Illinois Bankruptcy Lawyer Blog

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Could it be that public-sector employee unions in Illinois are out of control? Not according to the lobbyists, lawyers, and shop-bosses who would be thrown out of work if public-sector employees had to work for a living instead of sponging off the State. If you ask them everything is fine. But pieces like this one in the Chicago Sun Times tell a different story.

The way they tell it, the Illinois public-sector employee pension system holds $60 billion of assets but has $200 billion in legacy liabilities. 9% of the paycheck of each State worker or teacher is therefore supposed to go towards fixing the problem. But the problem is that instead of money being invested and the proceeds used to make payments to retirees, contributions are going straight to retirees.

In other words, the system is a Ponzi Scheme and by 2018 all of its assets will have been liquidated so there won't be anything left to pay employees - former, current, or future.

So why are the teachers and other public-sector employees in Wisconsin acting like victims? Aren't public-sector employee unions the ones that broke the system in the first place along with the corrupt politicians who allowed them to play kick-the-can with the future?

That does it. I'm moving to China. I heard they haven't grasped the concept of Unions yet.

This article in CNNMoney identifies 9 credit cards industry experts told CNNMoney were among the worst in America for nose-bleed interest rates and ridiculous fees. Here's the list:

1. Applied Bank Unsecured Visa Gold Card
2. First Premier Bank MasterCard
3. Baby Phat Prepaid Visa RushCard
4. Hooters MasterCard
5. The Shack Credit Card
6. Shell Select Member Card
7. Visa Black Card
8. JCPenney Rewards Credit Card
9. Household Bank Premium Platinum MasterCard

Bankruptcy In re Stuart M. Hanson d/b/a Hanson & White, LLC, 09-04820

Adversary Michael Deady v. Stuart M. Hanson, 09-00457

Issued October 14, 2010 By Judge John H. Squires

For Plaintiff: William P. Suriano, Esq.

For Defendant: Robert R. Benjamin Esq. & John M. Brom, Esq.

Trustee: Gina B. Krol, Esq.

The Upshot: Motion to Amend judgment order is not a second bite at the apple. The points of law and fact being referred to in the moving party's pleadings must be placed before the Court so that the Judge is not forced to dig through the record. The outcome here was the same as the outcome in the companion case of Grant, LLC v. Hanson: motion denied.

Download and view the Opinion in .pdf format here.

The Bureau of Economic Anaylsis reported today that consumer spending went up by 0.5% in January.

Hey, that's good right? We know that a large part of GDP -- gross domestic product, basically the worth of a country-- is comprised of consumer expenditure.

But before we get all excited, the BEA also reports that personal income, on the other hand, went down by 0.1%.

Even worse? Disposable personal income -- the income we have left for necessities -- went down by 0.4 %.

Okay, so that's even worse than I thought. Uh-oh. Uh-oh indeed.

An editorial by Rafia Khader, Law Clerk, M. Hedayat & Associates, P.C.

Bankruptcy is a trying situation for any individual. But for women it seems as if the laws yet again disproportionately burden them. I came across an interview with Harvard Law Professor Elizabeth Warren a while ago that was both shocking and predictable. In it she said that changes to the bankruptcy law made in 2005 (oh those again!) made it much harder for women to make ends meet.

Before 2005 women dependent on domestic support from their ex-husbands were able to collect such payments with full confidence because declaring bankruptcy meant that the ex-husband's debts, excluding domestic support obligations of course, would be wiped out. But no, the credit card companies didn't like that! Why should ex-wives be able to collect the ex-husband's money and not they! The injustice! So in 2005, they had the laws changed. Today, discharge of credit card debt is not necessarily guaranteed and women are, as Warren says, in 'direct competition' for the ex-husband's resources. Thanks, credit card companies!

But perhaps what is most truly startling are the statistics from theU.S. Women's Chamber of Commerce. A study found that women were 32% more likely to have received supbrime mortgages than men. And that's irrespective of income! Women were also 41% more likely have received higher cost subprime loans for their businesses. And we all know what suprime means. Thanks, Wall Street!

Sure, these statistics don't establish any type of causal relationship and you can't really blame credit card companies for ruining women's lives (there are other institutions in places that have contributed to that), but the bottom line is this: women definitely do have it tougher. But of course I am a woman and I would say that.

But I am also right.

RK

This past Monday, President Obama delivered a speech urging banks bailed out by the Troubled Asset Relief Program (TARP) to start lending on a wide scale basis again.

Translation: it's about time the banks pay back the millions of taxpayers who helped them survive.

Immediately following, Bank of America stated that it would increase its lending to small and medium-sized businesses by $5 billion. With $41.9 billion in outstanding business loans as of September, Bank of America is currently the second largest small business lender.

Let's see if other TARP recipients heed the President's message and follow suit.

Source: CNNMoney.com

... According to the IRS, not necessarily.

Could my Canceled Debt be Taxable?

Yes. Typically, loan proceeds are not income because there is an obligation to repay. According to the IRS, when a lender forgives a debt it is considered income.

What Count as Income Anyway?

The IRS is concerned with gross income (i.e. "all income from whatever source derived"). If it is not debt canceled by bankruptcy or other qualified indebtedness, certain qualified student loans, a gift, or a bequest, it is income.

What About Income from my Canceled Mortgage Debt?

Income from mortgage debt cancellation is usually taxable. However, the Mortgage Forgiveness Debt Relief Act of 2007 allows the exclusion of mortgage modification income. But only between the years 2007 through 2012.

What About Credit Card Debt Forgiveness?

In some cases, non-business credit card debt cancellation may be excluded from taxable income, but only if the cancellation is a result of bankruptcy or insolvency.

Where Can I Learn More About Canceled Debt Counting as Income?

The IRS has prepared an FAQ Page and Publication 4681 "Canceled Debts, Foreclosures, Repossessions, and Abandonments."

Source(s): IRS, U.S. Code, CreditCards.com, and Small Biz Accounting Specialist.

Q: I"m being sued by collection agency regarding my ex husbands debt. Should I retain an Attorney?

A: The short answer would be 'No' if the debt really belonged exclusively to your ex. In all likelihood however, the credit card in question must have included your name as an authorized signatory or co-debtor. In any event, you should take such a lawsuit seriously - under no circumstances should you ignore any suit in which you are named as a defendant (whether correctly or incorrectly).

Have a question? E-mail us at mhedayat@mha-law.com.

On March 30 Congress made it official. H.R. 200, the "Helping Families Save Their Homes in Bankruptcy" Act of 2009 was put down once and for all by a narrow margin in the Senate.

Pity. It turns out the Act would have gone a long way towards leveling a very uneven playing field. You can read about some of the (relatively) radical aspects of the bill in this summary from govtrack.us.

Now for the last time, stop fantasizing that the Federal Government is going to save your house and just hire a bankruptcy lawyer already.

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Excerpted from the March 5 post, Worst is yet to come for job market, by Chris Isidore, CNNMoney.com senior writer

It's no secret that the job market is bad. The Labor Department will release its latest jobs report Friday. Economists surveyed by Briefing.com forecast that the unemployment rate rose to 7.9% in February and that 650,000 jobs were lost. Still, as bad as those numbers are, some have argued that this jobs downturn is not as bad as the early 1980s. The unemployment rate peaked at 10.8% in late 1982. But several experts say it would be a mistake to come to that conclusion. They argue that unemployment rate only hints at why this jobs downturn is worse than any since the Great Depression ... If the job loss forecasts for February turn out to be accurate, it would be the worst monthly drop since 1949. It would also bring total job losses over the last six months to 3.1 million, the largest six-month job loss since the end of World War II. Even adjusting for the large growth in the nation's job base in recent decades, this would be the biggest six-month job loss since 1975. [read the rest of the article]

From The Heritage Foundation's blog The Foundry comes the text of the mortgage-rescue provision of the bailout plan currently under consideration in Congress

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.—The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for—

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.—The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.—The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.—The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.—The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary"s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.—The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.—The term "Secretary" means the Secretary of the Treasury.

(3) United States.—The term "United States" means the States, territories, and possessions of the United States and the District of Columbia.