Bankruptcy works on notice of the filing,  to the creditor who is bound by the automatic stay to stop collection.  Sounds simple, right?  Well, it got more complicated with BAPCPA, the supposed bankruptcy “reform” act.

Take a look at any credit card bill.  It has an address on the bill to which you send the payment.  Dollars to doughnuts, there is a second address somewhere on that bill for “customer support”, “billing inqueries”, or “correspondence”.  That’s the address you want in your bankruptcy schedules.

I take issue with my colleague David Leibowitz’s recent post on whether creditors can call after bankruptcy where he  says that it is the payment address that provides notice to the creditor.  Section 342(c) as amended by BAPCPA  provides that effective notice of the commencement of the case is notice to the correspondence address provided by the creditor.

This was added at the behest of creditors who found it inconvenient to honor the automatic stay and wanted to hedge their liability for continuing collection actions despite the bankruptcy filing.

So, your ability to seek damages for violation of the automatic stay may depend on the address you provided for the creditor.  Thus my repeated charge to clients:  bring me a bill for each creditor.  Let’s get it right.

The good folks at the National Consumer Law Center have put together a page of links to various programs and procedures for troubled home loans.

My colleague John Mlnarik has begun a discussion of the Obama Treasury programs announced earlier in  March on www.norcalmortgagemods.com.

Now, we need the Senate to move on S. 61 and judicial mortgage modification.  Speak up at www.nacba.org/TellCongress.

The survivors of someone who dies are not personally responsible for the decedent’s debts.  Yet debt collectors seem to be swarming the survivors to collect on bills the decedent owed, or didn’t owe.

The New York Times reported on debt collectors who focus on collecting debts of the recently departed, by fair means or foul.   Collectors never mention that the survivors are not personally obligated to pay the debt.  Instead, they catch people at a vulnerable moment and suggest that it would be the “right thing” to settle the debt.

Worse, fraudsters are apparently attempting to collect debts that the decedent didn’t owe, according to an article in the AARP Bulletin.

If faced with debts left behind by someone who has died, understand the applicable state law.  The general principle is that the property of the decedent is responsible for the decedent’s debts.  But if the estate is not sufficient to pay the debts, the heirs do not inherit the obligation.

My Bankruptcy Law Network colleague Jonathan Ginsberg points out that Georgia law provides for the exemption of a year’s support from the estate, before funds are available for payment of debt.  Exercise a healthy skepticism  when dealing with debt collectors in such situations.

The banking industry is swarming over Capitol Hill in an effort to gut or defeat S. 61, the Helping Families Save Their Homes Act.  The latest tactic is to try to limit the loans that can be modified in bankruptcy to sub prime loans.

These Senators are thought to be undecided or subject to being swayed one way or the other:

Max Baucus – Montana

Robert Byrd – West Virginia

Tom Carper – Delaware

Tim Johnson – South Dakota

Mary Landrieu – Louisiana

Joe Lieberman – Connecticut

Blanche Lincoln – Arkansas

Claire McCaskill – Missouri

Ben Nelson – Nebraska

Mark Pryor – Arkansas

Jon Tester – Montana

The freshman Democratic Senators have no history with this issue:

Mark Begich — Alaska

Michael Bennett – Colorado

Roland Burris – Illinois

Kirsten Gillibrand  — New York

Kay Hagan – North Carolina

Ted Kaufman – Delaware

Mark Udall – Colorado

Tom Udall – New Mexico

Mark Warner – Virginia

A few Republicans

Bob Corker – Tennessee

Richard Lugar — Indiana

Mel Martinez – Florida

Arlen Specter — Pennsylvania

George Voinovich — Ohio

If you or family or friends are constituents of any of these lawmakers, give them a call or email in support of a no cost opportunity to stop the housing collapse.

Call them toll free: 877.354.4958

Or email at: www.nacba.org/TellCongress

Ask them to support a strong and comprehensive judicial mortgage modification buill.

The bankruptcy mortgage modification provision, headed to the Senate this week, is a bargain to taxpayers next to the “voluntary” mortgage modification programs instituted by the administration.

HR 1106 involves no taxpayer money;  it strips the special interest provision sheltering banks from  home loan modification.  The costs of changing the mortgage so that the debtor pays the current value of the collateral and the lender is spared the costs of foreclosing are borne by the borrower and lender.

The modification and refinance programs introduced by the adminstration involve taxpayer  cash subsidies to servicers and borrowers who successfully renegotiate a mortgage.

Why is it that the opposition to judicial mortgage modification claim that the honest and responsible are paying the mortgage for the greedy and irresponsible?

The UST has posted new median income figures for cases filed on or after March 15, 2009.  This is the source of numbers used in the means test and Form B22 to determine whether the below median, safe harbor rule applies.

The median income for a single person in California is $49,182.  Two person households: $65,097;  three persons:  $70,684; and four person:  $79,971.

Below this income level, a Chapter 7 debtor presumably passes the means test .  A Chapter 13 debtor applies their actual, reasonable living expenses against this income level.

The National Association of Consumer Bankruptcy Attorneys has established a toll free line to connect constituents with Congressional representatives in support of HR 1106, the judicial mortgage modification bill.

1. Phone 1-877-354-4958 (between 9am and 6pm Eastern time.) You’ll be given specific suggestions for the substance of your phone conversation and prompted to enter your zip code.

Your call will be routed to the office of your Senator, House Rep, or the White House.

Tell the Congressman’s staffer that you want him/her to vote for a broad and effective mortgage modification bill. Put homeowners on equal footing with banks and the well to do.  Stop the crash of housing values.

This bill comes up for a vote this week, most likely on  Wednesday.  We are all in this crisis together.  Please call and be heard.