It’s a problem now affecting thousands of people who’ve lost their homes. WWJ’s Sandra McNeill reports on the phenomenon known as the ‘zombie foreclosure.’
Mark Gilman from Decus Consulting says a zombie foreclosure is when a homeowner walks away from their home but the tax debt isn’t dead.
“The banks are not starting the process immediately and what happens is a year later they get a tax bill and they can’t understand why? The reason is because the house was never actually put into the foreclosure process,” notes Gilman.
Gilman says because the markets are so bad the banks are holding on to a lot of these foreclosed homes.
Read the rest of the article at CBS Detroit
Monday, February 25, 2013
Business bankruptcies fall, but federal factors may reverse trend
Experts say as the economy continues to stabilize, the number of bankruptcies should continue its downward spiral. However, some experts question if the cost associated with Obamacare will either reverse the trend or cause an uptick in business insolvencies.
Read the rest of the article at The Birmingham Business-Journal
Read the rest of the article at The Birmingham Business-Journal
Top 10 Bankruptcies Of 2012
In 2012, unlike in many previous years, when bank holding and financial-services companies undone by the financial crisis dominated the Top 10 List for public-company bankruptcy filings, only a single financial-services company and two banking entities made the year's Top 10. The remainder of the list was populated by companies in the imaging, energy, publishing, aircraft, and shipping industries. Each company on the Top 10 List checked into chapter 11 with both assets and liabilities exceeding $1 billion.
Minneapolis, Minnesota-based real estate finance company Residential Capital, LLC ("ResCap") grabbed the brass ring for the largest public bankruptcy case in 2012 when it filed for chapter 11 protection on May 14 in New York with $15.7 billion in assets and $15.3 billion in debt. ResCap is a wholly owned subsidiary of GMAC Mortgage Group, LLC, which in turn is wholly owned by Ally Financial Inc. ("Ally"), the former finance arm of General Motors Co. once known as GMAC. As one of the biggest subprime-mortgage lenders in the country, ResCap was hit especially hard by the financial crisis. The fallout from the crash swamped both ResCap and Ally with mortgage liabilities to the extent that Ally is now 74 percent owned by the U.S. government after a series of bailouts and failed the most recent round of bank stress tests conducted by the U.S. Federal Reserve.
Read the rest of the article at Mondaq
Minneapolis, Minnesota-based real estate finance company Residential Capital, LLC ("ResCap") grabbed the brass ring for the largest public bankruptcy case in 2012 when it filed for chapter 11 protection on May 14 in New York with $15.7 billion in assets and $15.3 billion in debt. ResCap is a wholly owned subsidiary of GMAC Mortgage Group, LLC, which in turn is wholly owned by Ally Financial Inc. ("Ally"), the former finance arm of General Motors Co. once known as GMAC. As one of the biggest subprime-mortgage lenders in the country, ResCap was hit especially hard by the financial crisis. The fallout from the crash swamped both ResCap and Ally with mortgage liabilities to the extent that Ally is now 74 percent owned by the U.S. government after a series of bailouts and failed the most recent round of bank stress tests conducted by the U.S. Federal Reserve.
Read the rest of the article at Mondaq
Bankruptcy may be only answer for Detroit
Ann Arbor —
Same song … second verse.
That’s my reaction to last week’s news that the state team charged with reviewing Detroit’s financial condition has unanimously concluded that a financial emergency exists in the city.
To quote them exactly: “… a financial emergency exists because no satisfactory plan exists within the City of Detroit to resolve a severe financial problem.”
That’s putting it mildly. The city’s cash shortfall is likely to hit $100 million by June. The deficit accumulated since 2005 mounts up to nearly a billion dollars. Detroit’s unfunded long-term debt (mostly pension and other retirement benefits) is about $14 billion.
That comes to around $20,000 per city resident.
When General Motors went into bankruptcy in 2009, it had a staggering debt-to-asset ratio of 20 to 1. That meant for every dollar of assets GM had, the automaker owed $20 in debt. Detroit’s debt-to-asset radio? It’s now 33 to 1.
Thursday, February 21, 2013
The rise of zombie foreclosures
Foreclosing on your home is not the same as just walking away, financial experts say if you do that it could come back to haunt you long after you have moved out. Since the housing bubble burst seven years ago thousands of properties are said to be in so-called "zombie foreclosures." That's when a borrower moves out of a home after their bank schedules a foreclosure auction only to find out months or years later that the auction never took place or the bank never transferred the deed to the house. When this happens, the borrower still technically owns the home, and all the debt that goes with it.
From CBS 42
From CBS 42
Detroit has more foreclosures than it can handle
As more and more residents flee the progressive paradise that is Detroit, the city’s government is being overwhelmed by foreclosures — so many, in fact, that the city treasurer ignored the cases of 40,000 delinquent properties last year alone. Ignoring these properties that should be foreclosed on may be a violation of state law and encourages squatting, scrapping and speculation, the Detroit News warns.
Read the rest of the article at The Blaze
Read the rest of the article at The Blaze
Southeast Arizona Medical Center Files for Bankruptcy
Community Healthcare of Douglas, the operator of Southeast Arizona Medical Center in Douglas, Ariz., has filed for Chapter 11 bankruptcy, according to a Sierra Vista Herald report.
High rates of charity care and other financial issues have plagued the 25-bed critical access hospital, which is only miles from the Arizona-Mexico border.
Jim Riley, president of CHD, said there will be no layoffs. Sierra Vista (Ariz.) Regional Health Center has been managing SAMC for the past 18 months, and it will continue to do so until a federal bankruptcy court finds a bidder to take over SAMC's operations, according to the report.
Read the rest of the article at Becker's Hospital Review
Read the rest of the article at Becker's Hospital Review
Lenders: Beware of the Arizona "Two-Dollar Bankruptcy"
For many years, an Arizona individual debtor could place his or her future wages and commingled community property assets outside of the reach of his or her creditors simply by getting married. Thus, getting married in Arizona has been colloquially referred to as a "two-dollar Bankruptcy." The term-of-art "two-dollar Bankruptcy" refers to initial cost of an Arizona marriage license, which was at one time two dollars. Although the scope of the "two-dollar Bankruptcy" has been significantly narrowed though legislative and case law developments, its protection continues in certain contexts. One of these contexts is personal guaranties. Under Arizona law, both spouses must execute a personal guaranty to bind the marital community.
Read the full article at Mondaq
Read the full article at Mondaq
Atlantic City's newest casino to file for bankruptcy
Revel, the casino many people had hoped would turn around Atlantic City's sagging fortunes, said Tuesday that it will file for Chapter 11 bankruptcy protection in March, less than a year after it opened.
The voluntary, prepackaged bankruptcy envisioned for late March will wipe away about two-thirds of its $1.5 billion in debt by converting more than $1 billion of it into equity for lenders.
Read the rest of the article at USA Today
Read the rest of the article at USA Today
Bankruptcy Basics: Options for the “Honest but Unfortunate Debtor"
The federal Bankruptcy Code is designed to provide a “fresh start” to a broad range of individual debtors (including spouses, who can file joint bankruptcy petitions). As the United States Supreme Court recognized almost 80 years ago, the bankruptcy process “gives to the honest but unfortunate debtor . . . a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This “opportunity” is made available to debtors by the bankruptcy discharge, which prohibits creditors from taking action against a debtor who has been relieved of personal liability for specific debts. The filing of a bankruptcy petition also provides a temporary “breathing spell” known as the “automatic stay,” which stops lawsuits, foreclosures, garnishments and most types of collection activities against a debtor.
Read the rest of the article at The Alternative Press
Read the rest of the article at The Alternative Press
Thursday, February 14, 2013
Short Sale or Bankruptcy for Mom with Dementia?
Q. My dad passed away, and we cannot afford to pay the mortgage on a home he bought five years ago as a second home. Our mom is alive but has dementia. Should we try asking for a short sale or try going through bankruptcy?
A. In this situation, I would advise you to look into a short sale. Since this is your mother and late father's second home, she may have another home with equity, or she may have other assets. Those assets could be in jeopardy if she lets the house go into foreclosure, and she might not be able to protect all the assets if she files bankruptcy. Foreclosure is a dangerous option because, depending on which state she lives in, she could be on the hook for any unpaid balance after the foreclosure sale. For example, she might owe $200,000 on the mortgage, but the house sells in foreclosure for $150,000. She could be liable for the $50,000 difference.
Read the entire scenario at Fox Business
A. In this situation, I would advise you to look into a short sale. Since this is your mother and late father's second home, she may have another home with equity, or she may have other assets. Those assets could be in jeopardy if she lets the house go into foreclosure, and she might not be able to protect all the assets if she files bankruptcy. Foreclosure is a dangerous option because, depending on which state she lives in, she could be on the hook for any unpaid balance after the foreclosure sale. For example, she might owe $200,000 on the mortgage, but the house sells in foreclosure for $150,000. She could be liable for the $50,000 difference.
Read the entire scenario at Fox Business
Real estate companies top bankruptcy list
When the housing bubble burst in 2008, hundreds of real estate developers, contractors and homebuilders ended up at federal bankruptcy court.
While the biggest filings seem to have been resolved, ripples of the housing collapse are still evident at bankruptcy court.
Although the number of filings is down, of the biggest 10 bankruptcies in Oregon last year, roughly half were filed by developers, contractors, or other companies connected to the real estate industry, according to new research by American City Business Journals, the parent company of the Portland Business Journal.
Read the rest of the article at Portland Business Journal
While the biggest filings seem to have been resolved, ripples of the housing collapse are still evident at bankruptcy court.
Although the number of filings is down, of the biggest 10 bankruptcies in Oregon last year, roughly half were filed by developers, contractors, or other companies connected to the real estate industry, according to new research by American City Business Journals, the parent company of the Portland Business Journal.
Read the rest of the article at Portland Business Journal
Saturday, February 9, 2013
Gilbert legislator Farnsworth works to update state’s bankruptcy laws
The head of the House Judiciary Committee wants to update Arizona's dated and sometimes anachronistic bankruptcy laws.
Nothing in the proposal by Rep. Eddie Farnsworth, R-Gilbert, alters the process that allows individuals to seek protection from creditors. Those are set in federal law.
But that same federal law allows each state to decide what those declaring bankruptcy can keep. And Farnsworth said that list for Arizona is long overdue for an overhaul.
The big problem, he said, is that it is far too specific.
Consider: The Arizona law allows debtors to keep one kitchen table and one dining room table with four chairs each. They can keep additional chairs if there are more than four in the house.
The list of permissible items also includes three living room lamps, one radio alarm clock, one vacuum cleaner and a choice of one television set, radio or stereo.
And the total value of all that cannot exceed $4,000.
HB 2325 would keep that $4,000 limit for household items. But it strikes the specifics of what can be included to give those in bankruptcy some individual choices in deciding what's important to them.
Thursday, February 7, 2013
Bankruptcy - not the only answer
Bankruptcy is just a tool in my toolbox. Depending on your circumstances, other choices might include a short sale on your house, mortgage modification, forbearance, or assistance from the state fund.
Click here to read the rest of the article at The Florida Times-Union
Click here to read the rest of the article at The Florida Times-Union
Wednesday, February 6, 2013
Can Bankruptcy Court Force Home Loan Modification?
About three years ago, at the height of the mortgage crisis, there was a push to give judges power to force lenders into loan modifications or loan principal reductions. Attorneys and judges made a plea to state and federal legislatures to give bankruptcy judges power to force the lender to modify loans and/or reduce mortgage balances to the current fair market value.
Nothing changed. Bankruptcy judges were not given the power to require the lender to modify a loan or reduce loan principal.
Read the rest of the article at Fox Business
Friday, February 1, 2013
Phoenix shooter had filed for bankruptcy previously
A lawsuit over $20,000 worth of office furniture may be a factor in a deadly shooting in north-central Phoenix on Wednesday, according to court records.
Arthur Douglas Harmon is suspected of shooting three people outside the entrance of the three-story building at 7310 N. 16th St. Police say two of the victims — Mark Hummels, a partner with Osborn Maledon, and Steven Singer, president and CEO of Fusion Contact Centers — were the targets. Singer, 48, was killed. Hummels, 43, was taken off live support Thursday night.
The third victim, 32-year-old Nichole Hampton, was not seriously injured.
All three men had been in a morning mediation session at the law office of DeConcini McDonald Yetwin & Lacy, trying to resolve the case. Hummels was Singer’s attorney.
The financial dispute between Singer and Harmon, who operated a business called Redback Design since 1990, dated to February 2012.
In 2005, Harmon and his wife faced $219,000 in debts, most of it to banks and credit-card companies. The couple filed for bankruptcy, which proved to be “a fairly mundane case,” said Lothar Goernitz, a trustee who helped resolve the matter.
Read the rest of the article at AZCentral
Arthur Douglas Harmon is suspected of shooting three people outside the entrance of the three-story building at 7310 N. 16th St. Police say two of the victims — Mark Hummels, a partner with Osborn Maledon, and Steven Singer, president and CEO of Fusion Contact Centers — were the targets. Singer, 48, was killed. Hummels, 43, was taken off live support Thursday night.
The third victim, 32-year-old Nichole Hampton, was not seriously injured.
All three men had been in a morning mediation session at the law office of DeConcini McDonald Yetwin & Lacy, trying to resolve the case. Hummels was Singer’s attorney.
The financial dispute between Singer and Harmon, who operated a business called Redback Design since 1990, dated to February 2012.
In 2005, Harmon and his wife faced $219,000 in debts, most of it to banks and credit-card companies. The couple filed for bankruptcy, which proved to be “a fairly mundane case,” said Lothar Goernitz, a trustee who helped resolve the matter.
Read the rest of the article at AZCentral
Jamison misses deadline to purchase Phoenix Coyotes
The prospective owner of the Phoenix Coyotes was unable to complete his purchase of the team before a lease agreement deal with the City of Glendale expired, a league official told The Associated Press on Thursday.
Casey Anthony files for bankruptcy in Florida
Casey Anthony filed for bankruptcy in Florida on Friday, claiming about $1,100 in assets and $792,000 in liabilities.
Court records show that Anthony, who was acquitted of killing her 2-year-old daughter Caylee in 2011, sought Chapter 7 bankruptcy protection in federal court in Tampa.
Her listed debts include $500,000 for attorney fees and costs for her criminal defense lawyer during the trial, Jose Baez; $145,660 for the Orange County Sheriff's office for a judgment covering investigative fees and costs related to the case; $68,540 for the Internal Revenue Service for taxes, interest and penalties; and $61,505 for the Florida Department of Law Enforcement for court costs.
Read the rest of the article at AZFamily
Court records show that Anthony, who was acquitted of killing her 2-year-old daughter Caylee in 2011, sought Chapter 7 bankruptcy protection in federal court in Tampa.
Her listed debts include $500,000 for attorney fees and costs for her criminal defense lawyer during the trial, Jose Baez; $145,660 for the Orange County Sheriff's office for a judgment covering investigative fees and costs related to the case; $68,540 for the Internal Revenue Service for taxes, interest and penalties; and $61,505 for the Florida Department of Law Enforcement for court costs.
Read the rest of the article at AZFamily
Metro Phoenix bankruptcies post double-digit dip in 2012
The metro Phoenix bankruptcy picture ended 2012 the same way it started the year, with a double-digit decline in the number of filings.
Helped by a stronger job market, better economic growth and rising real estate prices, fewer consumers and businesses resorted to bankruptcy last year. The 20,156 bankruptcies in 2012 were down from 26,262 in 2011 and 31,207 the year before, reported the U.S. Bankruptcy Court in Phoenix.
Filings have fallen for 23 straight months on a year-over-year basis. The last 18 decreases have been at double-digit rates.
Read the rest of the article at AZCentral
Helped by a stronger job market, better economic growth and rising real estate prices, fewer consumers and businesses resorted to bankruptcy last year. The 20,156 bankruptcies in 2012 were down from 26,262 in 2011 and 31,207 the year before, reported the U.S. Bankruptcy Court in Phoenix.
Filings have fallen for 23 straight months on a year-over-year basis. The last 18 decreases have been at double-digit rates.
Read the rest of the article at AZCentral
Michigan Brewing files for bankruptcy
Michigan Brewing Co. of Webberville has filed for Chapter 7 liquidation bankruptcy, claiming assets of $51,521 and liabilities of more than $11 million.
MBC founder and majority shareholder Bobby Mason mailed notices to shareholders of Thursday’s filing in U.S. Bankruptcy Court.
MBC ran into financial troubles under the management of Mason and his wife, Denise Fulton, who served as chief financial officer.
Last April, MBC was evicted from the building that housed the brewing operation and restaurant for failure to pay rent. Mason previously owned the building, but lost it to a creditor.
Read the rest of the article at the Lansing State Journal
MBC founder and majority shareholder Bobby Mason mailed notices to shareholders of Thursday’s filing in U.S. Bankruptcy Court.
MBC ran into financial troubles under the management of Mason and his wife, Denise Fulton, who served as chief financial officer.
Last April, MBC was evicted from the building that housed the brewing operation and restaurant for failure to pay rent. Mason previously owned the building, but lost it to a creditor.
Read the rest of the article at the Lansing State Journal
The Broke and the Beautiful: Best Picture Edition
This week on The Broke and the Beautiful Kodak EKDKQ -3.70% may not have the naming rights for the theater where the Oscars are held, but it’s still starring in the best picture nominations. Also, the trustee for former University of Miami booster Nevin Shapiro’s bankrupt company is suing a law firm for its alleged role in Shapiro’s Ponzi scheme.
Last year, Eastman Kodak Co. took a starring role at the Academy Awards, thanks to presenter Billy Crystal’s jokes about the “Chapter 11 theater.” Dolby Laboratories Inc. now holds the naming rights to the theater, but that doesn’t mean Kodak can’t still be in the spotlight. As Bankruptcy Beat reported earlier this week, the company could edge its way onto the stage because its film was used to shoot a number of movies that have been nominated for this year’s best picture, including the musical “Les Misérables” and spaghetti western “Django Unchained.” Other movies that didn’t get nominated for Best Picture but still used Kodak’s film include “Anna Karenina” and “Moonrise Kingdom.”
Read the rest of the article at the Wall Street Journal
- Associated Press
- Oscar banners are seen outside the former Kodak— now Dolby—Theatre last year.
Read the rest of the article at the Wall Street Journal
Garcia’s, Garfield’s Restaurants Tell Workers About Bankruptcy
Two national restaurant chains that quietly filed for bankruptcy and tried to keep the news from their 1,400 employees caught the attention of a federal court watchdog, which has growled out an order to notify them.
A representative from the U.S. Trustee’s Office instructed the owners of—drumroll, please—the Garcia’s and Garfield’s restaurant chains to notify creditors, including many employees, that the chain’s two holding companies had filed for Chapter 11 protection on the Friday before New Year’s Eve.
Read the rest of the article at the Wall Street Journal
A representative from the U.S. Trustee’s Office instructed the owners of—drumroll, please—the Garcia’s and Garfield’s restaurant chains to notify creditors, including many employees, that the chain’s two holding companies had filed for Chapter 11 protection on the Friday before New Year’s Eve.
Read the rest of the article at the Wall Street Journal
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