Acceleration Abandonment Upheld in Texas

Acceleration of a debt occurs when a periodic contract amount becomes due all at once. In a case down in Texas, it turns out that in some instances a mortgage lender can abandon an acceleration of a mortgage in a number of ways. While the case discussed here is not in the 9th Circuit where Seattle sits, the case may be adopted in part or full in the future. A creditor can abandon the acceleration of a debt either by specific agreement or by actions consistent with abandonment, such as latches or statute of limitations(delay in bringing an action). In re Williams, No. 16-33276 (Bankr. S.D. Tex. Aug. 3, 2017).
In a Chapter 13 case, the debtor Durwyn Williams defaulted on his mortgage from U.S. Bank Trust which was then being serviced by Caliber Home Loans. Caliber accelerated the balance due on the Note in the year 2010, and later started foreclosure actions against the home securing the mortgage. In 2014, with the foreclosure still ongoing, Caliber sent Mr. Williams another notice repeating the information that his property was in foreclosure and there was a balance of approximately $250,000.00. Mr. Williams filed for Chapter 13 bankruptcy in 2016. Caliber then filed a proof of claim, claiming Caliber was owed more than $500,000.00. Williams’ attorney objected. William’s attorney argued proof of claim was precluded by the four-year statute of limitations (again in Texas) triggered when Caliber invoked the Note’s acceleration clause.
Under 5th Circuit, in particular Boren v. U.S. Nat. Bank Ass’n, 807 F.3d 99, 104 (5th Cir. 2015), abandonment of an acceleration can result from either agreement or “other action” of the creditor and debtor. Courts have broadly interpreted that “other action” by the creditor may include acceptance of payments after acceleration or written/verbal assurances that future payments will be made and accepted, intering into a new intent-to-accelerate notice, or institution of new foreclosure proceedings. Here, Caliber argued that it abandoned the acceleration when it sent Mr. Williams the 2014 statement showing an amount that was lower than the total accelerated balance. Caliber cited Leonard v. Ocwen Loan Servicing, L.L.C., 616 Fed. Appx. 677 (5th Cir. 2015) and Boren, 807 F.3d at 99, in which communications from the creditor to the debtor, while not using the word “abandon,” explicitly showed that payment of less than the accelerated balance would prevent foreclosure.
The court however, was not persuaded by Caliber’s. In Mr. Williams’ case, all communications from Caliber to Mr. Williams confirmed the existence of the acceleration by repeatedly reminding Williams that his property was currently in foreclosure and that he should pay the balance of the loan. Aside from this, the statement Caliber pointed to as indicating a balance less than the accelerated balance, was sent after the four year statute of limitations had already expired.
The court also denied Caliber’s contention that it abandoned acceleration when Caliber made advances for taxes and insurance on the property. Looking to Bank of New York Mellon v. Maniscalo, 2016 WL 3584423 *3 (E.D. Tex. March 3, 2016), the court determined that a lender does not abandon acceleration merely by taking action to protect its lien.
In this case there was no abandonment of the acceleration. Caliber failed to foreclose within four years, and therefor lien on Mr. Williams’ property was void to the degree Mr. Williams was objecting to the accelerated amount.
Turning to then to Caliber’s demand for the taxes and insurance, the court determined that the parties’ mortgage contract allowed for payments to be made incident to default by the debtor and for the taxes/insurance to be added to the indebtedness secured by the property. The limitations period that precluded Caliber’s claim for the balance of the mortgage did not also prevent the independent claim for the  payment of the taxes and insurance. The court then ordered an equitable lien for Caliber for $65,448.09, representing amounts paid over 4 years to maintain the property.

341 Hearings in Bankruptcy Aren't That Bad


341 Hearings in Bankruptcy

341 meetings, sometimes called a Meeting of Creditors or 341 hearing, is often the only actual meeting a bankruptcy filer must attend during the bankruptcy process. Every bankruptcy petitioner in a CHapter 7 and/or a Chapter 13 must attend a 341 hearing in order to have their debts discharged.  As an introductory summary, at a 341 hearing you will be asked questions under oath about your financal condition by a Bankruptcy Trustee, Bankruptcy Administrator, and/or possibly your creditors and/or their Seattle bankruptcy attorney. It sound scary and to first time filers; can be and feel nerve-wracking. However, in the vast majority of cases, you spend less than five minutes answering questions.

Prior to the 341 Hearing

341 hearings are usually scheduled 4-6 weeks after the date in which you file. At least one week before the 341 hearings, you or your Seeattle bankruptcy attorney should make sure the bankruptcy Trustee receives copies of your most recent tax returns, bank statements covering the date of filing, and 60 days of paystubs.  If you do not provide these documents or reasons why they are not provided, (for example you can’t provide pay stubs if you haven’t been working) your 341 hearing may be simply continued and you will have to come back for another hearing after the documents are provided.  At the meeting, you will usually be scheduled along with a room full of other people persons who have recently filed.  When your name is called, you will approach the trustee with your attorney to the front of the room. There you must provide two forms of ID, a photo ID, and some sort of ID that shows your social security number along with your name.  After that you will be placed under oath and sit down to answer questions.
During the Meeting
Some questions are canned, and are asked of every debtor at their meeting. Questions that everybody or almost everybody is asked:
Is everything that you wrote on your bankruptcy application correct?
Did you read and sign the petition before filing?
Do you have any domestic support obligations?
Have you ever filed for bankruptcy before?
Is the tax return provided the most recent tax return filed?
Have you made any payments on loans in the last 90 days?
Do you plan on keeping your car (if you owe money on your car?)
Additional questions may be asked by the trustee or administrator if your case is more complicated (if any funds may be distributed for example). Business owners and those with real estate may be asked additional questions. In my experience, business owners are typically asked the most questions in cases where there are items the trustee may need to seek and/or value to determine if any portion of this property must be liquidated.
When the Trustee has finished asking questions, the Trustee will ask if any creditors are present who want to ask the debtor any questions under oath.  In the vast majority of cases, there are not. If no creditors have any questions, the debtoris excused. and their 341 meeting is over.
After the 341 Hearing
Creditors will have an additional 60 days from the date of the 1st scheduled 341 meetings to object to any discharge in the bankruptcy petition.  In a Chapter 13 this means The debtor will also need to complete the 2nd credit counseling course (financial management course, sometimes called Debtor Education) within these 60 days.  If creditors have no filed objections; or any objections from the Trustee, a discharge in a chapter 7 typically takes place about 15 days after the deadline to object. In all about 80-90 days after filing).
Relax, its cool. Don’t be Scared!
Bankruptcy can still be the right move

341 hearings aren’t that bad in most cases

The 341 meeting is an extremely important step in the bankruptcy process. In the vast majority of chapter 7 cases it takes only a few minutes and is a brief hurdle towards a bankruptcy discharge.  Usually only people who did not do the necessary preparation (such as bringing their two forms of ID or did not make their paystubs available to the Trustee) have to repeat their 341 hearings.  If are ready and have a good Seattle bankruptcy attorney to help you, the 341 meeting is often one of the easiest tasks that you have to do in your chapter 7 bankruptcy.

Seattle bankruptcy attorneys must meet a high standard by law

Seattle Bankruptcy Attorneys is not immune to the possibility of being sanctioned by bankruptcy courts. One reason why hiring Seattle bankruptcy attorneys can be far better then filing yourself is that seattle bankruptcy attorneys are held to a very high standard in how they deal with clients and care for them. The 9th circuit in particular (where Washington resides) is particularly careful with how ot both punishes and protects attorneys who knowingly dismiss the need to file clients with care and consistency.
Bankruptcy judges have broad equitable power under Bankruptcy Code Section 105(a) which states in part that “The court may issue any order, process, or judgment that is necessary or appropriate to cary out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.” Essentially this means that the court has absolute authority to control the actions of any and all persons interacting with the court. This includes Seattle Bankruptcy attorneys but also includes anyone filing individually.
The Bankruptcy Court also has broad authority to impose sanctions under Rule 9011(c). Under §9011(c)(1)(A) sanctions under this section would typically be brought by motion.  Under  §9011(c)(2), the Rule provides guidance on the limitations of sanctions to directives of non-monetary nature, monetary sanctions to be paid to the court if warranted for effective deterrence, or reasonable fees to an opposing party.  Bankruptcy rule 9011(c)(1)(A) requires a 21 day notice before a motion for sanctions may be filed.
 The 9th Circuit has provides quite a bit of guidance in imposing sanctions throughout the years. Other courts also provide instances of when and how sanctions should be levied. In addition, when sanctions are imposed, the degree of sanctions is also carefully and strictly construed where appropriate, and expansive where appropriate. In Crayton, the BAP determined that “reasonable sanctions” are those sanctions which apply the ABA Standards (ABA = American Bar Association). The ABA Standards dictate consideration of four different criteria: (1) whether the duty violated was to a client, the public, the legal system, or the profession, (2) whether the attorney acted intentionally, knowingly or negligently, (3) the seriousness of the actual or potential injury caused by the attorney’s misconduct, and (4) the existence of aggravating and mitigating factors. In re Crayton 192 B.R. at 980 (9th Cir. BAP 1996).
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Seattle bankruptcy attorneys need to take the time to make sure filings are correct.

Aggravating facts in each instance can warrant an increase in the degree of discipline imposed include considerations of any prior disciplinary offenses, multitudes of offenses, an ongoing pattern of misconduct, and/or a refusal to acknowledge the wrongful nature of the conduct. In re Crayton 192 B.R. at 981. On the other side of the coin, mitigating circumstances justifying a reduction in the degree of discipline include the absence of a prior disciplinary record, personal or emotional problems, inexperience in the practice of law, or a timely good faith effort to make restitution or to rectify the consequences of the misconduct.
Three sources of authority make available the ability to admonish bad faith. “Bad faith” is a formless and elusive concept, and its definition can vary from jurisdiction to jurisdiction. It has been generally defined as “knowingly or recklessly raising a frivolous argument making a claim for an improper purpose, “delaying or disrupting the litigation”, hampering enforcement of a court order, improper motive, giving “no meaningful thought” to the purposes of bankruptcy, and more. In re Walker, 532 F.3d at 1309 (11th Cir. 2008); In re Yorkshire, LLC 2008 WL 3306680 at 2 (5th Cir. Aug 8, 2008).
In Hale v Trustee, a bankruptcy attorney refused to sign a bankruptcy petition he had prepared, arguing that the client had only hired him to draft the petition, and to not file the petition or do any post petition work. The Court ordered teh bankruptcy attorney to sign the petition. The attorney refused again. The court sanctioned counsel for failing to sign a pleading under B.R. 9011(a) but noted at lengthy ongoing and consistent pattern of counsel in eluding, failing to recognize poor conduct, and continually violating direct orders; the punishment was a $250 disgorgement and $2,000 along with an encouragement to change his conduct. Hale v. U.S. Trustee, 509 F.3d 1139, 1148 (9th Cir. 2007). The attorney had previously been required in the past to disgorge fees in several cases such as In re Castorena, 270 B.R. 504 at 532 (Bankr. D. Idaho 2001). The Court was relatively lenient in this matter considering the ongoing conduct of the attorney.
In re Nguyen, 447 B.R. 268 (9th Cir. BAP 2001) the attorney for the Debtor Margolis showed a distain for his own action. Margolis’ testimony revealed his generally lax and hands-off approach when attempting to ascertain the accuracy of bankruptcy schedules and statements of financial affairs. Margolis would not meet with clients, failed to counsel clients (letting his paralegal do all the work), and would file schedules not signed by the clients. The bankruptcy court was proper to be worried about potential harm to the public resulting from these practices and refusal to accept his/her own wrongdoing. Therefore, the court enjoined Margolis from filing schedules unless a Seattle bankruptcy attorney conducted the initial client interview and spent at least one hour with the debtor to make sure that assets and debts would be discovered and properly scheduled. Consistent with the bankruptcy court’s findings, this penalty was tailored to coerce Margolis into spending time and exerting effor with clients to determine a full view of their financial history, assure the clients’ understanding of the importance of correctly completing bankruptcy documents, and to assure that Margolis has a proper understanding of his clients’ requirements.
Other stories exist, and I may do another blog or two reviewing some of the cases which have resulted in Seattle bankruptcy attorneys being sanctioned or punished (or avoiding punishment) in the weeks to come. I find them interesting and a great warning to other Seattle bankruptcy attorneys when trying to figure out what is expected of them.

A Few Reasons Why Chapter 7 Bankruptcy Might NOT Be Right For You

We get a log of clients who call our Seattle bankruptcy lawyer office and ask; “I have lots of money owed in unsecured debt. My family has researched talked to family and friends who recommended the benefits of filing Chapter 7 bankruptcy. I know, however, that it cannot be all good because it sounds too good to be true. Can you tell me more about the drawbacks of filing Chapter 7 and whether it’s actually a good choice for me.”

At every consultation, we go over everyone’s situation. Look at their assets, look at their debts and make sure that the path we take is the right one. Here are a few of the most common reasons why a Chapter 7 bankruptcy might not be a good option. Keep in mind a Chapter 13 may be preferable if a Chapter 7 won’t accomplish the goal of keeping all of your property and discharging your debt. In addition, a Chapter 20 bankruptcy (filing a chapter 7 and then a chapter 13) is in a very small number of cases another option.

Chapter 7 bankruptcy overview

Chapter 7 bankruptcy allows Seattle debtors to receive a discharge all or some of their unsecured debt. There are a few categories of debts that cannot be discharged, and there can be ramifications if a full review isn’t done properly. But before you decide to file Chapter 7 bankruptcy it’s smart to review bankruptcy laws with a Seattle bankruptcy attorney. So ask your Seattle bankruptcy attorney if your debts can be discharged and understand the ramifications of your decisions.

It’s a good idea to slow down and find out all you can about the bankruptcy process. Too many debtors and attorneys rush to file without really understanding what they are doing or taking the time to do their due diligence and find out if their particular situation warrants a Chapter 7 bankruptcy.  With that in mind, let’s take a brief overview of some of the negatives to filing for Chapter 7 bankruptcy.

 
Reasons filing Chapter 7 bankruptcy may not be a good idea
1.    Chapter 7 may not discharge all unsecured debts.

Filing Chapter 7 bankruptcy could be a mistake for you if the vast majority of debt you have cannot be discharged. For example, if you have only secured debt, child support debt, certain taxes and student loan debt, filing Chapter 7 may not be the right option. However if your dischargeable debt is still substantial; then its definitely a good idea to think strongly about filing for Chapter 7.

2.    Chapter 7 will ruin your credit.

Most debtors already have a very low credit score due to repossessions, defaults, debt/income ratio, or wage garnishments. For those with a good credit score, their credit score plunge. A myth is that filing for Chapter 7 may also limit your ability to get new credit. While this is true of major loans like house loans, business loans and expensive cars; most clients are fine with waiting a few years to rebuild their credit. You will still have access to quality used car loans, small credit cards and other credit to start to rebuild. You should also have no problem finding housing to lease so long as you can afford it after your bankruptcy. Finally, bankruptcy does remain on your credit report for up to 10 years.

Buying any large item such as a home will also be impossible for several years; typically as early as 2 years after filing. In addition, due to tougher lending laws which are slowly relaxing, you may also have to save for a down payment if you want to buy.

3.    You might lose property.

Although some debtors have few assets and are not concerned about liquidation, other debtors may be forced to sell assets and other items that they would otherwise want to keep. A careful review with your Seattle bankruptcy attorney is necessary to determine if you can protect your property using available exemption laws.

 

4.    You have not investigated other options.

As mentioned above, many debtors move to file bankruptcy before really considering whether there might be an alternative option for solving their financial issues. For example, it might be a mistake to file bankruptcy if you have not analyzed your budget, cut your living expenses, considered additional employment to generate more income, or talked to a financial planner about consolidating your debt. I typically do not suggest debt consolidation but in some cases this may be an option if the payments are low in relation to your income and expenses.

At the same time, if you have more then $10,000 in debt, then considering filing for bankruptcy may still be your best move even considering the above. It can take years, even decades, to pay off $15,000 to $20,000 of debt. Interest will continue to accrue all the time. So getting a clean slate may be a great move if other options aren’t ideal or won’t safely work.  

5.    You think your situation may be worse in the future. 

Under some conditions, such as a severe medical issues or short term chronic problems, it may be a mistake to file Chapter 7 too soon. For example, if you think you might have more medical debts in the future for a surgery or physical therapy; filing now may be premature and you may want to wait. In fact, if you finalize a Chapter 7 and receive a discharge now you cannot file another Chapter 7 case for at least 8 years from the date you last filed for bankruptcy. Chapter 13 does remain available to those who need it, however. So, there are still solutions available if you need to file immediately to protect from garnishments, foreclosures, or repossessions.

Check us out at Johnson Legal Group and contact us today if you are in the Seattle area and are looking for an attorney to help decide if you should file for bankruptcy.

Bankruptcy can still be the right move

Bankruptcy can still be the right move

 

Bankruptcy 341 Hearing Reviewed

What is a Bankruptcy 341 Hearing?
Having not blogged for quite some time, I felt it might be good to go over 341 hearings again for those potential clients seeking a Seattle bankruptcy attorney but wanting a little information prior to committing to a consultation. During consultations the Bankruptcy 341 hearing is gone over in some detail, as the hearing can be daunting for those without legal experience. In general, a 341 hearing is nothing to be panicked about or to have anxiety over. Once in a great while, however, the Bankruptcy 341 hearing can have issues. For Chapter 13 clients, the 341 can be slightly more involved then a Chapter 7.

A 341 meeting is called a “meeting of creditors”. Its called a “341” because of the bankruptcy code Section 341 which requires the hearing. A 341 hearing is something virtually every bankruptcy filer must go through (with very rare exceptions) in order to receive their bankruptcy discharge and complete the process.

As a brief intro, at the hearing you will be asked questions about your financial condition by a Bankruptcy Trustee, the Bankruptcy Administrator (in some states), and possibly your creditors, the IRS if you have tax debts, and/or their Seattle bankruptcy attorney. It sound scary, and it can be; and can produce a large amount of anxiety in my clients; but in the vast bulk of cases, you spend less than ten minutes answering questions.

Preparation for the Meeting

A 341 meeting is typically held a month to a month and a half after you have filed, and is scheduled at the time your petition is properly filed with the Seattle bankruptcy court. Prior to the meeting, at at minimum a week before the scheduled hearing, you and your Seattle bankruptcy should provide the Trustee (1) your most recent tax returns, (2) bank statements covering the date of filing, and (3) previous 60 days of paystubs as of the filing date.

If these documents are not provided timely, your case may be continued to a following hearing date; so its best to get these documents to your Seattle bankruptcy lawyer as fast as possible.

At the bankruptcy 341 hearing, which are usually scheduled every hour on meeting dates; you will be in a room of about 10 to 15 other individuals or couples who have recently filed. When the trustee calls your name, you will need to approach the front of the room, and provide a photo ID, and some ID that shows your social security number. Once this is done the Trustee will administer an oath to tell the truth, and you may sit down next to your attorney.

Bankruptcy 341 Hearing

Your bankruptcy 341 hearing will usually last less then 10 minutes

During the Meeting

There are some “canned questions” that everybody or almost everybody is asked:
With the help of counsel did you prepare and file a bankruptcy petition with this court?
Did you read the petition and did you sign it?
Are you aware of the contents?
Are there any errors or omissions?
Did you list all of our assets?
Did you list all of your debts
Do you have any domestic support obligations?
Have you made any payments on loans in the last 90 days?
Have you made any substantial gifts in the last year
Do you plan on keeping your car (if you owe money on your car?)
Have you ever filed for bankruptcy before?
Have you read the bankruptcy information sheet?
Additional questions may be asked by the trustee or administrator if your case is more complicated (if any funds may be distributed for example)
When the Trustee and Administrator have finished asking questions, the Trustee will ask if any creditors want to ask the filer any questions. In the vast majority of cases there will not be any creditors present. If no creditors have any questions, you will be excused. and the Bankruptcy 341 hearing is over.

After the Meeting
Creditors will have 60 days from the date of the 1st scheduled 341 meeting to make object to anything in the bankruptcy petition and/or to object to a discharge of their owed debts. In the case of Chapter 13s they have a limited opportunity to object to a plan.

The debtor will also need to complete a financial management class (sometimes called Debtor Education) before this 60 days are up or the case may be dismissed without discharge. If there are no objections from the Trustee or the creditors, discharge in a chapter 7 typically takes place about 15 days after the last day to object (about 90 days after the initial 341 hearing, or about 105 days after filing your petition).

Don’t be Frightened
The 341 meeting is extremely important, but in the majority of Chapter 7 cases; the hearing takes only a few minutes depending on when you are called; and is basically a relatively minor requirement towards discharge.

The purpose of the meeting is to ensure the debtor has been honest in his/her petition to the best of that petitioner’s knowledge. Issues can happen though, which is why hiring a Seattle bankruptcy attorney is very important.

Filers who do not do the necessary preparation (such as bringing their two forms of ID or did not make their documentation available to the Trustee) have to repeat their Bankruptcy 341 hearing. If you prepare and file everything correctly, the bankruptcy 341 hearing is often one of the easiest tasks that you have to do in your chapter 7 bankruptcy.

6 Grocery Saving Tips and Tricks

Grocery saving can be a big money saver for those at or below the median income lane. With rising costs and stagnant wages, every little bit can count to try and stave off bankruptcy, or get back on track after a bankruptcy. If you are currently going through a monetary crisis, conserving cash is probably at the forefront of your mind. After all, we all understand that every little bit assists, specifically when you are trying to work your way out of a hard financial circumstance.
Grocery Saving

Grocery Saving

When finding places to cut the spending plan, the majority of people fast to blame– and cut– the little splurges and treats they may be enjoying. While this is absolutely an excellent first step, it does not need to stop there. There are in fact a number of methods to conserve loan that require little to no sacrifice whatsoever. For instance, setting your thermostat a couple degrees greater in the summer season and lower in the winter most likely will not be seen at the time, however can wind up saving your family a fair bit of cash.
Additionally, there are a large number of ways to minimize your groceries without going hungry.
Below we have actually put together a list of our favorite methods to save money consisting of apps, preparation, and grocers.
Meal Plan.
Meal planning is an exceptionally essential step in saving loan at the grocery store. By planning around what you have on hand, you can reduce the variety of products you have to purchase. In addition, going into the shop knowing precisely what you will buy assists cut way back on impulse purchases.
Receipt Hog.
For an enjoyable way to make some present cards, consider downloading the Receipt Hog app. This app allows users to publish images of their receipts in exchange for points, which can be used to buy present card prizes. The little animal pig in the app especially likes grocery receipts, and will give extra points for those.
If you like this app, be sure to check out others like it, including Yaarlo and Receipt Friend..
iBotta.
Another simple-to-use app, iBotta offers money back whenever you buy items on the current list. Products might consist of such things as produce and milk, making it simple to conserve even if you don’t buy a lot of packaged or name-brand foods
.
ALDI.
Among the most convenient ways to get some fast grocery saving while grocery shopping is to acquire your food from ALDI. This national chain offers just about any item you may need at rates that are lower than other supermarket we have found. Since the store stocks mainly their own brand name, there is very little window shopping to be done, making it fast and simple to cut your grocery expense by as much as 50%.
Go Meatless.
Nearly everybody likes a great steak from time to time. However, eating meat is not in fact excellent for your body or the environment. On top of all that, meat is likewise among the most costly items on your grocery list. For all these factors, it makes good sense to avoid the meat a few times a week and consume something a bit more economical rather. Help with some grocery saving with this excellent tip.
Avoid Benefit Foods.
Pre-cut, pre-cooked, and pre-packaged items are all going to be more pricey than they probably ought to be. Cut the convenience foods from your list and see your bill as it drops dramatically. Frozen pizzas can be changed with homemade variations, chips can be divided into private containers by the kids, and fruit is easy enough to cut up on your own..
Using a few of these tips, we just know you can cut down on your grocery spending so you have more loan to put towards your financial objectives. These tips can help you both before and after a bankruptcy. As always, if you do have debt issues call a local Seattle bankruptcy attorney right away.

Wells Fargo Scandal Was Nothing Compared To What Others Are Doing Legally

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Wells Fargo

The Wells Fargo mess informed us that retail account experts want to cross the line in pursuit of their end-of-year perk. However there is an equivalent if not greater interest in cross-selling: loan officers who also use the hat of financial investment advisor.
Having a bank loan officer authorized to likewise cross-sell securities resembles holding a burning candle at both ends; eventually the bank will get burned. The phony accounts scandal at Wells Fargo reminded management that for a retail worker, life can be more about capital than ethics.
When a bank or a commercial bank employee is also a signed up representative for an affiliated or unaffiliated broker-dealer, she or he is described as a “dual-hat employee.” These hybrid functions have methodically expanded throughout the banking sector as banks and their holding companies have aimed to increase market share, deposits and revenues.
Bank bonus offer programs typically create rewards for industrial loan officers to secure investment deposits for the broker-dealer affiliate. This in turn develops a dispute of interest for dual-hat employees between their duties to the consumer as a banker versus their responsibilities as a signed up representative. It is not tough to see the misalignment of inspirations in between the two roles. Whereas a financial institution underwrites a customer’s monetary health and keeps an eye on repayment, a monetary adviser goes through suitability requirements– and, as laid out in recent pending Labor Department guidelines, fiduciary commitments.
This evident conflict of interest exposes the bank to claims of predatory banking practices, negligent guidance and portfolio mismanagement. These disputes in turn are magnified by the financial power and weight of “too big to fail” corporations, which have a concentrate on the bottom line that inevitably leads to a business culture that will breach these ethical duties.
That is, unless institutional regulators step up their game. Wells Fargo could easily happen again, and even worse, happens all the time already.
These inextricably linked customer duties find their origin in the Gramm-Leach-Bliley Act, which was signed by President Clinton in 1999 and rescinded provisions of the Glass-Steagall Act of 1933. The 1999 law removed the regulative wall in between insurance, banking and the securities organization. This not only made it possible for the merger of industrial and investment banking, but likewise determined business to connect depository services with broker-dealer services, even more blurring the line in between traditional bank services and financial investment services.
To stem the tide of what resulted– one-stop monetary retailers integrating insurance, mutual funds, deposits and check services, and greater exposure for the FDIC safety net– a 2006 law gone by Congress required regulators to embrace guidelines governing the activity of bankers and broker-dealers. To even more that law, the Financial Market Regulatory Authority implemented a guideline requiring both the clear recognition of who provides broker-dealer services on a bank’s premises and the partition of the broker-dealer services from the retail deposit activities of the banks.
Likewise, the Office of the Comptroller of the Currency has chimed in on dual-hat employees. The OCC’s Handbook on Retail Non-deposit Investment Products states, “A bank should ensure that RNDIP sales program policies and procedures resolve the viability standard despite whether the sales are conducted by the bank straight or through a broker-dealer.” The OCC even more provided this prescient message concerning compensation in the sales of RNDIP: “Sales agents engaged in incorrect sales practices might be focused on creating commissions without thinking about a client’s financial investment profile and needs. … Other unsuitable strategies might consist of misrepresenting RNDIPs and misleading or pressuring customers.”
Nevertheless, such regulations and policy declarations by FINRA and the OCC are just as good as their implementation and enforcement. This is where the regulators fail, leaving bank clients exposed to predatory bank practices, possibly misleading trade practices and unneeded investment risk.
Commercial loan officers with a Series 7 license– the basic accreditation for securities representatives– are being armed with a business card marked on one side as an industrial banker and on the other side as a monetary adviser, a handful of advertising literature for both the bank and broker-dealer, and a reward program that rewards them not just for booking commercial loans but likewise brand-new properties under management for the broker-dealer.
Management has actually blurred the line with payment programs for cross-selling by these dual-hat workers– where their ethical commitments under their FINRA securities licenses are deemed to be covered under the cloak of their loan officer designation. Their tasks to their consumers are possibly compromised by these disputes of interest.
Research study on financial investment literacy conducted by the Securities and Exchange Commission, in conjunction with the OCC, suggests that consumer confusion originating from this dual-hat staff member status extends throughout the monetary product “circulation channels.”
Is a business banker prepared to divulge that a mutual fund of the affiliate is not FDIC-insured when making a play to protect the client’s investment portfolio in conjunction with the industrial loan? Is a commercial loan officer taking steps to avoid connecting the pricing and approval of a commercial loan to the condition that the customer transfers a securities portfolio to the broker-dealer affiliate? How can risk management cut across a double regulative plan to secure the interests of the bank?
The possibility of tying or perhaps consumer scams is arguably more worrisome with these cross-sale relationships than the unapproved opening of bank and credit card accounts by Wells Fargo workers. With the Wells Fargo scandal as a cautionary tale, regulators should planning to restrict dual-hat workers to secure the general public and the stability of the financial system.

Credit Cards and Three Reasons to Ditch Them

Credit cards can get the better of even the most financial savvy of people. Even the most positive sounding local credit card companies are troublesome. While some proponents of credit cards claim they can be used responsibly, we at Johnson Legal Group say its not worth the risk. The brand-new year is a time to start over with a blank slate. It’s an ideal time to rid yourself of negativity and provide yourself a fresh new outlook on life.
Unfortunately, this can be hard to do with debt hanging over your head. In fact, waking up to find yourself in deep– and ever increasing– debt can make it hard to concentrate on much of anything.
Luckily, there is an escape of financial obligation, even when it is deep and seemingly limitless. Although it will likely be a journey, there are a lot of others who have traveled the exact same road to help you out along the way. Most importantly, the liberty from debt discovered at the end of the roadway is well worth all your hard work.
The initial step on your journey to debt-free living is to ditch the charge card. Do not toss them out completely until they are settled, however do freeze them in a large block of ice, hand them over to a reliable family member to keep out of your reach, or conceal them from yourself in a place that is really bothersome to obtain to. This will keep you from utilizing them without a great deal of idea initially.
Here are 3 reasons you simply must stop using your credit cards.
Credit Cards are dangerous

Credit Cards are dangerous. Getting rid of them is a great way to avoid the hassle they can pose.

Credit Cards are Designed to Keep You in Debt

Charge card business want you to be in debt. They literally flourish off of your financial obligation, when you handle to work your escape of debt, they lose out on the unbelievable amount of interest you had actually been paying up until that point.
For this reason, these companies actually set things up so that an individual making the minimum payment and continuing to use the card every month would actually never ever work their escape of financial obligation. Even an individual with a relatively little financial obligation of around $4.000 would need around 15 years to settle that debt when paying only the minimum amount.
 

Using Credit Cards Will Only Make Your Scenario Worse

Clearly, because of the financial obligation carousel the charge card companies have put you on, continuing to utilize your credit cards definitely will not help matters. In fact, using your cards, even if you are getting some sort of reward for doing so, will without a doubt make your financial obligation situation worse.
 

Having Credit Cards Around is Too Tempting

Bring a credit card in your wallet, specifically when you are accustomed to utilizing the cards for anything and everything, resembles bring a little bit of temptation in your pocket at all times. Resisting the urge to utilize the card when you encounter a product you ‘d actually prefer to have takes an extraordinary amount of determination, and if you find yourself unable to resist, you just set yourself back even more.
For this reason, it is much better to obtain that card out of your hands and focus on having a good time without investing money. Instead you could learn to invest that money wisely.
Conclusion
We hope this post has actually inspired you to provide yourself a brand-new financial start this new year. By working your escape of debt and staying that way, you give your household and yourself the priceless gift of flexibility. If you feel you do want a credit card solely for your credit rating, find one with no annual fees and no hidden fees for non-use; and then bury them in the back yard and forget about them. If you cannot afford something, don’t buy it. Figure out how you can afford it first.
If you are having trouble with credit card debt and are located in our area, call and talk to a Seattle bankruptcy attorney today.

 

Divorce and Bankruptcy

Divorce and bankruptcy are often intertwined. Individuals file for declare personal bankruptcy for various reasons. Those factors are frequently more intricate than just being unable to make ends meet. Usually, there is another life occasion that is putting stress on home finances.
Divorce and bankruptcy often go hand in hand

Divorce and bankruptcy often go hand in hand

Many times, monetary difficulty and the requirement for bankruptcy relief are induced by a stopping working marital relationship. Or, it may be the other way around– financial concerns may have resulted in the breakdown of the relationship.
Personal bankruptcy cases that include a pending or recent divorce need to be analyzed closely by a personal bankruptcy attorney. You must be aware of the potential issues a divorce can have on your bankruptcy case or, vice versa, that the bankruptcy could have on your divorce case. While I can not perhaps cover every issue in between divorce and bankruptcy in a short article, I will explain a couple of typical concerns I typically come across in my workplace listed below.
 

Personal bankruptcy or Divorce: Which Should I Do First?

Probably the most typical concern I receive from a possible client that is thinking about divorce and personal bankruptcy is, “Which should I do first?” Sadly, most of the time, the answer to this concern is, “It depends.”

In order to identify whether divorce or insolvency need to precede, you ought to meet with a certified lawyer. Talk with your insolvency attorney about how you plan on dissolving the marital relationship. Is the divorce going to be uncontested (or agreed upon)? Or exist concerns that will be objected to (or need lawsuits)? Of course, things may show up in the divorce case that may alter this plan, but you should still have this discussion with your bankruptcy lawyer.

If you are pretty positive that your spouse will not agree to the best ways to divide possessions and debts, and it appears lawsuits can not be avoided, the first thing you need to do is hire a competent divorce attorney as soon as possible. In my opinion, having counsel in both the bankruptcy and divorce is vital to the success in both cases, particularly when the divorce is going to be objected to. You need to be getting sound suggestions on both cases and having lawyers that can interact with one another can be really advantageous for you.
How Will Assets and Debts Be Divided?
 
Another problem you have to think about when going through a divorce is “How will we divide our assets (and debts)?” A divorce determines how marital properties such as real estate and personal effects will be divided. A final decree of divorce will likewise dictate what debts each spouse will pay. If spouses owe a joint debt (for example, a vehicle loan or a charge card you may have together), the divorce decree ought to state which spouse is accountable for paying that debt. It is very important to note: if a partner is purchased to pay a debt pursuant to a final decree of divorce, that commitment becomes a financial obligation he or she can not discharge in a subsequent bankruptcy filing.
11 U.S.C. Area 523( a)(15) is the section of the Personal bankruptcy Code that states this exception to discharge of a debt owed to a partner or previous partner sustained in the course of a divorce. This exception from discharge is only enforceable by the spouse. The creditor to whom the financial obligation is owed still can not gather from the bankrupt partner. Nevertheless, here’s a typical scenario: Let’s state you are assigned to pay a joint credit card debt per your divorce decree and hold your previous partner harmless. You then file insolvency. The credit card lender then tries to collect from your partner on that joint financial obligation that you were decreed to pay as part of your divorce. To the extent that your ex-spouse sustains actual damages from the collection (i.e. garnished salaries), she or he would can file an action in the court where the divorce was completed looking for those damages, court costs, and attorney charges from you.
When a customer tells me they have recently separated, I constantly ask to see a copy of the last decree of divorce to see if the possible customer assumed any financial obligations pursuant to the separation. If they did, then this arrangement of the Personal bankruptcy Code would apply and the client frequently has to keep paying that specific debt completely to prevent a prospective action by their former spouse.
Declare Insolvency as Single or Joint.
Another typical situation I see related to divorce and insolvency is when a possible client and his/her partner are not yet separated however likely will be separating quickly. The question I get in this circumstance is: “Should we file personal bankruptcy together or individually?” Though it varies case by case, it is in some cases recommended for a couple to go on and submit a joint bankruptcy before they go through with the divorce.
One need to go ahead and file is that it usually will conserve you money related to court costs and attorney costs. A joint bankruptcy case normally costs the same as an individual case. Filing together can also take away the issue of the exception from discharge explained above if the celebrations owe joint financial obligations; if you both discharge your liability in bankruptcy then there is no party left for the creditor to collect from, rendering the assumption of that debt moot for separation functions. Frequently filing for bankruptcy together before a divorce, can pave the way for a much smoother and less expensive separation proceeding.
There are many other methods which divorce and personal bankruptcy communicate and I stumble upon distinct scenarios all the time. If you’re considering insolvency, make certain you mention to your attorney if you have actually recently divorced or might be separating soon so that the attorney can go through the possible impact of that divorce on your bankruptcy and the prospective impact of the personal bankruptcy on the divorce. Going through a separation is difficult, but the process can be earned less difficult with the best monetary advice.

Thanksgiving on a budget

Thanksgiving

Thanksgiving doesn’t have to break the bank


Thanksgiving Smart

Thanksgiving supper can be expensive to place on the table can add up fast! From picking out the best turkey to feed your whole household to a buffet line of sides to please everybody’s favorites, you may find that your budget plan is quickly extended to the snapping point.
By following a couple of basic principles, nevertheless, you can make your Thanksgiving dinner occur on a tighter spending plan.

Choose Your Meal Thoroughly.

Make the effort to thoroughly choose the dishes you’ll be serving at Thanksgiving. There are plenty of methods to put a delight in the table without overspending! These consist of:
– Concentrating on dishes that you understand the majority of the family will consume. If no one really eats the cranberry sauce or you’re the only person who loves Grandmother’s dish for creamed spinach, do not hesitate to leave those products off of the dinner menu this year.
– Selecting seasonal veggies instead of those that run out season for cheaper side meal alternatives.
– Limiting the meal to exactly what you’ll really consume. Do not put a meal for 30 on the table when you’re just feeding 10. Calculators like this one will make it simpler to choose precisely what you need.
– Preparing dishes for the kids that you know they’ll enjoy. If your child won’t eat turkey or your cousin’s boy is notorious for just eating peanut butter sandwiches, don’t include them in the count. Instead, prepare kid-friendly foods for them: a cheese and cracker tray, a tray of raw veggies, or a fruit salad, for instance.
– Cooking from scratch instead of depending on boxed mixes or pre-prepared sides..
Maximize Leftovers.
No matter how carefully you get ready for the meal, you’re probably going to wind up with leftovers. Luckily, there are a lot of recipes that will allow you to consume those leftovers, stretching your food budget for the next numerous weeks. Do not simply stop at turkey sandwiches for lunch every day! Rather, get imaginative with your Thanksgiving leftovers. Think about:.
With a little careful planning, you can make your Thanksgiving leftovers stretch well into the next week or more. Bear in mind that shredded turkey can replace chicken in lots of recipes, while leftover vegetables make a great filling for soups and stews. If you understand your household won’t be able to take care of the Thanksgiving leftovers prior to they go bad, think about freezing them into casserole type.
Choose the Right Active ingredients.
Before you head out to buy the active ingredients for your Thanksgiving meal, think about the components you actually require and what state you need them to be in. For example:
Rate compare frozen, canned, and fresh veggies to see what will get you the very best rate.
Take a look at the price for turkeys at a couple of regional supermarkets so that you can snatch one up when they’re on sale. Grocery store turkeys are often much cheaper than others you’ll find around town.
Check your cabinets for active ingredients you currently have. There’s no sense in including half a dozen herbs to your list when you currently have them in the cabinet.
Examine your dishes to see where you can do without. Is milk a reasonable alternative to whipping cream because dessert? Can you manage with water and a little additional salt instead of broth in your stuffing? A few cut corners can go a long way toward reducing your Thanksgiving spending plan.
As Thanksgiving techniques, take the time to analyze how you wish to manage the vacation. Make your wish list ahead of time, analyze your options, and be sure that everything you need fits into your existing budget plan. Do not be ashamed to admit that you can’t do it and call it a dinner meal, either!
Sharing the financial burden with friends and family is a great method to make sure that your Thanksgiving spending plan will stretch even more while still supplying everyone with their preferred vacation dishes. If you need more assistance managing your finances around this busy holiday season, contact us today to discover how we can help.