This is about as big as it gets in the world of a bankruptcy lawyer! This story in The New York Times talks about the controversy that will ensue if President Obama should nominate Harvard Law Professor Elizabeth Warren to the newly created Consumer Protection Czar position, a Presidential cabinet level position. Those of you who have met with me perhaps recall me speaking of Elizabeth Warren as a voice for the consumer during the frenzy leading up the passage of the 2005 Bankruptcy Reform Act. I do have some mixed feelings about Professor Warren’s candidacy. Having her become part of the “establishment” as a cabinet member does cause me to worry that her shrill acuity and advocacy may be muted and at worst, silenced. As an outspoken voice of superlative credibility, if she fails at the position because she will not “tow the line”, then I fear that her credibility and standing might be tarnished or compromised. However, in this reform-minded era I can also flip over and say, “Go get’em Elizabeth!” I am torn…and still in shock to learn of the pending appointment.
Tag Archives: Savings
10 Worst American Real Estate Markets – SUPRISE! Not all of them are in Michigan!
Now folks, this link was just too darn interesting to pass up, so here it is for a quick read. You may have to wait a moment for the iritating “pop up screen with shade over the article” to pass, but after it passes in about 20 seconds,you will be able to read a fascinating (and shocking) article with eye-popping statistics on the current state of real estate markets in America. Who would have thought Santa Cruz, CA would make the list…read on….
Consumer Alert: Judges suspicious of the rising tide of lawsuits and garnishments
Unscrupulous collection lawyers are being “called on the carpet” by consumers and some judges to show proof that the amounts alleged in collection lawsuits and garnishments can be verified through extrinsic evidence. This was reported on Tuesday, July 13, 2010 in the New York Times ( link).
The article explains that “debt buyers” purchase old debts from other collection agencies and credit card companies after the preceding collector/creditor has given up on trying to collect. The new “debt buyer” then often proceeds to file suit with scant evidence supporting the allegations in the lawsuit. Many Judges are dismissing these suits for lack of reasonable extrinsic (outside) evidence of the origin and the composition of the debt. If a consumer will both (1) respond in writing to a collection lawsuit demanding verification of the origin and composition of the debt and (2) show up for Court, the Judge in the case might dismiss the suit if the suing “debt buyer” cannot produce at least copies of billing statements which verify the underlying transaction in which credit was extended or wherein goods and services were purchased with the credit. The NY Times article linked above is very interesting; one small law firm in New York files over 80,000 lawsuits per year, frequently without securing any paperwork to verify that there exists a valid underlying debt of which enforcement is sought. Each lawyer in the firm was filing 5,700 lawsuits per year utilizing computerized and automated software. Very intriguing.
25.5% of Americans now suffer with poor credit scores of 599 and below
“The credit scores of millions more Americans are sinking to new lows. Figures provided by FICO, Inc., show that 25.5% of consumers – nearly 43.4 million people – now have a credit score of 599 or below, marking them as poor risks for lenders. It is unlikely that they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.” reports Eileen AJ Connelly of the Associated Press (See Tacoma News Tribune, 7/12/10, page A8). Ms. Connelly further reports: (a) 2.4 million more people are now in the poor credit 599 and below category than were there in 2008. (b) Only about 17.9% of Americans now enjoy a top credit score of 800 or above, while as recently as April 2008, 18.7% of Americans enjoyed top credit scores of 800 and above. (c) Mid-range credit score individuals who make up about 11.9% of people (FICOs of 650-699) are likely the most affected by the “credit crunch” in that prior to the late 2008-2009 financial meltdown, they readily obtained credit at reasonable rates, but now are often forced to pay much higher rates than they would have paid in early 2008.
AARP: When Bankruptcy is Smarter.
Recently, I read an article published in the American Association of Retired Persons AARP MAGAZINE in the May/June 2009 issue entitled “When Bankruptcy is Smarter!” by Walecia Konrad. The article discusses that when people are in trouble, they often wait too long before seeking assistance. The AARP article referenced above advises against draining retirement and savings accounts to pay debts, but rather to first consult with an experienced bankruptcy attorney.
For longer-term Washington state residence, one can usually have in excess of $120,000 home equity…and still file to extinguish debts through bankruptcy. The amount of funds one can retain in IRAs and 401k plans is also very, very liberal–particularly if a person is of middle or later age.
In evidence of a worrying trend, American adults age 55 and over experienced the sharpest increase in bankruptcy filings of any age group since 1991, according to a recent study conducted for AARP’s Public Policy Institute, writes AARP’s Jonathan D. Pond on October 14, 2008
AARP’s Mr. Pond notes that not only in Washington state, but across the country, that while the bulk of bankruptcy filers are in their 30s and 40s, Americans age 55 or older have experienced the sharpest increase in bankruptcy filings, accounting for 22 percent of all those in bankruptcy proceedings in 2007. That number is up from only 8 percent in 1991.
A weak economy and increasing health care costs put older Americans, regardless of whether they live in Washington State or not, at greater risk for bankruptcy. Health care expenses can be one of the biggest, if not the biggest, causes of bankruptcy among older Americans. This will affect all senior Americans, not just those residing in Tacoma, Gig Harbor, Bremerton, Puyallup, Chehalis, or Olympia.
Do yourself a favor: Listen to the AARP: Before draining assets or selling property to pay credit cards, medical bills and other debts, first consult with an experienced bankruptcy attorney. You may save yourself much grief, and tens of thousands of dollars.
