A proof of claim is filed by a creditor after a Chapter 13 bankruptcy case is filed.  Its essentially the way for a creditor to raise their hand and say, you owe me money, please pay me my share.

Most of the time, the creditor has a legitimate proof of claim and your plan must be adjusted accordingly (more on that in another post), but occasionally a creditor will file a proof of claim that defies logic.

I have a current case where several bogus proofs of claim have been filed.

The most egregious claim filed was by a debt buyer (more on that in another post).  This company probably purchased a portfolio of debt accounts for a penny on the dollar, and if this claim was any indication of the quality of the accounts, probably less.

This creditor filed a proof of claim for $8800 on a debt that was charged off in 1996.  Just to give you some context, in 1996, President Clinton hadn’t started his second term yet, The Spice Girls had the number one single on the radio (which was released primarily on cassette tapes I might add), gasoline cost 73 cents a gallon and the New York Yankees were world series champions (some things just don’t change).

This creditor did not provide any supporting documents either.  It is likely that this creditor saw that my client was filing a 100% plan and they were just throwing it up against the wall and seeing if it stuck.

Unfortunately for the creditor, the wall they hit was me.  The first thing I do in this situation is contact the creditor who has filed the bogus or deficient (a nice way of saying bogus) claim and ask them for supporting documents.  If they don’t have it, I request that they withdraw the claim.

This particular creditor only had a voice mail box, so I left a message that they would provide supporting documents or I would file an objection to their claim.

Well I didn’t hear back and I filed an objection to their claim.  Surprise, surprise, the creditor withdrew their claim rather than fight in court.

That is what you want.  Anyone can fill out bankruptcy documents, but you want a lawyer who isn’t going to roll over and just let a creditor steal from you, which is what this creditor wanted to do.

I saved my client $8800, or almost $150 per month in her Chapter 13 plan.  That is $150 that can go to pay for clothes for her daughter, gas for her car, or even a night out.  Most importantly its $150 that she isn’t paying to a thief every month.

You don’t just want to hire a paper pusher, you want to hire a fighter.  You want to higher a lawyer that gets his kicks from pushing back at debt collectors when they push you.  You don’t just want someone in your corner, you want someone who is going to get in the ring and flatten the creditor that is trying to do you wrong.

If you are in danger of losing your home and don’t want to go it alone, call me at 484-661-2891 to set up a free, no obligation consultation.

This is stupid.

The purpose of HAMP is to give people who are struggling to keep up with their mortgage a break.  It is not to give every person who feels like they should get a better rate a better rate.

HAMP is completely voluntary.  Your bank isn’t required to do anything for you.

If you deliberately fall behind on your mortgage and then do not get a modification, you are left with wrecked credit, a mortgage that is severely past due, and a huge payment owed to your mortgage lender rife with late fees and attorney fees… and if you are like this person, Chapter 13 will be your only option to save your home.

If you are struggling with your mortgage payment or other bills and you don’t know where to turn, call me at 484-661-2891 or email me at jim@padebt911.com and we can find a way out, together.

I’m more worried about April 2010, the month the housing crisis could explode.

Remember back in 2003-2005 when people were out there buying McMansions?  A vast majority of these loans were ARM (adjustable rate) mortgages and a lot of these loans are set to reset on April 1, 2010.

You thought tax day was going to suck, if you have an ARM on a jumbo-loan (a loan over $417K) that jumps 2% in interest, your payment is going to jump a minimum of $500 per month (and in some cases a lot, lot more).

In this difficult economy, $500 extra per month is hard to come by.

If you have a jumbo-loan that is ready to reset and don’t know where you are going to find that extra $500 each month and want to discuss mortgage modification, call me at 484-661-2891 or email me at jim@padebt911.com and we can schedule a free, no-obligation consultation.

The economic time-bomb is ticking down to April 1, are you ready?

Generally speaking your trustee payment will be due 30 days from the date of filing.  If you file your bankruptcy on September 2, your first payment to the trustee will be due by October 2.  In the Eastern District of Pennsylvania, payments are sent to a company called Ramapo, which is in Memphis, Tennessee, so it’s best to send your payment out approximately 10 days prior to the due date if possible.  Also, make sure your payments in certified funds, either certified check or money order or the payment will be sent back to you.

Your mortgage is a little different.  Most mortgages are due on the first of the month, which is why when I strategize about when to file, generally I suggest filing on the second of the month.  Filing on the second of the month gives you a full 30 days until your first mortgage payment after filing bankruptcy is due.

If your payment is due on the 15th of the month and you file your bankruptcy in September 2, your next mortgage payment is due September 15.  It goes the same way with other secured creditors (car loans etc.) that you are paying outside the Chapter 13 plan, so if your car loan is due the 20th of the month, the first payment due after filing bankruptcy on September 2 will be September 20.

If you have fallen behind your mortgage want to save your home, calling me at 484-661-2891 or e-mail me at Jim@padebt911.com and we can set up your free, no obligation consultation.

Kenneth Besser wrote Collections 101: A Training Manual for Entry Level Debt Collectors.

The Fair Debt Collections Practice Act specifically makes harassing a debot a violation.

Section 806(5) says that harassing a debtor is causing a phone to ring repeatedly with the intent to annoy, abuse, or harass any person at the called number.  That doesn’t mean that they are only allowed to call once per day, it just means they can’t harass you.

That is why I was shocked to read in Section 9.14 of Besser’s book about calling back a person who hangs up on you.  When I worked for the debt collectors, and the debt collection agency I worked with was one of the worst, we never called back.

This is taken directly from Section 9.14:  “Following a hang-up, some collectors make an immediate callback to make sure that the call was not terminated accidentally.  If a reconnection is made, the collector may wish to inquire about the reason for the disconnection by saying something to the effect of , ‘I’m very sorry, Mister/Miss ______, but we seemed to be cut off before we were done.”

It is 2009, most phones don’t cut out, unless they are cell phones, and I will write more about that later.

Besser continues: “If the debtor begins to state that he or she hung up on purpose, then a collector may politely, but firmly reply by saying, ‘If you found our previous conversation not to your liking, then, please accept my apology.’

OK, so far, so good, I wouldn’t have called them back but…

Besser continues: “‘Nonetheless, hanging up will not make this matter go away.’”

Actually maybe it might.

To me, if a debtor says they intended to hang up, the conversation should be over.  The parting shot, also known as the last word, is harassment and as such it is a violation of the FDCPA.

So how can I be sure?

I can’t, but I’m sure if I have it on tape and I file a complaint that debt is going to go away at the very least.  One of my favorite lines (that I stole from a national debt expert) with debt collection agencies is “I’d love to own a collection agency, do you want to keep it up.”

Are debt collectors driving you nuts?  Do you think they are crossing the line?  Call me at 484-661-2891 or email me at jim@padebt911.com and we can discuss your debt problems and dealing with debt collectors for no charge, which is certainly less than that check by phone the debt collector is offering you.

In most cases, the first hearing on confirmation is continued, so it isn’t anything to worry about if you keep in touch with your attorney.

If you filed pro se (by yourself) and are having second thoughts (and you should) about going it alone, feel free to contact me at 484-661-2891 or email me at jim@padebt911.com and we can discuss your case for no charge.

Perhaps the proper question is who. In both Chapter 7 and Chapter 13 bankruptcy, the bankruptcy trustee represents your creditors in the bankruptcy court. It is a trustee’s job to look out for the interests of the creditors.

That doesn’t mean the bankruptcy trustee is your enemy, the bankruptcy trustee is your friend, kind of like the friend who tells you that you had too much to drink and you shouldn’t drive home.

With the number of cases currently in front of the bankruptcy court, it would take years before a bankruptcy case would be processed if it were the sole responsibility of a bankruptcy judge, and that is where the trustee comes into play.  The trustee is there at your 341 meeting.  The trustee reviews all proofs of claim in your bankruptcy case for errors.  The trustee reviews of bankruptcy documents for errors as well, and generally speaking if your bankruptcy attorney follows the trustees request, your bankruptcy case should sail through.

The trustees also truth detector.  When you order 341 meeting the trustee puts you under oath makes you swear that you’ll tell the truth, and they’re very good at detecting when you’re telling a lie.

Bottom line is this, tell the trustee the truth and do what the trustee asks, and you’ll much better chance of getting your case confirmed.

My response: “good answer!”

Until the bankruptcy case is actually closed, there is still a chance to rescue your case from dismissal.  There is a motion that I’ve had to use called the “Motion to reconsider dismissal.”

You don’t want to be here.  If your case has been dismissed, it is probably because you did not follow an explicit instruction by the bankruptcy court, such as failure to submit documents or make payments.

Most dismissals happen in Chapter 13 cases, and most of these dismissals are the result of not paying your Chapter 13 trustee payment.

If your case is dismissed, the automatic stay that protects you from debt collectors is lost immediately, however there are certain circumstances where the judge will withdraw his dismissal order.

So you’re probably wondering: “How do I get the judge to withdraw the dismissal order?”  You’re probably not going to like the answer. You or your attorney (hopefully by now you have an attorney, you really need one) will have to go in front of the judge who ordered the case dismissed and convince him or her that your situation has changed and you are unlikely to run into the problem that caused your case to be dismissed in the first place.  If there ever was a Hail Mary pass a bankruptcy law, the motion to reconsider dismissal is it.

I had a client who fell behind on their chapter 13 plan payment and I was not able to convince a Chapter 13 trustee that they should continue the case to another hearing.  The case was dismissed, and because of that I filed a motion to reconsider dismissal after speaking with my client and determining that they could in fact come up with the funds to catch up to chapter 13 plan payment by the date of the hearing.

I went before the judge with a certified check for the entire amount my client was past due on the Chapter 13 plan payment.  Furthermore, I explained to the judge with detailed spreadsheets why my client would not fall behind again and respectfully requested that the judge reconsider his dismissal and reinstate my client’s case.

The judge was convinced in the case was reinstated.

Two weeks later, I was in front of a different judge, used the same tactic, and didn’t get the same result.  My client’s case was dismissed, that was a final decision, and now my client was going to lose her house because they fell behind on their Chapter 13 plan payment.

The moral of story is this, do not depend on the motion to reconsider dismissal order to save your home, however, if your case has already been dismissed and your lawyer is telling you you’re done, ask him or her about a motion to reconsider dismissal, and if your lawyer can’t or does not want to do that, call me at 484-661-2891 or e-mail me jim@padebt911.com and we can discuss whether or not this Hail Mary pass is worth throwing.

note: I will have to consult with the attorney who filed your bankruptcy case prior to accepting your matter.

Getting a mortgage modification after a Chapter 13 case is filed is tricky enough, if the Chapter 13 plan authority been confirmed, it requires permission from the court to modify the mortgage and amend the Chapter 13 plan.  Getting this permission is not easy.

This company is based out of Texas, and I’m not going to give them any advertising whatsoever, but you’ll know them when you deal with them.  Their salespeople are very good at being salespeople and they pretend to be a law firm, but if you dig through their website they will say that they’re not a law firm and not providing legal advice.  That’s a good thing, although I wish they be more up front about it, because if they try to practice law in Pennsylvania without a license, they be violating the law.  In my estimation, they are least violating legal ethics and while they say they are not providing legal advice, I’m sure that the State Bar of Texas would take a dim view of this behavior.

If you are in a current chapter 13 plan and you want a mortgage modification, you need to speak to your attorney before signing any papers.  As an attorney, I can only do so much to get sure money refunded from the slimy companies like this company in Texas and for one of my client it cost them $1899.

This client is angry with me.  I refused to authorize his company to process the mortgage modification.  The company claims you don’t need to be an attorney to process a mortgage modification, and they may very well be correct, but they are presenting themselves as a law firm and they are unlicensed, which could mean that my authorization of their services could mean they were working under my license.  I don’t know a single lawyer who would agree to that.

I don’t think I’m going to get the clients money back.  My best guess is that this firm is to disappear at the first sign of a complaint and reappear as another entity with a similar website and a similar slimy strategy.

Many clients seem to think that a mortgage modification is easy to get after a Chapter 13 bankruptcy is filed, nothing is further from the truth.  In the movie Back to the Future, Marty McFly said the Doc Brown: “you just don’t walk into a store to buy plutonium!”  You just don’t call the bank and get a mortgage modification either!  It’s a complicated process, a process being made more complicated because banks don’t really want to give modifications but are being pressured by the government.  Mortgage modification is a process that an experienced attorney should handle especially within a chapter 13 case.

So before you consider sending a large amount of money to an out-of-state company who promises you the world, think about this: “Can I get the Chapter 13 trustee to prove this modification and an amended plan by myself?”  The reason you should ask that question is because if you go behind your attorneys back and do this, they are likely to find a way out of the case, and then you’ll be left with no representation.

For my angry client, they got a happy ending to their case.  All they need to do is catch up their chapter 13 plan and they will have a confirmed Chapter 13 bankruptcy case.  They don’t have to lose their home.

When you’re ready to stop playing games with the out-of-state mortgage modification companies, call me at 484-661-2891 or e-mail me at jim@padebt911.com to schedule your free, no obligation consultation.

The first thing that you need to know is that most credit card cases in Pennsylvania are being heard in front of magistrates.  Pennsylvania magistrates  have such a wide variety of cases that they cannot possibly become experts in everything.  Because of this, even the best defense against credit card cases may not work, also, the best case against them can fail.  The magistrate judge will try his or her hardest to get these right, because no judge likes to be reversed on appeal, and for the most part, the Pennsylvania magistrates really do care about their positions and how they carry out their duties.  That being said, you may not get the correct outcome at the magistrate level, and you may be forced to appeal, which will cost you more money!

The second thing that you should know is that a credit card statement on its own is not enough to prove a debt.

The third thing you should know is that you have the right to question evidence the plaintiff puts forward to prove the debt.  The problem is that when you are defending yourself and you question the plaintiff’s evidence, the opposing side may ask the question did you make these charges, or is this your debt.  You have every right to decline after the question, but the magistrate is human and that may make you look liable further debt than you actually are.

Lets suppose for a moment that you all are representing yourself against Discover card.  Discover card has hauled you in front of your local magistrate because you owe them $5000 and haven’t made a payment in twelve months.  Now let’s just say this information is accurate, and you have actually made the charges, you owe the debt, and you just can’t pay it.  In a court you are under oath, you can’t lie and say you didn’t make the charges, so that puts you in a difficult position if you want to question Discover card’s lawyer about his evidence.

This is how it usually goes when a credit card company’s attorney present evidence in court.  The attorney is going to come up to the bench and show the court 6 to 10 months worth of statements from your credit card.  He will show where you did not make payments. They are going to point out that after a certain month the credit card company stopped charging over limit fees, or did something else to make it look like they were being altruistic and giving you a chance to catch up.  Then they’re going to pull out a credit card agreement.  It’s going to be the most recent version of a document that essentially says we (Discover Card) have all the rights and you have none.  If the attorney is good, they will have highlighted the portions most damning to your case and handed directly to the judge. Finally, some attorneys like to do a little bit of legal theater, and they will pull out a credit card slip.  The credit card slip will not be yours, it will be the attorney’s.  They will tell a hokey story about how they got pastrami on rye at the deli (that’s the story I used) and how they used their credit card.  Then they will show at the bottom how it says that the cardholder agrees to the terms and conditions of the credit card agreement and agree to repay the amount charged.  The attorney will discuss tacking with the attorney, and tacking essentially means that signing that little piece of paper means that you agree to be most recent credit card agreement.  Then if the attorney is smart, he or she will rest their case, and let the hapless defendant defend himself.

This is where it gets sticky for a person who defends himself. If you’re defending yourself, you may have every reason to attack the plaintiff’s evidence, but if you risk opening yourself up to questioning if you do.  The question is: When are you acting as lawyer and when are you acting as defendant and witness.  This is how a person who defends himself gets in trouble.  The judge or magistrate will say: “do you have any questions for opposing counsel?”  the first time you ask a question you’re cooked.  If you ask, “Do you have assigned credit card agreement from me?”, the attorney may respond no it was done electronically but you did take the card right?  You’re under oath, you can’t say no.  You might ask the other lawyer “Do you have any signed credit card slips from me?” Discover Card’s lawyer will probably say “No, but you did use the card to charge right?” Again you are not allowed to lie.

The bottom line is you’re not allowed to lie.  You can say, “I’m questioning the plaintiff’s evidence, not testifying”, but that seems evasive and even though the magistrate is required to allow you to defend yourself without testifying, the magistrate is a human being and he is likely to assume that your refusal to answer means you did charge on your credit card.  Unless you’re Frank Abigail or Will Hunting ( and remember they took Will Hunting off to jail before he was bailed out by the professor), you’re probably not be able pull this off.

A judgment from a credit card company can wind up being a lien against your home in Pennsylvania, I see it everyday, so a credit card lawsuit is not a joke.  If you don’t want to go the route of bankruptcy, you need to get a lawyer to defend you.  When I defend a client against a credit card company, I can usually pick them apart, because they come unprepared.

The credit card companies lawyer usually only shows up with a couple of statements and maybe the the credit card agreement.  The agreement is rarely signed.  I’m not give away my strategy for defending these cases on-line, that comes from years of defending this type of case, and it’s also something that fits my personality in a way that I can pull off where another attorney may not able to.  I couldn’t pull a Johnny Cochrane and put a glove on my client’s hand and “Say if it does not fit then you must acquit,” but I sure can poke holes in a credit card company’s lawyer in a way that only credit card company insider can, because that’s exactly what I was, one of the top debt collectors in the country and someone with intimate knowledge of the credit card industry.

So if you’re going to defend yourself, for the love of all that is good  get a lawyer.  Don’t defend yourself, because you will probably lose, and lose badly.  While lawyer be expensive, a lien against your house is much much more expensive.  If you find yourself being sued by a credit card company and you want someone who will go toe to toe with the credit card company’s attorney, call me at 484-661-2891, or e-mail me at jim@padebt911.com, and we give the credit card company a dose of their own medicine, together.