Chicago BK Law Blog

Bankruptcy is a Business Decision

noreply@blogger.com (Ben Koyl) — Tue, 07 Feb 2012 17:27:00 +0000

Many people feel ashamed or embarrassed when they think about filling for bankruptcy or after they have done so. The fact is that there is no reason to be embarrassed. Just know that while most people don’t talk about their financial status, many of those same people you don’t want finding out about your financial troubles are facing the exact same issues as you are. Bankruptcy is not limited to any group of people or any amount of income. It’s not just the person next door or the less well-off people of this country filing for bankruptcy. The fact is that many of the country’s most influential and wealthy figures have at one time or another filed for bankruptcy.

Hereare just a few of the people who have filed for Bankruptcy at one point in their lives: Michael Jackson, Elton John, Walt Disney, Stan Lee, PT Barnum, and Donald Trump. This small list of very successful people illustrates the fact that Bankruptcy does not prevent you from becoming a successful, contributing member of society. Instead, it shows that Bankruptcy is used by even the very wealthy and successful as a tool to deal with debts in a smart, business savvy manner..

Many major American companies have also filed for Bankruptcy in addition to many famous and influential people. Hostess Brands Inc, a wholesale baker and creator of the Twinkie has now filed twice for Bankruptcy. American Airlines, the third largest airline in the country, has also filed for Bankruptcy. The list of companies who have filed for bankruptcy, much like the list of famous and successful people, is long and extensive.

The reason I am telling you this is to encourage you to not worry about any embarrassment. If you are having financial troubles it is important to seek help from an experienced Bankruptcy attorney and not ignore or hide your issues. Know that you are not alone. Thousands of Americans file for some type of Bankruptcy every year. Understand that it is nothing to be ashamed of and should instead be viewed as something to be proud of. You are taking responsibility for your debts, dealing with your issues, and helping out yourself as well as those around you. There could be nothing worse than ignoring the problems you are facing until there is nothing that can be done about it.

Just know that Bankruptcy is not the end. Think of it as a new beginning, a fresh start. You CAN recover from this and become very successful in your life. Just look at all of the large companies and wealthy and successful people who have utilized Bankruptcy to their advantages and have continued a successful and prosperous existence.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

In Brief, What Bankruptcy Can and Cannot Do

noreply@blogger.com (Ben Koyl) — Thu, 02 Feb 2012 00:49:00 +0000

For whatever reason you are filing for Bankruptcy it is important to know which debts will be eliminated and which debts will remain. That’s why it is important to seek the services of an experienced Bankruptcy attorney to aid in your choice on which Chapter to file.

Which debts Chapter 7 and Chapter 13 can and cannot help with.

Bankruptcy Can:

Wipe out unsecured debts, debts which the creditor does not have a lien on any of your property and cannot repossess any items if you fail to pay the debt. Unsecured debt, like credit card debt, is exactly the type of debt Bankruptcy is designed to eliminate. However, Chapter 13 and Chapter 7 deal with the discharge of unsecured debts differently. When you file for Chapter 13 they may have to pay a portion of their unsecured debts through their payment plan. After successful completion of their payment plan the remaining unsecured debt will be eliminated.

Bankruptcy Can't:

Prevent a secured creditor from repossessing property. If you have a secured debt, a debt where the creditor has a lien on your property and can repossess it if you don't pay the debt, bankruptcy can eliminate the debt, but it does not prevent the creditor from repossessing the property unless you invoke certain procedures during the bankruptcy case.

Eliminate child support and alimony obligations.Child support and alimony obligations survive Bankruptcy.

Wipe out student loans. Student loans cannot be discharged through bankruptcy unless you can show that repaying the loan would cause "undue hardship.” The you must show not only that you cannot afford to pay the loans now, but also that you have very little likelihood of being able to pay them in the future.

Eliminate most tax debts.Eliminating tax debt in bankruptcy is not easy, but it is sometimes possible for older debts for unpaid income taxes. There are many requirements to be met, however.

Eliminate other non-dischargeable debts.The following debts are not dischargeable under either Chapter 7 or Chapter 13 bankruptcy:

-Debts not listed on your bankruptcy papers, unless the creditor learns of your Bankruptcy case

-Debts for personal injury or death caused by your intoxicated driving, and

-Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.

If you file for Chapter 7, debts which cannot be discharged in Bankruptcy will remain when the case is over. If you file for Chapter 13, these debts will have to be paid in full during your repayment plan. If they are not repaid in full, the balance will remain at the end of the case.

There are some situations in which the judge may decide dischargeable debts should survive the Bankruptcy. These include debts incurred through fraud, such as lying on a credit application or passing off borrowed property as your own to use as collateral for a loan.

What Only Chapter 13 Bankruptcy Can Do:

Stop a mortgage foreclosure. Filing for Chapter 13 bankruptcy will stop a foreclosure and force the lender to accept a plan where you make up the missed payments over time while staying current on your regular monthly payments. To make this plan work, you must be able to demonstrate that you will have enough income in the future to support such a repayment plan.

Allow you to keep nonexempt property.You don't have to give up any property in Chapter 13 because you use your income to fund your repayment plan.

"Cram down" secured debts that are worth more than the property that secures them. You can sometimes use Chapter 13 to reduce a debt to the replacement value of the property securing it, then pay off that debt through your plan.

12 Reasons to File Bankruptcy Part II of II

noreply@blogger.com (Ben Koyl) — Thu, 26 Jan 2012 21:53:00 +0000

Part II of Twelve common reasons people file for Bankruptcy.

6. Stop Harassing Phone Calls From Creditors
Some creditors try to harass debtors or try and intimidate them until they pay their debts. Many times creditors will relentlessly call you at home or at your job to try to get you to pay your debt. A Bankruptcy filing will immediately stop your creditors, and stop their harassing phone calls and other collection actions. Creditors may only contact the attorney representing the debtor and there may be a claim against that creditor if they do contact the debtor themselves after the filing of a Bankruptcy.

7. Restore or Prevent Your Utilities From Being Shut Off.

If your home is in risk of foreclosure then your utilities such as electric and heat may also be in risk of being terminated. Filing bankruptcy can prevent the utility company from leaving you in the dark and without heat.

8. Provide Help For Massive Amounts Of Student Loan Debt.
Even though student debt will not be eliminated in most cases, Bankruptcy can consolidate your student loan debt into a payment plan. This consolidation will allow a debtor to make monthly payments through a Chapter 13 plan, that is within the financial ability of the debtor.

9. Stop a Wage Garnishment.

A Chapter 7 case will immediately stop a wage garnishment. A wage garnishment basically takes away 10% of your weekly paycheck. After the wage garnishment eats up your paycheck, then you most likely will not have enough of your paycheck left to pay your rent, buy food, and support your kids. By filing for a Chapter 7 you will once again be able to support yourself and your family.

10. Challenge Certain Claims of Fraudulent Creditors or Padded Debts.

A bankruptcy will allow you to challenge these claims from creditors who are trying to collect more money from you than you really owe. Many creditors charge you so much interest, late fees, and attorney fees that they try to collect twice as much from you as you borrowed.

11. You are recovering from a bad divorce.

Divorce is a major reason why many people file for bankruptcy. Child support and alimony payments can take away most or all of a spouse’s income, leaving them with no way to support themselves.

12. You are trying to deal with a lawsuit that has been filed against you.

Many people file Bankruptcy to stop a lawsuit that has been filed against them. Bankruptcy stops any litigation that has been filed against you. Bankruptcy stops credit card lawsuits, car accident cases, and any other small business related lawsuits.

http://ezinearticles.com/?Top-Ten-Reasons-People-File-for-Bankruptcy&id=15274

http://newjerseybankruptcycenter.com/wordpress/2009/01/05/top-twelve-reasons-people-file-for-bankruptcy/

12 Reasons to File for Bankruptcy, Part I of II

noreply@blogger.com (Ben Koyl) — Thu, 19 Jan 2012 22:51:00 +0000

Once a person is educated on what Bankruptcy is and what it can do, the next thing they must decide is whether they have a valid reason to file for bankruptcy in which it will help them. Although Bankruptcy is a beneficial tool people must remember that it does have some negative repercussions that must be contemplated. Bankruptcy can affect credit, may create issues with keeping bank accounts and credit cards, can cause the loss of valuable possessions, and makes it difficult to get on with necessities of life such as buying or renting a home or car, getting insurance or finding a job. Financial advisors may view bankruptcy as a desperate last resort that should only be carried out with the counsel of an experienced bankruptcy attorney like myself, and only when budgeting, credit counseling or other efforts have failed.

Why do people file for Bankruptcy?

There are many reasons why people may find it beneficial, if not necessary, to file for Bankruptcy. Here is a list of twelve common reasons:

1. Eliminate the Legal Obligation to Pay Most of Your Debts.

As was discussed in a prior blog, the goal of bankruptcy is to discharge debt and give the debtor a fresh start. This can be done through Chapter 7, liquidation, or Chapter 13, reorganization.

2. Stop the Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.

If your home is in a foreclosure, then a Chapter 13 will stop it if is filed before the sheriff’s sale. However, a bankruptcy does not eliminate your mortgages that are filed on your home. A Bankruptcy will structure a repayment plan to enable you to repay the amount that you are behind on your mortgage over a three to five year period.

3. Prevent Your Car or Other Property From Being Repossessed.

Bankruptcy can save property such as a car from being sold even if it has already been repossessed. However, your bankruptcy must be filed before the car or other property is sold at the auction. Again, money owed will be consolidated into your Chapter 13 plan. After you file, you will no longer pay the bank or the finance company, instead you will make your monthly payments to the bankruptcy trustee who in turn will pay the finance company your missed payments over a three to five year period.

4. Reduce or Even Wipe Out High Medical Bills.

A Chapter 7 Bankruptcy can wipe out your outrageous medical bills that simply won’t go away.

5. Recent Loss of a Job.
Many people fall behind in bills and seek to file bankruptcy due to the loss of a job or some means of income. Many times the loss of a job is combined with the fact the debtor is also incurring high medical bills. The loss of employment is also intertwined with a family also incurring high medical bills.

If any of the first five reasons to file Bankruptcy fit your situation please contact Ben W. Koyl at Our Website. Check in to our next blog for seven more common reasons people file for bankruptcy.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Resource #1

Resource #2

Chapter 7 and Chapter 13, the Basics

noreply@blogger.com (Ben Koyl) — Mon, 16 Jan 2012 21:15:00 +0000

Chapter 7 may be filed by an individual or a business and is considered liquidation because some or all of the debtor’s property may be sold (liquidated) in order to pay off some of their debt. However, in Florida and other states, some property, known as exempt property, is protected and cannot be sold in order to pay money owed by the debtor. In return for filing Chapter 7 some or all of the debtor’s unsecured debts (debt with no collateral attached) will be discharged. Secured debts on the other hand are usually not dischargeable in Chapter 7 Bankruptcy. There are several choices of what to do for money owed on a secured debt. The debtor can either allow that property to be repossessed by the creditor, to continue payments on that property by reaffirming that debt, or redeem the property by paying the creditor a sum equal to the replacement value of that property.

Not everyone is entitled to file for Chapter 7 Bankruptcy because certain criteria must be met. The debtor’s income cannot be over a certain amount, and if it is, the debtor must pass what is known as "means test." Additionally, the court may dismiss the bankruptcy action if the debtor has filed a previous bankruptcy within a certain period of time or if the court believes the debtor is attempting to cheat their creditors.

Chapter 13 Bankruptcy

Chapter 13 is a type of bankruptcy referred to as reorganization because the debtor keeps all of their property but their debts are reorganized so that they may make monthly payments over of a time period of usually three to five years. Many times Chapter 13 is favored over Chapter 7 because it allows the debtor to save their homes from foreclosure by providing the option for the debtor to make up for those payments in their repayment plan. In order to file Chapter 13 Bankruptcy the debtor must have a reliable source of income that can be used to repay debts over a period of three to five years. The payments are determined by how much the debtor earns, how much is owed, and how much unsecured debt may have been paid.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Insolvency Can Happen to Anyone and Bankruptcy Can Help

noreply@blogger.com (Ben Koyl) — Thu, 12 Jan 2012 21:20:00 +0000

The very word often brings an almost dirty connotation to the minds of many people. People with little knowledge on the topic of bankruptcy often have misplaced or incorrect feelings and beliefs on what bankruptcy is and what it actually does. Before researching and learning about bankruptcy I was one of those people who had misplaced beliefs. I thought of bankruptcy as if it were in the game Monopoly. I believed it was just something that happened to someone when they lost all of their money, were poor, and were not productive members of society. I could not have been more wrong. Not only have I learned that there are many types of bankruptcy, but I have learned that it affects people of all walks of life and financial status.

So what does bankruptcy basically do?

One of the most important things about bankruptcy many people do not know is that it can be an effective tool to discharge one’s debt and protect assets such as real property. Bankruptcy allows people in over their heads to improve their financial condition by either discharging unsecured debts or through the creation of a payment plan which suits the individual debtor’s ability to pay while still being able to live.

There are several types of bankruptcies used for various situations.

“Chapter 7 Bankruptcy involves the liquidation of an individual or business’s assets and is the simplest and fastest version available. Chapter 9 Bankruptcy is known as municipal bankruptcy used to resolve municipal debt. Chapter 11 Bankruptcy is known as reorganization or rehabilitation bankruptcy primarily used by business debtors which liquidate some functions and assets while a business continues to maintain their day to day operations relatively undisturbed. Chapter 12 Bankruptcy is rare and is used for rehabilitation of fishermen or farmers that have lost a portion of their capital due to bad catch or harvest, among other reasons.Chapter 13 Bankruptcy is a rehabilitation bankruptcy that comes with a payment plan for individuals with a regular source of revenue or know someone that is willing to pay the creditors in installments while a person’s finances is being restored. Chapter 15 Bankruptcy is known as ancillary bankruptcy and is used primarily in international situations to enable foreign investors and debtors to clear debts that they cannot pay and cannot be held liable in the issuing country.”

Mortgage Modification Mediation Program Appears to Work

noreply@blogger.com (Ben Koyl) — Tue, 22 Nov 2011 19:21:00 +0000

I recently came upon an interesting article on the NACBA website.

A new program, established by the United States Bankruptcy Court for the Middle District of Florida, has helped greatly in approving loan modification and principal reduction programs between homeowners and mortgage companies. This program is running in two counties in and around Orlando, FL.

This program, which costs an additional $375 to participate, is available to Chapter 13 debtors and has shown a 90% success rate thus far with those who have applied for a home loan modification. Principal reduction efforts have worked to a lesser extent, about 20% success. The rate for state court loan modification mediation success is around 4%.

The program is set for implementation in Jacksonville, FL. I would hope that the Northern District of Illinois would take notice and consider implementing a similar program. The alternative, dealing with lender's loss mitigation departments, clearly has not worked.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Update: In re Republic Windows and Doors, LLC

noreply@blogger.com (Ben Koyl) — Thu, 20 Oct 2011 16:49:00 +0000

This week Judge Jacqueline Cox of the U.S. Bankruptcy Court for the Northern District of Illinois rendered her decision on the Defendant's, Republic Windows and Doors, LLC, motion to dismiss the bankruptcy trustee's first amended complaint.

You may remember Republic Windows and Doors as the company that bilked millions from the City of Chicago in TIF funding only to lay off all of its workers while still owing them over $150,000 in back pay. Furthermore, criminal charges were filed against a former CEO of the company.

The trustee is alleging a series of fraudulent and insider actions, including complex restructuring and sham corporations, that bilked Republic Windows of its assets.

Judge Cox granted and denied in part the Defendant's motion to dismiss. Four counts of the complaint relating to fraudulent transfers were dismissed on the grounds that the statute of limitations period (four years) had run. However, the judge opened the door for the complaint to be amended stating that a longer 10 year limitations for IRS claims may be exploited, but that "The generous IRS limitation provision is not available unless the IRS files its own claim or the Trustee files a claim on behalf of the IRS."

This is a real case of corporate greed gone awry. Stay tuned for more details.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Saab Automobile Files for Bankruptcy Protection in Sweden

noreply@blogger.com (Ben Koyl) — Wed, 07 Sep 2011 21:01:00 +0000

In a move that should not come as a surprise Saab Automobile and two other subsidiaries filed for voluntary bankruptcy protection in the district court in Vanersborg, Sweden.

Swedish Automobile, the parent company of Saab Automobile, purchased the car company from General Motors last year. Their plans to turn around the struggling manufacturer have failed, and the company was forced into bankruptcy once creditors refused to continue to provide credit. The company's employees have not been paid for two months.

With fresh funding from Chinese investors, Saab hopes to continue operations and to pay its employees and current creditors in full. The main point was to forestall any potential lawsuits, which undoubtedly were forthcoming.

Interesting enough the company, through the bankruptcy process, will request monetary assistance from the Swedish government.

While Saab North America will not be directly affected by the bankruptcy, I'm sure that current Saab owners and enthusiasts feel good knowing that their beloved car company will continue to operate...at least in the mean time.

Please see the article in the New York Times for more info.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com and http://www.southsidetaxlaw.com.

Pending Legislation to Protect Creditor Fraud

noreply@blogger.com (Ben Koyl) — Wed, 01 Jun 2011 02:56:00 +0000

This just posted on the NACBA newsletter regarding an important bill, S. 1054, "Fighting Fraud in Bankruptcy Act". This legislation will primarily operate to protect homeowners from dishonest mortgage banks, and compel the U.S. Trustee to ensure that mortgage companies are operating on the level.

"Senate Judiciary Committee Chairman Pat Leahy (D-VT), along with Senators Blumenthal (D-CT) and Whitehouse (D-RI) introduced legislation to strengthen the tools available to U.S. bankruptcy trustees to fight creditor fraud in bankruptcy court. S. 1054, the “Fighting Fraud in Bankruptcy Act,” will bolster the EOUST’s ability to fight creditor fraud and protect homeowners in the bankruptcy process, while preventing needless litigation over its authority to do so. The legislation will: (1) clarify that U.S. trustee has a duty to take action to remedy creditor abuse of the bankruptcy process; (2) permit the bankruptcy court, either on its own or in response to a motion from the trustee, to correct or sanction misconduct and fraud committed by creditors in the bankruptcy process; (3) empower the trustee to establish audit procedures to ensure that creditors are complying with the law; and (4) require a mortgage lender to certify under penalty of

perjury that a foreclosure proceeding against active duty members of the military who are deployed is in compliance with the Servicemembers Civil Relief Act (SCRA)."

This bill was also feature in a press release here.

Please write your Senator asking them to vote in favor of this bill when it is presented to the Senate.

File Your Consumer Bankruptcy Case Sooner

noreply@blogger.com (Ben Koyl) — Mon, 11 Apr 2011 12:27:00 +0000

File your consumer bankruptcy chapter 7 or chapter 13 the same day that you take your mandatory credit counseling session.

Prior to the most recent amendment of the United States Bankruptcy Code you were required to take your credit counseling session at least one day prior to the date of your case filing. Now you can take file your case the same day that you complete your credit counseling session.

This change will make it easier for consumer bankruptcy filer to get the immediate debt relief and protection from creditors that they need.

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Award Winning Short Story

noreply@blogger.com (Ben Koyl) — Mon, 21 Feb 2011 20:21:00 +0000

My wife, Nazli Mohyuddin, is an aspiring author. A while back she won a short story contest with her children's tale "The Frog King and the Cricket".

Here is the story, and feel free to share this blog posting if you find the story interesting.

"The Frog King and the Cricket"

by

Nazli Mohyuddin

There once lived a Frog King who had everything any common frog desired. Lavish ballrooms. Musicians and court jesters. Beautiful libraries. And of course, royal jewels, gold, and silver. Still the Frog King was unhappy.

One warm summer night the Frog King lay asleep when he was awakened by a peculiar sound. It was music, the likes of which he never heard before. The music filled the air with sweet notes, and its harmony had a peacefulness about it that contented the Frog King to his heart’s core.

The next day, the Frog King discovered that the music belonged to a cricket who lived in a village nearby. The Frog King asked that the cricket be brought to his palace. And the following day, the Frog King met the cricket in his court. The king praised the young cricket for his music and asked that he join his court as one of his musicians immediately.

“I’m sorry,” said the cricket. “My music is not for sale.”

The Frog King was confused. In all his years as king he was never refused anything by anyone. And for a brief moment the idea of rejection angered him.

“I must misunderstand your intentions, young cricket, or else you must misunderstand mine. I wish to purchase you as well as your music that you may play for me and be deemed the most established and most honored court musician our country has yet to hear. This would be a great privilege and an honor for one as young as you.”

“You are most kind to compliment me thus, Sire,” said the cricket. “However, my answer must remain unchanged.”

“And why is that?” said the Frog King, his temper slowly rising.

“You see, Sire, though I play for the sake of music, I also play for everyone’s enjoyment, so whatever you hear and enjoy, is everyone’s right to hear and enjoy.”

The Frog King stood up from his throne. “This is an outrage—you mean to compare me to the common frog, do you? Do you not see the difference between me and them?”

“As far as I can see, Your Majesty, you are a frog who has a great many things—more than the frog who has less. But you are still a frog, are you not?”

The Frog King laughed arrogantly. “You are young, cricket. And perhaps for that reason a bit naïve. I do have a great many things more than the common frog, but what you fail to notice is that I am king of all frogs as well. As such I am entitled to the best of things because I can afford them. Perhaps, young cricket, you doubt the price I would pay for your musical talents?”

“Not in the least, Sire.”

“But you are unemployed. You own no property, you have no place to live—“
“Sire, I’m afraid you cannot put a price on truth, nor joy, nor one’s freedom. I am free for I am neither bound by property nor possession. I live in the earth and upon the trees. When it rains I drink freely from the ponds and lakes. And when the night settles in the joy in being fills my heart to its core, and it is then that I make music. Do you not see, my dear Frog King? It is only in my freedom that I sing and make music with such ease and beauty. Without my freedom my music would soon wither away and the same musical talents you admire today would cease to be.”

The Frog King pondered the cricket’s words.

“If this is the circumstance concerning your music, then you must allow me to visit you where you can play your music for me, but for me alone.”

The cricket bowed humbly in agreement, and the Frog King permitted him to leave.

The following evening, the Frog King visited the cricket in his village. He arrived with blaring trumpets that were enough to awaken all the villagers. Then he sat upon a golden throne.

“Play for me, cricket.”

The cricket made a humble bow, and began to play music.

At the first, the Frog King felt nothing. Then a gentle tremor entered his heart. He closed his eyes. He felt he was traveling over lush green hills, flying over sparkling lakes and finally the mighty ocean itself. The king opened his eyes, and for the first time in a long time felt his anger and arrogance dissolve. He felt his heart open and close, as though it was breathing again after several years. Feeling light and carefree, the king stood up. Without knowing what he was doing, he began to dance to the cricket’s music. The king’s frogs were dazed, and the villagers expressed their amazement in hushed whispers. Their king appeared transformed, so light and agile were his graceful movements. The king danced and danced. Then a timid little frog approached the king, and the villagers held their breath. The king peered into the eyes of the little frog, who looked up earnestly at him. Then the king took the little frog by her hand and began to dance with her. The villagers exclaimed in cheers.

At once, the entire village was on its feet. They never felt such joy, such concord amongst each other. The king didn’t know what magic had befallen him and the villagers. Never in his life did he feel so free. Then he stopped suddenly in his tracks. He looked about him and the crowd of dancing villagers, in search of the cricket. He found him nestled deep in the grass, absorbed in his music.

“Cricket,” he said quietly. “I was mistaken. I’ve been king for so many years, that I’m afraid I forgot who I was. But what is all this? What is this music? I fear you have cast a spell on me.”

“It is no spell, Sire,” answered the cricket. “As you said yourself, you are only now beginning to remember who and what you are. There is great joy in that memory. And it is because of that joy, you dance. That is all.”
After the festivities subsided, the Frog King returned to his palace. He reflected on the day’s events and the cricket’s words to him. He went to bed thinking he would find it difficult to sleep after all the excitement. But as soon as the Frog King shut his eyes the sweet melodies of the cricket’s music rang in his ears and entered his heart again. He fell asleep with only one understanding: tomorrow was a new beginning.

The story can also be found on the website for Character Entertainment."The Frog King and the Cricket." I hope you enjoyed the story!

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

New FTC Rule Prohibits Loan Modification Companies from Charging Fees Up-Front

noreply@blogger.com (Ben Koyl) — Fri, 17 Dec 2010 23:15:00 +0000

Upon reading the latest edition of the Florida Bar News, I stumbled upon an interesting article entitled "FTC bans mortgage modification companies from taking up-front fees".

The Federal Trade Commission took an important step in reaction to the massive amount of wrongdoing concerning mortgage modification companies by taking steps to implement the new MARS ("Mortgage Assistance Relief Services") rule. The purpose of this rule is to "combat widespread fraud by mortgage modification companies, which have victimized many desperate homeowners seeking to forestall foreclosures."

As was stated by FTC Chairman Jon Leibowitz, "At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millinois of dollars from homeowners without ever delivering results."

First and foremost, the new rule bans "mortgage assistance relief services" from collecting any fees in advance of delivering results. In order for the mortgage relief company to collect fees an offer of loan modification must be made in writing provided by the lender and this offer must be acceptable to the client; the offer must also detail any key changes (from the original mortgage) made by the loan modification offer. Finally, the client also has the right to reject any offer from the mortgage lender.

Second, the new rule also requires mortgage assistance relief agencies to provide certain disclosures to their clients. These companies must disclose that: (1) they are not associated with the government and that their services are not approved by the government or a consumer lender; (2) the lender may not agree to change the consumers mortgage loan; and (3) if the mortgage assistance relief service tells the homeowner to stop paying their mortgage they must tell the homeowner that they could lose their home and damage their credit rating. Furthermore, the company must disclose that the homeowner can terminate their services at any time.

Finally, mortgage assistance relief services are prohibited from making a number of claims. For example these companies are prohibited from making claims concerning the liklihood of getting results sought. There are many more prohibited claims, see the FTC website for more details.

Attorneys licensed in the state where the dwelling is located are generally excempt from this rule. Attorneys are, however, required to put any money advanced by the client for loan modification services into his client trust account.

The MARS rule is an extremely important step in curbing the level of fraud perpetrated by these unscrupulous companies. As I always say hire an attorney to represent you as we are knowledgeable of the law and are subject to rules and regulations of the state supreme courts where we are licensed.

The MARS rule goes fully into effect on January 31, 2011. For more information see the FTC webpage detailing the proposed rule. See also the Florida Bar News at their webpage.