Kevin's Corner
Bankruptcy Practice Tip on Cleaning Up Your Files
"In our last newsletter, we detailed the potential value of using metadata software to extract hidden yet key information in settlement letters from collection agencies in violation of bankruptcy's automatic stay.
"As one example, I detailed how such software could allow you to examine the history of the settlement figure and determine whether this monetary amount had changed over time, possibly giving you some leeway when negotiating settlements or at least equipping you with some important knowledge to keep in your back pocket.
"With that in mind, it is a good idea to employ such metadata software to your own electronic documents. As bankruptcy lawyers, we deal with a lot of sensitive information that is best kept quiet or confidential for our clients' sakes. And as we work with a lot of documents that may undergo several revisions and histories, cleaning up your files becomes even more important.
"Purchasing and utilizing a product like MetaData Assistant is a smart and responsible way to make sure that none of this hidden information behind your documents is leaked to someone who has no business knowing about it.
"With such a product, you can actually go into your Word, Excel and PowerPoint files to examine the actual metadata that exists and clean it up as you wish. The same goes for cleaning up any information behind your e-mail messages.
"While taking such preventative measures may take a little more time from your end, it also shows that you care about the best interests of your clients and that you do not want to tip your hand in anyway that could harm them.
"Such extra effort is just another part of the process in fostering a happy and satisfied client, and should be something that you seriously consider if you are not already doing so."
- Kevin Chern
President, Start Fresh Today
Recent BAPCPA Exemptions & Updates
Here's the latest BAPCPA news to keep in mind:
- On Oct. 3, the House collectively passed (411-0) the National Guard and Reservists Debt Relief Act of 2008, which temporarily exempts eligible members of the Army reserve and the National Guard from having to undergo the Chapter 7 means test when filing Chapter 7 bankruptcy.
- The Executive Office for U.S. Trustees ruled that trustees involved in Chapter 7, 12 and 13 bankruptcy cases must submit uniform forms for final reports, effective April 1, 2009. The Attorney General has until that date to issue rules requiring standardized forms for the trustee reports.
The Numbers Game
Here's a tally of some of the latest figures that you should be aware of:
- In an October forecasting survey conducted by the Wall Street Journal, 52 economists estimated the odds of the United States falling into a recession during the next 12 months at 89 percent, an increase from the 60 percent odds given during an identical survey in September.
- Consumer bankruptcy filings were up 28.6 percent this past September as compared to the same time period in 2007.
- 159,000 jobs were lost in September (the worst such month in the last five years), bringing the number of lost jobs in the last nine months to 760,000.
A Friendly Reminder
With Start Fresh Today's new Prepay Functionality Program, you can free yourself from having to pay each time you set up a new client by purchasing a set amount of our packages, courses and/or due-diligence items in advance.
Let's say you have anywhere from 35-45 clients per month. With our prepay program, you can purchase 50 packages at the start of the month.
Upon doing so, you will be provided with a special Promo Code that will tell you when your packages are running low and let us replenish them if you desire. As for your debtor clients, they will use this Promo Code when coming to the payment section of the self-registration process.
To learn more about how this program works, check out this Prepay Functionality letter or contact Rori Endick at 954-377-9051.
If you are ready to participate, fill out our Prepay Authorization form to get started.
Thanks again for your time and participation with Start Fresh Today!
On the Bankruptcy Calendar
Some bankruptcy-related events to keep in mind during the next couple of months include:
- ABI – Detroit Consumer Bankruptcy Conference, Troy, Michigan, November 11;
- ABI – 20th Annual Winter Leadership Conference, Tucson, Arizona, December 4-6;
- ABI – Rocky Mountain Bankruptcy Conference, Denver, Colorado, January 22-23, 2009; and
- NACBA – 17th Annual Convention, Chicago, IL, May 29-31, 2009.
Are we missing anything on this list?
Let us know by shooting us an e-mail to newsletters@startfreshtoday.com with any upcoming consumer-related bankruptcy events.
Bankruptcy Article of the Week
U.S. Trustee Program Settlement Agreement Buries Zombie Debt
The U.S. Trustee Program (USTP), operating as a division of the U.S. Justice Department, announced on October 2nd that it had entered into a settlement agreement with Capital One Bank on a major issue debtors may face once a bankruptcy discharge is approved by the court – the reemergence of "zombie debt."
Zombie debt refers to debt that just won't seem to go away because it is revived by unlawful credit reporting or collection actions. More specifically, companies buy charged-off credit card accounts from the original lenders for pennies on the dollar. The purchasing company will then use credit-scoring and other technologies to gain greater insight as to who will be more likely to pay the debt.
Believe it or not, collection companies are striking it rich in purchasing and pursuing old debt. Often, the practices used to collect zombie debt turns abusive when dealing with the actual consumer, including:
- seeking to collect from consumers debts they don't owe, that have already been paid, or have been properly discharged in a bankruptcy proceeding;
- filing lawsuits or threatening to sue over debts long after the statute of limitations has expired;
- reporting to credit bureaus that an old debt is a new one (this illegal practice will extend the seven year limit on reporting negative items);
- agreeing to delete a negative mark on the consumer's credit report for a small, token payment and;
- becoming irate with the consumer.
All of these practices violate federal law and rob the consumer of the protection offered by the discharge obtained in bankruptcy court.
In its agreement with Capital One, the USTP has directly addressed specific violations and sought corrections. The press release issued by the USTP verified that Capital One acknowledged wrongfully receiving $340,000 from Chapter 13 estates and that Capital One returned the ill-gotten gains. As an additional remedy, Capital One will also withdraw or seek to withdraw all erroneously filed proofs of claim.
If the settlement agreement is approved by the U.S. Bankruptcy Court for the District of Massachusetts, the following actions will be implemented:
- an independent auditor will examine 650,000 Capital One accounts and any monies improperly received by Capital One will be returned to debtors or their bankruptcy estates; and
- the auditor will approve reimbursements to debtors and trustees for out-of-pocket expenses incurred to contest the wrongful claims.
As practitioners, we should applaud the vigilance of the USTP in maintaining federal bankruptcy law and consumer rights. After all, consumers who seek the protection of the bankruptcy courts should have their fresh start and not be haunted by the apparitions of old debt.
NACBA's 2008 Fall Workshop Roundup
Thanks to all of you who recently attended NACBA's Fall Workshop on October 2nd and 3rd in Hilton Head, South Carolina, and a special kudos to CIN, which hosted an amazing golf outing.
Start Fresh Today is pleased to announce that our hosted Beverage Cart was put to quite good use and that our Polynesian Review with hula dancers and fire dwellers was a smashing success (thanks in large part to the hula dancing lessons given by Candace Lambrecht).
Attendees at the Polynesian Review contributed $2,000 for Lowcountry Legal Aid. Thanks so much for your generosity.
On top of that, SFTI added an additional $1,500 to bring the grand total donated to Lowcountry to $3,500.
We will be adding photos from the Fall Workshop to Start Fresh Today as soon as possible; be sure to check back in the future to view and maybe even relive some of the great moments that were had by all in attendance.
Once again, it was great seeing so many of you, and we look forward to catching up again at future conferences.
Audacious Insolent Greed, Inc.
Less than a week after American International Group, Inc. (AIG) received an $85-billion bailout in federal funds (ahem, taxpayer money), some AIG bigwigs were sent on a $440,000 California retreat.
Yes, it's true—AIG brazenly blew hundreds of thousands of dollars while many taxpayers are having difficulty stocking their refrigerator and paying for medicine.
Some AIG employees melted their stress away by spending $23,380 on spa treatments, while others chose to golf to ease their troubled minds. If those techniques didn't help them relax, the distressed employees also attended lavish "banquets" where plenty of booze was readily available.
"Average Americans are suffering economically. They're losing their jobs, their homes and their health insurance," House Oversight Committee Chairman Henry Waxman (D-CA) said in a recent hearing. "Yet … company executives could be found wining and dining at one of the most exclusive resorts in the nation."
Last week, even after AIG demonstrated these irresponsible business practices, the New York Federal Reserve lent AIG an additional $37.8 billion.
This recent development begs the question: If we bail out companies who are collapsing because of negligent business practices, will they really learn a lesson?
Presidential Candidates on the Financial & Mortgage Crisis
Tonight at 9 p.m. EST, the presidential candidates will be tackling their last debate in Hempstead, NY. Start Fresh Today will be paying close attention to what the candidates say about the current foreclosure crisis.
Here's some highlighted quotes from the candidates regarding the financial crisis during their Oct. 7 debate:
Sen. John McCain (R-AZ): "Now, I have a plan to fix this problem and it has got to do with energy independence. We've got to stop sending $700 billion a year to countries that don't want us very—like us very much. We have to keep Americans' taxes low. All Americans' taxes low. Let's not raise taxes on anybody today.
"I am in favor of leaving the tax rates alone and reducing the tax burden on middle-income Americans by doubling your tax exemption for every child from $3,500 to $7,000.
"As president of the United States … I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes—at the diminished value of those homes and let people be able to make those—be able to make those payments and stay in their homes."
When asked about suggestions for who would be a good Treasury Secretary, McCain suggested Meg Whitman, the former CEO of eBay, but also added, "But the point is it's going to have to be somebody who inspires trust and confidence."
Sen. Barack Obama (D-IL): "This is a final verdict on the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Sen. McCain, that essentially said that we should strip away regulations, consumer protections, let the market run wild and prosperity would rain down on all of us.
"We've got to make sure [the recent government rescue plan] works properly. And that means strong oversight, making sure that investors, taxpayers are getting their money back and treated as investors.
"The secretary already has the power to [restructure mortgages] in the rescue package, but it hasn't been exercised yet. And the next president has to make sure that the next Treasury Secretary is thinking about how to strengthen you as a homebuyer, you as a homeowner, and not simply think about bailing out banks on Wall Street.
"The middle-class need a rescue package. And that means tax cuts for the middle class … It means help for homeowners so that they can stay in their homes."
When asked about suggestions for who would be a good Treasury Secretary, Obama suggested Warren Buffett, but also said, "The key is making sure that the next treasury secretary understands that it's not enough just to help those at the top."
Did You Know…
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