During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.
The delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association.
Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and because the value of the homes, the collateral backing the loans, has often disappeared.
The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up.
When houses doubled in value, middle class homeowners making $80,000 a year were taking out $300,000 home equity loans for new cars and boats. Now, with no home equity, the chances are pretty good of walking away and not having the bank collect.
Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same, with combined write-offs of $7.88 billion in the first quarter.
Even when a lender forces a borrower to settle through legal action, it can rarely extract more than 10 cents on the dollar. People got 90 cents for free (more or less). But the borrowers argue that they are simply rebuilding their ravaged lives. Many also say that the banks were predatory, or at least indiscriminate, in making loans, and nevertheless were bailed out by the federal government. Finally, they point to their trump card: they say will declare bankruptcy if a settlement is not on favorable terms.
When filing for bankruptcy in New York it is essential to know the law or to seek qualified legal help from a professional attorney. Since each state regulates bankruptcy issues finding out what you can and cannot exempt from the bankruptcy under the laws is key in being able to keep the property that is legally yours. Having accurate information regarding bankruptcy in New York will also ensure that there are no appeals on your exemptions that can delay the hearing.
Many of the exemptions from bankruptcy in New York state are similar to other those outlined in other states. There are also federal supplemental exemptions that can be used with the exemptions from the state. The following are included as exemptions:
In the state debts such as student loans and payment of child support cannot be discharged by the bankruptcy. In addition power companies such as Con Edison cannot stop power service just because of a bankruptcy filing when you own on their bill. They may require a security deposit on the account before they will continue to supply electricity.
In New York there is no requirement for an individual or business to exhaust all of their assets and resources before filing for bankruptcy. Often people mistakenly believe that you have to be completely liquidated before filing. In the state of New York this is certainly not the case, however you may have to file Chapter 13 bankruptcy with requires that the individual pay back a part of the debt owed to the creditor as part of the bankruptcy order.
It is essential to speak with a bankruptcy attorney – Ryan & Schwarz/LLP - that is familiar with New York bankruptcy laws before filing for Chapter 7,11 or 13. There are differences between the types of bankruptcies available that will have both short and long term effects on your credit rating and even perhaps on your employment options. With qualified legal advice you can make the right decisions with regards to bankruptcy and also get what you are entitled to under the law.
On October 17, 2005, the new wide sweeping bankruptcy law went into effect, forever changing the process of filing for bankruptcy throughout the United States. This new shift in law requires additional steps to be taken by the attorney and the debtor but has been geared toward benefiting the debtor. The following details explain the changes in the law and how they will affect anyone considering bankruptcy.
Documentation
The documentation required for filing for bankruptcy has been increased, asking the debtor to provide additional information thoroughly detailing all of their income and expenses. If expenses exceed the IRS allowance, a ‘special circumstances’ document must be submitted explaining the reasons for the extra expenses. A statement of accuracy must also be submitted with the special circumstances document. The additional documentation makes the task of filing take more time but provides more accuracy to a debtor’s financial dilemma. This could result in more debt relief.
Counseling
In an attempt to decrease the number of people filing for bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing for bankruptcy. The purpose of the counseling is to ensure that people are not making an uninformed decision to file for bankruptcy. It is also the hope of the court that counseling will provide alternative options for those who truly don’t need to file.
The Means Test
Before the new law, consultations with an attorney would allow the client to choose what type of bankruptcy they felt suited them best. However, the new law is framed to reduce the number of Chapter 7 filings by only allowing people who fall under their median income for the state in which the filing is made (adjusted for family size and inflation), and people who meet rigorous standards under the means test to file for it. The rest of the people who don’t meet these standards must be evaluated by a series of complex, mathematical formulas that change annually to match new median incomes and expense standards. Clients who do not qualify through the means test will be required to file for Chapter 13 bankruptcy. The new law also extended the Chapter 13 term from a three- to five-year term, to a mandatory five-year term. Throughout the mandatory five-year term, the client must be supervised and represented before they can receive their discharge.
The effects of the new law make the process of filing for bankruptcy more complex, requiring attorneys to specialize in bankruptcy law. To completely understand how the new bankruptcy laws in your state can impact your debt and affect your life, speak with a local bankruptcy lawyer.
Unemployment, garnishments, and repossessions can happen to anyone. When bad things happen to good people, and you are filing for bankruptcy in New York, the bankruptcy attorneys at Ryan & Schwarz/LLP. Stop the harassment, the worry, the financial stress. For a free same-day consultation, call 845-357-7700.
Despite rumors to the contrary sweeping Wall Street and Washington, D.C., the White House says it is not planning to order Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of people who owe more than their homes are worth.
“The administration is not considering a change in policy in this area,” said Treasury spokesman Andrew Williams.
Mortgage bond prices stabilized after that rumor was quashed. Let’s see what effect, if any it will have on the number of bankruptcies filed.
Source: Reuters News (08/05/2010)
City marshals intending to evict Francis Blackman, 55, from her St. Albans, New York home found their efforts were thwarted due to an organized effort to bring Blackman’s plight to the attention of city officials. After numerous phone calls were made to protest the eviction a temporary stay was granted. Blackman, who recently began bankruptcy proceedings, feels that she is only one of many in the southeastern Queens, New York area facing foreclosure due to foreclosure scams.
Blackman admits that in 2006 she and her stepmother fell behind in making payments on the $180,000 mortgage they held on their St. Albans home. Blackman asserts that she was instructed to sign over the deed to a woman who identified herself as a foreclosure specialist. According to city property records the deed was signed over to Orit Tuil and the original mortgage was repaid. However $405,000 worth of mortgages was subsequently taken out by Tuil who transferred the deed back to Blackman for $550,000 and a monthly payment of over $5,000.
Unable to keep up with the payments, Blackman found herself facing foreclosure. Since many of her neighbors were also dealing with various aspects of the mortgage crises she turned to them for advice and assistance. Blackman and nine other homeowners in the area have formed a group to help each other and to bring attention to the problems they are facing.
In case you confused “Real Housewives of New Jersey” with a PBS documentary, court documents filed by Teresa Guidice and husband Joe put to lie a few elements of the show’s second season.
The New York Post revealed over the weekend that the Giudices have filed for bankruptcy and owe $10.85 million. According to court papers we obtained today, they have $8.7 million in liabilities. They filed on Oct. 29, in the midst of filming the second season, and in the court papers, the Giudices stipulate that in the six months prior to filing for bankruptcy, they were briefed about credit counseling opportunities and performed a budget-related analysis.
Yet we see Teresa dropping $1,965.80 on clothes for her daughters at a Franklin Lakes boutique and presenting oldest daughter Gia with a mini-ATV (but not a helmet) at her lavish 9th birthday party, all of which occurred before the bankruptcy filing (in which she says she spends $400 a month on clothes). Later in the season, the Giudices throw an over-the-top christening party and they and some of their fellow housewives jet off to Venice, Italy.
UPDATE: Teresa blames bankruptcy filing on bad economy
The court papers show that the Giudices’ assets include $2.2 million in real estate — $1.7 million for the lavish Towaco home seen in the series, and the remainder for a small house in Lincoln Park and a beach house in Stafford. But all of the homes have mortgages — in the case of the small homes, several mortgages — which exceed the value of their homes. (We indeed had an inkling of financial troubles last fall, when foreclosure proceedings were started on the Lincoln park house.)
The Giudices also owe $6.1 million to various and sundry banks, credit card companies, utilities, law offices, and construction outfits, plus nearly $20,000 to Bloomingdale’s, Nordstrom and Neiman Marcus, and about $12,000 to an in vitro fertilization clinic — so apparently there’s no need for Joe to get a vasectomy, as Teresa was filming requesting.
According to the filing, Joe nets $3,250 a month as owner of his stone and stucco company plus $10,000 a month in loans from his family, while Teresa makes $3,333 a month from Bravo.
Read the original article here:
http://www.nj.com/entertainment/celebrities/index.ssf/2010/06/real_housewives_of_new_jersey_57.html
The pace of U.S. bankruptcy filings were up in May to the second-highest daily level since 2005. There were 133,459 U.S. bankruptcy petitions filed in May, 10 percent more than a year earlier, according to preliminary data released Thursday by Automated Access to Court Electronic Records, or AACER. Average filings per day edged up to 6,673 from 6,646.
Exemptions for personal property, that is what the bankruptcy trustee will allow the debtor to keep after discharge are found in New York State law and not the U.S. Bankruptcy Code. Underneath Section 522 of the U.S. Bankruptcy Code, a consumer domiciled in New York can exempt solely personal and real property exempt underneath Section 5205 and Section 5206 of the New York CPLR, Section 3212 of the New York Insurance Law, and below New York Debtor Creditor and Law Section 282.
Here are 10 vital New York bankruptcy exemptions you need to know before filing for Chapter 7 bankruptcy:
1. One motor vehicle not exceeding $400 in worth on top of liens such as automotive loans;
2. Your right to receive social security edges, unemployment compensation
3. Your right to receive a native public assistance benefit;
4. Your right to receive veterans’ edges;
5. Your right to receive edges for disability, illness, or unemployment;
6. Your right to receive alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
7. Your right to receive all payments under a stock bonus, pension, profit sharing, or similar arrange or contract on account of illness, disability, death, age, or length of service except beneath bound circumstances;
8. Your right to receive award underneath a criminal offense victim’s reparation law;
9. Your right to receive payments for wrongful death of a parent or guardian;
10. Your right to receive up for $seven,five hundred for compensation in connection with a pending personal injury lawsuit; and
11. Your right to receive payments in compensation of loss of future earnings.
The New York bankruptcy exemptions are necessary when determining the impact that filing for bankruptcy can have on you.
These exemptions can have a significant impact on the debtor’s life post-discharge. Sadly many individuals who file Chapter 7 do not take the time to figure out what personal property they may keep and end up losing assets that that they’d otherwise been in a position to keep.
Despite optimistic news about job growth in New York State and the prospect of a increasing commercial real estate sales, the market’s recovery could be delayed by a large amount of vacant office space that would normally be sublet or otherwise absorbed in a healthy market.
Nearly 18 million square feet of unoccupied office space in Manhattan has not been factored into the market’s vacancy rate. This so-called shadow space consists of individual desks as well as entire floors that are empty after layoffs and consolidations. Because these vacant areas are not for rent, they are not recorded anywhere and so are hard to pinpoint. As the economy improves and employment picks up, tenants will spend the next several years backfilling these shadow spaces before venturing into the leasing market. That will postpone a rise in commercial rents and drive down building values.
Entering a Big 4 Firm is a lot like entering a secret society or fraternity. There are traditions and secrets that are shared by the members and passed down to new recruits. This feeling of comradery and heritage is one of the most special parts of working for a Big 4 firm and what separates the experience from working for a regional or local firm.
As you begin your journey, it will do you good to learn a bit of the history of these firms. Knowing where these firms have been will help you understand the role that you will be taking on as a new recruit and the legacy you will continue.
While you will most likely not be held responsible for this information in an interview, learning these basic facts will provide you with an easy way to impress the Big 4.
PricewaterhouseCoopers (aka PwC, “P Dubs”)
The history of PwC dates back to the 19th century London. Samuel Lowell Price, the son of a Bristol stone potter, was born in 1821. Entering the accounting profession at an early age, Price was a member of several smaller firms before striking out on his own as a sole practitioner.
Meanwhile, a young English accountant, Edwin Waterhouse (b. 1841), was making a name for himself. The son of lucrative mill-owning parents, and brother to Alfred Waterhouse, a prominent London architect, Edwin rose quickly in the ranks to the London accounting elite.
Around this time, another accountant by the name of William Cooper established a rival firm in London with his three brothers. Across the ocean in the U.S., William Lybrand and others created yet another firm. These firms merged in 1957 into what would be known as Coopers and Lybrand.
Price and Waterhouse joined forces in 1874 to create Price, Waterhouse & Co. The firm became well-known as one of the finest in London and eventually opened their first U.S. office in 1890 in New York. The firm began to establish separate partnerships across the globe.
In 1998 Coopers & Lybrand merged with Price Waterhouse to form, PricewaterhouseCoopers. The firm now employs over 146,000 people in 150 countries and had worldwide revenues of $28 billion in fiscal year 2008.
Deloitte Touche Tohmatsu (aka Deloitte, D&T, Deloitte & Touche)
Back to London….let’s meet William Welch Deloitte. Born in 1818, Deloitte was the grandson of Count de Loitte, an expatriate of France who left during the French Revolution. Deloitte was a quick learner and began his career at the age of 15 in the bankruptcy courts of London. Deloitte opened his own office at the age of 25 with a focus on the railway industry. In fact, Deloitte was employed as the first external auditor EVER appointed and developed a system of safeguarding records to protect investors.
Deloitte would go on to become president of the Institute of Chartered Accountants and open a U.S. practice in 1893.
Sir George Alexander Touche (b. 1861), an accountant from, you guessed it…London, opened a practice in 1899. He later spread the practice to New York, capitalizing on the growing demand for income tax preparation.
Over the course of the 20th century, Deloitte and Touches’ separate firms merged with a number of other firms in various markets. One of the key mergers was the combination of Touché Ross (as it was then known) and the Japanese firm, Tohmatsu Awoki & Co in 1975.
In 1989, the firm then known as Deloitte Haskins & Sells broke up. The majority of the individual partnerships that had made up the firm, including the U.S. piece, merged with Touché Ross to form Deloitte & Touché. Some of the smaller partnerships that were against the merger of Touché Ross merged with Coopers & Lybrand. In 1993 the firm was renamed to Deloitte Touché Tohmatsu, due to the growing influence of the Japanese brand.
The firm now employs over 165,000 people in 140 countries and had worldwide revenues of $27.4 billion in fiscal year 2008
Ernst & Young (aka E&Y, EY)
As is the case with PwC and Deloitte, E&Y in its current state is a result of a series of mergers. One difference with E&Y, however, is that the major players and namesakes of the firm are American rather than British. In 1903 an accounting firm was formed in Cleveland by brothers Theodore and Alwin Ernst. In 1906 the firm Arthur Young & Co. was established in Chicago. These two firms individually joined forces with well-known British firms. Ernst merged with Whinney Smith & Whinney and Young joined forces with Broads Patterson & Co. In 1989, the successors of these firms merged to create what we now know as Ernst & Young.
The firm now employs over 137,000 people in worldwide and had revenues of $24.5 billion in fiscal year 2008
KPMG (aka Klynveld, Peat, Marwick, Goerdeler)
By now I’m sure you can see a pattern here: two or three dominant US and British firms join forces, go through a series of mergers and achieve world-wide status. KPMG is no different. The key information to note is the following:
Prominent British Founder – William Barclay Peat (b. 1852)
Key Mergers:
William Barclay Peat merge with Marwick Mitchell Co. (1911) to form Peat Marwick Mitchell & Co.
Thomson McLintock firm forms a group of independent European firms known as KMG (1979)
KMG and Peat Marwick Mitchell & Co. join forces in largest accounting firm merger to date to form KPMG (1987)
Renamed to KPMG Peat Marwick (1991)
Renamed back to KPMG (1995)
It is interesting to note that KPMG and E&Y were all but ready to merge in 1997 as a power play against the merger of Price Waterhouse and Coopers Lybrand. However, this merger eventually fell through.
The firm now employs over 123,000 people in worldwide and had revenues of $19.8 billion in fiscal year 2008.
Phew….that is all for the history lesson. The common theme here is that these firms are all founded by the best and the brightest of their time. The accounting profession as we know it today would not be what it is without good old Sam Price, Billy Deloitte, Teddy Ernst and Bill Peat. These men are the founding fathers of public accounting and it is their legacy you will continue when you join on of these great firms. Their stories are a lesson in excellence and their influence is still felt to this day.
For more information on how to work for the Big 4, please visit http://www.big4guru.com