TAMPA BANKRUPTCY, INSOLVENCY & WORKOUTS
We are experienced in all areas of corporate and business insolvency
matters. Past representation includes representing creditors, debtors and
trustees under all areas of the bankruptcy code. In addition, we have
represented businesses as well as assignees under Florida's Chapter 727:
Assignments for the Benefit of Creditors.
Our network of professionals includes cash flow experts, auditors, forensic
accountants and turn-around specialists, all dedicated to protecting the future
of your investment. If your business is in trouble, or a business you have
invested in appears to be faltering, we can help.
Significant Representations:
* Successfully represented international banking conglomerate as white
knight purchaser of bankruptcy debtor corporation.
* Successfully represented large pediatrician practice struggling with
claims for retribution for alleged up-coding (over-billing) from insurance
companies and million dollar claim from the IRS with reorganization and debt
consolidation.
How can your Tampa Bankruptcy Attorney help you:
Individual Bankruptcy
Business Bankruptcy
Creditor Inquiry
Tampa Attorney
GALEWSKI LAW GROUP, P.A.
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Tampa Bankruptcy Attorney’s Update to the Bankruptcy Mortgage Reduction or Bankruptcy Mortgage Modification
Amendments:
Senate Rejects Mortgage Cramdown Provision
The Senate defeated by 51 to 45 votes an amendment to the Helping Families Save Their Homes Act that would have granted bankruptcy judges broad
authority to modify the mortgage terms for at-risk homeowners.
Assistant Senate Majority Leader Dick Durbin, D-Ill., chief sponsor of the ‘cramdown’ provision, said he was disappointed with the vote but would continue to
bring the issue to the floor “until the Senate decides to put the interests of homeowners above the interests of bankers.” Durbin noted that the number of
homeowners at risk of losing their homes now stands at over eight million, compared to nearly two million only two years ago.
“We’ve given the bankers who got us into this crisis every opportunity to responsibly address this crisis and they have failed,” Durbin said.
The White House said that notwithstanding the Senate vote on the Durbin amendment it looks forward to working with Congress to craft “appropriately tailored
legislation to provide a mechanism for homeowners who are out of other options to file for bankruptcy and implement a responsible plan to pay the debts that
they are able to pay.”
Meanwhile, Senate Minority Leader Mitch McConnell, R-Ky., said the provision would have lead to higher interest rates and even greater uncertainty in the
housing and credit markets. “It’s clear that we cannot fix the housing problem by implementing bad policies,” he said.
The American Bankers Association agreed, noting that Congress and the administration have taken several strong steps to help troubled borrowers and get
the economy back on track. “Giving bankruptcy judges broad cramdown authority would work against those efforts and effectively undermine the goal of
stabilizing the housing market,” the association said.
Analysis: Your Tampa Bankruptcy Lawyer notes that this means that for the time a Bankruptcy cannot be used to
reduce the principal amount due on a first mortgage, but since the House has passed the Bankruptcy Reform Bill,
it is possible that a Bankruptcy Judge may have the authority to cramdown or modify a mortgage in the near
future. It appears that as elections near we may see similar provisions added to various bills so Congressmen
can appear to be fighting for things important to voters. These provisions are often not germane to the bill and
are voted down. We will update this information when a bill with a realistic chance of passing is circulated,
LATEST REPORT ON BANKRUPTCY MORTGAGE MODIFICATION:
Bankruptcy Court Set To Require Mortgage Lenders To Negotiate Mortgage Modifications With Chapter 13
Debtors
UPDATE: New rules require that the bank inform parties of their right to mediation of the foreclosure action
at the onset of any litigation. Tampa bankruptcy and foreclosure attorneys at Galewski Law Group, P.A.
have significant experience in mediation and foreclosure actions and may be able to use this process to
push the bank to modify your mortgage or to forgive debt in a short sale.
The Orlando bankruptcy court is preparing to adopt a rule providing for mandatory mediation between homeowners and their
mortgage companies to facilitate mortgage modification. Congress rejected a change in the bankruptcy code that would have
empowered Chapter 13 debtors to force reduction in their first mortgage principal to their residence’s current fair market value.
This proposed procedural rule will not circumvent the bankruptcy code and will not force reduction of first mortgage principal.
What the rule will do is enable Chapter 13 debtors by motion filed with the court to compel a bank representative with full
authority to modify mortgages to meet with the debtor and an independent mediator to negotiate in good faith a possible
modification of the debtor’s first mortgage terms. The terms and the conditions of the rule are expected to be announced
shortly. This bankruptcy rule should be a big help to debtors who want to save their primary residence from foreclosure.
The Florida Supreme Court is requiring mediation in state court foreclosure cases. This state court rule is helpful, but the
bankruptcy court rule could be better for homeowners. Before getting to mediate with a bank agent with full authority the
homeowner has to be in a foreclosure case. The homeowner first has to stop paying the mortgage for at least three months,
wait for the bank to file a lawsuit, hire a civil attorney to answer the lawsuit, proceed for several months in civil litigation, and then
at some point, arrange for a court ordered mediation. The result of the mediation is a contractual agreement to modify the
mortgage, and the modification usually calls for a few months of trial payments before it is binding.
Chapter 13 mediation should be faster and more definitive. A debtor probably can get an order requiring mediation with their
mortgage lender very soon after filing a Chapter 13 bankruptcy petition. The borrower/debtor will not have to miss several
mortgage payments and fall farther behind on their mortgage. There will probably be uniform court orders. The bankruptcy rule
probably will permit a court order adopting any mediated mortgage modification which order can be recorded in the public real
estate records.