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. At this point it appears that election time politics will hamper any realistic chance for meaningful
mortgage modification or Bankruptcy reform.
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