Capital One Caught With Its Hands In Your Wallet

by L. Jed Berliner

-

Capital One violated the bankruptcy discharge thousands of times and got caught, as was recently reported by the Wall Street Journal.  It filed claims in second bankruptcy cases based upon debts which were already discharged in earlier cases.

As my colleague Andy Miofsky wrote, "There is a reason Capital One Bank portrays credit card banks as a horde of marauding invaders.  Merriam Webster's Dictionary defines maraud as ''to roam about and raid in search of plunder'.''  Here, it plundered bankruptcy estates.  It caused other creditors to receive lower payments and some debtors to pay more than they should have.

This credit card issuer files a great number of claims every month in bankruptcy cases.  In 2008 the United States Trustee filed suit against it in Massachusetts, stating that it had filed 5,600 illegal claims based on debts which were already discharged in bankruptcy. 

An independent auditor was appointed to review the results of Capital One's belated investigation – you know, like closing the barn door after the horses have escaped.  The auditor determined that about 15,000 illegal claims had been filed.  This figure used Capital One's own waiver of exclusions of claims otherwise included in the illegal claims category where it felt it was too burdensome to be accurate.  The auditor is now working on refunds of payments made to Capital One based on these bankruptcy-discharged and illegal claims, plus appropriate attorney fees.

This just burns me.  There's a legend at the bottom of every proof of claim form which states that the penalties for a false filing is up to a $500,000.00 fine and five years' imprisonment.  The United States Trustee did not seek a fine, much less any imprisonment.  But it regularly seeks to deny or revoke the discharge of a debtor caught filing false statements.   How about penalizing Capital One by prohibiting any claims for a period of time?  There's no lesson to be taught, or penalty to be incurred, if all it suffers is the return of its wrongful gains.

For more information on these matters,please call our office at 305 548 5020.

-

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

What is a Fulcrum Security in Bankruptcy?

by Nicholas Ortiz

-

In bankruptcy there is a hierarchy in the right to get paid. Secured creditors come before unsecured creditors who, in turn, come before stockholders. Senior creditors get paid in full before their juniors get anything. In a Chapter 11 bankruptcy scenario, there is usually a tier of creditors that is only partially "in the money." For example, if a debtor's secured debt will be paid in full, but unsecured debt will receive 10 percent on the dollar, the unsecured debt is what is known as the fulcrum security. That is because the unsecured debt is the tier of claims that will likely end owning the reorganized debtor and that will have maximum leverage over approval of the debtor's reorganization plan. Why is this the case?

The reason the only-partially-in-the-money group of claims end up "owning the debtor" is because of something called the absolute priority rule. That rule requires that senior creditors be paid in full before junior claims get anything. If a class of claimants is only being partially paid, then no one else is entitled to receive the stock (i.e. ownership) of the reorganized debtor unless they buy this stock with cash or all classes approve the plan. So the partially-in-the-money group of claims has a presumptive right to the stock of the reorganized debtor.

A fulcrum is a lever. A partially-in-the-money group of claims has leverage over a bankruptcy plan because they are often the only class of claims that has a vote that matters. The existence of a fulcrum security usually means that a senior class of debt is being paid in full. The approval of this senior class is automatic. Any interests junior to the fulcrum will get nothing, and so the rejection of the plan by that class of claims is presumed. Consequently, the fulcrum group is the only one with a vote that matters, and this gives it leverage over plan confirmation. No wonder the this concept has such a prominent plays a key role in distressed company investing.

For more information on these matters,please call our office at 305 548 5020.-

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Internet Loans: A Bad Idea Gets Worse When You File Bankruptcy

by Wendell Sherk
--

Why would anyone take out an Internet payday loan?  Bankruptcy lawyers scream this out loud at least once a week.  It tends to frighten the neighbors.

Small, high interest loans are often the last gasp effort folks use to make payments on other debt (like mortgage or car loans) — before they give in and call a bankruptcy lawyer for help.  They're the proverbial "last straw."  But they also can make your life a living hell — and cleaning up your finances a nightmare.

"Payday loans" are basically high interest small loans — $3-500 often — where the borrower promises to pay the loan off in a short period of time, often when their next payday comes.  In local offices, it's usually "secured" by a post-dated check.  Over the Internet, you agree in advance to have the payment plus interest deducted electronically from your bank account.

Post-dated checks are bad enough — bankruptcy law allows them to be cashed even after you file a case.  But giving out your bank account information to a website and authorizing that faceless site to deduct money from your account?  Your mother didn't raise you right, if that doesn't worry you.

If you take out a loan from a store down the street, you know how to find them.  Do you know how to find the lender you take out an Internet loan from?  Sure, in some cases the website is just another outlet for a business that has actual street addresses and phone numbers. You can see them on the website and you can find their business registered in their respective states.  That is a lender trying to play by the rules.

But often the Internet lender has no physical location mentioned anywhere on the website — and their website ownership and registration is masked behind privacy services too.   It turns out quite a few of these are offshore, outside the United States often theoretically existing in places like Malta or Caribbean island countries, which offer drop box address services so it becomes almost impossible to locate a person or business.  They are corporate phantoms that infest the Web, obeying only the laws of the most convenient forum, if even those.

And you would like to take a loan out from them?  And give them access to your bank account?   It's like giving your bank account a financial virus.

When you file bankruptcy, it's even harder to deal with them.  I spend a lot of time trying to find anything like a valid address for these companies to send written notices.  Or FAX them.  Or, sometimes, to even e-mail them information to stop collecting debts.  Of course, if I do track them down and give them notice and they ignore it, what can I do?  Sue them?  That's hard without anyone I can actually serve papers to — and even harder to collect from them when I win.

It means, effectively, they obey bankruptcy law only if they feel like it.

Most states regulate — more or less — small lenders like these.  They often have very liberal rules allowing them to get away with lending terms that make a loan shark blush.  But at least they're here and we can find them.

Borrowing from "some guy" who registered a business last month on the Island of Lost Dreams, and built a payday loan webpage — and wants to keep his name, address and phone number out of this?  And giving him all of your most personal financial information?  How crazy does that sound?

It's a business that should not even exist if people did not go a little crazy when they're desperate for money.  That it is thriving and there are (at least) thousands of these websites tells you a lot about economic desperation these days.

For more information on these matters,please call our office at 305 548 5020..

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Do You Owe What I Owe? Bankruptcy Attorney’s Riff on Christmas Carol

by Jill Michaux

--

Last year St. Louis bankruptcy attorney Wendell Sherk published his riff on a popular Christmas song – Do You Owe What I Owe?  We thought it worthy of sharing it with you again this holiday season.

(To the tune of "Do You Hear What I Hear?")

Said the neighbor to the young man,
"Do you owe what I owe?
Bills up to the sky, young man,
Do you see what I see?
A choice, a choice, waiting in the night
A new start to end the year alright,
A fresh start for a New Year's Night."

Said the collector to the young man,
"I know what you owe,
Bills up to the sky, little debtor man,
Do you hear what I say?
Pay what you can't pay, little debtor man!
With a voice as big as the sea,
With a voice as big as the sea.

Said the young man to the lawyer kind,
"Do you know what I owe?
In your palace warm, lawyer man,
Do you know what I owe?
An arm, a leg, I'll be out in the cold–
Help me save a little silver, or gold,
Help me save a little silver, or gold."

Said the judge to the people everywhere,
"Listen to what I say!
Be at peace, people, everywhere,
Listen to what I say!
A fresh start, a new start, waiting in the night
To bring you peace and goodness,
To bring you quiet in the night."

With apologies to Noel Regney & Gloria Shayne Baker

A sample of the original (better) song can be found here.

For more information on these matters,please call our office at 305 548 5020. 

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Do It Yourself Debt Settlement

by Andy Miofsky

-

Credit card and medical debt can often be settled for pennies on the dollar. You do not need to hire a fancy fly by night late night television advertising debt settlement company to settle your debt. Give it a try yourself. You will probably realize a considerable savings.

I have been filing bankruptcy cases for almost 30 years. As a test, I volunteered my legal services pro bono with a young man who owed over $20,000 in credit card debt on 6 accounts. He had some money available, but he did not want to use it all to pay debts. To start, I suggested he invest half of his money in a 6 month certificate of deposit, so it would gain interest and be available in case he needed to use it. Then he began calling his creditors. I coached him on what to say and how much to offer. We started low, usually at 15 per cent of the debt. There were several phone calls to and from creditors as he tested the water to see what would be accepted and what would not. In some cases, we sent seed money, a small payment, a token of good faith to keep the collector interested.  Some times he would go for weeks without hearing from anyone. I kept on him to initiate the call and to stay motivated as he settled one account after the other. As negotiations heated, he texted and emailed me furiously for his next steps.

It took almost eight months, but he was able to settle each account for less than 50%, some for much less. In each case, the collector took considerably less than the amount first demanded, thus proving the point that you should not hire a debt settlement company to do what you can do yourself over the phone.

For more information on these matters,please call our office at 305 548 5020.

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

How Long Can The IRS Collect From Me?

by Kent Anderson, 

Bankruptcy is not always the best way to get rid of federal tax debt.  Given enough time, the tax may just go away.  The IRS is given 10 years from the date the tax is assessed to collect in most cases by 26 USC §6502, a section of the Internal Revenue Code. The date after which the tax can no longer be collected is called the "Collection Statute Expiration Date" or "CSED" for short in IRS lingo.

However, there are many things that can give the IRS more time to collect the tax. Under most circumstances, when the IRS collection officers are prevented from taking action to collect an overdue tax, the collection time is extended by the amount of time they can't collect plus some extra time to restart their collection work.

Federal law prevents the IRS from using its powers to forcibly collect unpaid tax when an Offer in Compromise is pending and for an additional 30 days after the offer has been rejected if it was unsuccessful. Likewise, if a taxpayer has appealed a decision by the IRS to collect the tax by levy or siezure, the time that is taken to review the appeal, plus 30 days is added to the collection period and the CSED is extended. 

Additional provisions for extending the collection period are contained in 26 USC §6503. This section of the Internal Revenue Code provides for extension when the assets of a taxpayer are in the custody or under the control of any court, and for 6 months after they are released. The collection period also is extended for the period of time when a taxpayer is outside of the United States continuously for six months or more.

One common way the IRS collection period is extended and the CSED is delayed is by the filing of a bankruptcy court proceeding. Because federal law prohibits collection of a pre-bankruptcy tax while the case is being processed, 26 USC §6503(h) allows the IRS tax collectors additional time equal to the amount of time the case was open plus an additional 6 months for collection after the case is closed or the stay is released.

Unless it has a secured claim, the IRS is no longer able to collect tax after bankruptcy if the tax was discharged. To learn more about what types of tax debts are discharged in a bankruptcy, read: What About The IRS? and Use Bankruptcy To Solve Tax Problems. Both of these articles and many more can be found on theBankruptcy Law Network.

For more information on these matters, please call our office at 305 548 5020.

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

How To Miss Out On Discharging Credit Card Debt

by Cathy Moran
--

Somewhere in our recent past, the holiday season became the shopping season.

Lots of people in financial trouble hang on through the holiday season before taking up bankruptcy as part of the New Year.  (I haven't seen many people give themselves a bankruptcy filing for Christmas, though, for many, it would be objectively the best thing under the tree.)

If bankruptcy may be  in your  future after the holidays, it pays to know how credit card debt is treated in bankruptcy.  Welcome to the short list of ways to miss out on discharging credit cards in bankruptcy.

In the typical bankruptcy,  credit cards make up the largest part of the unsecureddebt. The basic premise in bankruptcy is that unsecured  debt is dischargeableunless it appears on the list of non dischargeable debts in § 523(a).  As the heading to the statute says, non dischargeable debts are exceptions to the rule of dischargeability.

There are two basic ways to blow your chance to discharge the balance on your credit card in bankruptcy:

1. Lie on the credit application to get the credit
2. Use the card fraudulently

Lie to get the card

If credit was granted to you on the basis of a false application , there's a risk that the entire balance on the account  could be non dischargeable.   Suppose  that you  misstated your income , assets, or employment status to look more credit worthy.  Those misstatements fall within the exception to discharge for debts created in reliance on a false statement in writing.

Practically, I've only seen this kind of challenge once in 31 years of bankruptcy practice.  The card application was submitted within months of the bankruptcy filing and the entire picture of the applicant in the application was a fabrication.

I have my doubts that most card issuers can retrieve a copy of the application or are much exercised about proving up misstatements, when there's another route to saving their claim from discharge.

Use the card fraudulently

Credit card charges may survive a bankruptcy filing if they were incurred by false representations or actual fraud. Since no one plunks their card down with the announcement that they don't really intend to pay  the issuer, courts have had to find ways to infer what's in your head when you make that purchase with plastic.

The legal fiction that has grown up is that when you present your plastic  to pay for a purchase, you make a representation that you intend to pay the  issuer.  If that weren't so, the entire credit card industry collapses.

Credit card issuers, then, are looking for evidence that the bankruptcy debtor didn't intend to pay.  They look to the facts that appear on the card statement and ask courts to infer from those facts the debtor's state of mind.

What triggers the assumption the  use was fraudulent?

• Dramatic run up in account balance shortly before bankruptcy filing
• Purchase of non essentials
• No payments after significant purchases
• Going over limit
• Continuing use right up to bankruptcy

This list isn't exhaustive, but it touches the things the creditor can see from its records and use to form a conclusion that the debt wasn't incured with an intention to repay.  Here's more factors courts consider when looking for fraud.

Part of my charge to clients when we first meet to discuss bankruptcy is to stop the use of credit cards.  It is hard to argue to a judge that even though you've met with a bankruptcy lawyer, you really did intend to pay when you swiped your card the next week for a weekend getaway.

Another time, we'll talk about responding to the charge that card use was fraudulent.

In the mean time, if you are considering filing bankruptcy, remember that your use of your credit cards, even within the card limits, is subject to scrutiny in your bankruptcy case.  If proven fraudulent, those charges may be with you for the New Year and beyond.

For more information on these matters,please call our office at 305 5485020.

 

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Bankruptcy: Reality or Fantasy

by Rachel Lynn Foley

When you file for bankruptcy you must ask yourself are you in a reality or  fantasyframe of mind?  When I was young , one of the professions I pursued and dreamed about was being an actress.  I trained, auditioned and actually took several classes in college along the way.  I am talented enough to be represented by two agents, one in Kansas City and the other in North Carolina.   In my fantasy view of my acting ability I am every bit as talented as Angelia Jolie.  Even though I have appeared in several national films the reality is that my talent and skills are much more suited to being a bankruptcy attorney than an actress.  Facing reality is a hard position for anyone to be in and truly is the first step that one must take when you consider filing for bankruptcy relief.

People often have a fantasy view about what bankruptcy is like and what it will do for them.  Please allow me to walk you through an example.  A debtor comes to the office and says " I need help with my bills as I just cannot make ends meet."  This particular debtor has monthly bills of a mortgage payment of $1,000, car payment of $350 and utilities of $200.  Additionally this debtor is behind $5,000 in their mortgage and wants to save their home.  Keep in mind these expenses do not include other budget items such as fuel, food and clothing.

In examining the budget the debtor tells me that their take home pay is $1800 per month.  This is a reduction in pay because they were laid off in 2010 and this is the only job they could obtain.  To complete the financial picture they are also looking todischarge $30,000 in credit card debt.  Their fantasy is that bankruptcy will resolve all their financial woes and they will magically be able to afford the home, vehicle, make the credit card debt go away while making ends meet.  But is this view set in reality?  The floor of their budget if they were even is $1550 per month.  This total is comprised of the mortgage, vehicle payment and utilities.  Subtracting the $1550 from the $1800 net pay  leaves $250 a month to cover food, clothing, fuel, medical and other misc. items.  So no I do not think that this debtor is set in reality just yet.

The reality outcome of this scenario is that without a loan modification and/or other changes there is no way that this debtor can file a Chapter 13 to save the home.  Why?  Because the reality is they do not make enough money meet their basic necessities let alone a Plan payment.  The reality is that bankruptcy will not re-write the mortgage terms.  The reality is mortgage modification and bankruptcy are not the same thing.  The reality is that no judge can force the mortgage lenders to issue a modification. And the reality is that some times bad things happen to good people.

Are you stuck in one version of reality and therefore should never consider a fantasy view? Absolutely not!  When Walt Disney began to pursue his fantasy of cartooning lovable characters he faced many harsh realities.  Walt's reality in the beginning was that he was not a savvy business person and it cost him dearly.  However Walt decided that he could take his fantasy and make it his reality.  This process is not one that occurs overnight nor does it occur absent hard work, sacrifice and persistence.  Changing one's financial picture through bankruptcy is the same process.

Let's take a look at the financial picture again of the debtor outlined above.  Would I advise them that a Chapter 13 to save the home is absolutely impossible? No, my analysis would evaluate what is this debtor willing to do to make the fantasy of keeping the home into a reality.  Are they willing to do the work to attempt a loan modification?  Are they willing to take on a second job or a roommate? Depending on the principal balance of the vehicle are the willing to consider surrendering the vehicle and purchasing a less expensive vehicle? Basically I want to know what are your goals and expectations.  I have seen many miraculous things occur in bankruptcy but the bottom line is that debtor MUST be set in reality if they expect to have a successful bankruptcy.

Everyone has a fantasy about their situation.  Even my my dog has a fantasy.  Chip's fantasy is that he possesses special Jedi powers and he is able to move his ball about without human intervention.  However the reality is that ball is not going to move unless there is an earthquake, tornado or human intervention.  Unlike Chip you have the power to change reality into whatever you desire if you willing to do the work.  No matter how long Chip stares at his ball it will never move without some intervening force beyond his control.

Would it not be a great Christmas gift to yourself to take control of your financial situation and in turn change your financial reality?

Remember that knowledge is power.  The more knowledge you have about of your financial picture the more power you will have in making your fantasy your new reality.

For more information on these matters, please call our office at 305 548 5020.

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Top 10 Countdown of Bankruptcy Myths: Will Debtors Lose All Possessions?

by Karen Oakes, 

Folks are often afraid to file for bankruptcy as they worry that they will be left without possessions–that the trustee will take all their "stuff" or the kids' "stuff".   The ones who really worry will even try to gift away property in order to keep it out of the bankruptcy trustee's possession.   They will start giving things away without talking to an attorney first.

STOP!!  Each and every state has laws called "exemption laws" that allow debtors (folks in debt) to keep property (certain kinds) up to a certain amount as I explained in an earlier article on this site.  Unfortunately each state is different.  Even the federal bankruptcy law has a set of exemptions for debtors and those laws help the system work, according to Doug Jacobs, California attorney.  Some states laws allow high value for possessions; other states have very low values for possessions.   But in each instance, the trustee is not going to come marching into your home and strip it clean of all furniture, appliances, bicycles, knick-knacks, books, and clothing.    Some debtors worry that the trustee will take their tax refund, as explained by Kevin Gipson of Louisiana.   If a debtor seeks legal advice from an experienced attorney, those worries can be put to rest and some pre-planning can happen.

The worst case scenario, as explained by Pamela  Stewart, a Texas bankruptcy attorney, is to transfer property to try to keep the property away from the trustee by giving it away or by hiding the asset (lying).    Folks are often upset to find that these kind of  transfers can have dire consequences, such as a denial of a bankruptcy discharge or even criminal charges by trying to hide assets.  Hiding assets is just about the worse thing a debtor can do; don't make your life even more stressful by being dishonest.   Honest debtors find their bankruptcy a much smoother process.

For more information on these matters, please call our office at 305 548 5020.

Stay Tuned as the Countdown Continues!  Myth #10 debunked:  An honest debtor does not lose all his property!

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Bankruptcy Or Not, Student Loan Debt Will NOT Be Repaid

by Kurt O'Keefe 

It is just a fact that the over one trillion (uh,  yeah, not billion, not hundreds of billions, trillion) dollars of student debt now outstanding in our fair land will not be repaid.

Because the graduates will not generate sufficient income to pay it back.

The jobs they were told were out there for them are not there.  Of course, that big increase in degree programs colleague Chip Parker wrote about is one of the symptoms.

Another one is unjustified tuition increases by colleges, who already have enough money, but know their customers can get more student loan money to buy their product.  Which they do, mostly because they do not understand what paying it back means to their lives.

I take issue Mr. Parker's statement that student loans, like mortgages are a necessary evil.

We will save that debate for another time.

The problem on the table is what to do about the debt that is already out there.  It isnot currently dischargeable under bankruptcy law, unless the debtor can prove it would be an undue hardship to have to repay it.  Very little student loan debt is resolved by this method.

What if this debt cannot be discharged in bankruptcy?

We will have thousands of students shackled into debt.

(image credit: dreamstime)

So, who should take the hit?  What about the banks that lent the money?  Oh, sorry, I forgot.  This is America.  The banks NEVER take a hit.  Most of this debt was guaranteed by, or to, the government anyway.

The universities?

Should they be required to pay all or some of the debt their graduates cannot pay?

Nearly seventy universities in the U.S. have endowments of over a billion dollars.  They are the ones who are supposed to be making the students job worthy.  Big paying job worthy.

Boy, I love this idea.  As you can tell from Chip's post, being that faculty number and salary have not increased during the last decades of tuition inflation, funded by easily obtained student loans, where did the money go?

"If the professors are not getting this booty, it must mean the administrators are. "

Still, very difficult to work out the details on this one.  Probably would require a whole new bureaucracy.

So what are we left with?

The students?

Calls to return bankruptcy laws to the days when student loans were dischargeableare increasing, even law professor Glen Reynolds, considered a conservative (actually, libertarian) blogger (Instapundit) has joined the chorus.  Glen has long written about the unsustainability of the student loan bubble.

Something will change.  We just have to work out what it will be.

For more information on these matters, please call our office at 305 548 5020.

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"

Florida – Plaintiff Must Prove Ownership at Time Foreclosure is Filed

by Chip Parker 

In the latest foreclosure decision out of Florida,  the 4^th District Court of Appeal, in the case of McLean v. JP Morgan Chase, ruled that the plaintiff in a foreclosure must prove it owns and holds the note at the time the foreclosure case is filed.

In the McLean case, the appellate court reversed the trial court's entry of summary final judgment in favor of the bank because the bank failed to provide evidence that, at the time the case was filed, it "obtained its rights and standing to proceed in this cause" prior to the filing date.  Instead, it presented to the trial court an Assignment of Mortgage dated three days AFTER the case was filed.

The trial judge, apparently not understanding the basic concept of chronology, denied the homeowner's motion to dismiss the case and granted the bank's motion for summary judgment.  In reversing this decision, the 4^th DCA said:

While it is true that standing to foreclose can be demonstrated by the filing of the original note with a special endorsement in favor of the plaintiff, this does not alter the rule that a party's standing is determined at the time the lawsuit was filed. Stated another way, the plaintiff's lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed. Thus, a party is not permitted to establish the right to maintain an action retroactively by acquiring standing to file a lawsuit after the fact. [Cites omitted]

While this ruling may seemingly state the obvious that you can't put the cart before the horse, please understand that many Florida trial judges treat foreclosure cases differently.  They tend to allow plaintiff lawyers to "dumb down" the practice of law.

I'm not saying plaintiff's lawyers are stupid.  To the contrary, they are smart enough to know that most foreclosures are impossible to win by applying 150 years of Florida real estate law.  So, they have waged a campaign to convince trial judges to relax Florida Statutes, Florida case law, the Rules of Evidence and Rules of Procedure.   Because of the sheer volume of uncontested foreclosure cases winding their way through Florida's courts, it is easier for these judges to "clear out the backlog" by forgetting the stuff they learned in their first year of law school.  Sadly, many lawyers defending homeowners allow the "dumbing down" because they, too, forgot (or never learned) how to litigate.  Many are converted real estate lawyers with little or no trial practice.

Just a couple of days ago, I attended a hearing where the judge accepted as evidence an unproved allegation in the plaintiff's motion.  This essential factual element was just "presumed" because the plaintiff's lawyer said so, even as I vigorously demanded that the plaintiff lawyer provide some piece of evidence to back up the assertion.  Call it "par for the course."

Fortunately, albeit reluctantly at times, the appellate courts routinely reverse these horrid trial court decisions, but if the trial judges continue to ignore Florida appellate decisions favoring homeowners (and the 150 years of jurisprudence), who cares?

Many trial judges forget that their job is simply to interpret the laws on the books.  Instead, they often ignore the laws because they fear "giving a homeowner a free house."  This is known a "legislating from the bench."  Our American democracy is based upon the notion of "separation of powers," wherein government is divided into the executive, legislative and judicial branches, each with separate and independent powers and areas of responsibility so that no one branch has more power than the other branches.  When a trial judge factors his social view into his decision, he has essentially stolen power from the state legislature.

For more information on these matters, please call our office at 305 548 5020.

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"