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Articles Tagged with debt

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This post was prepared by yours truly, with contributions from Phil Bradford, a financial web content writer. Phil graduated from New York University School of Law and recently joined Herald University as a reporter. He has also written for websites such as debtfreeguys.com and disabilitycanhappen.org

An now, on with the post…

Those who’ve exhausted their financial options or are unable to meet obligations due to illness, divorce, job-loss, or other life-altering events, may consider filing Bankruptcy to get their life back on track.  Here is a quick-guide to help you navigate the process with the help of a good Bankruptcy Lawyer:

Basic Types of Bankruptcy

The most basic distinction when thinking about Bankruptcy is the one between a liquidation (Chapter 7) and a reorganization (Chapter 13 for most people). Whether you need to file a Chapter 7 or 13 case will depend on several factors, including:

  • Total “household” income
  • The value of your property
  • What you stand to lose
  • What you intend to keep

That said, below you will find a few of the most important points when considering if Bankruptcy is right for you.
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How does a company with $69.8 million in assets and only $9.2 million in liabilities end up filing for Chapter 11 bankruptcy protection? The answer is crime doesn’t pay, especially when you get caught hiring a hit man to make someone “stop breathing.”

An Offer A Creditor Can’t Refuse…Unless Someone’s Wearing a Wire.

Daniel Dvorkin, a local developer who was formerly in charge of Dvorkin Holdings LLC, was arrested in July after telling a federal informant that he would pay $100,000 for the informant to find a hit man that would make sure one of his creditors would sleep with the fishes. The cooperating witness was wearing an audio and video recording device for several of the conversations with Dvorkin. The target was an attorney who owned a corporation that had recently won an $8.2 million judgment against Dvorkin.

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Everyone has heard of Bernie Madoff. But have you heard of James and Verna Pilon? If you live in Chicagoland, you better pay attention-the Pilons are a couple from Joliet that have swindled investors out of over $1 million. Both are headed to federal prison.

Before the Pilons were caught and sentenced however, they perpetrated a fraud against nearly 40 investors. How did this happen?

Enemies, and an Error, of the State

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“It’s not just a low-income problem. We’re seeing folks who are middle and upper income as well… loss of employment has been the catalyst, or a family crisis or some other emergency has triggered the problem.” — Case Worker at NFP Mortgage Counseling Agency

Not-For Profits to the Rescue?
Millions have been put out of their homes by foreclosure, with millions more hurtling in that direction this year. The problem is ripping families apart. Meanwhile, programs such as NeighborWorks America and Housing Counseling Services have been cropping up around the country in response to the permanent housing underclass. Typically such not-for-profit enterprises are funded by Congress through the Department of Housing and Urban Development (HUD). But in 2012 HUD received just half its requested funding and a similar 2013 appropriation is on its way. Why isn’t Washington sold on not-for-profit organizations offering counseling to homeowners? Do such organizations bring solutions, or peddle false hope?

Counselors Can Only Do So Much
If all goes well in working with a counseling agency, counselors can act as neutral go-betweens bridging the gap between homeowners and lenders: but there is only so much that can be done. At the Homeownership Preservation Foundation, 70% of clients are driven to counseling by unemployment; and it’s hard to negotiate with your mortgage company if you cannot establish that you have steady income. Counselors repeatedly stress that clients should not be paying for help when HUD-approved services are free. Of course the fact remains, you get what you pay for and in order to justify its funding from HUD, counseling agencies must maintain a high caseload and open-door policy. Counselors can only do so much. Homeowners who want more tailored advice should consider speaking with a knowledgeable Attorney that can help them sort through their finances.

Don’t Go It Alone: Get Advice
Regardless of whether homeowners look to Federally-funded housing counselors or reach out to a knowledge local Attorney, they should make the decision not to endure the foreclosure process alone. After all, trained professionals are available to help them through the process and the first call and appointment is inevitably free. If you’ve got questions, what have you got to lose?

For a telephone consultation and office visit, contact us at mhedayat@mha-law.com or call 630-378-2200 to set up an office visit. We have convenience payment plans available and work with both consumer and business clients throughout the Chicagoland area. If you believe that it is too early to speak with an Attorney, check out these agencies:

NeighborWorks America
Housing Counseling Services, Inc.
Homeownership Preservation Foundation

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Alan J. Mandel Law Offices had been representing a Debtor in Possession (DIP) in Chapter 11 and sought final payment for Attorneys’ fees as well as expenses. Ultimately Mandel received only part of the requested compensation due to its overly broad reading of the Bankruptcy Code and the resulting attempt to fit a square peg into a round hole.

Officially “No” … Unofficially “Yes”

Multiut, an Illinois Corporation, filed a Chapter 11 Petition on May 14, 2009 due largely to litigation between it and Dynegy Marketing and Trade. Mandel, who was eventually retained with Court approval, served as outside general counsel to Multiut during the litigation and even acted as Bankruptcy Counsel. But Mandel was not hired by Multuit until January 22, 2010 and was not “officially” retained until February 1, 2010; at which point it sought payment for fees and costs retroactive to the Petition Date via a legal technique known as nunc pro tunc (Latin for ‘now, for then’).

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