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.