February 2012

This post gathers my thoughts on three eye openers.  Some were in the news, and some I experienced first-hand in my bankruptcy practice.  The common thread among these eye openers is a profound threat to the freedom and wellbeing of the citizenry.

I.          Debt Collector Abuses

A.        Whole Lotta Collectin’ Goin’ On

In the February 16, 2012 Los Angeles Times, Jim Puzzanghera reported on the recently formed Consumer Financial Protection Bureau and noted:

Debt collection has been second only to identity theft in consumer complaints to the Federal Trade Commission in recent years. The bureau estimated that 30 million Americans have debts in the collection process.

Thirty million!  Wow!  That’s one-tenth of the entire U.S. population.  So it’s not just my clients who are facing debt collection agencies and their corrupt and abusive tactics.  And given the volume of complaints it appears that abuses by debt collectors are widespread – it’s not just a few bad apples.
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In my last post – the one about the taxation of cancellation of debt income – I promised I’d write about discharging income taxes in bankruptcy.  In fact, I recently published an article on the subject, but the flavor was a bit dry and technical.  I’ll try to make today’s version a bit less so.

By the way, although some articles on that site are ghost-written, I really did write the article.

I.          Discharging Taxes In Bankruptcy

There are two possible scenarios:  discharging taxes in a bankruptcy other than a completed Chapter 13 plan, and discharging them through a completed Chapter 13 plan. 
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I.          Loan Modifications:  The New Scam On America

In the January 20, 2012 issue of the Wall Street Journal’s Market Watch, Lew Sichelman shared a few of the many letters he received from homeowners detailing their nightmarish experiences in trying – unsuccessfully – to modify their mortgages.  Take a look at the stories and know that they are being repeated thousands of time a day all over the country.

Those of you familiar with this blog know that I have written posts about loan modification before.  My take on the process has been quite cynical because of what I’ve seen in my bankruptcy practice.

Apparently, the problems I’ve seen in the Central District of California are mirrored throughout the nation.  
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