Articles Tagged with Detroit Bankruptcy

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I keep my house if I file bankruptcy?”


New York State’s Court of Appeals ruled on Thursday that rent-stabilized leases are a public benefit and therefore cannot be seized as assets of persons who are going through bankruptcy.

Court of Appeals NY Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Debt AttorneyRent-stabilized leases allow millions of tenants in New York City and elsewhere to make rental payments based on their income as opposed to market-based rental prices. In many cases, state or municipal authorities make up the difference, rendering payment to landlords who agree to certain terms and conditions regarding protections for rent-stabilized tenants.

The case in New York arose when an 80-year-old widow named Mary Veronica Santiago filed for bankruptcy after amassing—in relative terms—a small credit card debt. In essence, Mrs. Santiago’s lease was “grandfathered” by a succession of landlords, who allowed her to continue to pay $703 per month to rent the apartment where she has lived for over 50 years.

During that time, the market value of renting the apartment rose as high as three to four-thousand dollars per month. Mrs. Santiago qualified for one of New York’s rent stability programs, and her rental agreement was subject to its terms.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 7 Bankruptcy?”


Bank of America has litigated its objection to the discharge of second mortgages in Chapter 7 bankruptcies all the way to the United States Supreme Court.

Bank of America Charlotte Mecklenburg Chapter 7 Lawyer North Carolina Chapter 13 AttorneyBanks loan money to people who then use the money to buy a home. In exchange, the borrowers agree to repay the money, and if they do not, their lenders can take possession of their home through a process called foreclosure. Some homeowners take out second mortgages. Many of these second mortgages are called “home equity lines of credit” and are reserved for borrowers whose home value exceeds existing or countenanced loan amounts.

Although lenders in second mortgages have the right to foreclose on properties if borrowers default, their rights are secondary to those of first-mortgage holders, meaning if borrowers go bankrupt, second mortgage lenders often lose their lien rights on a property.

In the run-up to the Great Recession, which officially ended in 2009, home values in states like Florida, New York, Nevada and California became inflated, and millions of borrowers undertook mortgage loan obligations that exceeded the value of their homes, once the housing market “corrected” and housing values began to tumble.

This left many borrowers “under water” on their mortgages, meaning that even if they sold their homes for full value, they would still owe money on their mortgages.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 11 Bankruptcy?”


A Texas bankruptcy court ruled late last month on two issues that commonly arise in business reorganization bankruptcies—also known as Chapter 11 actions.

Plumbing Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Chapter 11 AttorneyThe issues concerned the notice due to putative creditors who are doing business with a company at or shortly before the time a company enters bankruptcy, as well as the effect a subsequent bankruptcy discharge has on claims later brought by creditors.

The case involved a plumbing company named AMPAM Power Plumbing L.P. The company filed for bankruptcy in 2003 and sought to reorganize its business under Chapter 11 of the Bankruptcy Code. Chapter 11 reorganizations must be approved by a bankruptcy court. AMPAM’s reorganization was confirmed on July 30, 2004.

Before AMPAM’s bankruptcy confirmation, the company entered into a contract with Capstone Building Corporation. Capstone hired AMPAM to provide plumbing services on a construction project at a university. The work was largely complete by August 2004, and Capstone issued a certificate of substantial completion.

Nearly seven years later, on February 16, 2011, Capstone became aware of issues related to AMPAM’s plumbing work on the project. It sued AMPAM in state court, seeking contractual indemnity and contribution, or reimbursement for damages it paid out on claims that it alleged resulted from AMPAM’s work.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I buy a home after bankruptcy?”


Many prospective borrowers emerging from financial hard times after personal bankruptcies peaked in 2010 are seeking to reenter the housing market. Experts caution borrowers from rushing into a mortgage too soon after bankruptcy and having to pay a high rate of interest on a loan.

FHA Home Loan Charlotte Bankruptcy Attorney Mecklenburg Debt LawyerThe better a person’s credit score, the more competitive interest rate a person can get on a mortgage loan. People who go through bankruptcy usually exit the process with credit scores in the low 500s.

Credit expert John Ulzheimer of cautions that while borrowers with minimum scores of 620 can qualify for mortgages, these loans can come with steep price tags, or high interest rates. Ulzheimer said prospective borrowers need a minimum score of 680 to qualify for truly competitive interest rates.

Looking at the 680 number, many borrowers who have exited bankruptcy may ask: How do I get there from here?

Personal bankruptcies stay on a person’s credit report for 10 years. That does not mean, however, that it takes 10 years to rebuild a person’s credit to a point at which one may qualify for a mortgage.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get credit after filing personal bankruptcy?”


City council members in cash-strapped Harrisburg, Pennsylvania knew what was on the line when they considered five applicants to replace the city’s previous treasurer, who resigned in August after being accused of stealing $8,500 from the Historic Harrisburg Association.

Harrisburg PA Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Debt AttorneyCouncil members failed to ask accountant Timothy R. East—the candidate they chose—whether he had ever gone bankrupt, and East did not tell members he filed for Chapter 13 bankruptcy in June 2011. A federal court dismissed East’s bankruptcy last year after he fell short on required payments, but the court reinstated bankruptcy protection in January after East caught up on his obligations.

Harrisburg’s treasurer must be bonded, and city officials are waiting to hear back from insurance companies who may be leery of taking a chance on a treasurer who has already declared personal bankruptcy. A bond is an insurance policy the city takes out to insure itself against potential losses caused by the treasurer.

The previous treasurer—John Campbell—was executive director of a charity that was supposed to raise funds to replace the city’s broken light poles. Campbell stole the money to pay for medical and college expenses, according to the Dauphin County District Attorney.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Are my 401k and IRA protected in bankruptcy?”


If you thought becoming a best-selling author would end your money troubles, ask Zane. The 47-year-old best-selling author and Washington, D.C.-native is now known as Maryland’s worst tax cheat.

Reading a book Charlotte Bankruptcy Lawyer North Carolina Chapter 7 AttorneyThe State of Maryland says Zane—whose real name is Kristina Laferne Roberts—is the Old Line State’s top tax cheat. Maryland’s Comptroller, Peter Franchot, said in January that the author owes the state $341,000 in back taxes. The state has been trying to collect taxes from her since 2003. The federal Internal Revenue Service said in court filings in 2010 that Zane owed some $541,000 in federal income taxes.

The Treasury Department placed a tax lien on Zane’s house in 2010, when the author faced foreclosure after falling 79 days behind on her mortgage payment. Zane eventually settled the foreclosure case and kept her home.

She did not leave financial troubles behind, however, as the Washington Post reports. In June, the author filed for bankruptcy in the United States Bankruptcy Court for the District of Maryland, listing assets of $1.4 million and some $3.4 million in liabilities.

Zane is the author of more than 30 books, including her most popular selection, Addicted. A feature film based on that book opened in theaters this past weekend. Zane declined to comment on her financial woes during television appearances to promote the movie.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Are my 401k and IRA protected in bankruptcy?”


Detroit is not the only bankrupt city in the United States. Detroit’s municipal bankruptcy may be the largest of its kind, but the decision United States Bankruptcy Judge Christopher Klein made yesterday in Stockton, California’s bankruptcy may impact millions of workers as well as investors and municipalities across the United States.

Stockton California Mecklenburg Bankruptcy Lawyer North Carolina Chapter 13 AttorneyIn what the Wall Street Journal hails as “a landmark decision,” Judge Klein ruled that Stockton could sever its ties with California’s Public Employees’ Retirement System. He cited a section in the Bankruptcy Code that provides that bankrupt cities and companies can break contracts. It is one of bankruptcy law’s core powers, and through it, Judge Klein said, “Pensions could be adjusted.”

City employees and their employers, over time, can set aside money—usually tax exempt—for employees to use for their future benefit, usually after they retire. The terms of a pension—and how much an employee expects to see returned to him or her over the course of a retirement—are set forth in a contract between a city and its employees. Most cities—Stockton included—engage a third party to invest the pension money and obtain the best possible return on it.

California’s Public Employee’s Retirement System is in charge of retirement money for most municipal workers in California, controlling some $294 billion in assets. Stockton contributes about $30 million per year to the fund. The retirement system argued in Stockton’s bankruptcy that pension payments to workers are guaranteed by California state law and could not be cut. Judge Klein disagreed.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is a bankruptcy discharge ?”


An expert appointed by a U.S. Bankruptcy Judge will be paid over $500,000 for services rendered in April and May in connection with the City of Detroit’s bankruptcy. Detroit is struggling to figure out how to address a staggering $18 billion debt.

Detroit Skline Charlotte Bakruptcy Lawyer North Carolina Debt AttorneyJudge Steven Rhodes named Boston-based Phoenix Management Services—headed by Marti Kopacz and an eight-person staff—as his expert witness in April. Kopacz and her team were ordered to prepare a report analyzing whether Detroit’s debt-management plan is feasible and whether financial forecasts and projections used by the city were reasonable.

Rhodes approved payments to Kopacz and her team of $101,370.71 and $334,882.58 for work done in April and May. In addition, he ordered the city to reimburse Phoenix $53,632.98 for expenses in May and $24,849.87 in fees and expenses incurred by Kopacz’s lawyer.

So far, Detroit’s bankruptcy has cost taxpayers more than $36 million. The point, the city says, is to save billions of dollars by dealing with long-term debt through bankruptcy. Emergency Manager Kevyn Orr produced a debt-adjustment plan that would reduce retiree pensions and make deep cuts in debt owed to bond holders. A federal mediator announced late Tuesday that Detroit’s largest police union backed the plan.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”


Though most people have heard of Chapter 7 bankruptcies (known as liquidation bankruptcy) and Chapter 13s (used to restructure debts), Chapter 12 bankruptcies are far less common. To find out more about what a Chapter 12 bankruptcy is and how it is used, keep reading.


Number 12 sign Charlotte Chapter 12 Bankruptcy Lawyer North Carolina Debt AttorneyWhat is a Chapter 12 bankruptcy?


Chapter 12 is actually one of the newer categories of bankruptcy and was only formally made permanent in 2005. Chapter 12 is used specifically for family farmers and family fishermen. Chapter 12 is similar to a Chapter 13 in that it allows the restructuring of a person’s debts to avoid liquidation or foreclosure.


Who is eligible for a Chapter 12 bankruptcy?


Very few debtors are actually eligible to file Chapter 12 bankruptcy and in 2011, the most recent year that numbers have been made available, only 630 of the overall 1.4 million bankruptcies filed in the U.S. were for Chapter 12 cases.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Does Bankruptcy stop foreclosure?”


One of the things most people considering filing for bankruptcy are confused by and concerned with is the meeting of creditors. The name can seem ominous, implying that the debtor is placed on a chair in the center of the room and then picked apart by angry lenders. The reality is, thankfully, far more boring.


contemplating woman Charlotte Debt Attorney North Carolina Bankruptcy LawyerWhen does the first meeting of creditors happen?


Once you officially file for bankruptcy you will receive a notice from the bankruptcy court informing you that the case has begun. This letter will typically appear about a week after you first file. In the letter, the date and time for the first meeting of creditors will be found. The meeting itself is usually scheduled a few weeks after the letter is delivered, ensuring that the process moves along at a relatively fast pace.


What is the meeting about?


The meeting of creditors is also known as a 341(a) meeting and it exists so that the bankruptcy court trustee, as well as your creditors, receive an opportunity to ask you questions under oath. This allows creditors to get a more complete understanding of your overall financial picture and clear up any confusion that may exist regarding your bankruptcy filings.

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