Eviana Martin, an attorney at the Martin Law Firm, P.L. has recently attended the 20th Annual Bankruptcy Law Convention organized by the National Association of Consumer Bankruptcy Attorneys in San Antonio, Texas.

One of the topics discussed at the conference was “The Big Freeze” referring to Wells Fargo a/k/a/ Wachovia Bank putting a hold on the individual’s bank account if that individual files for bankruptcy protection. The bank is fast at putting a hold on the bank account even if the individual filing for bankruptcy protection does NOT owe any money to the bank and even if the funds are claimed as exempt in bankruptcy. It does not matter if you are filing Chapter 7 or Chapter 13 bankruptcy, just the fact of having any funds in the Wells Fargo bank account is enough for the bank to “freeze” the account.  The bank “preserves” the money in the account for the bankruptcy trustee. An individual can prevent this from happening by withdrawing the funds from the bank account before filing the bankruptcy case. Eventually the funds will be released back to the debtor and the hold will be lifted, but this process might take several weeks and if the money in the account were intended to be used to pay the utilities bill or mortgage, by losing access to these funds an individual’s payments might be jeopardized.

Another hot topic discussed at the conference was the recent state and federal foreclosure settlement with five of the U.S. largest mortgage servicers including Bank of America, Citi, JPMorgan Chase, Ally/GMAC, and Wells Fargo banks. The settlement applies to the homeowners in the State of Florida whose loans were serviced by the above mentioned loan providers and who were harmed by the bank’s unfair mortgage servicing practices and foreclosure abuses. The logistics of the settlement awards and the application procedures and requirements are still in the workouts.  The settlement is intended to provide mortgage relief and direct payments to the Florida borrowers. The settlement consists of two segments- one is the federal settlement in the amount of approximately $25 billion dollars and second is a portion of the settlement in the amount of estimated $8.4 billion dollars available to Florida residents who meet the application criteria and have mortgages with one of the five servicers listed above.

Homeowners who are current on their mortgages but who owe more than the property is worth, will also be evaluated for possible eligibility for mortgage modifications and principal reductions to the first and second mortgages. Qualifying homeowners who lost their homes in foreclosure lawsuits from January 1, 2008 to December 31, 2011 might also be eligible to receive cash payments. The settlement will also address the future loan servicing practices and will require the loan servicers to comply with a stricter mortgage servicing standards. The settlement does not release the banks from the criminal liability or individual claims from the borrowers or class action lawsuits.

The settlement Monitoring Committee, consisting of  numerous State Attorney Generals, is currently looking to select a settlement administration companies that will be in charge of receiving and reviewing the claims for the settlement benefits. The Committee will also overview the bank’s compliance with the settlement provisions and deadlines, imposing penalties and fines for non-compliance. The Committee estimates that the review of the claims will start as early as June 2012 and will continue for the next six to nine months.

Since the duration of this agreement is limited to three years, homeowners are encouraged to contact their lenders directly to inquire about the application process and the qualifications for the mortgage modification programs or monetary awards. Listed below is contact information that will help you to further inquire into the workouts of the settlement agreement:

For the further information regarding the financial restitution for the borrowers who lost their home in foreclosure between January 1, 2008 and December 31, 2011, contact the Attorney General’s Office at www.myfloridalegal.com.

For the loan modifications and refinancing options for borrowers who are current but underwater on their homes, contact the banks directly:

Ally/GMAC: 800-766-4622

Bank of America: 877-488-7814

Citi: 866-272-4749

JPMorgan Chase: 866-372-6901

Wells Fargo:800-288-3212

However, if your loan is owned by Fannie Mae or Freddie Mac, you are not affected by this settlement. If you are not sure whether your loan is owned by one of these servicers, check their websites:

Fannie Mae at http://www.fanniemae.com/loanlookup

Freddie Mac at http://freddiemac/mymortgage

More information could be found on www.nationalmortgagesettlement.com or www.myfloridalegal.com.

Eviana Martin is an attorney with the Martin Law Firm, P.L. Her practice focuses on Bankruptcy and Consumer Law. She is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. She represents clients from Lee, Charlotte and Collier Counties at the firm’s offices in Fort Myers, Cape Cora, North Fort Myers, and Naples, Florida.

All too often our clients come to us and are unaware of the actual process of filing for bankruptcy protection.  We have simplified the steps of a bankruptcy into a few core stages along with what we require of you as part of this process.

CHAPTER 13 FILING ROADMAP

Pre-Filing

1.  Pay attorney’s fees in full, gather all required documents, schedule an appointment for a Questionnaire Review, and write down questions for the attorney.

2. Provide any additional documents requested at the Questionnaire Review, take the Credit Counseling Course at Debthelper.com.  If you have an operational business, please provide our office with the business’s bank statements.  Additionally, please annotate all non-business related (personal) deposits and withdrawals.  Our office will give you a call to schedule an appointment to sign your bankruptcy petition once it is ready.

3. On the date of filing your bankruptcy petition our office will give you a call to get the current balances for all of your bank accounts (personal and business). You will be provided with the case number once your bankruptcy petition is filed.

Post-Filing

4.  About a week after your petition is filed, a bankruptcy Trustee will be assigned and a date for the 341 Meeting of Creditors will be automatically scheduled by the court.  The meeting will usually take place about 30-45 days after filing.  You will receive a letter from our firm reminding you of the date, time, and place of the meeting.  You must attend the meeting in person and bring your original Social Security card and Driver’s License to show the Trustee.  At the meeting the Trustee will ask you questions about your assets, liabilities, income, expenses and other questions pertaining to your specific case.  Please be familiar with your monthly expenses such as food, home maintenance, and medical expenses.

5.  Your payments to the Trustee will start in about 30 days from the date of filing your petition.  You will receive a letter from the Trustee (Jon M. Waage) indicating the amount, date of payment, and the address where to send the payments.  The next step in a Chapter 13 filing is a Confirmation of Your Plan Hearing.  You do not have to attend this hearing.  The attorney handling your case will attend the hearing on your behalf.  Prior to the confirmation hearing the Trustee will file a Recommendation concerning your case.  Usually the Recommendation is Unfavorable and restates the issues that still have to be dealt with in your case (for example if your income is understated or if the trustee feels that your expenses are too high or luxurious; you may have to show proof of particular expenses in order for the Trustee to allow those expenses, or if any amendments need to be filed in your case).  Your creditors have approximately five months from the date of filing to file claims in your case.  The first Confirmation Hearing is usually continued for a variety of reasons.  If your case is for 100% repayment, you need to wait until the last date for your creditors to file a claim in your case to see how many claims were filed.  Once your case is confirmed, your payments to the Trustee are determined and in about a month you will receive an Order of Confirmation spelling out the contents of your plan, its duration, and who is entitled to receive the distribution of funds from the Trustee.  You can set your payments to automatically withdraw from your bank account.  Please note that you might be required to surrender your tax refunds to the Trustee for the duration of your Chapter 13 Plan.

All too often our clients come to us and are unaware of the actual process of filing for bankruptcy protection.  We have simplified the steps of a bankruptcy into a few core stages along with what we require of you as part of this process.

CHAPTER 7 FILING ROADMAP

Pre-Filing

1. Pay attorney’s fees in full, gather all required documents, schedule an appointment for a Questionnaire Review, and write down questions for the attorney.

2. Provide any additional documents requested at the Questionnaire review, take the Credit Counseling Course at Debthelper.com, and appraise your jewelry and vehicles that you plan to keep. Our office will give you a call to schedule an appointment to sign your bankruptcy petition once it is ready.

3. On the date of filing your bankruptcy petition our office will give you a call to get the current balances for all of your bank accounts (personal and business). You will be provided with the case number once your bankruptcy petition is filed.

Post-Filing

4. About a week after your petition is filed, a bankruptcy Trustee and a date for the 341 Meeting of Creditors will be automatically scheduled by the court. The meeting usually will take place in about 30-45 days after filing.  You will receive a letter from our firm reminding you about the date, time, and the place of the meeting. Any additional documents required by the Trustee have to be provided to our office fifteen (15) days prior to the meeting with the Trustee. You have to attend the meeting in person and bring your original Social Security card and Driver’s License to show to the Trustee. At the meeting the Trustee will ask you questions about your assets, liabilities, income, expenses and other questions pertaining to your specific case.

5. Please provide our office with additional documents that the Trustee might request after the Meeting of Creditors. The Trustee has 30 days to file an objection to a claim of exemption in your case and arrange an appraisal of your personal property. This appraisal might take some time so please be patient.  The court will consider you over-exempt when you want to keep non-exempt assets, or want to keep more property than you are allowed to keep under the applicable Florida or Federal Law. The Trustee will then send us a Stipulation for Repurchase of Assets which is a letter stating how much money, if any, you are over-exempt in your case. The total amount of this overage will have to be repaid over the next 12 months in equal payments or you can repay the whole amount at once. You will have an option to surrender some of the assets if you do not plan to keep them.  If you are considered over-exempt, you will also have to surrender a whole or a pro-rated portion of your tax refund to the Trustee. We will notify you as soon as we receive this letter from the Trustee, but it might take some time so please be patient.

6. Discharge!