Filing Fee Increase On June 1st

Bankruptcy case filing fees are increasing on June 1, 2014.  The Chapter 7 filing fee will rise from $306 to $335 and the Chapter 13 filing fee will kick up from $281 to $310.  Although there are many other important considerations in timing the filing of your case, saving $29 is a good reason to hurry up and contact your bankruptcy attorney to see if you can file your case before the end of May!

New Regulations Require Mortgage Statements Continue in Bankruptcy and More

Mortgage lenders can no longer refuse to provide monthly statements to individuals in bankruptcy.  Typically mortgage lenders stopped providing monthly statements when a borrower filed bankruptcy, which is the time when, more than ever, borrowers need to know what is going on with their mortgage.  Without statements, borrowers in bankruptcy were not alerted to changes in their monthly payment amount due to rate adjustments or changes in escrow or the assessment of fees and costs or even if they have missed payments.

New rules effective January 10, 2014 require that if mortgage lenders provided monthly statements before a case, they must continue providing statements during the bankruptcy case.  These rules were promulgated by the Consumer Financial Protection Bureau (CFPB) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  There are some exceptions to this rule such as for reverse mortgages or home equity lines of credit (HELOCs).  In addition to monthly mortgage statements, lenders must also provide at least two months advance notice of changes in the monthly payment amount due to a rate adjustment.

The CFPB regulations also address the use of “force placed” insurance by mortgage lenders.  Typically, if a borrower’s home insurance lapses, lenders are allowed to obtain their own “force placed” insurance which only covers the lender up to the balance of the mortgage if something happens to the property.  The lender then assesses the costs for this “force placed” coverage, often several times higher than the borrower’s private home insurance, to the borrower’s account.  “Force placed” coverage was sometimes even put in place when a borrower paid their home insurance premiums as part of their mortgage payment, so-called “escrow,” if the borrower fell behind on their mortgage payments.  Assessing borrowers the more expensive premiums for the force placed coverage would compound the amount of the mortgage arrears catapulting borrowers into foreclosure.

The new regulations require that if a borrower escrowed their home insurance premiums as part of their mortgage payment, lenders now have to continue paying these premiums, even when the borrower falls behind on their mortgage payments.  Mortgage lenders will no longer be able to swap in the more expensive “force placed” coverage.

For more detailed information on the new CFPB regulations, see the very informative article by Attorney John Rao of the National Consumer Law Center titled “New Servicing Regulations Adopt Sensible Approach” published in the May 2013 ABI Journal at page 16 and available at this link: http://journal.abi.org/content/new-servicing-regulations-adopt-sensible-approach

Attorney Susan Grossberg Recognized In Pro Bono Honor Rolls

This October, Attorney Susan Grossberg was recognized for her pro bono publico representation of the indigent by both the Supreme Judicial Court Pro Bono Recognition Program Honor Roll and the U.S. Bankruptcy Court for the District of Massachusetts.

Attorney Susan Grossberg celebrated as 2103 Top Women of Law Honoree

Attorney Susan Grossberg is being celebrated as a 2103 Top Women of Law Honoree on October 31st at the Boston Park Plaza Hotel.  Each year the Massachusetts Lawyers Weekly honors women who have made great professional strides and demonstrated outstanding accomplishments in private practice, the corporate arena and social advocacy. For more information about the legal educators, trailblazers and role models who have demonstrated outstanding accomplishments in social justice, advocacy and business and who are being recognized as the Top Women of Law, click here.

Finally – Pay Your Plan Payments Online!

Finally, the Chapter 13 Trustee in Boston has adopted an online method to pay plan payments. You no longer have to go out and buy a money order or bank check, fill it out, address an envelope, buy a stamp for it, and get it to a mailbox to make your plan payment.  Instead, all you have to do is go online to TFSBillPay.com.

Once you have registered with TFSBillPay.com, you can safely make plan payments from your bank account directly to the Chapter 13 Trustee.  No more worrying if your payment was lost in the mail or credited to the wrong case because you can track your payments at the TFSBillPay.com site.  You can also schedule future payments.  All for the same cost (or less) than a money order or bank check.

Yes, I am very excited because I believe this will help my clients stay current on their plan payments and avoid the hassle and expense of Trustee Motions to Dismiss for failure to pay plan payments.  I would so much rather spend my time helping clients put their lives back together, than to nag about why plan payments weren’t made.  So, to all of my Chapter 13 clients, if you haven’t signed up for TFSBillPay.com yet, please do it today.  Thank you!

Why you should file your tax returns (even if you can’t pay the tax)

Nobody receives their w-2s and 1099s and thinks “someday, years from now, I’m going to file bankruptcy and discharge the tax I will owe on this return.”  But failing to file a tax return could prevent you from being able to wipe out income taxes if you do eventually end up in bankruptcy.

It’s true, it is not an easy thing to discharge income taxes in bankruptcy.  There are many factors which influence whether a tax can be extinguished.  For example, it has to be a tax that was due at least three years ago (technically speaking, a tax for a year for which the return was due at last three years prior to the date the bankruptcy petition is filed).

And the return has to have been filed at least two year before the bankruptcy case is filed.  The return could even be filed late as long those two years have passed.  And there’s your first reason to file the tax return as soon as possible — to get that two-year clock running.  Yep, you may never need to file bankruptcy, but you’ll be so glad those returns were filed at least two years ago if you ever do.  But that’s not the most important reason to file your tax returns on time. [Read more…]

What will happen if I file bankruptcy?

Most people have at least some incorrect perceptions and unfounded fears about bankruptcy.  Below I discuss a few I have come across over the years.  I hope that by dispelling some of these widely held myths, I can help you to determine whether bankruptcy is the right course for you. My initial phone consultation is free. You owe it to yourself to call.