The New York City Opera Declares Bankruptcy

The curtains have fallen upon the New York City Opera aftera failed fundraising campaign fell short of the $7 million needed to keep open its doors. The opera is shutting down indefinitely and it’s unclear whether they’ll ever be back on their feet. 

When created by New York mayor, Fiorello La Guardia, it was deemed the “people’s opera”, giving access to the art of opera to the general public. It has proved to have a great impact upon the culture of the city of New York and the US as a whole in pioneering access to art for those less well off and its musical contributions.

While the average price of a ticket at the Metropolitan OperaHouse, the New York City Opera’s older sister institution,is $174, the New York City Opera provided an opportunity for people to see its entire season for $100—opening doors for opera to be accessed even by those of limited means.

Many great singers passed the halls and made their careers in this “moststoried” of all opera houses including Beverly Sills, Placido Domingo, and Catherine Malfitano.  It has made its mark as bringing adventurous contemporary works to the New York stage such as Mark Anthony Turange’s Anna Nicole and Bartok’s Bluebeard’s Castle. The Opera is also known for its workshop that allows composers to hear their operas performed by live singers and musicians.

The opera has declared Chapter 11 bankruptcy, a form of debtrestructuring which allows companies and organizations a chance to restart andmove forward.   Mr. Moton views this move with a sense of optimism.  Many arts organizations have filed for bankruptcy and came out better, including the San Antonio Symphony.  He comments, “The arts are a national treasure.  That they resort to bankruptcy protection demonstrates valiant attempts to preserve a part of the fabric of our lives.”

Bankruptcy Helps Some Workers Cope With Downsizing

Underemployment is a circumstance many Texans face today.  Frustrated by a tight job market, thousands of workers have settled for part-time jobs and employment that pays less than their previous jobs.  I often hear from hard working Texans feeling the weight of mounting debt after brief to moderate periods of unemployment and they are not alone.

The lone star state faired better than most of the nation following the 2008 recession, but that still does not mean Texans have regained all of their lost ground.  Citing newly released U.S. Census Bureau data, the state’s median income remains below 2000 levels, the Associated Press Reports. 

Texas is only one of two states where the poverty  rate declined, dropping to 17.9 percent in 2012 from 18.5 percent in 2011. The August unemployment rate fell sightly from the previous month to 6.4 percent, the Texas Workforce Commission said. 

In order to cope with lower incomes, some workers are now trimming their spending. They give up larger homes and vehicles for more moderately priced items.  Unfortunately, banks are not always so forgiving of consumers looking to return things they can no longer afford.  Even if a borrower returns a home, vehicle or other secured asset, they often owe a portion of the original debt.  This is where the United States bankruptcy laws offer consumers solid protection.  Dependent on income and other factors, consumers can either file Chapter 7 or Chapter 13 Bankruptcy and stop creditors from making attempts to collect on debts. Bankruptcy can offer consumers facing these difficult issues a fresh start.  

Periods of unemployment or underemployment can also cause some workers to fall behind on their mortgage or vehicle payments.  All to often, lenders do not do a good job working with these folks to modify their home loans and threaten foreclosure or repossession.  Using Chapter 13 Bankruptcy, I help consumers stop the banks from foreclosing and set up a payment plan so they can get back on track.  

For a Free Consultation Click Here or Call 210- 841- 8728

Student loan rates hike and bankruptcy

The money 7 million college students are expected to borrow this year just got more expensive.
Overnight loan rates on subsidized federal student loans doubled to 6.8%.  While members of congress promise to work on the issue through the summer, million of college students face renewed worry about the price tag of a college diploma.

Student worries concerning debt are well placed.  On average 2013 graduates face $35,200 in college related debt according to a recent Fidelity survey of 750 college graduates.  Student loan debt is second largest debt most consumers carry after mortgages.  However in matters of bankruptcy, student loan debt can be far more troublesome for consumers.

"Students need to consider their loans permanent until they are fully paid.  Unlike a mortgage loan which is tied to an asset which a consumer can give back and then discharged, student loans do not have the same flexibility," said Gerald Moton, San Antonio bankruptcy attorney.

This means a consumer who is in trouble and unable to pay a student loan has limited options.  Student loans must be repaid and in most cases, can not be cancelled even if a student did not enter an expected career field. In different cases, consumers can request a temporary forbearance, deferment and payment plans.  It is extremely rare a student loan can be cancelled.

Bankruptcy in most cases only offers limited protection for consumers concerning student loans.  During a Chapter 13, creditors including student loan lenders are prevented by the court from attempting to collect a debt.  Sometimes this allows consumers time to improve a financial situation so they can repay their student loans.  However even through bankruptcy in most cases, the court does not allow student loans to be discharged.  Only in rare cases where the court finds repayment of a student loan would cause undue hardship is a discharge allowed.

"Students and their parents really should consider these issues when evaluating borrowing for an education.  Student loans are now more expensive than they used to be and they can carry expensive consequences far into adulthood, " said Mr. Moton.

Extra Incentive To Save

The weekend may be the perfect time to finally get that tax return on file. Before you spend your entire refund, D2D Fund is giving consumers a reason to save a little.

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Predatory Tax Lien Lending In The Crosshairs of Texas Law Makers?

By Laura Whitley

One of the most expensive loans some consumers encounter are tax lien loans. Consumers use these loans when they are behind on property taxes. While the loans offer temporary relief they come with long term consequences: high interest rates that often take may years to pay off and at times can drive the consumer into deeper financial problems.

"These types of loans come with serious shackles for borrowers and are really a bad deal," says San Antonio Bankruptcy Attorney Gerald Moton.

"Even in a Chapter 13 Bankruptcy, these loans are secured and pay nearly an 18% interest rate!"

A great long term pay off for the lenders but a long painful financial lesson for consumers.

Now Texas law makers are taking a closer look at these types of loans and their predatory nature.  The legislation would require tax lien lenders provide notice to the borrower and bank BEFORE providing the loan.

www.chron.com/opinion/outlook/article/Law-would-address-predatory-nature-of-tax-lien-4386324.php?utm_medium=referral&utm_source=t.co

Tax Return = Extra Money: Not So Fast For Chapter 13 Debtors

From banners promising big refunds and quick service, the signs of tax time are all around.  For many Americans tax season brings an expectation of a extra cash. A little something to help with an unexpected expenses, seed for savings or perhaps a down payment.

However, many people who file for Chapter 13 find tax season brings an unwelcome surprise: a tax return turnover.   Cases filed after January 1, 2010 are subject to an annual return turnover. According information distributed by San Antonio Chapter 13 Bankruptcy Trustee, Mary K. Viegelahn,  this means debtors whose plans are over 36 months and are not paying 100% to general unsecured creditors may be required to turn over their tax return to the trustee.  The trustee may view the return as disposable income that should be distributed to creditors.  

This does not mean Chapter 13 debtors are immune to unexpected expenses. Actually, there are situations where a debtor may be allowed to keep a tax return by the court if proper documentation is filed.  In the case of the Western District of Texas, a request can be filed with the court. The document is known as a Stipulation For Debtor To Retain Tax Refund and your attorney should be able to help you prepare and file it. 

Trustee Viegelahn and many other bankruptcy trustees, request debtors provide them a copy of each year's tax return citing 11 U.S.C. 521(f)(1) of the bankruptcy code.  Not doing so can result in the trustee moving to dismiss your Chapter 13 case.

If you have questions about filing for bankruptcy contact The Law Office of Gerald C. Moton for a free consultation with Mr. Moton.

Being Harassed by Student Loan Collectors? How to Fight Back!

By Laura Whitley

Falling behind on any bill can cause concern, however defaulting on student loans can be especially frustrating.  Aside from damaging credit scores,  defaulting on student loans can carry long term and  painful financial consequences like wage garnishments.  Filing for bankruptcy can provide consumers temporary relief from student loan debt collections.  However, student loan debt can not be discharged in a bankruptcy and consumers should seek the advice of a licensed attorney.

Certain collection agencies specialize in collections for government student loans.  Private lenders often hire them as well, for a list click here.  At times, some agencies my engage in unethical or abusive tactics.  Those abuses can violate state and federal fair debt collection laws.  Federal and state laws offer protections to consumers from abusive and fraudulent collection practices.  In Texas collection agencies must follow the Texas Debt Collection Act.

Consumers who think a collection agency is violating their rights should contact the loan holder, guaranty agency or Department of Education and complain in writing. Those complaints are taken seriously.

There are a few ways student loan borrowers with government backed loans can complain to the Department of Education.

How to Complain:

A. Document every contact with collection agency noting, date, time, actions
B. Keep copies of all complaints filed
C. File complaints with 3 different agencies

1. the collection agency
2. the Office of Inspector General - Online Complaint Form
3. the Department of Education

-Send a letter and any evidence to
U.S. Department of Education
61 Forsyth St., SW 19T89
Atlanta, GA 30303

4. Contact the Department of Education's Default Resolution Group to be connected with the Special Assistance Unit
1-800-621-3115

In May 2012 the National Consumer Law Center, released a comprehensive report detailing problems with complaint systems in the student loan collection agency industry.