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The Federal Reserve recently held a two-day meeting, at which the country’s central banking system announced that it will not be raising interest rates, which could mean that more personal bankruptcies are on the way as the economy continues to struggle. Although the decision not to change the interest rate has at least temporarily allayed some market watchers’ concerns about what might happen if the Fed reacted too strongly to a stagnating economy, there remain fears that the government will be helpless when it comes to stopping another recession. Will the Fed Eventually Raise Interest Rates? Some economic experts still believe that the Fed will eventually have little choice but to raise interest rates as the U.S. economy remains stagnant – something that the Fed did not dispel when it indicated that a rate hike could still be coming in June. Earlier this year, several market observers predicted at least two interest rate hikes before the end of 2016. When determining whether to raise the interest rate, the Fed will likely consider a number of factors, such as the inflation rate and any “global economic and financial developments.”
2 weeks 1 day ago
On April 25, 2016, Judge Glenn of the Bankruptcy Court for the Southern District of New York issued a memorandum in an adversary proceeding in which neither of the two non-debtor parties apparently wanted to be in the Southern District of New York.  Without addressing the merits of the underlying case, Judge Glenn ruled on the plaintiff’s motion to remand the proceeding to state court on the basis of lack of subject matter jurisdiction and the defendant’s competing motion to transfer venue to the Eastern District of Virginia.  In his decision, Judge Glenn emphasizes the breadth of bankruptcy court subject matter jurisdiction, to the point that the bankruptcy court can retain jurisdiction in certain cases to hear exclusively state law disputes between non-debtor parties even after confirmation of the related chapter 11 plan.  Background
2 weeks 1 day ago
The Federal Reserve deserves praise for a proposal that would strengthen financial stability by eliminating the rights of counterparties to tear up derivatives contracts in a failure.

Read More from: BankThink

2 weeks 1 day ago
I talk with clients about walking away from underwater houses day after day. *
  • The  mortgage payments on their home eat up fifty percent or more of their income.
  • They’re struggling now, and the mortgage will reset soon.
  • Attempts to modify the mortgage are fruitless.
  • They expect a foreclosure notice any day.
Yet despite the pain and the roadblocks,  these clients express reluctance to move because of the impact on their children.
It’s our home, they intone.
It’s as though there can be only ONE home, and it’s this piece of real estate. They imagine that moving will scar the kids and render them insecure and vulnerable. Leaving a home that offers nothing but debt nonetheless seems to be a horrendous and overwhelming prospect. More than their stressed-out selves can manage. Moving away from bad mortgage That’s the parade of horrors that march through the minds of those facing decisions about a bad housing situation. I got a peek at the actual impact of moving from a former client last week:  sheer and utter delight!   The two children, middle school and high school, were happy, making friends, and making grades. The family had rented spacious and fresh housing in a lower cost community at less than 25% of the mortgage on the over encumbered house here. The family income covered their living expenses and  they were able to make  provision for some savings.
2 weeks 1 day ago
The U.S. Bankruptcy Court for the Eastern District of Michigan recently considered the issue of whether a Chapter 7 trustee may bring a cause of action against a debtor for damages caused to the bankruptcy estate by the debtor’s alleged failure to comply with the debtor’s duties under section 521 of the Bankruptcy Code. Under the circumstances, the court held that no private cause of action existed and thus ruled in favor of the debtor on the issue.[1] Read More › Tags: Chapter 7, Eastern District of Michigan

Read More from: Michigan Bankruptcy Blog

2 weeks 1 day ago
David Ampaw and Chris Parker have been promoted to partner in the restructuring group in DLA Piper’s London office. Mr. Ampaw has advised clients in restructurings, workouts and insolvencies in the U.K. and abroad, and he has experience in the oil and gas industry. Mr. Parker has experience with fraud, investigations and litigation in complex restructurings. He also worked on Lehman Brothers’ bankruptcy case in Europe. William Ellis has joined the Akerman firm as a partner. Mr. Ellis, who will work in the real estate group, has experience in real estate workouts and restructurings, financings and corporate mergers and acquisitions. He has represented hotels, banks, lenders and other parties. Mr. Ellis earned his law degree from the University of Michigan.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 1 day ago
As has been expected for some time, the Consumer Financial Protection Bureau has issued a proposed rule that would prohibit companies providing consumer financial services from pairing arbitration clauses with clauses that prohibit consumers from bringing or participating in class actions. The rule also imposes disclosure requirements on companies that use arbitration. The CFPB's announcement is here; the proposed rule is here. There are two main components.

Read More from: Credit Slips

2 weeks 1 day ago
The Federal Deposit Insurance Corp.Â's request for input on mobile financial services allows banks to promote how their mobile app helps the underserved, which is a plus when seeking merger approval.

Read More from: BankThink

2 weeks 1 day ago
Receiving Wide Coverage ... Laplanche Resigns: LendingClub chief executive and chairman Renaud Laplanche resigned after an internal review of loan sales found $22 million in near-prime loans to a single investor, against that investor's instructions. Separately, the investigation also showed a failure to report personal interests held in a third-party fund to the board's risk committee, as the company was mulling an investment in the same fund. President Scott Sanborn will become acting CEO and director...

Read More from: BankThink

2 weeks 1 day ago
Wheels are essential for most of us to get to work. And whatever you’re driving when you file bankruptcy will need to be replaced at some point. So, how are you going to finance that next car if you’ve just filed bankruptcy and face 10 years with the bankruptcy on your credit report? The credit industry tries to fan that worry;  after all, they want you to keep paying on impossible debt rather than get a fresh start. They want you to believe that no credit is available for eons to those who have filed bankruptcy. Hogwash. Bankruptcy improves your credit score Under the credit scoring system used by Fair Isaacs, your credit score improves after bankruptcy.  Upon entry of the discharge, your debt to income ratio improves dramatically. When you sit down to pay your bills after bankruptcy, there are fewer creditors clamoring for a piece of your paycheck. Now, granted, that’s just one element of the score.  But it makes the point that credit scores are not all about whether you paid your bills as agreed. The negative impact of a bankruptcy fades over time, time that is far shorter than the 10 years that it may appear on your credit record. People in bankruptcy get car loans
2 weeks 1 day ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NQ955_0421ca_P_20160421113701.jpg" J="//si.wsj.net/public/resources/images/BN-NQ955_0421ca_J_20160421113701.jpg" M="//si.wsj.net/public/resources/images/BN-NQ955_0421ca_M_20160421113701.jpg" caption="Caterpillar, Inc. heavy dump trucks mine coal at the Arch Coal Inc. Vindex surface mine in Frostburg, Maryland, on Wednesday, Jan. 13." credit="Bloomberg News" placement="Inline" suppressEnlarge="false" ] Arch Coal Inc. might be in for a fight over its bankruptcy plan, which gives most of the company’s new common stock to secured lenders and which doesn’t have bondholder support. Read the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Legend International Holdings Inc. filed for chapter 11 bankruptcy to deal with losing a $12.3 million with a fertilizer collective in India, DBR reports in The Wall Street Journal.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 1 day ago
A View from Brussels As the 23 June date for the British referendum about its future in the European Union (EU) comes closer, the EU political leadership in Brussels remains uncertain how best to support the ‘Bremain’ forces in order to avoid the embarrassing and damaging departure of one of its largest and strongest members. None of the political leaders in Brussels or in other EU capitals want to see the UK leave, but they have learned to be cautious and show restraint when it comes to engaging in EU related discussions in Britain. Often enough they were told to stay neutral (or silent) in order not to make things worse for the pro-EU forces. But they now ask themselves whether their passive stance is a sufficiently supportive strategy for a decision of this magnitude for all partners involved – also because many traditionally pro-EU industry stakeholders in the UK have remained reserved so far, leaving a lot of momentum to the “Leave” side. Supporting the (B)Remain Camp while Preparing for the Eventuality The top EU leadership has clearly spoken out in favour of the UK to remain a part of the European family. Already in 2014 European Commission President Juncker has given the financial services dossier to the British EU Commissioner Jonathan Hill, and has recently asked Jonathan Faull, a top level UK EU official in Brussels, to lead the Commission’s high level Brexit task force.

Read More from: eSQUIRE Global Crossings

2 weeks 1 day ago
Unlike the bankruptcy judges in Nortel, who synchronized their trials in a landmark case of cross-border insolvency cooperation, the appellate judges run at their own speed, so results will trickle in here and there. The Canadians got through their appeal first, and the 3-0 ruling from the panel of the Ontario Court of Appeal was rightly withering of the losing appellants.  In response to the argument accusing the trial judge of applying -- instead of the correct law of property entitlements -- his own "commercial judicial moralism," the panel had this to say on his analysis: "Based on those facts, he concluded that a pro rata order constituted the answer to the allocation issue. The fact that the answer is also fair should not detract from the force of his conclusion." Who said Canadians can't be snarky, or at the very least passive-aggressive? The next stage in Canada would be the Supreme Court, which requires leave to appeal, although its grant rate is higher than the U.S. Supreme Court's cert rate.  Stay tuned!

Read More from: Credit Slips

2 weeks 3 days ago
Baffled by community property? Think it makes you personally liable for the debts of your spouse? California has been a community property state since it became a state in 1850. You would think we’d have gotten the hang of it long ago. But the community property system  continues to confound some married folks, not to mention lots of debt collectors outside of California, Let’s review 7 basic facts about California community property. 1  Property acquired during marriage is presumed to be community Wages, benefits, lottery winnings:  if they are earned or acquired during marriage, they are community property. Assets either spouse brings to the marriage are separate property.  Gifts and inheritances acquired during marriage are the separate property of the spouse who acquires them.  Family Code  § 770. Do nothing, and your acquisitions during marriage belong to the two of you, equally.  Family Code  §  760. 2  The spouses have equal, undivided interests in all community property While at any division of the community, each spouse gets half, during marriage they have an undivided interest in all of the community.  Family Code  §  751.
2 weeks 3 days ago
We’re so used to thinking about married folk as a couple, rather than as two individuals:  George and Gracie;  Bill and Hillary;  John and Abigail. The Bankruptcy Code feeds that perception when it allows a married couple to file a joint case.  Two people, one set of papers, one filing fee. But while filing together is permitted, it is not required. You don’t need your spouse’s consent or participation to get relief from your debts. You can file bankruptcy without your spouse.  Likewise, your mate can file bankruptcy whether you approve or not. Complications in single spouse bankruptcy Things can get dicey when the non filing partner is absolutely non cooperative. Since 2005, the bankruptcy means test requires analysis of the last six months of paystubs for both parties, if they live together. There’s no uniform approach by judges if the non filer won’t provide information. Then there’s the issue of jointly owned property.  File bankruptcy and all the assets of the person filing are brought into the bankruptcy estate.  The estate could include an operating business if the business is run by the non filer as a proprietorship, rather than a corporation or LLC.
2 weeks 3 days ago
In a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations.
2 weeks 4 days ago
Venue has long been a contentious topic highlighted by cases such as Enron and WorldCom to the more recent venue battle in Caesars.  Recently, the United States Bankruptcy Court for the District of Kansas addressed this issue, and declined to transfer a pending bankruptcy case to the District of Delaware where cases involving the debtor’s indirect parent company and other affiliates were pending.  Background: Abengoa Bioenergy Biomass of Kansas (“ABBK”) was the subject of an involuntary chapter 7 petition filed by a number of holders of mechanics’ liens involved in a state court foreclosure suit against the debtor in the bankruptcy court in Kansas.  Ten days later the debtor filed a motion to convert the case to chapter 11 and subsequently filed a motion to transfer the case to the District of Delaware so it could be jointly administered with the chapter 11 cases filed by the debtor’s affiliates.  The debtor also filed its own voluntary petition in the District of Delaware.  The petitioning creditors objected to the transfer.
2 weeks 4 days ago
Nearly a quarter-century before his wife was on the verge of winning a presidential nomination, then-Democratic candidate Bill Clinton was seen as supporting "true nationwide banking," though some worried he would also expand the Community Reinvestment Act.

Read More from: BankThink

2 weeks 4 days ago
Well, at least that is the case as the Eleventh Circuit rules on communications between attorneys.  Recently, I read a warning from a colleague about the expansion of liability for creditor’s lawyers under the FDCPA.  In Bishop v. Ross, Early & Bonan, P.A., the Eleventh Circuit reversed the dismissal of an FDCPA complaint brought by a homeowner whose attorney received a letter from the HOA’s counsel regarding unpaid assessments.  At issue was a purported violation based on a faulty disclosure under 15 U.S.C.

Read More from: Creditors' Sidebar

2 weeks 4 days ago
Colorado gold miner Midway Gold Corp. could get the court approval it needs to sell most of its properties out of bankruptcy to GRP Minerals LLC at a hearing scheduled for Monday. Judge Michael E. Romero is expected to review GRP Minerals’ purchase offer—the only one of its value to come in before the company’s bankruptcy auction—for its Pan mine in Nevada and several other properties. The Pan gold mine is the company’s only gold-producing property, according to documents filed in U.S. Bankruptcy Court in Denver. Midway Gold officials have been disappointed by the amount and quality of gold that has been pulled out of the earth since digging began in March 2015. Gold prices, meanwhile, have declined in recent years. Midway Gold officials looked for buyers after putting the Englewood, Colo., mining company into bankruptcy protection on June 22. Under the deal, GRP Minerals has promised to pay $5.25 million in cash and to take responsibility for $16.1 million worth of expected reclamation liability. Other properties included in the proposed sale include its Gold Rock project, which is located near the Pan mine, and its Golden Eagle project in Washington state. On Wednesday, lawyers who put Sundevil Holdings LLC into bankruptcy protection could get permission from a Delaware judge to sell the company’s two gas-fired power plants in Arizona.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 4 days ago

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