Billy D. Price, P.C.
Mon, Jun 9, 2008

Stressing Over Debts Can Make You Sick

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Chapter 7

If you have ever been behind on your bills, you know the stress that it can cause.  It can cause you restless nights because you are worrying about your bills.  It can cause you to have panic attacks and even depresssion.  But, accroding to an article posted online by CNN, worrying about debt can also make you sick.  This article reported that , according to a recent poll of people dealing with debt:

27 percent reported having ulcers, compared with only 8 percent of those who had low levels of debt stress;

44 percent reported migraines or other headaches, compared with 15 percent;

29 percent suffered severe anxiety, compared with 4 percent;

23 percent had severe depression, compared with 4 percent;

6 percent reported heart attacks, double the rate for those with low debt stress.

If you have debt, do something about it before you get sick.

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Fri, Apr 18, 2008

The Foreclosure Machine

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Foreclosure Issues

Doesn’t it seem that a foreclosure is a losing proposition for homeowner’s as well as mortgage companies? Then why are there so many foreclosures lately? Turns out there are other players in the foreclosure game that ARE making money off of foreclosures. Gretchen Morgenson and Jonathan D. Glater published an article entitled the Foreclosure Machine for the New York Times On March 30, 2008. Morgenson and Glater describe a little known phenomenon in the foreclosure universe: The law firms which represent mortgage companies are able to make large profits whenever a consumer’s home enters foreclosure. This seems counterintuitive at first. The consumer loses money and often seeks bankruptcy protection. The note holder (AKA, the mortgage company) is not receiving its monthly mortgage payments from the consumer, so how are these law firms making such large profits?

According to the Morgenson and Glater article, bankruptcy judges explain that many of these law firms are paid by the number of motions filed in foreclosure cases. As a result, law firms which represent mortgage companies in foreclosure are encouraged to file as many claims as possible—hence the title of the article: The Foreclosure Machine. “Court documents say that some of the largest firms in the industry have repeatedly submitted erroneous affidavits when moving to seize homes and levied improper fees that make it harder for homeowners to get back on track with payments.” Associate Professor of Law at the University of Iowa, Katherine M. Porter, found that a recent analysis of 1,733 foreclosures across the country showed that “questionable fees were added to borrowers’ bills in almost half the loans.”

The article tells the story of a couple, the Atchleys, who had a home loan with Countrywide and entered Bankruptcy to protect their home from foreclosure. The Atchleys almost lost their home again when Countrywide falsely told the court that the Atchleys were 60 days behind in their Chapter 13 payments two times over four months. As we know, a Bankruptcy Debtor is required to continue making his mortgage payments while he makes his payments to the Bankruptcy Trustee. If Countrywide had been successful in their claim, the Atchleys home would have entered foreclosure again.

“After the Atchleys supplied proof that they had made their payments on both occasions, Countrywide withdrew its motions to begin foreclosure. But the company also levied $2,793 in fees on the Atchleys’ loan that it did not explain, court documents said.”

Sadly, the Atchleys’ case is not uncommon. Homeowners come to my office on a regular basis and state that they have completed their Chapter 13 bankruptcy, made all payments due to the mortgage company during the bankruptcy but get a bill for fees and expenses that the mortgage company charged during the bankruptcy without their knowledge or Court permission. Mortgage company’s attorneys increase their profits by filing more motions, and Chapter 13 bankruptcy debtors are paying the price. On top of this, the mortgage company’s attorneys charge fees without receiving court permission, and for which they are unable to account.

However, bankruptcy judges are beginning to punish mortgage company’s attorneys and mortgage companies for their behavior. A Texas judge sanctioned a Texas firm, Barrett, Burke, Wilson, Castle, Daffin, & Frappier $75,000; the firm Shapiro and Diaz was sanctioned $125,000; and a bankruptcy judge awarded a debtor $250,000 in emotional distress damages and $500,000 in punitive damages against Ameriquest.

Too often Mortgage Company’s and their attorneys are not punished for their behavior and the homeowner suffers. This is true even when the homeowner has sought bankruptcy protection. By charging additional fees without court permission and filing false motions, the mortgage company’s and their attorneys are abusing the bankruptcy system. This is unfair to the bankruptcy debtors, and it is illegal.

The first step to alleviating this problem is awareness, and the next is action. Mortgage Company’s and their attorneys will continue to employ The Foreclosure Machine as long as it is profitable to them. The best way to stop them is to file suit every time they have violated the law, and for judges to implement uniform punishment.

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Fri, Apr 4, 2008

New Bankruptcy Law May Have Actually Intensified Foreclosure Rates

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Foreclosure Issues

In signing the New Bankruptcy Bill that was enacted on October 17, 2005, President Bush promised that this bill would make credit more affordable and that we would be better off.  Is credit more affordable and are we better off?

That question was explored in a recent article by James Suroweicki in the New Yorker.   He found that credit is not easier to obtain since the enactment of the new bankruptcy bill and may actually be worse.  He also noted that more and more people who are in debt are walking away from their homes when they owe credit card debt that they cannot pay. They are not sure that they can file for bankruptcy; the credit card companies harass them non-stop by phone, mail and sometimes suing them and garnishing their wages; and the mortgage companies typically do not harass homeowners who simply walk away from their homes.

Mr. Suroweicki noted that without the ability of a fresh start that a bankruptcy would afford, the spending power of the Nation is less and this only worsens recession conditions.

So not only was the 2005 file amendments to the Bankruptcy Code not necessary, it has been a factor in foreclosure rates skyrocketing and the deepening economic slow down that the Nation is experiencing.

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Fri, Mar 28, 2008

Congress Should Pass The Proposed Changes To The Bankruptcy Code

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Bankruptcy Legislation

Do you think that a Bankruptcy Judge should have the power to modify the mortgage interest rate or reduce the principal balance owed on a home mortgage to the value of the home? A bill is before both the U.S. House and Senate that would allow bankruptcy judges to modify mortgage interest rates and reduce the principal balance owed on a home mortgage to the value of the home for homeowner’s principal residence.

In an opinion posted in the New York Times, the article states that passage of this Bill would help stem the tide of the rising foreclosures our Nation has seen.  We all have seen the almost daily reporting of the rise of foreclosures in the nation

Consumer advocates, including The National Association of Consumer Bankruptcy Attorneys are urging those who are in favor of such a bill to write to their U.S. Congressman or U.S. Senator to voice their approval of the passage such bill.  If you would like to support the passage of this bill.  Click onto this link for your U.S. Congressman in your District and this link for your U.S.  Senators.

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Mon, Mar 24, 2008

Can You Put Past Due Utility Bills In Your Bankruptcy?

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Debts Included In Bankruptcy

You can include debts to utility companies in your bankruptcy but the the utility company can require you to pay another deposit.

In In re Cunha, 1 B.R. 330, 333 (Bankr. E.D. Va. 1979), the bankruptcy court held that a utility company could not discontinue service but may require a deposit as “adequate protection”.

What is “adequate protection?” It isn’t defined in the Bankruptcy Code, so an example may help clear things up a bit.

When someone files bankruptcy, the Trustee divides that person’s assets among the creditors (with certain limitations, but we won’t talk about that right now). In a Chapter 13, certain creditors will be paid completely, but other creditors will be forced to compete for table scraps.

The creditors who don’t get paid in full – such as utility companies – are taking a risk when someone files for bankruptcy. In return for the obligation to keep pumping the house with electricity (or gas heat, phone, cable, etc.) that utility company needs protection against losing money in the bankruptcy.

In other words, the utility company says, “Wait – you mean to tell us that we may lose money from the old service and STILL have to give NEW service? Not fair!”

In cases like this, the court will Order that the creditor be given “adequate protection.” Such protection can include:

1) requiring the Trustee to make cash payments to the creditor;
2) giving the creditor an additional lien in the property; or
3) granting such “other relief.”

The third option is a catch all, allowing courts discretion to fashion the protection provided to a creditor.

So if you file for bankruptcy, don’t be surprised if your utility company demands a security deposit.

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Mon, Mar 24, 2008

What Happens If Someone Dies And Leaves Me Money While I’m In Bankruptcy?

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Bankruptcy Exemptions, Chapter 13, Chapter 7

Inheritances are subject to creditor and trustee claims while you are in bankruptcy. That’s because when you file for bankruptcy, the trustee takes control over all of your property – including any inheritance you have a right to within180 days after he files his petition. You don’t even have to receive the property within 180 days; it is only necessary that you become entitled to receive the property within 180 days of your petition.

In the case of Alford v. Reed, 2005 U.S. Dist. LEXIS 19024 (N.D. Tex. Sept. 2, 2005). a husband and wife filed a Chapter 7 Bankruptcy. Shortly after filing bankruptcy the wife inherited nearly $170,000 from her mother. The wife decided not to accept her portion of the inheritance and gave her gift to the other beneficiaries.

The trustee sought a transfer of the property claiming it as property of the estate. The court determined that the gift fell to the bankruptcy estate upon the mother’s death and not to the wife personally. Therefore, the wife could not disclaim the property. So, the trustee was allowed to distribute the $170,000 to the couple’s creditors even though the wife never received the gift and even though she tried to refuse it.

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Mon, Mar 17, 2008

Chapter 7 Bankruptcy Trustees In The Dallas Area

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Chapter 7

There are ten Chapter 7 bankruptcy trustees serving the Dallas area bankruptcy courts. Each Chapter 7 bankruptcy case is assigned to a trustee, who is responsible for administering the case. The trustees for Chapter 7 bankruptcies are:

Michelle Chow, Trustee
5401 N. Central Expy Ste 218
Dallas, TX 75205

Jeffrey H. Mims, Trustee
3102 Oak Lawn Ave Ste 700
Dallas, TX 75219

Robert Newhouse, Trustee
1412 Main St Ste 2400
Dallas, TX 75202

Daniel Sherman, Trustee
509 N. Montclair Ave
Dallas, TX 75208

Robert Yaquinto, Trustee
509 N. Montclair Ave
Dallas, TX 75208

James Cunningham, Trustee
6412 Sondra Drive
Dallas, TX 75214

John Dee Spicer, P.C.
PO Box 820009
N. Richland Hills, TX 76182

Law Office of Robert Milbank, Jr.
500 N. Akard Ste 2980
Dallas, TX 75201

John H. Litzler
1412 Main St Fl 24
Dallas, TX 75202

Diane G. Reed
604 Water St
Waxahachie, TX 75165-3361

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Fri, Feb 29, 2008

Mortgage Rescue Scams Can Cost You Your Home

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Chapter 13

If your home has been set for foreclosure, you will get plenty of letters in the mail. Some of them, though, are complete shams and could cost you your home. The Dallas Morning News has published a story that explains how Ms. Wynn lost her home because she relied upon Resolutions, a company she thought she was hiring to help stop the foreclosure. Resolutions took $950.00 from the Wynn and her husband, assuring them that that they had worked out a deal with the Wynns’ mortgage company, Countrywide; no deal, however, had been worked out. The Wynns relied on the assertions of Resolutions and lost their home.

Chris Wages, Operations Manager for Resolutions, indicated in this article that he was getting out of the foreclosure negotiation business - but that was not quite the case. Instead, Wages merely changed the name of the company to Homeowner’s Assistance & Collections and changed his tactics. Chris Wages now sends out a letter that appears to be a W-9 form from the mortgage company.

The second page of this letter implies that the homeowners are being offered a “Second Chance Program” from their mortgage company.

I have had several clients who have received these phony offers. They all tell me that they thought that this letter was being sent to them by the mortgage company. If you look at the letter, it does appear that this is being sent by he mortgage company and that Chris Wages is VP of Homeowner’s Assistance & Collections for the mortgage company.

This letter is a complete sham and Mr. Wages is not affiliated with any mortgage companies. This company is not a member of the Better Business Bureau and has an unsatisfactory record.

Don’t be fooled by phony offers if you are facing foreclosure. You owe it to yourself and your family to consult a qualified attorney about your foreclosure situation and what your legitimate options are.

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Thu, Feb 28, 2008

Keeping A House And Cars In Chapter 7 Bankruptcy

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Chapter 7

If you own your home and autos free and clear of all liens, in most Chapter 7 cases, you will be able to keep these items.

If you owe money on your house and cars, filing for a Chapter 7 bankruptcy does not mean that you will have to give these items up. You will, however be required to be current on these payments at the time you file your Chapter 7 bankruptcy case and make sure that you continue to pay your payments every month after you file.

If you want to keep these items, you may be required by the your mortgage company or your car creditor to reaffirm these debts. If you would like to know what a reaffirmation is and whether or not you may be required to file a reaffirmation agreement if you file a Chapter 7 bankruptcy, just call my office; we’ll sit down to review your situation and see if reaffirmation is right for you.

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Wed, Feb 27, 2008

Mortgage Rescue Scheme Unmasked In Texas Bankruptcy Court

Posted By Billy D. Price, Dallas Bankruptcy Lawyer in Cases of Interest, Chapter 13

Judge Jernigan shed light on a mortgage rescue scheme:

On December 7, 2007, Judge Stacey G.C. Jernigan, Bankruptcy Judge for the Northern District of Texas, Dallas Division, Issued a Memorandum Opinion in the case of In re White, Bankruptcy Case Number 06-32324. This opinion discussed a type of mortgage rescue scam that I had not heard of until I read the opinion.

In this case, the Whites were involved in a Chapter 13 bankruptcy. They had filed the case to save their home from foreclosure. Unfortunately, after they had filed their case, they missed some post-petition mortgage payments. The servicer of the mortgage note, HomEq Servicing Corporation, filed a Motion for Relief from the Automatic Stay. An Agreed Order was entered which conditioned the continuation of the Automatic Stay as long as the White’s made future mortgage payments and added the missed post-petition payments into their Chapter 13 plan.

Unfortunately, the Whites got behind yet again on post-petition mortgage payments and the Automatic Stay terminated. At this point, the Whites testified that they got as many as 40 mail solicitations offering to help them save their home. The White’s being desperate, hired a company called North American Foreclosure. They spoke to This company sent a man who identified himself as David Curtis, who indicated that he represented a company known as Jireh Capital Services, LLC and that he was involved with North American Foreclosure. to the Whites’ home and told them about a process that they were told was “completely legal” wherein the White’s would deed a 1% interest of their home to a third party. That party would file bankruptcy in California and would stop the pending foreclosure. The Whites would pay this company $650.00 dollars a month for as long as it took to clear up the problem. Judge Jernigan referred to this scheme as “A new cottage industry of bottom feeders.”

Sometime after that, HomEq facsimile notice of a bankruptcy proceeding in California wherein, the facsimile indicated had an interest in the Whites home. HomEq stopped the foreclosure and filed a Motion to Show Cause in the bankruptcy case. At the Hearing, it was learned that the bankruptcy case in California was a pro se debtor who had absolutely no knowledge of the Whites’ bankruptcy, the purported 15 conveyance to her or the facsimile sent to HomEq that stopped the foreclosure. Evidently, North American Foreclosure perused the pro se filings in California for a pro se debtor and then used that case number and a phony conveyance instrument, a General Warranty Deed, that claimed to convey a 1% interest in the White’s homestead to the pro se debtor in California, to stop the White’s foreclosure.

Judge Jernigan noted that counsel for HomeEq indicated that this was not an isolated incident and that this scam had been taking place all over the Country. Judge Jernigan found that the White’s and the pro se debtor from California were complete innocent parties. Judge Jernigan did, however, set a new Show Cause Order Hearing for North American Foreclosure, David Curtis and Jireh Capital Services, LLC., for January 9, 2008.

At the end of this opinion, Judge Jernigan put in a paragraph that is entitled” Plea to the consumer debtor bankruptcy bar.” Judge Jernigan urged all attorneys representing consumer debtors to warn their clients about these type of schemes and to warn debtors not to deal with non-attorney Bankruptcy Services.

It will be interesting to see if someone for North American Foreclosure or David Curtis shows up for the January 9, 2008 Show Cause Hearing. Stay tuned!

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