Erich M. Niederlehner, has just completed a free ebook on Bankruptcy and encourages anyone considering filing for bankruptcy or just wants to know more about Bankruptcy to download and read the free ebook.  Erich M. Niederlehner, currently has offices in Pensacola, Fort Walton Beach and Panama City and has been practicing Bnkruptcy law for 14 years in the Gulf Coast Panhandle.  Go to www.ShouldIFileForBankruptcy.com and download the free "Book on Bankruptcy" by Erich M. Niederlehner today or click on the image above.

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Here is the latest video from the Bankruptcy Attorney Erich M. Niederlehner. In this video Bankruptcy Lawyer Erich M. Niederlehner invites you to explore bankruptcy in further detail at www.ShouldIFileForBankruptcy.com or go to www.GotDebtPensacola.com



The Law Office of Erich M. Niederlehner, PA has 5 convenient locations in Mobile, Pensacola, Fairhope, Panama City and Fort Walton Beach. Please call toll free 877-607-2228 to schedule a free consultation or self schedule you own appointment at www.GotDebtPensacola.com, www.GotDebtFortWalton.com, www.GotDebtFairhope.com, www.GotDebtPanamaCity.com or www.GotDebtMobile.com.

Home Mortgage Cramdown is Back in the News

Earlier this year a bill that would have given bankruptcy judges the authority to modify home mortgages was soundly defeated in the Senate after intensive lobbying by the financial industry. After the defeat Sen. Dick Durbin said of the bank lobbying effort, “Frankly, they own the place.”

Six months later, it is apparent that legislation designed to encourage home loan modification between lender and home owner is impotent. The “Home Affordable Program (HAMP)” and the 2008 HUD “Hope for Homeowners” are voluntary programs that have proven too costly and cumbersome to be effective. The Huffington Post recently characterized the situation this way:

“The Obama administration had high hopes for the law Congress passed intended to encourage mortgage modifications. The law is all carrot, however, and no stick. Cramdown is the stick. If banks think they could get hit in bankruptcy court, they're more likely to bargain.”

Rising unemployment rates and mounting home foreclosures are putting new pressures on Congress to do something. Some lawmakers are revisiting the idea of bankruptcy cramdown to encourage voluntary modification by lenders, or to enable forced modification by the bankruptcy courts. Passage of this cramdown legislation would give Federal bankruptcy judges the authority to modify bankruptcy debtors’ mortgage contracts by lengthening terms, cutting mortgage rates, or reducing loan balances. The current bankruptcy law allows modification of some contracts, but not home loans.

House Financial Services Committee Chairman Barney Frank (D-Mass.) has announced his intent to push for legislation giving bankruptcy judges the authority to modify home mortgages. The Huffington Post reports that Frank has met with key members of the Senate Banking Committee who are ready to make a serious push at major financial regulatory reform before the year was out.

If you are behind on your mortgage and experiencing difficulty with your lender, consult an experienced bankruptcy attorney for advice. There are many options available to homeowners, and new opportunities are developing, but quick action is still vital to your chances for a positive result. Take control of your situation by learning your rights and legal options. The Law Office of Erich M. Niederlehner, PA has 4 convenient locations in Mobile, Pensacola, Fairhope and Fort Walton Beach. Please call toll free 877-607-2228 to schedule a free consultation.

Congress has designated us a debt relief agency. We help people file for bankruptcy under the bankruptcy code. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. Main office is in Pensacola, Florida. No attorney client relationship is established by using this website.

Chapter 13 Co-Debtor Stay?

The “Co-Debtor Stay,” also known as the “Co-Debtor Automatic Stay,” is a feature of a Chapter 13 Bankruptcy designed to protect a debtor by insulating him from indirect pressures from his creditors exerted through friends or relatives. The Co-Debtor Stay stops all collection actions against any individual who is obligated on a consumer debt owed by the debtor. The Co-Debtor Stay continues until the Chapter 13 case has concluded.

The Co-Debtor Stay is not a direct protection intended for the co-debtor. The debtor’s Chapter 13 Bankruptcy will not discharge the co-debtor’s responsibilities to the creditor. It will, however, prevent collection action by the creditor against the co-debtor (e.g. lien perfection or even adverse notation on the co-debtor’s credit report) during the pendency of the Chapter 13 case.

The Co-Debtor Stay does not prohibit collection on a debt incurred in the ordinary course of business by the debtor. Additionally, tax debt is generally not considered a consumer debt. It is important to note that the Co-Debtor Stay does not apply at all to Chapter 7 Bankruptcy cases.

The Co-Debtor Stay is effective immediately upon the filing of the debtor’s Chapter 13 petition and continues until the case is closed, dismissed, or converted to Chapter 7 or 11. The Bankruptcy Court can also modify or terminate the Co-Debtor Stay upon the motion of a creditor. The creditor may be successful in this type of motion if the codebtor received "consideration" for the debt (e.g. you cosigned a car loan for your brother, who actually owns the car), if the debtor’s Chapter 13 plan proposes to not pay the debt, or if the creditor's interests would be irreparably harmed by continuation of the Co-Debtor Stay.

A knowing violation of the Co-Debtor Stay is contempt of court and punishable by damages, including attorney's fees. Any collection action taken by a creditor in violation of the co-debtor stay is void.

The Co-Debtor Stay is a powerful tool to prevent collection action in Chapter 13 Bankruptcy. If you are contemplating a bankruptcy filing and have co-debtors, consult with an experienced bankruptcy attorney. An experienced bankruptcy attorney can explain your options and work with you to find the best result.

What Is Chapter 13 Bankruptcy?

A chapter 13 bankruptcy is also called a “reorganization plan” or a “wage earner's plan.” A debtor who files a chapter 13 bankruptcy intends to repay all or part of her debts in installments to creditors over three to five years. The individual’s repayment plan term cannot exceed five years.

There are a number of advantages that chapter 13 affords to debtors. The most significant is the ability to stop a home foreclosure and force the creditor to accept payments for any delinquent mortgage payments. The bankruptcy automatic stay stops foreclosure proceedings immediately upon the debtor’s bankruptcy filing with the court. However, this temporary relief may be lost if the debtor fails to make the regular mortgage payments that come due after the chapter 13 filing.

Another advantage of chapter 13 bankruptcy is that a debtor may modify a secured loan and repay it over the plan term. This usually lowers the monthly payment. In certain circumstances the debtor can also “cram-down” the secured loan by stripping away the unsecured portion of a debt. For example, a debtor may owe $20,000 on a car that is only worth $10,000. Chapter 13 may allow the debtor to modify this loan and only pay the creditor the value of the car, or $10,000. There are special qualifying rules for this type of modification, so be sure to discuss your situation with your attorney.

Within 15 days of the filing of the chapter 13 bankruptcy petition, the debtor must file a proposed repayment plan with the court. The plan is also sent to the U.S. trustee and all creditors for review and opportunity to object. The plan must provide for regular fixed payments to the trustee who then distributes the funds to creditors according to the terms of the plan (which may be less than full payment on their claims). It is common for a chapter 13 plan to propose to pay secured creditors in full and nothing to unsecured creditors. This largely depends on whether there is “extra” money at the end of the month after the debtor’s secured creditors and monthly expenses are paid.

Occasionally circumstances change after confirmation of the chapter 13 plan that prevents the debtor from completing the repayment plan. The debtor may ask the court to allow the debtor to modify the plan, or to grant a “hardship discharge” and end the case early. Otherwise, at the end of the three to five year repayment period the court will discharge the debtor’s remaining debts that are not “non-dischargeable” by law. The chapter 13 bankruptcy discharge prevents those creditors from seeking payment from the debtor.

If you are over-burdened with secured debts and are in need of relief, consult with an experienced bankruptcy attorney about your rights under chapter 13 of the bankruptcy code.

Discharging Student Loans in Bankruptcy

Recently the House of Representatives Judiciary Subcommittee on Commercial and Administrative Law held a hearing to initiate legislation to change provisions of the federal bankruptcy law that give student loan lenders an advantage over other consumer loans. Current bankruptcy law provides that student loans are generally not dischargeable under any chapter of the bankruptcy code unless the debtor can show that repayment of the loan creates an "undue hardship." Unfortunately, Congress did not define "undue hardship" in the bankruptcy code, so this interpretation has been left to the individual bankruptcy court judges.

During the Committee hearing Rafael I. Pardo, an associate professor at the Seattle University School of Law who has studied the discharge of student loans in bankruptcy, challenged Congress “to clarify the undue hardship standard.” Many courts view "undue hardship" as a high bar that is only met by a showing of exceptional circumstances (like physical or mental disabilities, or poor or no future earning potential) that result in an inability to both repay the student loans and provide a minimum standard of living for the debtor and the debtor’s family. This is a very difficult burden for most debtors to meet, and consequently bars the discharge of student loans in most cases - even while other consumer debts like auto loans, credit cards, medical debts, mortgages, and even taxes are discharged in the debtor’s bankruptcy.

Consumer bankruptcy attorney Brett Weiss, who testified on behalf of the National Association of Consumer Bankruptcy Attorneys and the National Consumer Law Center, called the situation "unfair" when other consumer loans are forgiven in bankruptcy proceedings while student loans are not. As a result of these hearings, Rep. Steve Cohen (D-Tenn.) announced his plans to file legislation to “give private student loan borrowers more equitable treatment during the bankruptcy process.”

For the time being it remains extremely difficult to discharge student loans. However, there are other non-bankruptcy programs for debtors unable to repay their loans. In some cases debtors may qualify for reduced payments, deferment, forgiveness or cancellation. Chapter 13 bankruptcy can also provide a way to cure defaulted student loans, or pay them off during the bankruptcy. If you have student loan debt, discuss your situation and options with a qualified bankruptcy attorney.

Wall Street Bailout Bill Needs to Help the Little Guy!

Looks like the economy is bad shape to say the least. The President, Presidential-Hopefuls and members of Congress all pay lip service to this $700 billion Wall Street bailout, helping the little guy. However, this bailout as it currently stands does nothing to help the homeowner with a loan in or facing foreclosure. People in this situation can not refinance their mortgage and the housing market is so depressed and devalued the stressed and over extended homeowner can not sell their home. What is needed is the ability of the Bankruptcy Courts to restructure primary residential loans in a Chapter 13 Bankruptcy. The Court needs the ability to rewrite the terms of these bad and unaffordable loans. The ability of the Courts to restructure the loans will greatly increase the likelihood of repayment. Court supervised restructuring of primary residential home loans is the only way to truly help the little guy in this bailout. The ability for the Bankruptcy Courts to rewrite primary residential mortgages will not only help the little guy, but also Wall Street and soon all tax payers when the government buys all these loans. How, you may ask? With more people repaying their loans instead of turning in the keys fewer homes will be foreclosed. Thus, with a lower number of homes on the market for sale hopefully the property values will begin to trend upward.

I am a member of the National Association of Consumer Bankruptcy Attorneys, below are key points they are trying to stress to law makers who are today considering this Wall Street bailout. Why should a Wall Street CEO be able to restructure their vacation home’s mortgage in Bankruptcy, but the guy on Main Street is not able to restructure the loan on his primary residence. This is against public policy and makes no sense to many Americans facing the loss of their home. Without the ability of the courts to restructure these bad loans more and more families are truly going to be on Main or some other street. Please call, fax or email your members of the House and Senate and urge them to support a court-supervised mortgage restructuring amendment in the Wall Street bailout bill.

* The rapid deterioration of the financial sector has been fueled by the steep rise in delinquencies and foreclosures of risky mortgages.

* These mortgages have been sliced up and sold in complex financial instruments that now sit as "toxic assets? on the balance sheets of our largest banks.

* Every financial expert, including Treasury Secretary Paulson and Federal Reserve Chairman Bernanke, agree that we will not stabilize our financial markets until we stabilize the housing markets.

* The housing market will not stabilize absent a solution to the tide of foreclosures.

* Simply giving a government entity the authority to purchase the "toxic assets? of troubled financial institutions will not result in fewer foreclosures. This is complicated, but the basic problem is that the government will not be buying mortgages ...those mortgages have been carved up and sold to investors all over the world. The government essentially would have to put all the pieces back together to modify the loan, which just is unrealistic.

* Court-supervised mortgage modification in Chapter 13 bankruptcy is perhaps the most effective tool for ending the foreclosure crisis.

* Court -supervised mortgage modification will not cost the U.S. taxpayer one penny, but will keep families on Main Street in their homes. It deserves your support in the taxpayer funded bailout of Wall Street.

Bankruptcy Attorney Erich M. Niederlehner, of Mobile, Alabama, Pensacola Florida & Fort Walton Beach, Florida provides qualitiy legal Bankruptcy services to the citizens of Escambia County Florida, Santa Rosa County Florida, Okaloosa County Florida, Walton County Florida, Mobile County Alabama, Baldwin County Alabama which includes but is not limited to the following cities:

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Alabama and Florida Bankruptcy Attorneys offer Affordable Bankruptcy, Debt Relief & Debt Consolidation in Alabama and Florida. Bankruptcy Attorneys provide Low Cost Bankruptcy & Discount Rates on Bankruptcy Attorney Fees serving Mobile, Alabama, Pensacola Florida & Fort Walton Beach, Florida.
Alabama and Florida Bankruptcy Lawyer – Attorney Erich M. Niederlehner Chapter 7 &13, Affordable Debt Relief & Bill Consolidation in Alabama and Florida.

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