All posts in Legislation

First Revamped Bankruptcy Forms Out for Public Comment

The Judicial Conference Committee on Rules of Practice and Procedure is asking for comment on the first proposed modernization of bankruptcy forms in two decades. The revised forms, published for comment, are all used by individual debtors and include the fee waiver and installment fee forms, income and expense forms, and the means test forms, replacing previous forms. The comments, submitted by the public, will be reviewed in coming months and will be used to fine-tune the forms.

There were over 1.2 million non-business bankruptcies filed in federal courts in the 12-month period ending September 30, 2012, where the debts were predominantly personal or consumer in nature.

Read the full article here.

California Assembly Bill 929: Increasing Certain Exemptions Available to Bankruptcy Debtors under C.C.P. Sections 703 and 704

Dear California NACBA member:

In case you had not heard, California Assembly Bill 929, took effect on January 1, 2013, increasing certain exemptions available to bankruptcy debtors under CCP Sections 703 and 704.  This legislation was introduced by Assembly Member Bob Wieckowski, who is also a long-time NACBA member.  We have learned that Rep. Wieckowski has been named the Chairman of the Assembly Judiciary Committee in the legislative session which began on December 1, 2012, and NACBA looks forward to working closely with him in this session to address further revisions needed to CCP 703 and 704.

Here are some highlights of California Assembly Bill 929:
. Increases the dollar amount of the exemptions for various categories under CCP 703.140(b)
. For the personal injury exemption under CCP 703.140(b)(11) (D), eliminates the exclusion for pain, suffering and actual pecuniary loss
. Expands the motor vehicle exemption under CCP 703.140 (b)(2) to one or more vehicles
. Increases the maximum income threshhold for persons 55+ years of age to be eligible for the $175,000 homestead exemption under CCP 704.
. Beginning April 1, 2013, and every 3 years thereafter, requires the Judicial Council to submit to the Legislature the amount by which the homestead exemptions may be adjusted based on the change in the annual California Consumer Price Index

Read more…

Homeowner Bill of Rights

Hello, Happy Holidays

Please see the link below; it is a link to ConsumersUnion, and contains what I think is an excellent summary of the law about to take effect.  I assume the lenders have prepared & are preparing new forms for this, such as foreclosure notices & denial of loan modification applications. I also assume this is going to have an impact on the bankruptcy filings; it will likely slow them down for a month or so. And, for oppositions to motions for relief from the stay, if I were a debtor’s attorney I would include a copy of the loan mod. application (although getting a copy may be much easier said than done).

For creditors, as the attorney for the lender I would ask for copies of all letters denying any & all loan mod applications so to be prepared for the debtor who says he or she never received it. You just know that is going to be part of an opposition to the motion for relief from the stay.
http://www.consumersunion.org/pdf/CA_Homeowner_Bill_of_Rights_Summary.pdf

David Brian Lally, Esq.
Law Office of David B. Lally
8001 Irvine Center Drive, Suite 1090
Irvine, CA 92618

National Forms Subcommittee Proposing a National Chp. 13 Plan

To my fellow Ch13 Brethern!

Please take note that there is a National Forms Subcommittee, called the “Working Group” headed by retired Judge Eugene Wedoff (retired Bankruptcy Judge from Chicago & one of the 3 authors of the Means Test) that is proposing the creation of a NATIONAL CHAPTER 13 PLAN. It is an effort to make the plan easier to understand and to combine Motions to Value & Motions to Avoid Liens through the plan in one document. Please review the draft as it will significantly affect our practice — both for creditors and debtors.

Our Judge Saltzman has been requested to participate in this endeavor and will be attending a meeting in mid-January. It would behoove you to provide comments in this endeavor.

KEITH

THE LAW OFFICES OF KEITH ALAN HIGGINBOTHAM

Possible “Drastic” Overhaul of Student Loan Collections

I’ll see it when I believe it – makes too much sense.  As posted by Prof. Nathalie Martin on Credit Slips:

A new bill is pending in Congress that

would require employers to withhold payments from wages in the same way they do taxes, capping payments at 15 percent of borrowers’ income after basic living expenses.  The bill follows growing concern about the burden of $1 trillion in outstanding student loans, which now exceed credit- card debt. Under the new system, the government would no longer need to hire thugs to collect, and I personally have found these student loan debt collectors to be quite formidable indeed.  Never mind that the debt collectors fees can add up to 25 percent to borrowers’ loan balances, leaving defaulted former students even deeper in the hole.  This new process would streamline the confusing process of getting on a reduced payment plan if a borrower is un or under-employed, but would still provide for repayment of the student debt.

Bloomberg article is here.

Proposed New Rules and Forms

The 458 page report of the Advisory Committee on Bankruptcy Rules can be accessed here.  A proposed new Chapter 13 plan form can be found at page 186.  The proposed new forms begin at page 215.  I understand that these forms are getting pretty close.  The proposed new rules will be “published” in August 2013.  According to a press release:

These are going to be the most important changes to Chapter 13 practice and procedure since the enactment of BAPCPA.  PLEASE take time to read the Draft Form and Working Group comments below.  Send your suggestions and comments to: Troy McKenzie at troy.mckenzie@nyu.edu and/or Hon. Eugene Wedoff at eugene_wedoff@ilnb.uscourts.gov.

Governor Brown — signed three significant foreclosure bills into law

Governor Brown signed three significant foreclosure bills into law:

AB 2610 (Skinner) – Extends the federal 90-day notice protection to all tenants in foreclosed properties, not just bona fide tenants. The bill also enacts the PTFA’s lease protections into state law but places the burden of proof on who qualifies for lease protections on the landlord. The newly enacted law also reforms the eviction process to better ensure that foreclosed tenants can assert their rights in post-foreclosure eviction actions.

SB 1191 (Simitian) – Requires landlords in 1-4 unit properties to disclose a notice of default (foreclosure) to prospective renters. Disclosure must be made in the six most frequently used languages in California. If the landlord fails to make the necessary disclosure, the tenant may ether (1) void the lease and recover all pre-paid rent plus additional damages or (2) elect to remain in the home and deduct one month’s rent from future rent obligations.

AB 1599 (Feuer) – Requires foreclosure notices (notice of default and notice of trustee sale) to include summaries in the six most frequently used languages in California listed in Civil Code 1632. This law will take effect on April 1, 2013 or 90 days after the Department of Consumer Affairs issues the translations, whichever is later.

The text of the bills is linked above.  The tenant bills will take effect on January 1, 2013.

Best,

Magdalena Reyes Bordeaux
Senior Staff Attorney
Public Counsel
mbordeaux@publiccounsel.org

New California Law Signed by Jerry Brown re Levies on Banks

Governor Brown Signs AB 2364 into Law, Centralizing the Location for Service of Levies, Attachments and Garnishments on Financial Institutions

The Consumer Financial Services Committee is pleased to report that an Affirmative Legislative Proposal on service of levies and other process on financial institutions that was sponsored by the CFSC has now become law.  This will require large banks, and permit smaller banks, to designate a central location where judgment creditors must serve levies, attachments and garnishments on deposit accounts and safe deposit boxes. The advantage for plaintiffs such as tort victims suing underinsured or uninsured motorists, as well as debt collectors, is that they no longer will have to serve the correct branch of the bank holding the account, a requirement that was a vestige of the pre-computer era.  Identifying the right branch bank for service of levies, attachments and garnishments has necessitated the costly use of orders of examination of the debtor and other procedures, and enforcement of money judgments could be frustrated by the judgment debtor moving money around.  The advantage of the legislation for financial institutions lies in both the efficiency of centralizing this function and the reduced risk of errors by branch bank staff.   The Department of Financial Institutions is required to create a procedure for banks to designate their central locations for service, and to establish a website where judgment creditors can obtain this information.

The law goes into effect January 1, 2013.

For the text of the Bill, click here: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2351-2400/ab_2364_bill_20120911_enrolled.pdf

Jonathan Leventhal, esq.

Homeowner Bill of Rights Act Signed by Jerry Brown on July 11, 2012 (Effective January 1, 2013)

From the Department of Justice:

Two key bills of the Homeowner Bill of Rights contain significant mortgage and foreclosure reforms. The major provisions of AB 278 (Eng/Feuer/Mitchell) and SB 900(Leno/Corbett/DeSaulnier/Evans) include:

  • Dual track foreclosure ban: Mortgage servicers will be required to render a decision on a loan modification application before advancing the foreclosure process by filing a notice of default or notice of sale, or by conducting a trustee’s sale. The foreclosure process is essentially paused upon the completion of a loan modification application for the duration of the lender’s review of that application.
  • Single point of contact: Mortgage servicers will be required to designate a “single point of contact” for borrowers who are potentially eligible for a federal or proprietary loan modification application. The single point of contact is an individual or team  with knowledge of the borrower’s status and foreclosure prevention alternatives, access to decision makers, and the responsibility to coordinate the flow of documentation between borrower and mortgage servicer.
  • Enforceability: Borrowers will have authority to seek redress of “material” violations of theCalifornia Homeowner Bill of Rights. Injunctive relief willbe available prior to a foreclosure sale and recovery of damages will be available following a sale.

The actual changes are to the California CVivil Code Section 2920 et seq.   For example,

Read more…

New Anti-Deficiency Protection (a little at least) in California Starting January 1, 2013

Thanks to Arne Wuhrman for this:

Just received from the California Association of Realtors:   New Anti-Deficiency Protection for Refinance Loans Made After January 1, 2013

Starting January 1, 2013, a new California law will protect homeowners who default on their refinance loans from personal liability for any deficiency following foreclosure. Existing anti-deficiency law protects a borrower from personal liability for the difference between the principal balance and what the lender receives at foreclosure if the loan is a purchase money loan secured by an owner-occupied property with one-to-four residential units. The new law, Senate Bill 1069, extends that anti-deficiency protection to include any loan used to refinance the purchase money loan, plus any loan fees, costs, and related expenses for the refinance. The anti-deficiency protection, however, does not extend to any “cash out” in a refinance, which is when the lender advances new principal not applied to any obligation owed under the purchase money loan.  This new law does not affect the other anti-deficiency protections for non-judicial foreclosures (or trustee’s sales) and seller financing.

This new law only applies to refinance loans or other credit transactions used to refinance a purchase money loan, or subsequent refinances of a purchase money loan, that are executed on or after January 1, 2013. For purposes of this law, any payment of principal shall be deemed to be applied first to the principal balance of the purchase money loan, and then to the principal balance of any new advance and interest payments shall be applied to any interest due and owing.

  Arnie Wuhrman SERENITY LEGAL SERVICES