Mankato, MN (PRWEB) June 29, 2017
Recently, the outdoor retail chain Gander Mountain has filed for bankruptcy, with the intent to sell. It’s hard to imagine such a corporate giant going under, but their situation is not uncommon. From large corporations and wealthy celebrities, to private citizens of more modest means, anyone can find themselves in this difficult position.
Fortunately for Gander Mountain, they have a large legal team to navigate the intricacies of bankruptcy. However, private citizens rarely have this luxury, making them prime targets for aggressive collectors, unlawful foreclosures, and predatory lenders.
In response to these issues, Stephen Behm of Behm Law Group, Ltd. in Mankato, MN, has published advice for how individuals filing for bankruptcy can spot abuse and fight back.
1. Abusive Collectors
Before filing for bankruptcy, calls from persistent collectors and creditors are typical. However, what some people don’t know is that once a bankruptcy has been filed, the injunctive provisions of automatic stay of 11 U.S.C. §362 go into effect. This means that creditors and debt collectors may no longer contact the debtor, allowing the debtor some breathing room. However, oftentimes the debtor will experience continued harassment from creditors, even after the automatic stay is in effect. This behavior only adds to the already significant stress a debtor is experiencing and is completely unlawful.
Fighting back: If creditors continue calling after the automatic stay goes into effect, the debtor must inform them that they have filed for bankruptcy relief then give them their attorney’s name, telephone number, and their bankruptcy case number. Also inform them that their behavior is unlawful and take notes of the details of the calls (the creditors’ names, the names of the creditors’ agents, the creditors’ addresses, the dates and times of day of the calls). Then, contact a bankruptcy lawyer and discuss the activity. If the ongoing collection activities persist, the debtor and their bankruptcy lawyer can sue the offending creditors under 11 U.S.C. §362 of the Bankruptcy Code to enforce the injunctive provisions of the automatic stay and, possibly, get punitive monetary sanctions awarded against such creditors.
2. Foreclosure Defense
It isn’t uncommon for mortgage lenders to perform unauthorized foreclosures on a home. If a homeowner is three months or more delinquent on their mortgage, there are certain steps that a mortgage lender must follow in order to perform a proper foreclosure. For example, the mortgage lender must hire a monitor to periodically drive by the house to make sure that the house is still in good shape, rather than in a state of decay or abandonment, and they must have a realtor drive by periodically to inspect and assess the value of the house. The mortgage lender must, in Minnesota, generally place a notice of mortgage foreclosure sale once per week for six weeks in the primary newspaper for the county in which the property is located. Often, these procedures aren’t followed through, yet the homeowner is still charged fees as if they were.
Fighting back: If a debtor suspects they've been the victim of foreclosure fraud, they should contact an attorney experienced with their state’s foreclosure laws right away. Often, there are numerous defenses that can stop a foreclosure or prevent one altogether. In certain circumstances where a court has determined that a mortgage lender has conducted itself in a reprehensible and abusive manner, the subject mortgage debt can be either reduced or eliminated as a penalty.
3. False Claims
After a debtor files for bankruptcy, creditors sometimes must file proofs of claim with the bankruptcy court, detailing how much a person owes them. In some cases, bankruptcy trustees actually distribute money to creditors. In order for the creditors to get paid anything by the trustee, they must file proofs of claim. In some cases, predatory creditors will lie about how much is owed and complete false proofs of claim in an attempt to get paid more money from either the debtor or the bankruptcy trustee.
Fighting back: The first step to fighting false claims comes before the claim has been filed. Debtors must keep detailed records of spending and debt. This will help to identify any creditor who has inflated the debt. Also, carefully review all proofs of claim that creditors file with the bankruptcy court to check for discrepancies between what is stated on the claims and what is written in self-kept records. Whether the debtor has or hasn’t kept records, working with a lawyer who can navigate the claims process and work to review both the creditors’ proofs of claim and the debtor's records is best.
4. Predatory Lenders
It is easy to fall prey to predatory lenders. Predatory lenders will charge delinquent homeowners extra fees without grounds. For example, if a homeowner pays their mortgage near the due date, predatory lenders will sometimes wait to process the payment after the actual due date has come and gone. Sometimes, they will then charge a late fee even though they actually received the payment prior to the due date.
Fighting back: “Again, it’s important to keep records of all payments and when they were made to identify lenders who are not processing payments appropriately,” says Stephen Behm of Behm Law Group, Ltd. in Mankato, MN. After making mortgage payments, it's important to regularly check the checking account history to make sure that the mortgage creditor is processing the payments in a timely manner.
If a lawyer has been appointed, they will file a “Qualified Written Request” (QWR) with the mortgage creditor demanding a complete loan history, formally called a “life of loan transaction history”. The life of loan history will list all payments made, all fees incurred, all amounts paid out of escrow, what the escrow funds were used for, and show how all of the payments from the start of the mortgage were applied.
Mortgage lenders use transaction codes in the life of loan histories to identify how the payments were transacted and where they were applied (e.g. escrow, suspense, interest, principle, inspection fees, updated valuation costs, etc.). The attorney will demand the transaction code software and an explanation of the codes in “plain English”. Under Section 6 of the Real Estate Settlement Procedures Act (RESPA), the mortgage creditor must acknowledge receipt of the QWR within 20 business days and must, in good faith, try to resolve the matter within 60 business days. If the mortgage creditor does not do this, they can be sued and punitively sanctioned under RESPA.
When filing for bankruptcy, the best thing to do is hire a bankruptcy lawyer to help navigate the complicated process.
“A lawyer will be able to identify and fight against instances of abuse, protecting you and your family,” says Behm.
With large businesses such as Gander Mountain going bankrupt, it’s important to make bankruptcy information accessible to private citizens with limited resources, warning them about abuse and how to fight back before it’s too late.
About Behm Law Group, Ltd.: Behm Law Group, Ltd., based out of Mankato, MN, is the only law firm in south central and southwestern Minnesota that is exclusively dedicated to helping residents navigate chapter 7, 12, and 13 bankruptcies. Since receiving his Juris Doctor from the University of North Dakota in 1995, owner and founder, Stephen Behm, has specialized in bankruptcy law. Behm is a member of the Bankruptcy Section of the Minnesota State Bar Association. In his free time, Behm gives back to the community as a mentor with the YMCA Big Brother/Big Sister Program.