Mississippi Consumer Help Blog

Why does my mortgage company keep losing my modification paperwork?

Published on: July 13, 2012 | Frank Coxwell

You’re trying to work through the process of getting a modification of your home loan and you can’t seem to ever get the same person on the phone. When you talk to one person, they give you different answers, pass you around, or claim the information you provided was to another department so they need you to repeat it. Maybe they can’t find any record of your information at all. You’ve faxed the same paperwork multiple times – only for it to “disappear” or to “never have arrived”. You’ve mailed the information but “a page or two is missing”. You mail it again and somehow different pages aren’t there now. Is it just you? NO! Can a huge company be this incompetent? Is it a consipiracy? A stall tactic?

Your mortgage company does not want to give you a modification. It’s “let the games begin” time. It’s not your fault. They simply make more money foreclosing. Don’t believe me? Investors are the ones that own your mortgage. The mortgage company or mortgage servicer is simply servicing the loan – collecting your payments and passing them on. Let’s say they make $250 a year for doing this. But if you’re late – hey! They get late fees, can then tack on assessment fees, attorneys fees, modification screening fees (I said screening – they are not incented to actually give you a modification), foreclosure processing fees, and on and on and on. These fees that they get to keep can add up to thousands! And oh yeah – they tell you not to pay your normal note while they are screening you for this modification. Why? Because you will then get farther and farther behind and they will make more and more and more in fees.

There is a way to save your home, regain control of this nightmare, and get back in the driving seat. Read on.

Can filing a Chapter 13 protect the co-signer of my student loan?

Published on: July 12, 2012 | Frank Coxwell

I get countless calls from people asking what they can do to about their parents or grandparents who co-signed for them on a student loan and are now facing garnishment, loss of their tax refunds, or even seizure of their bank accounts because they co-signed and the loans have not been paid.

This is a common tactic for debt collection on student loans. If the student isn’t working – they will go right after anyone who co-signed for the loan. And they have broad powers – there is no notice required – they can garnish, etc without warning unlike collection of normal debt where there must be a lawsuit filed and judgment obtained first, etc.

It’s pretty well known you cannot wipe out student loans through bankruptcy, but if you file a Chapter 13 bankruptcy, you can stop all action – against you AND against anyone that co-signed for your student loan. Chapter 13 bankruptcy protects the debtor and co-debtor. Both do not have to file – just one. If the co-debtor files it protects the main debtor and vice versa. For example – mother co-signed for son’s student loan. Mother files Chapter 13 bankruptcy (maybe even for other reasons) – it protects the son regarding the student loan they both signed for. Or son files Chapter 13 bankruptcy – it protects the mother.

Frank Coxwell Guest on MPB Money Talks – Facing Foreclosure

Published on: July 11, 2012 | Frank Coxwell

Air Date: 7/10/12

To listen to the program, click here and search all episodes.

Attorney, Frank Coxwell explains how you should handle foreclosure. Nancy & Chris answer personal finance questions!

What does it mean to “cram down” a debt in a Chapter 13?

Published on: July 11, 2012 | Frank Coxwell

First you should understand that when we talk about “cramming down” a debt, it is referring to a secured debt (such as debts for vehicles, furniture, household goods and appliances). Referring to a debt as secured means there is some type of collateral attached, which you would lose if you defaulted on the debt.

All secured debts can be stretched out in a Chapter 13 up to the 5 year max period. This is often helpful by lowering the note. However, you may find even more benefit within a Chapter 13 regarding secured debts through a “cram down”.

“Cram down” of debt means that you can reduce the amount you must pay to be equal to the current value of the collateral rather than the current amount owed if certain criteria is met.

I lost my license because of past due support. Can bankruptcy help me get it back?

Published on: July 7, 2012 | Frank Coxwell

The “withholding, suspension, or restriction of a driver’s license, a professional or occupational license, or a recreational license, or the reporting of overdue support to a consumer reporting agency, or the interception of a tax refund” are actions that can be taken upon an individual as a penalty for failure to pay support. These penalties are excepted from the Automatic Stay and can continue despite the initial filing for protection under bankruptcy. However, by filing a Chapter 13 bankruptcy the Chapter 13 plan will provide for payment of the past due amount as well as offer provision for the current and ongoing amount owed to ensure that the debt does not become delinquent at any time during the life of the Chapter 13 plan. Once the Chapter 13 plan is confirmed (you file, attend a 341 hearing approximately 30 days later, then the bankruptcy judge approves the plan approximately 30 days after that thus “confirming” the plan) with payment of the past due support provided in the plan, any continuing action of any of these penalties would be in violation of the confirmed plan and the creditor could be subject to sanctions if they continue any such actions against the debtor. So bottom line is yes, a Chapter 13 bankruptcy could provide some relief regarding these types of penalties.

Can bankruptcy keep me out of jail for failure to pay child support?

Published on: July 6, 2012 | Frank Coxwell

Filing Chapter 13 bankruptcy can be used to pay past due support over an extended period of time (max of 5 years within a single Chapter 13 plan) and yes, it can protect the debtor from going to jail for previously failing to pay what was due. It’s important to note that you cannot discharge (wipe out) in any type of bankruptcy (Chapter 7, Chapter 11, Chapter 12, Chapter 13, etc) debts relating to child support, maintenance, alimony, and other domestic support obligations. Not only will the Chapter 13 plan provide for catching up the past due amounts, but it will also provide for the current and ongoing payments in order to prevent the debtor from becoming behind in support during the Chapter 13 bankruptcy plan period.

Can You File Bankruptcy on Criminal Restitution?

Published on: July 5, 2012 | Frank Coxwell

Debts stemming from a fine, penalty, or forfeiture payable to and for the benefit of a governmental body, (other than a tax penalty in some cases), cannot be discharged by bankruptcy. Criminal restitution in all forms will have to be paid in full; however, filing a Chapter 13 bankruptcy can be used to stretch the payment of the restitution out over a 60 month (5 year) period. Extending these payments can be significantly lower than the monthly restitution payments as set up by the court. There may be situations where the restitution cannot be paid in full through the maximum period allowable in a Chapter 13 bankruptcy, so the debtor may need to do 2 or more Chapter 13 cases back to back. This would provide for repayment of the restitution over a longer period of time than the 60 months (5 years) allowed in a single Chapter 13 bankruptcy case.

Can bankruptcy help with tax debt?

Published on: July 5, 2012 | Frank Coxwell

In a Chapter 7 and Chapter 13, as long as four basic criteria are met, both state and federal income taxes can be discharged.

The tax return due date was at least 3 years before filing bankruptcy.
The filing of the tax return must have been done at least 2 years before the bankruptcy filing.

Does Bankruptcy Affect Statutes of Limitations On Other Types of Cases?

Published on: July 4, 2012 | Frank Coxwell

Something most people do not realize (including attorneys who are not versed in bankruptcy law), is that if someone has been hurt and there is a statute of limitations governing the timeline the person has to take action upon that injury (using personal injury as one example), filing a bankruptcy will extend such statute of limitations by 2 years as long as the filing of the bankruptcy was before the expiration date of the original statute of limitations.

Bankruptcy Code § 108(a) allows a bankruptcy trustee to commence an action on behalf of a debtor’s estate within the period allowed by state law for such an action, or within two years after the filing of the bankruptcy, whichever is later. Stanley v. Trinchard, 579 F.3d 515, (5th Cir. 2009).

The language about the trustee commencing the action should not raise concern with you or with your personal injury (or other such) attorney. The trustee will always keep the original attorney that was hired by the client for the associated case. Never do Trustees handle personal injury or other cases themselves. Being able to have 2 years added to the statute of limitations can be a huge advantage!

Articles Posted in MS Association for Justice Voir Dire Magazine Summer 2012

Published on: July 3, 2012 | Frank Coxwell

I had the privilege of being asked to write a couple of articles for the Mississippi Association for Justice Voir Dire Magazine’s Summer 2012 edition. This is a regular publication of the MAJ and is devoted to presenting timely, informative, and practical information to its membership of attorneys. I make the most of every opportunity to educate attorneys of all areas of practice on the fundamentals of bankruptcy. For this edition I focused on Chapter 13 and several of the areas where this financial tool can assist clients that many attorneys may not be aware of if bankruptcy is not their focus. I also wrote an article on the morality of a bankruptcy. Most people don’t realize that the idea for bankruptcy law was based on the Old Testament sabbatical and Jubilee years. Our forefathers recognized the significance of forgiveness of debt and how cruel old world practices were of having debtor prisons, etc. No one comes to me for a consultation on bankruptcy with a desire to “get out of” paying a debt. They have experienced a tragedy (illness, job loss, pay cut, etc) that has crippled their ability to provide for their self and their families and need assistance to make a fresh start.

If you have questions about bankruptcy and have not been able to fully find the answers posted, please contact me. I’ll be happy to provide those answers to you and it would also help me to know what additional information I can post that would be helpful to people researching bankruptcy related issues.

Click here to read : Chapter 13 – The Financial Super Tool