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Please visit my new website http://www.friendlawfirm.com/ which contains information regarding my practice.

Home Prices in “Double Dip”

From CNN: "Home prices in February sank 3.3% to just above the post-crisis lows reached in April 2009. It was the seventh straight month of declines. Home values are down 32% from their peak set in May of 2006, according to the S&P/Case-Shiller index of home prices in 20 cities." http://money.cnn.com/2011/04/26/real_estate/february_case_shiller/index.htm?hpt=T2.


This unfortunate trend should come as no surprise to anyone who has been following the housing market over the last few years. Government efforts to artificially prop up the market are failing, and homeowners continue to pay the price. This is especially troubling for people who bought homes based on the homebuyer's tax credit, or who took out home equity lines based on artificially inflated home values. A larger and larger number of homeowners are finding that they have absolutely no equity left in their homes, or that they are actually tens of thousands of dollars "underwater" on their mortgages, which gives them less flexibility when their families run into financial trouble.



As usual, middle and lower class Americans are paying for Washington's mistakes. The politicians and their Fannie Mae/mortgage industry cronies have created a disastrous situation: they have pumped untold billions worth of taxpayer money into trying to keep prices up, and they have lured more and more people into bad mortgages by claiming that everything is OK. The solution is simple, but unavoidable: the government can't continue to pile on its past mistakes by throwing more money at the problem. The market is going to have to fix itself, and prices have to come back to their natural levels. The tragedy is that average Americans are going to have to pay the price.


Consumers do have several options to try to get themselves out of trouble, such as mortgage modifications and bankruptcy. These are complicated areas, and consumers should find an attorney who is qualified to advise them about the specifics of their situation. Consumers who got particularly bad deals should also consult with an attorney to determine whether they may be able to bring suit for predatory mortgage lending.

 

Former MLB All-Star Charged with Bankruptcy Fraud

Former MLB All-Star Lenny Dykstra (Mets/Phillies 1985-1996) was recently charged with bankruptcy fraud for removing property from his $18 million mansion after he filed for bankruptcy protection in 2009. It is estimated that Dykstra removed $400,000 in items from the home, including a $50,000 granite sink. Dykstra has been charged with fraud because he removed, sold, or damaged the items without the permission of the bankruptcy trustee. http://www.bloomberg.com/news/2011-04-15/former-baseball-player-lenny-dykstra-charged-with-bankruptcy-fraud.html

While most of us don't have $50,000 granite sinks in our homes (or for that matter, $400,000 worth of furniture) Mr. Dykstra's case raises issues that should be in the minds of anyone who is filing a bankruptcy case. The Bankruptcy Code creates something called the "bankruptcy estate" whenever a bankruptcy case is filed. See 11 U.S.C. § 541. The estate generally consists of all of the debtor's interests in any kind of property, including homes, vehicles, and other personal property. Once an item is in the bankruptcy estate, it is given special protections that keep creditors from being able to take the item without first getting permission through the bankruptcy court. The problem that Dykstra ran into is that once something is property of the estate, the debtor cannot simply decide to sell, transfer or destroy the item. The debtor is also required to go through the bankruptcy court before taking these kinds of actions with property of the estate. Debtors who take these kinds of reckless or dishonest actions can face criminal charges, in addition to the fact that their bankruptcy cases will probably be dismissed. The lesson that most of us can learn from these cases is simple: once you have filed a bankruptcy, be very careful about what you do while the case is going on. If you have large transactions or decisions involving your property, make sure to run it through your attorney.

Welcome & Intro

Welcome to the Kentucky Consumer Law Blog. My name is Noah Friend, I am an attorney practicing in my hometown of Pikeville, Kentucky. My practice focuses on consumer bankruptcy and consumer rights.

This blog will be focused primarily on issues related to: consumer bankruptcy; the Fair Debt Collection Practices Act; the Fair Credit Reporting Act; the Kentucky Consumer Protection Act; and, the Truth-in-Lending Act. These areas of the law can be very difficult to navigate, and I hope that this blog will prove to be a useful resource for attorneys and consumers alike.

Please feel free to comment on the posts, and if you have any specific questions for me, please shoot me an email at friendlawoffice@gmail.com