March 30, 2009
A Richardson-based debt settlement company faces a lawsuit, filed last week by Texas Attorney General Greg Abbott, which alleges that it defrauded Texas consumers by failing to negotiate settlements with the customers’ creditors as promised.
A story in the Dallas Morning News says that Abbott’s office received 140 complaints against Credit Solutions of America in the past two years. The Better Business Bureau, which gave the company an “F” says that they have received more than 1,600 complaints against the firm in the last three years.
The lawsuit seeks an injunction against Credit Solutions to prevent them from “continuing to unlawfully promise services which it does not deliver.”
A spokesperson for Credit Solutions told Pamela Yip of the Dallas Morning News that the company “works diligently to resolve all complaints with the Better Business Bureau, and to our knowledge any BBB complaints referred to by the attorney general of Texas have been appropriately addressed.”
The company’s mouthpiece also said that they looked forward to working out an “acceptable resolution” with the Abbott and his team.
March 26, 2009
The Teacher Retirement System (TRS) of Texas has asked to be the lead plaintiff in a federal class-action lawsuit against Bank of America Corp.
Plaintiffs allege in the lawsuit, filed in January, that Bank of America made “untrue statements” and withheld crucial information from shareholders during its acquisition of Merrill Lynch & Co. Inc. last year.
The lawsuit marks the first time that the Texas teachers fund has ever sought lead status, which gives the fund managing control of the case including choosing which attorneys actively oversee the case.
Four other funds, including national public-sector funds from the Netherlands and Sweden and two Ohio employee funds, have asked that the Texas teachers fund be named lead plaintiff.
TRS Spokesman Howard Goldman said that the aim is to improve corporate governance at Bank of America, but that the “TRS hopes to obtain the best financial recovery possible for the harmed investors.”
The California Public Employees Retirement System and the California State Teachers Retirement System also filed for lead plaintiff status in the suit which will be tried in the U.S. District Court for the Southern District of New York.
Bank of America shareholders have filed numerous lawsuits against the company over its Merrill Lynch acquisition.
March 25, 2009
A report on USA Today’s Web site written by Christine Dugas shows that the U.S. Senate’s delay in changing bankruptcy law to allow judges to change the terms and interest rates on mortgages may bring even more changes to the law regarding credit cards.
Dugas writes…“Congress wrangled for eight years before passing a reform act aimed at curbing abuse and ending an alarming rise in bankruptcy filings. With the economy in tatters and personal fortunes often in even worse shape these days, the bankruptcy law is beginning to undergo scrutiny again.”
Dugas contends that once the mortgage issue is settled, “attention will turn to the 2005 bankruptcy reform.”
“There is continuing concern about the bankruptcy-reform bill and what its effects have been,” says Sen. Sheldon Whitehouse, D-R.I., who leads the Senate Judiciary subcommittee that oversees bankruptcy law. “We are looking at a number of things that we can do to address the problems.”
The reform passed in 2005 made bankruptcy filing more costly and more difficult, according to consumer advocates. It created more hurdles, such as the “means test” and mandatory credit counseling, for those who are experiencing financial difficulty to clear before they can get help from bankruptcy.
Dugas reported that Whitehouse was scheduled to “hold a hearing that will discuss legislation he has introduced that would allow families burdened by exorbitant credit card rates and fees to more simply discharge their debt under bankruptcy. He is considering several other proposals.”
Sounds like someone in Congress is working for the people, and not the banks.
March 20, 2009
A Texas debt adjustment firm has agreed to pay a fine to the Georgia Governor’s Office of Consumer Affairs (OCA) to settle charges that it violated state law.
Under the agreement, Debt Relief USA Inc. will refund $527,205.55 in fees to 330 Georgia residents and pay $40,000 to the state for expenses. It will also cease operations in the state until it practices comply with the Georgia Debt Adjustment Act, according to the OCA.
Georgia regulators alleged that the company fialed to pay its clients’ creditors within 30 days of receipt and did not maintain separate trust accounts and insurance for each customer, as required by the act.
The company also allegedly charged more than 7.5 percent that the law allows debt adjusters to take from the amount customers pay to their creditors each month.
March 17, 2009
If you live in Dallas/Fort Worth and you are considering filing for Chapter 7 bankruptcy it is important to understand if you meet the federal guidelines outlined in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Current bankruptcy law will let a person file Chapter 7 bankruptcy if they have an income below the current household average income for a similar size family in the stat in which they reside. Failure to meet the income limits will force you to meet other criteria or means tests. Failure to meet these requirements may force you into other types of bankruptcy , such as Chapter 13 bankruptcy.
To get legal advice about the bankruptcy process in the Dallas/Fort Worth area it may be a good idea to talk to a bankruptcy attorney. An experienced bankruptcy attorney will determine if your income is below the median income for Texas as determined by the Internal Revenue Service.
If your median income is higher, you might still be eligible for Chapter 7 bankruptcy. If you are considering filing for Chapter 7 bankruptcy you may want to talk to a Fort Worth bankruptcy lawyer who will be able to outline any other exemptions and other criterion allowed for filing for Chapter 7 bankruptcy under the current federal bankruptcy laws.
Bankruptcy is an important financial decision. Fortunately, you do not have to do this alone. If you are facing a financial crisis, are harassed by creditors or if the banks or mortgages companies are threatening home foreclosure, you do have options. Let a Dallas/Fort Worth bankruptcy attorney help you determine if filing for either Chapter 7 bankruptcy or Chapter 13 bankruptcy may be a sound financial decision for your family.
Bankruptcy is a serious financial decision and can have serious financial consequences for your family. It is not a financial decision that should be made lightly or with out the sound legal advice of a qualified bankruptcy attorney. Contact a Dallas/Fort Worth bankruptcy lawyer today and see if bankruptcy is right for you or your family.
March 9, 2009
A report in the Fort Worth Star-Telegram last Friday said that Tarrant County lost 16,400 non-farm payroll jobs last in January, rocketing the area’s unemployment rate to 7.1 percent.
The jump in jobless numbers, up from 5.7 in December and 2.5 points higher than the January 2008 rate of 4.6 percent, are responsible for higher delinquency rates for homeowners, according to a study released by the Mortgage Bankers Association.
Jay Brinkmann, MBA’s chief economist and senior vice president for research and economics, said in the report that while California, Florida, Nevada, Arizona and Michigan continue to dominate the delinquency numbers, the sharpest increases in loans 90 days or more delinquent in the last quarter of 2008 were in Louisiana, New York, Georgia, Texas and Mississippi.
He sighted the growing numbers in those states as “signs of the spreading impact of the recession.”
Even though the area has been less affected by the economic downturn, a report on bankruptcy filings in Texas Northern District Bankruptcy Court showed that its case filings were up 4 percent in 2008.
The rising unemployment numbers also don’t bode well for the area which, while not unaffected by the economic crisis, hasn’t seen as quite as many layoffs in the downturn as some parts of the country.
Some of the area’s largest employers, like American Airlines and General Motors, may still layoff more workers as the economic downturn cuts into the companies’ bottom lines.
March 5, 2009
The Fort Worth Star-Telegram is reporting that Magna Entertainment Corp., the parent company of Lone Star Park in Grand Prairie, has filed for bankruptcy.
The company made the announcement just as a $40 million debt payment was due. The Chapter 11 case was filed in Delaware.
Magna said that its day-to-day operations would not be interrupted though the Chapter 11 bankruptcy process.
Company officials also stressed that the bankruptcy filing should have little impact on Lone Star or on its upcoming race season, set to begin April 9.
“There should be no immediate implications for Lone Star Park, our employees, horsemen, vendors or customers,” track president and general manager Drew Shubeck is quoted in the Star Telegram. “We are proceeding with business as usual.”
March 4, 2009
Democrats in the House of Representatives, under pressure from a group of moderates in their ranks and the banking lobby, agreed to restrictions on legislation that would give bankruptcy judges the power to change the terms of a mortgage by the reducing interest rate or principal.
The legislation, which the House could vote on by Thursday, will require the judge to consider whether a homeowner had been offered a reasonable deal by the bank to rework his or her home loan before seeking help in bankruptcy court. It also puts the responsibility on borrowers to prove that they tried to modify their mortgages.
The measure is another piece of President Obama’s plan to stabilize the housing market and reduce the number of foreclosures. It follows several initiatives aimed at getting banks to modifiy mortgages for distressed homeowners who are in danger of losing their homes.
March 4, 2009
The Deal of the Week column in today’s issue of the Wall Street Journal discusses the 18-story One Riverwalk Place in San Antonio.
The building on the northern edge of the city’s famed River Walk was purchased by Equastone LLC in 2006. Its mortgagte is in default, contractors have filed claims against the property for unpaid bills and it has been scheduled for foreclosure auction at least twice. No sale has been recorded on the property, and if the foreclosure were to go through, it would be the largest multi-tennant office building to go back to a lender since the savings and loan crisis of the late 1980s.
With that, and a report from the Federal Reserve Bank in Dallas that predicts the state will lose 300,000 jobs this year and the unemployment rate may rise to 8 percent, it is clear that Texas will not be immune to the economic downturn.
Speaking of ties to a crisis, the construction of the River Walk began in the 1930s as a Works Progress Administration project. The 3.2 mile strip draws thousands of tourists annually to its numerous shops, hotels and restaurants.
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