Corona virus, finances, bankruptcy ... Part 4 ... Credit Card Collections

There is much talk about "forbearance," "deferral" and other "loan assistance" programs. What does that mean for people who were already behind on their credit cards, mortgages, and other loans? If collection efforts for those debts have stopped, I have not seen any evidence to that fact.

I received a call two weeks ago from a potential client. A collection law firm filed a law suit against him on March 23, the same day Gov. Wolf issued the stay at home order for the Philadelphia suburban counties. This week, a new client hired me after the county sheriff showed up at her door with a Writ of Execution for a judgment on a credit card debt. 

As I was thinking about this issue, I looked up the filings in the Montgomery County Court, Pennsylvania using the search term "bank." I found that 175 cases have been filed between March 1 and April 10, 2020. The last case filed was a mortgage foreclosure complaint filed yesterday, April 9, 2020 by DEUTSCHE BANK NATIONAL TRUST COMPANY. There were numerous actions to file Judgments from District Justices in the county court, which create liens and allows creditors to execute on the judgments by taking actions like garnishing bank accounts.

Since the courts in this area are closed for the most part now, I do not expect much activity on these filings now. But, once the courts reopen, I expect things to start moving quickly. 

While there are programs out there to help people who started having trouble making payments during this crisis, they do not seem set up to help people who were behind before this started. It appears that the collection attorneys are readying their cases to go as soon as the courts open up again. 

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

During the "stay at home" orders, we are working with clients via telephone, internet and limited video conferencing. 

Other Link:

DEBT COLLECTION INDUSTRY DEEMS ITSELF ESSENTIAL TO “FINANCIAL HEALTH” OF CONSUMERS, FIGHTS COVID-19 SHUTDOWN

Credit after bankruptcy ... One of the most common questions

One of the most common questions I receive from clients is, "When will my credit come back?" I always try to assure my clients rebuilding credit can be done with a little effort and discipline. I also blogged about it in the articles at the links below:

Bankruptcy - mortgages and rebuilding credit - a brief conversation with a banker ...

Bankruptcy - Rebuilding your credit after filing

But the question continues to come up and I found this article. I thought people might want to hear this from someone else:

"Bouncing Back From Bankruptcy - Sooner Than You Think" 

@ thestreet.com by Brian O'Connell, published May 8, 2018 

Image courtesy of Master isolated images at
FreeDigitalPhotos.net

 "Bankruptcy afflicts over a million Americans on a yearly basis, and going under financially is widely viewed as a nightmare scenario. That isn't necessarily the case, as a new Lending Tree report shows.

In fact, more than 40% of Americans have a credit score of over 640 one year after filing for bankruptcy, 65% of bankrupt Americans see the same score (at least) three years after a bankruptcy..."

The article goes on to list actions a person can take to rebuild credit. There is life after bankruptcy.

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

 #bankruptcy Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania    

Should I assume my car lease in my bankruptcy?

Keeping a car lease during in a bankruptcy case is an important consideration. Debtors can reject without any penalty or further obligation or assume contracts. A lease is a contract and debtors need to decide how they want to deal with leases. 

Image courtesy of nitinut at FreeDigitalPhotos.net

Debtors can reject a lease and give up the property or assume the lease to keep the leased property. Debtors have the responsibility and are required by the bankruptcy law to "assume" a lease if they want to keep the leased property. 

But a debtor must remember when he or she keeps the property, he or she keeps all the obligations. The most obvious obligation is the over-mileage fees. If the debtor has already driven the car over the contracted mileage rate, it might be a good time to give up the car in the bankruptcy and prevent any additional fees.

Another consideration might be the performance of the car. Has it been a maintenance burden... not quite a lemon but far from being cherry? Maybe it is a good opportunity to dump it and to find something else.

Whatever the result, a Debtor should make sure it was a thoughtful decision. If the lease is a burden, rejecting the lease and giving up the car may be the best decision.

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

 #bankruptcy #Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania

Why you should not borrow from your retirement fund...

This is just a quick entry about using retirement money to pay back debt. If you read some of my other blog entries, you may find where I talk about keeping your retirement money for retirement. Under bankruptcy protection in Pennsylvania, you can usually protect 100% of your retirement accounts.

Image courtesy of David Castillo Dominici
at FreeDigitalPhotos.net

This LSS Financial Counseling Blog article;  4 Big Reasons Not to Borrow From Your Retirement Fund, gives you a couple additional reasons not to use your retirement fund. The article lays out four reasons:

- You’re stealing from your future self

- You’ll have less options

- It’s not free money

- There are risks

The article explains each reason. It talks about other options instead of bankruptcy. But that is ok because financial problems do not have a one-size fits all solutions. Check out the article if this topic interests you.

You can also check out some of my other blog entries:

- Bankruptcy - I cannot say it any better than this: "Bankruptcy is an excellent retirement strategy"

- Bankruptcy - How can I file bankruptcy with $50,000 in my retirement account?

- Bankruptcy - When is it a "good" time to file?

-  New Reviews - Have you checked my review page recently?

 If you want assistance, legal representation, or just want to know more about Mark Medvesky or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com or call us a 215-660-3170 and schedule an appointment.

#bankruptcy Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania

Bankruptcy - “Can I keep my house?” - is that the best question?

Most clients come in and ask, “Can I keep my house?” The better question might be, “Should I keep my house?” A home is a sacred belonging in our society and holds great sentimental value to many families. I get it. Plus there are practical considerations about giving up a home and moving. But the reality is … in many bankruptcy cases … the home has no current value. In many cases, the house is at break-even or underwater. In those cases, I talk to my clients about surrendering their home.

Image courtesy of Mister GC
at FreeDigitalPhotos.net

Times are not what they once were. I bought my own home in 2008 and I do not think it has appreciated more than $10k. If a client is $20k, $30k, $40k, or more underwater, how long will it take to get even or gain some value? I don’t know but I am guessing not soon in the current climate. So people should really ask themselves is keeping the house a help to getting a new start?

Some make the argument, the mortgage is the same or less than rent. There is some merit to that argument. One problem is everything else … taxes, maintenance, repairs on the house as well as contents in the house (like a broken oven), etc. Renting limits exposure to additional costs.

I once had clients who kept their townhome through a bankruptcy. They were upside down on the mortgage but kept it anyway. About 6 months later, they called me with a water problem. They believe the grading of the grounds outside the home caused the rain runoff to roll into their unit (not the type of cases I work). They found mold under their siding and carpets. They were just coming out of the bankruptcy and did not have the funds to fix it or litigate it with the homeowners’ association to repair the grading and damage.

They did not reaffirm the mortgage so they could still walk away. But they  spend 6 - 9 months of mortgage payments they could have used to plan their exit and sustain a new rental home for their family.

Many clients think the would need to leave the house immediately when they file for bankruptcy. That is not true. The mortgage company would need to ask the bankrupcty court’s permission to start or continue a foreclosure action. This takes time. While that is happening, the family can stay in the house. Once the bank gets a judgment in the foreclosure, it still needs to schedule the sheriff’s sale. All this takes time. This is time a debtor can use to prepare for the next steps after bankruptcy. He or she can save the money they would be paying on their mortgage.

While I know many of my clients will not leave their homes if they have any chance of saving them, it is a discussion debtors should have with their bankruptcy attorneys.

If you want assistance, legal representation, or just want to know more about Mark Medvesky or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

#bankruptcy #Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania

Summary Of The Fair Debt Collection Practices Act

The federal Fair Debt Collection Practices Act (Act) is the main federal law that governs debt collection practices. The Act prohibits debt collection companies from harassing you by using abusive, unfair or deceptive practices to collect past due debts from you.
Some examples of prohibited acts are:

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• Repetitious phone calls that are intended to annoy, abuse, or harass you or any person answering the phone
• Obscene or profane language
• Threats of violence or harm
• Publishing lists of people who refuse to pay their debts (this does not include reporting information to a credit reporting company)
• Calling you without telling you who they are

The Act covers personal debt, not debts for business purposes. It also does not generally cover collection by the original creditor to whom you may owe the debt. Rather, it governs the actions of third party debt collectors. Pennsylvania has a statute that extends these same types of protections to consumers from actions by the original creditor...

This article continues and the original can be found on our website here or generally go to www.whhmlaw.com for more information on our firm.

#Bucks #lawyer #lawyers #Attorney #Montgomery #Pottstown #Souderton #Law_Firm #Debt #Collection #Pennsylvania