Statman, Harris & Eyrich, LLC has successfully represented business and individuals from the United States in bankruptcy related matters. SH&E’s bankruptcy practice is primarily creditor-oriented and provides bankruptcy and work-out related advice to its clients. SH&E is involved in significant Chapter 7 liquidation and Chapter 11 reorganization cases. The firm has extensive experience in representing secured lenders in relief from stay motions, adequate protection issues, cash collateral orders, debtor in possession financing, and issues relating to assumption or rejection of executor contracts and leases and true leases versus security interests.
Statman, Harris, & Eyrich, LLC attorneys have extensive experience in successfully representing businesses and individuals in the United States with bankruptcy issues. Bankruptcy is a broad term that encompasses a number of specific procedures that have been authorized by the federal government to help people and other entities with insolvency issues. Bankruptcy may absolve a person or business of their debt or reorganize their financial obligations, possibly making it so they are responsible for paying back only a portion of their debt. Bankruptcy provides insolvent persons with legal protection from prosecution by creditors and is intended to give a person or business a fresh start, financially speaking.
The various types of bankruptcy take their names from the chapter about them found in the United States Bankruptcy code. The most common form of bankruptcy is called Chapter 7. It involves liquidating and selling a person’s or business’s assets and using the funds to pay creditors, after which any remaining debt is discharged. There are generally certain assets that remain exempt from liquidation, such as a person’s home or automobile, personal jewelry, and the like. Exemptions vary from state to state and may be subject to both numerical and financial limitations.
Chapter 13 bankruptcy involves debt restructuring but limits the amount of debt that can be restructured. Chapter 13 is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Debtors usually propose a plan of repayment by making installments to creditors over 3 to 5 years. The plan will be for 3 years unless the court approves a longer period “for cause” if the debtor’s current monthly income is less than the applicable state median. The plan is generally for 5 years if the debtor’s current monthly income is greater than the applicable state median. In no case may a plan provide for payments over a period longer than 5 years. During this time the law forbids creditors from starting or continuing collection efforts.
Chapter 11 / Chapter 9 / Chapter 12
Unlike Chapter 13, Chapter 11 has no upper limit on the amount of debt that can be reorganized. It is available to individuals, partnerships, and corporations and is the logical choice for large entities with a great deal of debt. Other, less frequently employed forms of bankruptcy also exist, such as Chapter 9, which provides for the financial reorganization of municipalities or Chapter 12, intended specifically for farms. Note that Bankruptcy Law is concerned not only with the rights of those dealing with insolvency but also with the rights of creditors to whom money is owed. There are two types of recognized creditors in cases of bankruptcy: secured and unsecured. Unfortunately, unsecured claims are not always addressed.
All types of bankruptcy proceedings have prescribed steps as they proceed. A trustee is appointed to oversee and administer each case. Generally speaking, at least one hearing, and sometimes more, is required. Hearings may involve meetings with the trustee, creditors, or a bankruptcy judge. Another facet of bankruptcy involves adversary proceedings, which take place whenever the entity filing for bankruptcy is suspected of abusing the bankruptcy system. Examples of actions that could result in these proceedings include fraud, lying about pertinent information, hiding assets and similar issues. An adversary proceeding can be thought of as a lawsuit that is filed within a bankruptcy case.
Creditors clearly have a stake in bankruptcy proceedings, too. While the consideration of those with unsecured claims often come last, those whose claims are anchored with collateral have a clear right to share in the distribution of assets, to challenge a debtor’s discharge, and to also file a claim with the bankruptcy court. Creditors also have the right legal representation. Not only will an attorney provide creditors with up-to-date legal counsel, but they are helpful in securing the largest share possible of any given distribution and, when workouts are involved, arranging the most advantageous terms.
Bankruptcy is a highly specialized area of the law and carries long-term consequences, financial and otherwise. Those filing for or affected by bankruptcy are wise to seek experienced counsel, such as that available at Statman, Harris & Eyrich, LLC. In addition to helping those in need file bankruptcy, SH&E attorneys have great expertise in a sub-category of Bankruptcy Law known as creditor-oriented law. If you or your company is experiencing financial difficulty and are wondering if bankruptcy is an option, contact SH&E and avail yourself of their expertise, help, and guidance.
At Statman, Harris & Eyrich, LLC, we work hard to help our clients in debtor-creditor issues in which one party is unable to pay a monetary debt to another. Here we strive to resolve situations so that the outcome in most cases will be mutually acceptable for everyone.
…and the Fair Debt Collection Practices Act
Many debt collectors continue to use deceptive, unfair, and abusive practices to obtain money owed to an individual or company. It is believed these practices lead to marital instability, job losses, individual privacy invasions, and personal bankruptcies, and many feel measures currently in place fail to protect consumers. For this reason, the Fair Debt Collection Practices Act (FDCPA) was enacted. Laws vary by state, but debt collectors in every state must comply with this act when attempting to collect these monies. For this reason, many turn to an attorney specializing in collections law for assistance when they need to recover an unpaid debt. One must be aware, however, that this practice does not apply to commercial debt.
Harassment Or Abuse
Debt collectors aren’t allowed, by law, to oppress, abuse, or harass any individual in connection with a debt they own, yet people may have different definitions for these terms. According to the FDCPA, a person in this position isn’t allowed to use or threaten to use criminal means, such as violence, to collect the debt, and this applies to more than just the physical body of the person. Threats cannot be made to their property or reputation either. In addition, the collector cannot threaten to publish the debtor’s name, other than to share this information with a credit reporting agency or other persons who meet the requirements of the act. Collectors must identify themselves when calling a debtor and certain other requirements must be met to ensure the collector is complying with this act. An attorney can determine what constitutes harassment, abuse, or oppression when it comes to this law.
Misleading And False Representations
Any individual or company attempting to collect a debt must not falsely represent the legal status, amount, or character of the debt being collected. In addition, the collector is barred from suggesting or implying the consumer engaged in a criminal activity in an effort to disgrace the debtor. Collectors cannot state they are affiliated with the country or any state, nor can they imply or state they are bonded by or vouched for by the nation or state. These are only a few of the many misleading and false representations a person or company attempting to collect an unpaid debt cannot use.
Other Actions Covered By the Fair Debt Collection Practices Act
Individuals or companies attempting to collect a debt are prohibited by law from collecting any amount above and beyond what is outlined in the original contract and cannot request postdated payment with the intent of threatening or establishing a criminal lawsuit. Debt collectors are also barred from threatening to take possession of any property unless they actually intend to do so, and they are not able to communicate with a debtor by postcard. These are only a few of the many practices addressed in the act that companies and individuals must be aware of, as a violation of the act could lead to legal action taken by the debtor. Debtors who win may collect damages for physical or emotional distress, wage garnishment recovery, and more.
Companies often find debtors cannot satisfy their obligations for one reason or another. When a company needs to collect a debt and finds they are unable to do so, Statman, Harris & Eyrich, LLC. may be of assistance in ensuring collection practices comply with the FDCPA. The attorneys at the firm are well-versed in Collections Law and can answer any questions regarding the process to be used or the legalities of collecting debt, both at the state and federal level. The goal is to resolve the situation in a manner that is mutually acceptable to all parties whenever possible. Contact Statman, Harris, & Eyrich, LLC. today to discuss collection issues you are facing and how best to address them to obtain positive results.
Statman, Harris & Eyrich, LLC’s foreclosure department has successfully handled collections, bankruptcies and foreclosure work-outs in Indiana, Ohio and Kentucky. As foreclosure work is a competitive market, we feel that we offer to our clients competitive pricing for our outstanding services. Please contact our offices in Cincinnati, Dayton and Chicago to discuss the many quality services that our firm can offer you.
Homeowners who fail to pay their mortgages in a timely manner face foreclosure. During this process, the loan originator works to recoup the remaining balance of the loan to protect their interest in the property. They do so by forcing the sale of the asset used to secure the loan, and any proceeds from the sale are used to pay off the mortgage. In past times, any mortgage default resulted in the loan originator automatically receiving ownership of the property, yet this is no longer the case. Today, mortgagors are provided an opportunity to bring the loan current before the process is complete. Each state enacts laws governing this process, therefore a homeowner must make certain they are familiar with Foreclosure Law in their state.
Once a homeowner defaults on a loan, the mortgage provider may begin foreclosure proceedings at any time. Two foreclosure processes are used in most states, although strict foreclosure continues to be the process used in Vermont and New Hampshire. A judicial sale brings the legal system into the equation, as the court supervises the sale of the property. Proceeds from the sale go first to the primary lien holder. Any monies remaining are then distributed to other lien holders and, if funds remain once these debts are satisfied, the money goes to the borrower. As this process involves legal action, all parties must receive notification of the foreclosure and a short trial may be held before a judicial decision is reached.
Some states make use of the foreclosure by the power of sale process. In these states, the loan originator retains the right to sell the property without court supervision. This process generally takes less time than judicial foreclosure, and many states make use of this method. As with judicial foreclosure, any monies received from the sale of the property go first to the primary mortgage holder, then to secondary lien holders and finally to the borrower, if funds remain.
The amount owed to bring the property out of foreclosure is determined by the concept of acceleration. Here, the loan originator declares the total amount of the debt due and payable. The majority of mortgages, with very few exceptions, come with an acceleration clause in the terms. This clause isn’t imposed by statute, so any mortgage that doesn’t contain this clause can’t technically be foreclosed on. The reason for this is the mortgage holder will be forced to wait until every payment has come due or until he or she convinces a court to break the property up into sections, selling off sections as each installment comes due. As an alternative, a court can order the property be sold subject to the mortgage loan. Any proceeds from the sale are used to satisfy the payments owed to the lender.
Contesting A Foreclosure
Borrowers have the right to contest a foreclosure. Some individuals choose to do so by requiring proof of ownership, while others allege their loan documents are fraudulent. Doing so doesn’t necessarily mean the foreclosing proceedings stops, yet this is an option that a borrower may wish to consider. In this situation, it’s wise to seek legal counsel.
Anyone facing the loss of their home should contact a foreclosure attorney for assistance. Statman, Harris & Eyrich, LLC. works with clients facing bankruptcy, collections and foreclosure to stop the process and find alternate solutions. The firm offers competitive pricing, as they understand the client is going through a difficult time financially. The level of service remains of the highest caliber at all times, and clients feel confident working with the firm to retain control of their residence. Contact the firm today to discuss your situation and determine how Statman, Harris & Eyrich, LLC. can be of help.
Loan Workouts: An Alternative to Foreclosure
Statman, Harris & Eyrich, LLC represents both companies and individuals in troubled loan situations, assisting lender and borrower clients in workouts, restructurings and, where necessary, claims in bankruptcy proceedings.
The firm represents secured, partially secured and unsecured creditors in Chapter 11 cases and other proceedings in federal bankruptcy courts throughout the country. SH&E also represents lenders in foreclosures, workouts, and restructurings outside of bankruptcy, including structuring and implementing asset swaps, asset sales and new, additional or restructured debt financing or investment.
The firm has counseled clients in a variety of structuring transactions with regard to bankruptcy considerations and also advises clients concerning stays of lien enforcement, set-offs, preferences, fraudulent conveyances, leveraged buyouts, equitable subordination, lender liability and assumption or rejection of leases and executor contracts.
The word workout typically brings to mind exercise, yet loan Workouts are a completely different thing. When a homeowner is facing foreclosure, loan workout attorneys step in to try to get the home loan back on track. The goal of the workout in this situation is to restructure the homeowner’s debt to prevent the foreclosure. Often, individuals hear of loan workouts being referred to as a mortgage or loan modification, yet they are all discussing the same process. The homeowner and lender work together to find a way to make the monthly payment affordable for the homeowner so the foreclosure process may stop. All parties need to agree on the modified terms if the program is to be successful.
Factors Considered By The Lender During A Loan Workout
Lenders prefer not to take a home, as they then become responsible for upkeep and maintenance, and they also become responsible for selling the home. Before a loan workout can be completed, however, they examine various factors to ensure the homeowner will be able to meet the modified loan terms. Factors considered during this process include the reasons the homeowner fell behind on his or her loan initially and the amount owed on the property. The lender determines how much equity is built up in the home and looks at the homeowner’s future financial prospects. Obviously, the lender considers what is in their best interests as well. In some situations, they continue with the foreclosure process as it is more beneficial to them. In others, however, they are more than happy to provide a loan modification.
Ways A Loan May Be Modified
Homeowners often find they have options when it comes to working out their loans. This isn’t always the case, as the lender wants to receive their money, but a homeowner always needs to ask what is available to them. In some situations, the lender adds the missed payments to the remaining loan balance. Another option involves extending the loan and adding the missed payments to the end, and a third option leads to a change in the interest rate the borrower is paying. In some cases, the change in interest rate involves converting an adjustable rate loan into a fixed rate loan.
Requesting A Loan Workout
Many homeowners wait until the last minute to contact their lender, yet communicating with the lender quickly shows the homeowner is acting in good faith. Many individuals remain hesitant to begin this conversation, however, as they believe they may be forced to make concessions they aren’t comfortable with. Others worry they will agree to something, not fully understanding what it involves. For this reason, many individuals choose to seek legal advice before beginning this process.
Statman, Harris & Eyrich, LLC works with clients to halt the foreclosure process. With the help of loan workouts, many individuals find they can remain in their home and make payments they can truly afford. As the homeowner is already struggling with financial difficulties, the firm strives to keep their prices affordable while providing outstanding service at every stage of the process. Contact Statman, Harris & Eyrich, LLC. today to discuss your options when it comes to stopping the foreclosure process so you can keep your home.
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