Nathan Horowitz, Esq.

11/26/2024

Analysis: Personal Bankruptcies Are on the Rise

Bankruptcies are still significantly below pre-pandemic levels, but have gone up relative to last year. Personal bankruptcies were up 16% in October from a year ago, as more Americans are seeking debt relief, CBSNews.com reported. But those struggling to stay financially afloat should consider the option sooner rather than later, advise experts who study when and why people file. "When a consumer feels financial pressure, the last thing on their mind is seeking bankruptcy protection," said Michael Hunter, vice president of Business Development at Epiq AACER, a provider of bankruptcy information and partner to the American Bankruptcy Institute. Most people don't file until 18 to 24 months after they've incurred financial hardship, Hunter said. Over decades of interviewing thousands of people who've declared personal bankruptcy, researchers have found that about two-thirds of individual filers struggle with paying their debts for up to five years before seeking help. "People misunderstand bankruptcy and wait too long to see a bankruptcy lawyer. Most people would benefit by going earlier," said Lawless, a co-principal investigator in the Consumer Bankruptcy Project, launched in 1981 by a group of academics including Senator Elizabeth Warren, D-Mass., a law school professor at the time.

07/15/2024

As you read this or similar articles, remember that the earlier you recognize a financial concern and seek assistance, the more options you are likely to have.
The Consumer Financial Protection Bureau (CFPB) yesterday proposed new rules to make it easier for homeowners to get help when they are struggling to pay their mortgage, according to a CFPB press release. The proposal, if finalized, would require mortgage servicers to focus on helping borrowers, not foreclosing, when a homeowner asks for help. The proposed changes would also make it simpler for servicers to offer assistance by reducing paperwork requirements, improve communication with borrowers, and ensure critical information is provided in languages borrowers understand. The CFPB is requesting comment about several other topics, including possible approaches it could take to ensure servicers are furnishing accurate and consistent credit reporting information for borrowers undergoing review for assistance.

07/11/2024

Financial Strain may be on the horizon.
U.S. consumer borrowing increased in May by the most in three months, reflecting a jump in credit-card balances, Bloomberg News reported. Total credit outstanding rose $11.4 billion after a revised $6.5 billion gain in April, according to Federal Reserve data released Monday. The median forecast in a Bloomberg survey of economists called for an $8.9 billion increase for May. The figures aren’t adjusted for inflation. Revolving credit, which includes credit cards, advanced $7 billion, also the most in three months. Non-revolving credit, such as loans for vehicle purchases and school tuition, increased $4.3 billion. Many Americans who have whittled away their pent-up savings accumulated during the pandemic are relying on credit cards and other payment methods to spend. Combined with the rise in the cost of living, that’s further straining household finances and points to a slowdown in consumption
If you are feeling financial pressure, I can discuss your options with you.

06/17/2024

And now, some good news. Feeling Consumers’ Pain, Retailers Bring Back Discounts

U.S. consumers, fatigued by a three-year bout of inflation, want lower prices. And large retailers that have increased prices, partly to contend with their own rising costs, appear to be responding to customer concerns — to an extent, the New York Times reported. Walgreens said last week that it was lowering prices on over 1,000 items. Target recently announced modest price cuts on 5,000 food products and household goods. Craft and furniture stores like Michael’s and Ikea have also said they will drop prices on popular items. A broader range of companies have indicated on quarterly earnings calls that they plan to slow price increases and seek other ways to expand profitability. Signaling empathy with customers facing higher living costs is an increasingly important marketing strategy, retail analysts say. But regardless of motivation, a shift is in motion that may help ease inflation in the coming months.

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06/17/2024

Borrowers Increasingly Struggling with Credit Card Debt

Consumers are increasingly struggling to pay their credit card bills, raising concerns about severe delinquencies spiraling and sapping consumer spending, the Associated Press reported. The share of credit card debt that's more than 90 days overdue rose to 10.7% during the first quarter, a 14-year high, according to the Federal Reserve Bank of New York’s report.
My Opinion: If you are struggling with your budget, remember your rent/mortgage and car payments should be high on your list, if not top of list, of expenses that must be paid. Credit Card interest rates are punishing but you can get relief from that debt. Most people need their home and car.

01/29/2024

Since prior to the pandemic, I re-structured my office setting. Joining a company with multiple offices, I can now meet you in a location most convenient for you. There are professional suites available to me in Mt. Kisco, Tarrytown, White Plains and Harrison; and two (2) locations in Manhattan. Although I very much prefer meeting people in person, the pandemic made ZOOM an option as well.

Nathan Horowitz, Esq.
Nathan Horowitz, Esq.
Main: 118 N. Bedford Rd, Ste 100
Mt. Kisco, NY 10549
Office: 914-684-0551
914-684-0551

Call now to connect with business.

01/29/2024

Analysis: Credit Card Debt Is Up — and It’s Taking Longer to Pay Down

The message from this Article is to be mindful of the too easy use of credit cards and to stay within your budget. If life events result in over use of credit cards and inability to pay, there are options and the sooner you inquire, the more options you may have. Our Bankruptcy Law, grounded in the U.S. Constitution provides a fresh start to folks who realize how punishing the credit interest rates are and cannot realistically pay down the debt.
From fuel and groceries to hotels and airline tickets, consumers are putting more purchases on credit cards — and taking longer to pay them off, the Wall Street Journal reported. Since 2020, credit card spending has steadily increased at three of the four largest banks. Customers also aren’t paying off their charges as quickly as they used to. Credit card loans, or unpaid balances on accounts, jumped 14% at JPMorgan compared with a year earlier and 9% at Bank of America. Credit card loans were also up at Citigroup and Wells Fargo. In the aggregate, credit card loans at the four banks grew faster than spending in 2023. The unpaid balances also surpassed 2019 levels for the first time, showing that consumers are putting more purchases on cards and taking longer to pay off their bills than they were before the pandemic.

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03/29/2023

KNOW WHAT YOU OWE!
In March 2023, the Consumer Financial Protection Bureau (CFPB) issued a report focused on “junk fees” uncovered in supervisory examinations of mortgage servicing companies.
The Bureau highlighted Unfair or Deceptive Acts or Practices related to junk fees in mortgage servicing. What you should be aware of:
Late Fees
Mortgages contain late fee amounts. But, servicers charged the maximum allowable late fees under the relevant state laws; and sent statements including late payment fees, exceeding the amounts permitted by the loan agreements. Certain servicers charged a late fee even though the monthly periodic statement reflected a late fee in the amount of $0.00. Examiners found this practice to be deceptive.

Property Inspections
Banks inspect properties in default. The Bureau highlighted property inspection charges unnecessary because it involved the wrong property. Even when the inspector reported back to the servicer that an address was incorrect the loan servicer would hire the vendor to again inspect the wrong property address and pass those charges along to the borrower.

PMI
Borrowers pay PMI until loan is 80% or less than property value. According to the Bureau, sending a monthly periodic statement that included charges for private mortgage insurance (PMI) when the borrower did not owe such a charge constitutes a deceptive act or practice. Servicers continued to charge for PMI even though the loan-to-value ratio outlined in the Homeowners Protection Act (HPA) had been met, which should have resulted in the automatic termination of PMI.
YOU should know your home value and ask Lender to terminate PMI

Charging Borrowers Fees that Should Have Been Waived.
Under The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), servicers were directed not to charge fees or penalties during the time period borrowers were in a forbearance agreement. The CFPB’s examinations found that some servicers failed to waive such fees and charges on FHA-insured loans.

TAKEAWAY: Have copies of your loan agreements and do not blindly accept all fees charged.

08/03/2022

With the ending of COVID-19 foreclosure moratoria and payment forbearances, homeowners have a renewed need for mortgage loan modifications.
Many FHA-insured borrowers have faced significant obstacles to obtaining a loan modification, where there is a co-borrower and the co-borrower is unavailable. Mortgage servicers have generally allowed a modification only where the absent co-borrowers execute the modification agreement. But that may be impossible because death, divorce, separation, domestic violence or other significant life events involving the co-borrower.
A June 29 update to HUD’s Policy Handbook, effective September 26, 2022, clarifies that FHA does not require unavailable co-borrowers to execute FHA mortgage loan modification agreements. This is an important policy clarification that should help borrowers more easily access alternatives to foreclosure.
Fannie Mae and Freddie Mac presently have policies in place that allow servicers to excuse the participation of an absent co-borrower from executing a loan modification.

02/09/2022

Bankruptcy relieves you of most unsecured debt and protects your most important assets Bankruptcy stops all collection activity
Most debts - credit cards - are “unsecured”. You do not put up any collateral such as home or car to secure repayment. An unsecured creditor can legally do the following if you do not pay
1 Stop doing business with you A credit card can cancel your card or a dentist might refuse to have you as a patient. Credit is a privilege, not a right.
2 Report to a credit bureau The fact that you are behind will likely end up on your credit record. You cannot stop this. Many creditors routinely report the status of accounts each month. If so, the damage to your credit score has already happened. Paying the collector will not improve the rating and not paying will not do more damage.
3 Contact you for payment. Your account may be placed with debt collectors who try to reach you. Most of these communications are in writing or phone, but collectors can also use email, text, or via social media platforms.
4 File a lawsuit It is hard to predict whether a creditor will sue. If the creditor does sue, you have a right to respond and raise defenses. Failing to respond to a lawsuit may result in a win by default for the creditor. If the creditor prevails, the unsecured debt becomes a judgment. A judgment can change the unsecured debt to a secured lien on property. The creditor may be able to use powerful collection tools such as wage garnish or freezing bank accounts

02/04/2022

Information courtesy of National Consumer Law Center
Should you wish to discuss legal options for dealing with debt, please contact me.
Do Not Let Collectors Pressure You
Do not let debt collection harassment force you into wrong decisions. Make your own choices about which debts to pay first based on what is best for you.
You are not a deadbeat—circumstances outside your control prevent you from paying all your debts. The most common reasons most people cannot pay their bills are job loss, illness, divorce, or other unexpected events. Creditors and collectors know this. The debt collector’s job is to try to convince you to pay their debt first. Your job, however, is to make the right choices for you and your family.
Nathan Horowitz, Esq. offices in Westchester County, NY
914-684-0551; [email protected]

11/09/2021

Judge Tells Gamblers What Records to Keep to Win a Discharge in Bankruptcy
Bankruptcy is not an easy out or guaranteed. You need competent counsel to review your situation and be sure that a bankruptcy filing will obtain the desired relief. Since 1980, I have seen all types of debts, including from gambling. Here is a cautionary tale.
Anyone who gambles incessantly risks bankruptcy and the denial of discharge without adequate documentation of gambling losses.
Bankruptcy Judge Timothy A. Barnes of Chicago wrote an opinion listing records that gamblers should keep to avoid having their discharges denied under Section 727(a)(5). The section calls for the denial of discharge if “the debtor has failed to explain satisfactorily . . . any loss of assets or deficiency of assets to meet the debtor’s liabilities.”
The debtor sold real estate and received about $70,000 in net cash proceeds. He filed a chapter 7 bankruptcy 10 months later. Within six weeks of the sale, the debtor withdrew some $15,000 from ATMs located in casinos. Within a month of the sale, the debtor made $37,000 in cash withdrawals from his bank. The debtor testified that he lost the $52,000 playing poker at casinos.
The chapter 7 trustee asked the Court to deny discharge. In his opinion, Judge Barnes said that the trustee carried his burden by showing that funds sufficient to pay the Defendant’s debts in full existed. Judge Barnes denied discharge because the debtor “failed to sufficiently explain the dissipation of such funds.”
Judge Barnes focused on the insufficiency of the debtor’s testimony at trial and the inadequacy of documentary evidence of gambling losses. The opinion lists the types of evidence that a gambler could introduce to justify discharge.
The ATM withdrawals at casinos were “some evidence” but only represented 30% of the sale proceeds. Although a gambler “typically leaves little in the way of documentary evidence,” Judge Barnes said “there is more the [debtor] could have done to convince the court. For instance, the [debtor] could have provided a witness to corroborate his gambling and traveling, etc. The Judge said it was “difficult to fathom” why the debtor made frequent trips to casinos but could produce “no corroborating documentation from gas stations, buses, restaurants or similar trip-related expenses.”
Judge Barnes was mystified as to why the debtor had no records of winnings. The debtor, he said, was asking him “to believe that he is an incredibly unlucky (or perhaps poor) poker player as the [debtor] never discussed or mentioned leaving the poker table with winnings.” The Judge denied discharge because the “lack of even a basic accounting of gambling wins and losses (beyond simply what was withdrawn in cash) makes it impossible for the court to determine whether the cash was really lost gambling or was hidden away to avoid creditors.”