for the Seventh Circuit has taken under advisement the latest case involving the now contentious issue of credit bidding. 

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Can You Modify a First Mortgage in Bankruptcy?

04/25/11

Can You Modify a First Mortgage in Bankruptcy? Nope. While there have been rumblings about new legislation that would allow first mortgages to be modified in bankruptcy, the current state of the law does not allow first mortgages to be modified on a debtor’s primary residence. How About a Second Mortgage? Now, before you get [...]

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Chapter 13 Success Enhanced With Voluntary Automatic Wage Deduction Payments

04/25/11

Most Chapter 13 bankruptcies fail. Most debtors do not pay their required payments to the Chapter 13 trustee throughout the term of their plan, and when payments fall behind their bankruptcy is dismissed without a discharge. It takes financial discipline to consistently budget money for Chapter 13 plan payments.

Chapter 13 success is greatly increased when the debtors pay the trustee through automatic wage deductions so that the debtor’s employer deducts the  required plan payment from the debtor’s pay check.

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Are the Bible’s Debt Forgiveness Principles Codified in the Bankruptcy Code?

04/23/11

Despite sites like National Bankruptcy Forum which disseminate good bankruptcy information to the public at large, some think that filing for bankruptcy carries a stigma. I guess we have Dave Ramsey to thank. Is filing for bankruptcy ethical? We’ve addressed the subject many times before on this forum. For example, see: Does the Very Existence [...]

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Some Banks Charge Business Customers Merely for Running Checks Through Their System

04/22/11

We all know that banks are allowed to charge customers for things that do not cost them anything, but I guess I just assumed that they did this only to consumers. Silly me. 

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