Barack Obama discusses bankruptcy and debt

Here is an article from suntimes.com that follows up on yesterday's post about the candidates' views on debt, the economy, and bankruptcy.

Obama has round-table talk on South Side

June 12, 2008
BY ABDON M. PALLASCH

Democratic White House hopeful Barack Obama held a round-table talk today on the South Side with three consumers gouged by credit card companies.

“For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford,” Obama said.

The credit card companies start with teaser rates of four percent, then jack them up to 30 percent, lower customers’ credit limits so they can then charge interest, late fees and over-the-limit fees on them, said Obama and Elizabeth Warren, a Harvard Law School professor who participated in the event.

Obama said he knew only too well how easy it was to get caught by deceptive credit card deals: In the interest of full disclosure, I've gone through this. I've had credit cards, Obama said.


Obama's Republican rival, Arizona Sen. John McCain, has been on the other side of bills on which Obama fought for consumer rights, such as the bankruptcy bill, Obama said. The bill made it harder for consumers drowning in credit card debt to seek refuge in bankruptcy, Obama said.

I fought this bill hard, as many of my colleagues did as well, Obama said. Ultimately it passed. It was jammed through. John McCain was strongly supportive of this bill.

Obama acknowledged that, Part of why our debt crisis is so bad is that some folks are making reckless decisions -- racking up big credit card bills by purchasing flat-screen TVs and other luxury goods that they know they can't afford. But he said the credit card companies are pushing many responsible consumers into inescapable debt.

He proposes a Credit Card Bill of Rights that bans the companies from unilaterally changing rates, especially on past debt; and a ban on charging interest on late fees.



We've heard three examples of what I think most people would say is grossly unfair, but this is not atypical, Obama said after the three told their stories at the Illinois Institute of Technology.

Ironically, Obama's national finance chair, Penny Pritzker, headed up a Chicago-area bank that critics said was a pioneer in predatory lending: Superior. The campaign said Pritzker and her family voluntarily paid $460 million to clear up the banks debts, though that still left 1,400 customers without some of their savings.

McCain's campaign charged that the man who, until today, headed up Obama’s vice-presidential search team, James Johnson, got special mortgage rates from his friend’s bank, Countryside, another sub-prime lender.

“On the same day Barack Obama is staring down headlines about the head of his VP selection committee’s inappropriate ties to a predatory lender, Obama launches blind political attacks against John McCain for voting for the bipartisan Senate Bankruptcy Bill that was actually supported by 18 Democrats,” said McCain spokesman Tucker Bounds.
See rest of article here.

Score one for the good guys..."My Bad = Not Good"

recent case law updates:
In re Crawford Bankr. S.D. N.Y.
A secured creditor which proceeded with a foreclosure sale after being notified of a bankruptcy filing was liable for actual and punitive damages. The creditor's announced caveat that the sale would be void "if it violated the automatic stay" did not prevent imposition of damages.

When do I get my car title in chapter 13?

I filed CH13 Bankruptcy in June of 05. We put or vehicles into the bankruptcy. We have now, according to the Trustee website, paid off the "agreed" amount on both vehicles. Can you tell me how long it takes to obtain our titles?

If your vehicle was crammed down in the bankruptcy, you will receive them once you get your discharge (Since the over-financed portion is being stripped off in the case and is not official until the debt is officially discharged.) If you paid the car note in full based on your original contract, then the creditor will process the title once they receive the last of the payments. keep in mind, the trustee usually only disburses funds once or twice a month. Check with the lender, and they may have a more precise date for you.

Illinois Chapter 13 Bankruptcy Case law.

NEW CASE UPDATE

Initially prepared by John Gustafson, Staff Attorney for Anthony B. DiSalle, Trustee; Revised by Jerry Mylander for Glenn Stearns, Trustee

BAPCPA ND IL:

In re Farrar-Johnson, 353 B.R. 224 (Bankr. N.D. Ill. 2006). Judge Goldgar. Above-median Chapter 13 debtors could deduct standard expenses in means test in calculating disposable income regardless of actual expenses in schedule J.

In re Curry, 2007 WL 549360 (Bankr. N.D. Ill 2007). Judge Schmetterer. Termination of stay under §362(c)(3)(A) terminates the stay in all respects to the property.

In re Morales, 2007 WL 92414 (Bankr. N.D. Ill 2007). Judge Schmetterer. Hanging paragraph in §1325(a) does not allow surrender of vehicle in full satisfaction on entire claim of 910 creditor in Chapter 13 plan.

In re Blanco, 06 B 13223 (Bankr. N.D. Ill. 2007), Judge Squires. Hanging paragraph in §1325(a) does not allow surrender of vehicle in full satisfaction on entire claim of 910 creditor in Chapter 13 plan.

In re Randle, 2007 WL 3734351 (Bankr. N.D. Ill 2006). Judge Doyle. Above-median debtors may deduct secured debt payments in means test in collateral that is being surrendered. (affirmed by the District Court on 7/20/07)

In re Nevitt, 2006 WL 2433491 (Bankr. N.D. Ill 2006). Judge Barbosa. Form B22C does not apply for below median debtors. Also, commitment period is temporal not monetary.

In re Wiggs, 2006 WL 2246432 (Bankr. N.D. Ill 2006). Judge Barbosa. Above-median-income debtors may not take vehicle ownership expenses, even though they own their vehicles outright (only those standard expenses that are “applicable”).

In re Demonica, 345 B.R. 895 (Bankr. N.D. Ill 2006). Judge Barbosa. Debtor’s current income, as opposed to historical average, should be used to determine “projected disposable income. A debtor is allowed to deduct the full amounts listed in National and Local Standards for the categories of expenses that fall within those standards. Additional expenses are only proper if they fall within the additional expense provisions as specified by the IRS or as defined in the Code.

In re Gossett, 2007 WL 1226629 ( Bankr. N.D. Ill 2007). Judge Squires. Credit counseling briefing must be concluded ONE CALENDAR DAY PRIOR to the filing of the petition. Also, in the event of ineligibility, dismissal is the appropriate remedy.

In re Mathis, 2007 WL 1320740 (Bankr. N.D. Ill. 2007) Judge Doyle. The applicable commitment period is a multiplier, determining the minimum amount that the debtors must pay the unsecured creditors.

In re Williams, 2007 WL 1206738 (Bankr. N.D. Ill 2007) Judge Hollis. When the debtor is not entitled a discharge, payment of the underlying debt determined under non-bankruptcy law under §1325(a)(5)(B)(i)(I)(aa) means that the debtor must make payment as required by the contract (at the contract rate of interest). Compare In re Hopkins, 2007 WL 2028799 (Bankr. N.D. Ill 2007) Judge Goldgar. Method of full payment of balance of 910 secured debt not determined by the contract.

In re Robson, 2007 WL 1531610 (Bankr. N.D. Ill 2007). Judge Schmetterer. A debtor must provide monthly adequate protection to a creditor that is equal to the depreciation of the collateral the first month after the filing of the petition.

In re Wright, 2007 WL 1892502 (7^th Cir. 2007). Post-petition surrender of 910 vehicle does not preclude a unsecured deficiency claim by a creditor.