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The Meeting of Creditors (What to Expect in Minnesota)

About 3 to 5 weeks after you have filed for bankruptcy you will be required to attend a meeting of creditors, which is also known as the 341 meeting.  For some bankruptcy cases, just the meeting of creditors will suffice, in others you may need to appear in court; even if you didn’t need to appear in court, you should take this meeting just as seriously. Another thing to keep in mind is that although the name of the meeting implies creditors will be there, it does not necessarily mean that ALL of your creditors will be there.  Most times you will see only one creditor at these meetings.  In addition to the few creditors that may be present, your lawyer and a bankruptcy trustee will show up as well.  A bankruptcy trustee is somebody appointed by the court to review your case and deal with your estate/assets, they will also be the ones to ask you a series of questions regarding your bankruptcy case during this meeting.

Before heading to your meeting, make sure you have the following items with you: proof of ID, social security number, most recent pay stub, and bank statements.  If you are missing one of these items you will have to reschedule your meeting (especially if you forget your ID or social security number).  If you forget your pay stub or bank statements but your attorney has back-up copies on hand, your meeting can continue as planned.

As mentioned above, the trustee present at your meeting will ask you a series of questions regarding your case.  The following are some areas the trustee may ask about: your assets, property ownership, your bankruptcy petition, whether or not others owe you money, history of payments to creditors, property transfers, domestic support, or previous bankruptcy filings.  These are just a few areas that the trustees might ask about, however, they are not all the areas they may question you on.  These questions may make it seem like this could be a long meeting, but it is quite short.  The meeting of creditors usually lasts around 5 minutes; it is short, brief and is meant to get to the point.

 

https://www.friedmaniverson.com/consumer/blog/bankruptcy/what-should-i-expect-at-my-bankruptcy-meeting-of-creditors/

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Late Mortgage Payments Increase

According to the Mortgage Bankers Association, the number of borrowers who were late on their mortgage payments rose to 12.87% in the second quarter of 2011. Prior to the second quarter of this year, the number of homeowners who were delinquent on their mortgage payments had been decreasing for over a year.

The 12.87% refers to mortgages that were at least 30 days overdue or in the foreclosure process. The second quarter figure represents a decrease from the 14.4% in the second quarter of 2010, but a slight increase from the 12.84% at the end of the first quarter of this year. The figure corresponds to 6.3 million homeowners who are behind on their mortgages.

The actual foreclosure rate is near its lowest in four years. However, this is largely due to government assistance programs and an investigation into foreclosure documents that has caused lenders to delay foreclosing. The increase in late mortgage payments illustrates how the rise in unemployment can affect the struggling housing market.

 

 

Source:

Maggie Shader, Delinquent Mortgage Payments on the Rise (accessed August 25, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Supreme Court Will Decide Whether Farmers Pay Tax On Bankruptcy Sale

The Supreme Court recently granted an appeal from Lynwood and Brenda Hall, farmers who were compelled to sell their farm in bankruptcy. The farm was sold for $960,000, and the proceeds were used to resolve the Halls’ bankruptcy debts. As a result of the sale, the Halls owed $26,000 in capital gains taxes. The Halls attempted to pay a portion of the capital gains taxes, but wanted some of taxes discharged by the bankruptcy court. The IRS insisted that the entire $26,000 be paid. The case ended up in the U.S. Court of Appeals for the 9th Circuit in San Francisco. The 9th Circuit Court ruled in favor of the IRS. The United States Supreme Court granted the Halls’ petition for review, and will ultimately decide whether the taxes must be paid.

Source:

Associated Press, Supreme Court to Decide Whether Couple Must Pay Tax on Bankruptcy Sale of Family Farm, https://www.startribune.com/nation/123747189.html (accessed June 21, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Young Americans Feel Empowered By Debt

New research conducted at Ohio State University indicates that 18 to 27 year olds feel empowered by their debt. The study found that a greater amount of education loan and credit card debt corresponded to higher self-esteem. Additionally, young people with high debt feel more in control of their lives. (Anand)

The study compared information about credit card and student loan debt with participants’ self-esteem and feelings about their ability to accomplish goals and control their lives. Lower income people were the most affected by their debt. Participants with the lowest income felt the most empowered, with higher debt corresponding to higher self-esteem. Young people in the middle class felt no effect from student loan debt, but experienced higher self esteem by holding more credit card debt. Participants with the highest income felt no self-esteem increase from either education or credit card debt. (ScienceDaily)

Researchers also found that at age 28 young people start to realize the consequences of their debt. At 28, study participants felt more stress about their debt, understood that they may have overestimated their future income, and realized paying off their debts would not be easy. (ScienceDaily)

Source:

Anika Anand, Young Adults Wear Their Debt Like a New Tattoo, https://lifeinc.today.com/_news/2011/06/08/6814827-young-adults-wear-their-debt-like-a-new-tattoo (accessed June 21, 2011).

 

What, Me Worry? Young Adults Get Self-Esteem Boost From Debt, https://www.sciencedaily.com/releases/2011/06/110606113401.htm (accessed June 21, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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What is a deed in lieu of foreclosure?

What is a deed in lieu of foreclosure?

With so many individuals unable to afford to keep their homes, many people are looking for ways to walk away from their home.

One option is to do a deed in lieu of foreclosure. When a person signs a deed in lieu of foreclosure, the person is essentially signing the property over to the mortgage without forcing the mortgage company to go through a foreclosure to reclaim the property. When a property is foreclosed upon, the mortgage company must follow state laws which set up a number of steps a mortgage company must complete in order to take over possession of the property. This can be a drawn out process and typically the mortgage company will incur costs such as attorney’s fees when undertaking a foreclosure.

When an individual signs a deed in lieu of foreclosure that person is essentially giving the mortgage company permission to bypass the foreclosure process and take back possession of the property immediately.

Clearly, in this situation the mortgage company benefits by skipping over the expensive step of foreclosure; however, the property more quickly enters onto their books as a foreclosed property. Some mortgage companies have “Cash for Keys” programs that will offer financial compensation for owners willing to vacate their property more quickly.

The benefit for the homeowner in a deed in lieu of foreclosure is not as obvious. Many individuals believe that their credit will be spared by doing a deed in lieu of foreclosure. This is not the case. A deed in lieu of foreclosure can still adversely affect a person’s credit score.

In addition, when a person signs the deed in lieu of foreclosure that person is giving up his or her right to occupy the property during the redemption period. In Minnesota as in many states, a homeowner is allowed a time period after a sheriff sale to try to refinance the property or pay off the entire mortgage in full in order to keep the home. During the redemption period, the homeowner is entitled to keep possession of the home. In Minnesota, this period typically last 6 months. In certain circumstances it can last a full year. Essentially this means that a person can lose their home to a foreclosure and yet remain in the property until the redemption period expires. During this time the homeowner’s name remains on the title of the property and the homeowner is responsible for the property. The homeowner is not required to make mortgage payments on the property during this time and therefore has a chance to save up money that would have been spent on rent.

Signing a deed in lieu of foreclosure ends this right. It can however occasionally be in a homeowner’s best interest to sign a deed in lieu of foreclosure. For example, if an individual has already moved out of the property, having their name remain on the title is a liability for them if the property is not being maintained.  For example, if the lawn is not mowed, the city could cite the homeowner for the violation.

Another concern that an individual should have when considering signing a deed in lieu of foreclosure is whether the mortgage company will choose to go after the homeowner for a deficiency balance if the property subsequently sells for less than the homeowner owes the mortgage company. One should be wary about signing an agreement that makes them responsible for the difference.

Not all mortgage companies will willingly allow a homeowner to sign a deed in lieu of foreclosure straight away. Often the mortgage company will force the homeowner to put the property up for sale before considering the option of a deed in lieu of foreclosure. A homeowner may incur unnecessary costs in doing this.

Whether or not signing a deed in lieu of foreclosure is in a person’s best interest depends on a number of factors. Before making such a decision, an individual would be wise to consult with an attorney regarding their options.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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What is a short sale?

With today’s housing market many individuals find themselves in the unhappy position of owning a home where the balance owed to the mortgage company is far greater than the value of the home. Many of those finding themselves in this circumstance want desperately to get out from under the house.

One method used to accomplish this is selling the home to a buyer for less than the balance of the mortgage. This is referred to as a short sale.

Short sales can help an individual extricate themselves from a house, but there can be issues which arise from a short sale that are unexpected.

A short sale must be approved by the mortgage company. If there is a second mortgage, the second mortgage must also approve. It is often difficult to get a mortgage company to approve a short sale. One may invest a great deal of time in finding a buyer and setting up the sale only to have it fall through at the last minute. The process can be extraordinarily frustrating.

In addition, sometimes when a person sells a house on a short sale, the mortgage company will force the seller to sign a note agreeing to pay the difference between the short sale purchase price and the balance owed on the mortgage. This leaves the seller without the property and with a frequently large unsecured debt. More often than not, a person selling a home on a short sale will end up owing almost the entire amount of the second mortgage on the property as well.

Before agreeing to sign such a note, one should be aware that in Minnesota a mortgage company holding a first mortgage is only allowed to pursue an individual for the deficiency balance on the first mortgage in very limited circumstances if the property is foreclosed upon. Signing a note in a short sale would make the seller responsible for the difference between the sale price and balance when if the property had just been foreclosed on, the individual would have not been responsible for the difference.

A mortgage company does not have to have the seller sign a note for the difference. The mortgage company can elect not to pursue the difference and forgive the debt. If the mortgage company forgives the seller for the difference in sale price and the amount owed, there can be tax consequences. In certain circumstances the difference will be considered taxable income. Anyone planning on selling a house on a short sale would be wise to consult with a tax professional before agreeing to the deal.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Supreme Court Rules Against Estate of Anna Nicole Smith

The Supreme Court recently ruled against the estate of the late model Anna Nicole Smith. In a 5-4 decision, the Court ruled that Smith was wrongly awarded $400 million from the estate of her late husband by a bankruptcy court. When she was 26, Smith married wealthy oil executive J. Howard Marshall, who was 89. Marshall died just one year later and left everything to his son Pierce. A probate court in Texas awarded the estate to Pierce after Smith sued. However, Smith filed for bankruptcy in California and made claims that Pierce withheld money that Marshall had promised her. The bankruptcy court agreed with Smith and awarded her $400 million.

The Supreme Court case addressed the conflicting rulings by the Texas and California courts. The Court held that the United States Constitution prevents bankruptcy courts from ruling on claims outside of bankruptcy law. This means the California bankruptcy court was prevented from granting damages on tort claims. Therefore, the ruling from the Texas court stands and Marshall’s whole estate was awarded to Pierce.

The parties involved in the case did not live to see the outcome. In 2007, Smith died from an accidental overdose. Marshall’s son, Pierce, also died while the case was pending.

 

Source:

Newscore, Estate of Anna Nicole Smith Loses at Supreme Court,

https://www.nypost.com/p/news/national/estate_of_anna_nicole_smith_loses_tdc2FYsQQPIXCPZkKnE3aI (accessed June 28, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Popular Restaurant Chains May Be At Risk For Bankruptcy

According to new research, popular food chains Denny’s, Wendy’s and Domino’s may be in danger of going bankrupt. TheStreet.com ranked restaurants’ chances of going bankrupt by their Altman Z-Score. The score is based on financial information from each company, and predicts the likelihood of bankruptcy within two years. TheStreet has been using their scoring system since 1968, and they claim to have a 72% rate of accuracy in predicting bankruptcies two years before the filing.

Denny’s is the restaurant most at risk for bankruptcy, according to the most recent ranking. Wendy’s/Arby’s came in second, and Domino’s Pizza was fifth. Additionally, DineEquity, which operates Applebee’s and IHOP, ranked fourth on the list. Other restaurant chains, including Sbarro, Perkins and Marie Callender’s, have already filed for bankruptcy this year.

 

Source:

Pete Kenworthy, Report: Denny’s, Wendy’s and Domino’s Among Restaurants in Danger of Bankruptcy, https://www.abcactionnews.com/dpp/news/national/wews-report-dennys-wendysand-dominos-among-restaurants-in-danger-of-bankruptcy1309574048690 (accessed July 3, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Regional Bank President Wants Tax Reform To Lower Debt

Narayana Kocherlakota, president of the Federal Reserve Bank in Minneapolis, recently suggested a change in the U.S. tax system to discourage debt growth. High consumer and bank debt lowers the stability of the economy. This makes economic trouble, like what occurred in 2007 through 2009, more likely.

Currently, the tax code encourages debt by allowing taxpayers to take advantage of interest deductions. Consumers are encouraged to incur mortgage debt and banks are encouraged to take on debt for financing. Kocherlakota urged Congress to reduce the deduction for mortgage interest and reduce the interest deduction for corporations. This would reduce the incentives for people to take on debt that destabilizes the economy.

Officials are attempting to avoid another economic downturn. President Obama signed a bill last year that gives the Federal Reserve the power to supervise financial institutions whose failure could cause an economic crisis.

 

Source:

Vivien Lou Chen, Fed’s Kocherlakota Calls for Tax-system Changes to Discourage Debt

Growth, https://www.bloomberg.com/news/2011-06-27/fed-s-kocherlakota-calls-for-tax-systemchanges-to-discourage-debt-growth.html (accessed June 28, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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L.A. Dodgers Baseball Team Files Bankruptcy

The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection in Delaware. Dodger’s owner Frank McCourt was relying on a TV deal worth billions to help ease financial troubles. However, Major League Baseball did not approve the deal. McCourt is asking for time to secure another media deal, and he is seeking $150 million to finance daily expenses. The Dodgers owe millions to former players, who have filed claims. The team has also experienced a substantial decrease in fan attendance at games.

The Dodgers likely would have been unable to make their next payroll. McCourt filed for bankruptcy before a takeover by MLB could become an option. Analysts believe MLB will fight the bankruptcy, because the league wants the issue to stay within baseball. Additionally, the MLB constitution gives commissioner Bud Selig the power to takeover a team in bankruptcy.

McCourt has been a controversial owner since he acquired the team in 2004. McCourt purchased the Dodgers for $430 million in a highly leveraged transaction. Selig hired Tom Schieffer to monitor the Dodgers in April, because he was worried about the financial situation. The bankruptcy filing has been an embarrassment for the team.

Source:

Associated Press, Los Angeles Dodgers File For Bankruptcy, https://msn.foxsports.com/mlb/story/los-angeles-dodgers-file-for-bankruptcy-frank-mccourt-blames-bud-selig-decision-062711 (accessed June 27, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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