Maryland Bankruptcy Blog » Bankruptcy In the News

The Human Cost of Foreclosure

Brett Weiss, Esq. — Wed, 07 Oct 2009 20:42:41 +0000

An article in the July 26, 2008 Washington Post, “What Gets Left Behind,” talks about one side of the human cost when a house goes to foreclosure. As the owner of a company that cleans out foreclosed homes, Troy Hughes notes:

I remember that kid’s balloon was still inflated, like someone had just had a birthday party. That what kills, me, the things the children had to leave behind. Sometimes, their crayon pictures are on the wall. A lot of toys are in the closet…It’s traumatic.

It was too traumatic for one woman in Massachusetts. She faxed a note to her mortgage company saying, “By the time you foreclose on my house, I’ll be dead.” As this ABC News story sadly relates, 53-year-old Carlene Balderrama of Taunton, Massachusetts, fatally shot herself with her husband’s rifle shortly before the foreclosure.

Nadine Kaslow, chief psychologist at Grady Memorial Hospital in Atlanta and a professor at Emory University’s School of Medicine, said such financial stresses come attached with significant psychological consequences.

There is no question that the economic downturn in our country is causing havoc with people’s mental health,” she noted. “It is very depressing to lose one’s home. It represents loss of stability, a feeling of failure. … It is scary and overwhelming.

But it’s not the end:

Once you find out that foreclosure is not a sign of personal failure, that it is not anything that is happening to nobody else … there’s hope.

And given the numbers, it’s happening to a lot of people. According to RealtyTrac, the number of U.S. homes receiving a foreclosure notice between April and June of this year shot up 121 percent compared with the same period last year. That means that 739,000 households received a foreclosure notice during this three-month period — which translates into one out of every 171 households in the country.

There is a way out–Chapter 13 gives you the chance to catch up on missed mortgage payments over 5 years. And even if you can’t, a Chapter 7 will delay the foreclosure to give you some time, let you wipe out any arrearages and deficiency and start over with a clean slate.

Bankruptcy Law, Obama and McCain

Brett Weiss, Esq. — Tue, 08 Jul 2008 00:41:07 +0000

Over on the Bankruptcy Law Network, I have been writing a series of blogs on Senators Obama and McCain’s positions on bankruptcy. The results may surprise you.

The articles may be found by clicking on the links:

Obama vs. McCain on Bankruptcy
Obama and McCain’s Votes on Bankruptcy Amendments
Barack Obama on BAPCPA
Barack Obama on Bankruptcy/Credit Reform

US Trustee Audits to Resume May 12, 2008

Brett Weiss, Esq. — Tue, 13 May 2008 20:56:02 +0000

According to an article on the US Trustee website, random debtor audits, which were halted in January 2008 due to budgetary problems, will resume on May 12, 2008. The only change appears to be that instead of randomly auditing one out of each 250 cases filed, the UST will audit one out of each 1,000 cases filed.

Brett Weiss Quoted in the “Salisbury Daily Times” Discussing Foreclosures

Brett Weiss, Esq. — Thu, 01 May 2008 12:57:38 +0000

Brett Weiss was quoted in an article in the May 1, 2008 Salisbury Daily Times. The article, “Bankruptcy Reform May Have Exacerbated Foreclosure Crisis,” discussed the impact of the 2005 adoption of major pro-creditor changes to the Bankruptcy Code, called BAPCPA.

Mr. Weiss’ summary of BAPCPA may be found by clicking on this link.

Bankruptcy Audits Suspended

Brett Weiss, Esq. — Mon, 21 Jan 2008 17:03:44 +0000

According to a recent article on the Bankruptcy Law Network by Kansas bankruptcy attorney Jill Michaux, the random and targeted audits of bankruptcy cases by the office of the U.S. Trustee have been suspended. The reason? Congress didn’t appropriate any money!

According to the U.S. Trustee website:

The FY 2008 Consolidated Appropriations Act, Public Law 110-161, provided no funding for debtor audits. As a result, the USTP has suspended its designation of cases subject to audit and has notified the independent accounting firms performing the audits. The Program is pursuing alternative sources of funding to permit it to resume the designation of cases subject to audit and, if successful, intends to reinstate the audits.

Maryland Foreclosure Taskforce Issues Report

Brett Weiss, Esq. — Sat, 17 Nov 2007 21:23:24 +0000

While traditionally, Maryland has not been the most homeowner-friendly state in terms of its foreclosure procedures, things have gotten far worse with the deepening of the mortgage crisis. According to State officials, Maryland has jumped from No. 40 to No 15 in foreclosures nationally. A recent article in The Washington Post summarizes the recommendations of the Maryland Homeownership Preservation Task Force. (I haven’t been able to read the full report yet, and my comments below are based on the Post’s summary. If it proves that the summary is wrong or incomplete, I’ll revise this blog.)

It’s always nice to look as if you’re doing something in response to a problem. It’s even nicer to actually do something. Unfortunately, the task force’s recommendations sound a lot more like window dressing than actual improvements in the current foreclosure system in Maryland.

(more…)

Collection of Debts Discharged in Bankruptcy

Brett Weiss, Esq. — Sat, 03 Nov 2007 02:45:25 +0000

BusinessWeek published online (and will publish in its magazine) an amazing article, “Prisoners of Debt.” This major story talks about the increased selling and collection of debt discharged in Chapter 7 cases. A must read.

BusinessWeek has two companion articles: “Conveniently Not Updating,” about improper credit reporting of discharged debt, and “Whose Second Chance,” about improper collection of discharged debt.

The fact that BusinessWeek (of all magazines) is doing stories about creditor abuse is a clear reflection of just how rampant this sort of thing is.