Friday, September 20, 2013

Surveys and Other Lies

The economy is improving, except it's getting worse, depending on who you talk to. Statistics lie as do many government reports and surveys. As an example, I was just contacted by phone by some organization doing a survey. "Just four questions," they said, and then proceeded to ask four heavily slanted questions about mandatory ratings for childrens games designed to elicit the answer they really wanted from me. Being a lawyer, I am a professional pain in the butt, so I didn't give them the answers they wanted. They stated that kids spend 10 hours a day on TV and video games, so would I support a rating system like in the movies. Of course, I said no. I added that if a child spends 10 hours a day on these things, the parents were at fault. They didn't like that answer, so at the end, they said, "Well, since you don't have children or grandchildren under 15 we won't be using you in the survey." The problem is - they never asked if I had kids or grandkids that age. I said wait, I never said I didn't..." The phone hung up. So if they simply eliminate any calls that don't match what their pitch is, they can claim that their survey showed a large margin in favor of their proposals. Many surveys and polls do the same thing. The result is that they are all unreliable. If I pitch it right, I can probably prove in a survey that Adolf Hitler would be a better president than Barack Obama. "I'm not saying he was a good guy, but just judging on leadership skills, who would you say would make a better President?" "Ignoring for a second all the Jews he killed, who would you say was a bigger patriot to his country?" If you avoid calling Democrats and northern states, and throw out the answers you don't like, you can probably claim a majority in favor of Hitler over Obama. Except it's all a lie. It is difficult to say exactly where our economy is going, but I suggest ignoring the "experts." The one figure I look at is not unemployment (which everyone knows is skewed) but rather I look at exchange rates. If Europe and the Euro are in such trouble compared to us, why is it $1.33 American to buy one Euro? If the cost of living is stable, why does everything cost more? My advice is "Don't trust the surveys, trust your wallet." Besides, according to my own personal survey, 10 out of 9 bankruptcy lawyers agree with me. Who can argue with those numbers?

Thursday, September 5, 2013

What If They WON'T Take The House?

One of the harder issues in bankruptcy is surrender of assets. With a regular asset like a car, most of the time the creditor wants the asset returned quickly so they can sell it and cut their losses. However, with real estate, we live in a Bizarro world. Sometimes, the mortgage creditor wants to sell the house, but not quite yet. The problem is that as long as the title to the property is in the debtor's name, the debtor is responsible for taxes, insurance and any fines issued against the property. The bank may not want to take on those legal and financial responsibilities until they have a buyer, or they want to wait for the market to improve, interest rates to rise, or just control the rate at which defaulted properties go for sale to control real estate prices. Great for them, not so great for a debtor. Are they allowed to wait in order to maximize their eventual recovery forever? Even if it harms the debtor? Is there any way to force the creditor bank to take the house? This is an open issue in bankruptcy. Recently, in one case, the First Circuit has said generally "no" - but possibly "maybe" if the facts were a little different (citation omitted so laymen can follow the reasoning). There is also the issue of more limited Federal jurisdiction of the Bankruptcy Courts in general due to recent U.S. Supreme Court decisions. I think that until the courts work out the law, a wiser decision may be to post a document on the court docket showing that you offered the house to them and they refused. This perhaps may open up an argument regarding the deficiency on the house based on a "failure to mitigate damages" argument. Maybe this could help when the bank inevitably issues a Form 1099 as to the amount of the loss. I don't give tax advice here but it is something to consider discussing with your tax lawyer or accountant. To sum up in layman's terms, I think you can't force them to accept the deed, but you might be able to use their refusal to accept it to some legal effect in some circumstances. It's just a thought, for now. But it wouldn't be the first time a bank's gaming the system eventually came back to bite them in some other way.

Saturday, March 23, 2013

I haven't been on here in a while. I added a new blog with WordPress so didn't pay much attention to this one. So what is new? For one thing, the number of debtors filing their own bankruptcies has skyrocketed. I don't know if it's that people can't afford lawyers or are just getting cheap and think they can handle it on their own, but the number of "pro se" non-lawyer assisted filers is as large as the number of pro se filers that get into trouble with some of the finer points of bankruptcy after they file. Whether it involves exemptions, tax refunds, inheritances, car creditors or omitted creditors, I get calls post-filing asking for advice to fix a screwed up case. By then, it is often too late to fix anything because once the trustee get a smell of an asset, it's like blood in the water to a shark. Hiring me up front is often cheaper than doing it on your own and then getting into expensive trouble, but try to tell that to a debtor. They will be changing the forms again to try to make it easier for pro se debtors to file without an attorney. That's like giving out free guns and bullets and saying just follow the instruction manual. Bankruptcy is not just filling out a form - it's knowing the statutes, the local decisions in interpreting the statutes, knowing the local rules and practices and knowing each judge and trustee and their particular idiosyncrasies. Can I fix a broken case? Sometimes, but it usually ends up costing twice as much as doing it right the first time. Penny wise, pound foolish, they say. But human nature does not change.

Wednesday, April 21, 2010

ONE HUNDRED NEW FEATURES

The U.S. Treasury is once again redesigning the $100 bill. Since this is the most counterfeited bill passed outside the U.S., the Treasury wants to make sure foreigners are reassured they are spending the most secure and complex deflated currency in the world.

Because counterfeiters are getting more sophisticated and have access to better computers, the new bill contains numerous new security features.
There also may be many unrevealed security features, but this article will cover the most obvious changes.

For one thing, the microprinting has changed.
Federal Reserve Chairman Ben Bernanke ordered the microprinting to now read “The United States of Goldman Sachs” so all foreign investors could be reassured as to who really runs America.

Along with the microprinting, there is a new blue security stripe containing microlensed images that move when you move the bill.
Tiny Liberty Bells change into 100s when you tilt the bill. As inflation increases, you can shake the bill and the 100s will automatically turn into 1,000s. If you turn the security strip upside down, the 3-D Liberty Bells turn into the blue aliens from Avatar. Additionally, if you manipulate the heat sensitive 100 on the lower right hand corner with your thumb, you can play Pac-Man - Ben Franklin’s head moves and gobbles up the Liberty Bells.

The bill contains an inkwell that is invisible when you tilt it one way but appears when you tilt it the other way, to represent how the Treasury has cooked the books of the United States Treasury. The inkwell is filled with red ink to represent our deficit. The Liberty Bell also appears and disappears in the inkwell, to symbolize freedom drowning in red ink.

Benjamin Franklin will no longer have a wrinkled forehead, thanks to micro-Botoxing of each bill.
If you fold the bill along his forehead, the fold will disappear when you unfold it, just like Demi Moore.

Rumored to be next on the security agenda - adding an iPhone app to the bill so you can call overseas to see how your money is doing.
Foreigners can also use the new currency as a coupon to buy a Happy Meal at McDonalds.

The Treasury was concerned about complaints that the older redesigned bills looked like monopoly money.
Due to the redesign, there will be no more such concerns since the bills now look like Las Vegas slot machine symbols. Everyone loves Las Vegas.

Treasury Secretary Tim Geithner’s electronic signature will grace the new hundred dollar bills, so that each time a consumer spends one, it will look like Tim is paying his taxes.

Not everyone is happy about the changes. Some think the changes are unnecessary since the U.S. government steals far more money from citizens than do counterfeiters. Another negative is that given the complexity of the security features and the cost of the licensing payments to Bill Gates, each new one hundred dollar bill actually costs more than one hundred dollars to produce. But President Obama is convinced the cost is worth it to stimulate the economy and that replacing the motto “E Pluribus Unum” with “Intel Inside” will stabilize the dollar in the long run.

Rush Limbaugh is still alleging the new bills will have a “Press 1 for English and 2 for Spanish” feature. The Treasury did not respond to that allegation, but fortunately, it appears there is no truth to the rumor that the Liberty Bell was to be replaced by the Taco Bell logo. U.S. Treasurer Rosie Rios allegedly stated in response to the rumor, “The U.S. bill must remain American. ¿Entienda, gringo? Ben Franklin nunca habló español.” Verdad, Rosie, Verdad.

Thursday, October 1, 2009

NEW JERSEY AND YOU – IMPERFECT TOGETHER

New Jersey has just come in last place in a list of business friendly states – at least as far as taxes go – according to the Tax Foundation, a nonprofit organization that keeps track of such things. It’s the second year in a row New Jersey has scraped the basement. New Jersey has higher property taxes than anyone else, and comes in just above New York in personal income taxes. This year, New Jersey has added a few new taxes just to make sure we keep the tarnished tin cup for a long time to come. We used to be able to say, “Well, at least we’re not New York.” No more.

Who is most business friendly? South Dakota. There is also Wyoming and Alaska. That’s right. We got our butts beaten, and beaten badly, by Sarah Palin, who is suddenly looking a lot more competent than Governor Corzine.

What to do? For some, the answer is to get out of town. A 2007 Monmouth University/Gannett New Jersey Poll found that 49% of New Jersey residents wanted to move out of state.

Over the last 10 years, New Jersey lost 150,000 manufacturing jobs. When I turn on the television I see ads narrated by Jeff Daniels encouraging businesses to move to Michigan. Michigan really wants our business. Apparently Detroit is doing so badly that they ran out of money to bury their dead. So they really are pushing incentives to move to Michigan. New Jersey doesn't bury its dead either - we just elect them to higher office. South Carolina also advertises on billboards near the airport trying to get our people. Other states are willing to bribe New Jersey businesses to move, awarding 5-year tax breaks, and even paying for the moving trucks. Obviously, many employees will follow these companies to other states, especially closer, more business-friendly states such as Delaware and Pennsylvania.

That’s not counting the businesses that are moving overseas and leaving their employees behind. When I get calls from debt collectors, they are usually from India. When you call up about your phone bill, you often get India. This is not an anti-foreigner rant – I have Indian friends who came here to the U.S. to work and are complaining about their high-paying jobs going to India. Maybe New Jersey should secede from the Union and become an Indian state. After all, the rupee is doing better than the dollar these days.

If New Jersey wants an economic recovery, it needs to be friendlier to businesses. Bruce Springstein and Bon Jovi are not reasons to move a business to New Jersey. Unfortunately, pro-business usually means anti-union. Plus, it would require major health care reform since one-third of employee costs involve health care.

New Jersey needs to be friendlier to people too. New Jersey prohibits out-of-state competition for health insurance. Also, a lot of medical patients leave New Jersey for California in order to obtain legal medical marijuana for their health conditions.

In the current political climate, Corzine is saying nasty things about Christie. Christie is also saying nasty things about Corzine. I fear they are both right, which leaves us with little or no choice.

Hey, maybe Sarah Palin needs a new job.

Mr. Wolf can be contacted through his website at www.wolfprotect.com.

Wednesday, June 3, 2009

NACBA Convention - The Blues in Chicago

I just got back from the NACBA Convention in Chicago. There were about 1,400 bankruptcy attorneys present. The event sold out very quickly and the organizers had to set up an overflow room.

These are a few of my observations about the convention.

1. More attorneys are going into or returning to the bankruptcy field as other fields of law are drying up. Many business attorneys have lost clients and jobs due to cutbacks and think "Hmm. There are a lot of bankruptcies - I can do that." However, these days, bankruptcy is financial brain surgery - not a field for amateurs.

2. There were more exhibitors. A lot of people want to sell us things because they think we have money. Everybody wants to take on a part of our practice - from web site design to site optimization, running credit reports, doing credit briefings, assisting us in document preparation through software or virtual assistants, providing court notices to us and certificates of service for items we send to creditors. There was even a vendor who would prepare my fee applications for me. If I hired them all, I would barely have to lift a finger, but all my fees would end up going to them. I'd make myself obsolete.

3. Many of the speakers were as confused as I was over certain complex issues. Still, it's nice to know that even the experts don't know all the answers. That's why I'm shocked when I see ads claiming that filing bankruptcy is easy or offering a lowball price. A lot of these issues still have to work their way through the court system.

4. Chicago pizza just isn't the same as New York pizza. Same for the hot dogs. Salad does not belong on top of a hot dog. But Chicago Thai food is excellent - easily on a par with New York and New Jersey, and the prices are significantly cheaper. Star of Siam was wonderful.

5. Hotel catered lunches never quite get the chicken right. Last year, in our Hollywood Convention, we were catered by Wolfgang Puck. My mother-in-law cooks better. Hollywood really is all about hype. Chicago catering was better, but still not exceptional.

6. Television keeps saying this will turn around next year. Television lies. Most of my colleagues and one of my friends who has a doctorate in economics are predicting a depression. I trust my friends more than I trust TV.

7. President Obama really betrayed us on the mortgage modification bill. During the election, he was all for it but his support in the Senate was so lukewarm, he almost guaranteed its failure. I realize he wants to do it his own way, with voluntary programs. He seems not to get it - banks are greedy and never volunteer. It's all cosmetics - lipstick on a pig. I believe we will revisit the legislation again later on, after his HAMP program fails.

8. Letting servicers modify mortgages may not even work, since they often don't have the authority in their pooling and service agreements to modify them. They are doing it anyway, which may create a really unholy mess on top of the mess we are already in.

I never really get to see much of a town during conventions because of the heavy load of seminars. I can't stay away too long because I can't ignore my client base. I always come back having learned something new, but I can't say I learned that much more about Chicago. However, I can tell you a lot about Marriott hotels. Such is my life.

Tuesday, January 27, 2009

DON’T WALK – SPRINT – IF YOU WANT OUT OF YOUR CELL PHONE CONTRACT

A fellow NACBA member has found out something very useful I would like to share with you.

If you want to get out of your cell phone contact with Sprint, you have a short opportunity to do so without paying an early termination fee (ETF).

The way it works is this – when a wireless carrier makes changes to the language in their “Terms of Service” agreement, you have a right to reject it and drop the carrier without an early termination fee. Sprint has just raised their internal administrative fees again - to 0.99¢ per month, from their original fee hike of 0.75¢ in December. The December fee hike opened a window until early January, and the second hike in January opened up a new window until January 31. As a result of this administrative fee increase, anyone who is currently under contract with Sprint can leave the carrier early without paying termination fees. There are only two catches to this deal:

First, you can only cancel the service without getting hammered with an Early Termination Fee if you do it by January 31, 2009 AND, second, VERY IMPORTANT, you need to call Sprint and ask specifically about the rate hike first.

In short, ask about the rate hike first, and then use the rate hike as your reason for canceling service. Make sure you follow Sprint’s instructions on how to cancel properly and follow up in writing to make sure they have done it.

Since it’s only a few days until the end of the month, you've got only a few days left before the window of opportunity closes.

Why the hike? Money problems. Sprint just cut 8,000 jobs, about 15% of its workforce, trying to reduce its costs by $1.2 billion, so they need that extra fifteen cents.

What if you already canceled and got hit with an ETF? Do not despair. Sprint just settled a class action regarding these. If you had a wireless contract with Sprint from July 1999 and December 2008 that contained a time based ETF fee clause and can prove that you were charged an ETF fee, you could get back up to $90. Even if you didn’t cancel, you could get a $35 settlement fee just because you kept the contract for fear of getting hit with an ETF. There are a lot of hoops to jump through, and there are some exceptions and reductions in payouts, but you can start by going to www.sprintetfsettlement.com and registering.

Of course, keep in mind that changing carriers can be like going from the frying pan into the fire and there is no guarantee the replacement carrier will be much better.

Also, I’ve read that since Palm will soon be debuting a new web-based operating system exclusively using Sprint (for a time), canceling now could open up an opportunity to re-sign with Sprint later on in exchange for a free or low cost Palm Pre device.

So, whatever you decide to do, don’t dawdle. Sprint.