Not only do you have to have a higher score to get lower rates, people that traditionally have those higher scores are finding that smaller things, like purchases made with retail credit cards and revolving lines of credit, are having a greater negative impact on their credit score even if payments are made on time.  The obvious question resulting from these changes is: WHY???

While there are several factors to consider, the simplest answer is to blame it on today’s villain; Big Banks.  In 2008 the nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac, posted enormous losses.  Even massive TARP loans were not enough to stem losses so to recoup losses and mitigate risk they decided to take the TARP funds AND lend less.  In early 2008 they announced they would revise the number for a “good” credit score raising their requirements to 720; they increased it again in 2009 to a 740.  Other banks and lending institutions followed suit and soon so few people qualified for competitive rates, or even any loan, that consumer mortgage lending was nearly at a standstill.

While much of the blame lies with the banks, consumers are not completely powerless.  The most important thing is to be aware of not only your credit score, but what is contained in your credit report.  Consumers have the right to contest inaccuracies and each credit reporting agency provides an address where consumers can report discrepancies and send proof.  Consumers can also reduce their debt-to-income ratio; while not using available credit helps, closing lines of credit that are not used helps even more.  When applying for a mortgage a good mortgage broker can help you improve your credit by 10, 20, or even 30 or more points in a short period of time.

Hubbell DuVall PLLC has compiled its pro bono and low income services numbers for the second quarter of 2009. From June 1, 2009 through September 30, 2009, attorneys at the firm logged over 80 hours of free or substantially reduced-cost time representing underpriveledged, low-income, or indigent clients. This represents a 9% increase from the previous quarter.

Your tax returns and potential bankruptcy filing are invariably connected.  Your tax returns from previous years are used as evidence of your adjusted gross income and are provided to the trustee in bankruptcy before your meeting of creditors.  Taxes deducted from your paycheck are not counted as income for purpose of the Schedule I income calculation; this is important in a Chapter 7 where your monthly expenses must exceed your income and in a Chapter 13 where Schedule I might be used in calculating your plan payment.

Any tax refund you might receive affects and is affected by your bankruptcy as well.  In a Chapter 7, your refund is property of the estate and is subject to seizure if it is received within 90 days before filing or up to 180 days after discharge.  If it is not received in that period, the policy here in the Eastern District of Michigan is that it still has to be prorated and exempted.  The problem is that if you have to exempt a large tax return using the “wildcard” exemption, your attorney may be unable to exempt other assets as well.  Even more concerning is the case of the debtor that has equity to exempt; the “wildcard” exemption may not even be available to that debtor and the trustee will take the tax return.  In a Chapter 7, if you can plan a little ahead, you can prevent this money from being used to repay your creditors:

1. If you have no home equity to exempt, and little in the way of other assets, don’t worry, your tax refund will probably be exempt.
2. If you have home equity, or a large number of other assets that are not exempt under another category, you may need to preserve your “wildcard.”  If your Schedule I (income) is not in danger of exceeding your Schedule J (expenses) all you need to do is fill out a new W-4 and increase the number of exemptions you are taking.  While you won’t get a large check come tax time, you will notice an increase in your take-home pay.

Your tax refund amount matters less if you do not qualify for a Chapter 7 and file Chapter 13 instead because that money will likely end up with the trustee, for the benefit of creditors, no matter what.  The reason behind this is that if you decrease your monthly taxes, your Disposable Monthly Income (“DMI”), and thus your plan payment will most likely go up.  If you choose to leave it alone and receive a refund, you’ve most likely got to turn it over to the trustee anyway.

While the content of this article are legal in nature, and the author is an attorney licensed to practice in Michigan, this is opinion only.  You should consult with your own attorney before acting on any advice or, call us today at (248) 595-8617 for a free consultation.

Our standard fee agreement, which includes a free consultation preparation of the bankruptcy petition, statements and schedules, representation at the meeting of creditors, a consumer liability report and analysis, filing motions to redeem secured collateral, answering motions for relief from the automatic stay, preparing and filing reaffirmation agreements, and executing amendments, as necessary, will still fall under our normal pricing. A standard individual filing is $800.00, exclusive of the credit counseling and filing fees.

Our new fee schedule involves a low-cost bankruptcy option, which is ultra-competitive, and responsive to our clients’ needs. For $500.00, we offer a free consultation preparation of the bankruptcy petition, statements and schedules, representation at the meeting of creditors, a free consumer liability report, exclusive of the credit counseling and filing fees. This more affordable option is for clients who have no need for the additional services included in the standard Chapter 7 representation.

Since cost seems to be the motivating factor for many seeking the advice of a lawyer, we are responding by making low-cost options available. It is no longer out of your reach to have an attorney by your side. We continue to honor our pledge to beat any price quoted in writing by any attorney or bankruptcy petition preparer. If you bring us your quote, we will charge you less. Call us today.

Please visit Human Rights Watch’s Website for more.

What seems to have given this bill some pause was 16-year old Jonathan Belton being charged with open murder in the shooting death of 28-year-old Oak Park Police Officer Mason Samborski, which shooting occurred on December 27, 2008. Citizens responding to the news made comments such as: “fry the little puke,” and “kill him—at least he doesn’t leave a wife and child behind like Ofc. Samborski,” and “I hope he gets the death penalty.” Clearly these comments are born of rage, justified anger, and rietous indignation. Unfortunately, they are also born of ignorance, vengeance, pain, and fear.

One main purpose of the criminal justice system is so that the types of punishment that would be inflicted by an angry mob are replaced by ideas like due process, trial by jury, a defense, and a neutral judge. The system, however, is bound to apply the laws handed down by the representatives of the people of the state. What the state currently says is that juveniles convicted of certain crimes shall be imprisoned without the possibility of parole. MCL 750.316. Until the peoples’ representatives act to undo this policy, justice continues to unravel in Michigan.

Here is one example of a failure of the mandatory JLWOP sentencing policy. On December 14, 1993, a murder occurred in Detroit. Michael Scott, MDOC no. 240464 was sentenced to life in prison on November 30, 1994 after pleading guilty as the principle to the murder. Another man, Cortez Davis, MDOC no. 237818, was present for the murder and robbery, but maintained through trial and to this day that he was not the shooter. Davis was convicted by a jury after improper jury instructions were given at his trial concerning the interplay between accomplice liability and felony murder, a legal fiction, and a failure of his defense to hit on the fact that principle liability had been previously established. He was convicted of felony murder, having not actually committed any murder. Liability for the murder was admitted by the principle to the crime, Michael Scott. Nonetheless, the judge having commented in an order that she had serious doubts about Mr. Davis’s liability, the nature of the jury instructions, and the possibility of rehabilitating Mr. Davis, sentenced him to JLWOP. Thus the law failed—a sixteen year old with at worst secondary liability, and at best no liability, was sentenced to die in prison.

Such failures disgrace our system and embarrass our state, and perhaps more importantly, our credibility on the world stage. The United States continually censures foreign countries for various abuses, which it paternalistically styles “human rights violations.” See U.S. Department of State defending U.S. policy as “consistent.” But, it seems to me at least a little absurd to contend simultaneously that children should be free from oppression, sex abuse, and unjust imprisonment, when we subject children to those very things here at home. The only difference between the two being that oppression, sex abuse and unjust imprisonment are justified here by convicting the children of certain enumerated crimes. If you disagree, and don’t find it absurd, then you can at least appreciate the inconsistency.

The raw numbers reflect the values of the angry mob, and not of the interests of justice. In its report of May 2008, entitled The Rest of Their Lives: Life without Parole for Youth Offenders in the United States in 2008, Human Rights Watch studied the JLWOP phenomenon and made several disturbing findings. Today, Michigan is third to Pennsylvania and Louisiana in terms of the number of juveniles sentenced to life in prison without parole, with 316 incarcerated as of May, 2008. The majority of youth sentenced to life without parole are first offenders. An estimated 26 percent of these offenders were convicted of felony murder. Many youth get into fights with other prisoners in order to defend themselves from physical violence, including rape. Once in prison, youth offenders sentenced to life without parole believe that society has thrown them away, and their loss of hope can result in self-harm and suicide.

Perhaps the most important conclusion of the report is that lawmakers do not face a choice between being “soft on crime” and supporting life without parole for teen offenders. They can protect community safety, save on incarceration costs, and still save youth from a lifetime in prison. Giving youth offenders a second chance would align U.S. sentencing practices with the rest of the world and with the goals of criminal punishment, which are rehabilitation, retribution, deterrence, and incapacitation.

Retribution against youth offenders is unjust. Based on medical evidence, while teens can commit the same acts as adults, by virtue of their immaturity they are not as blameworthy or culpable. They do not have adults’ developed abilities to think, to weigh consequences, to make sound decisions, to control their impulses, and to resist group pressures; their brains are anatomically different, still evolving into the brains of adults. Exacting retribution upon a youth offender is akin to vengeance of the strong against someone weak and partially incapacitated.

The deterrent effect of JLWOP is almost completely absent. As the report points out, young people are less likely than adults to pause before acting, and when they do, research has failed to show that the threat of adult punishment deters them from crime. Deterrence is also unlikely given research showing that adolescents cannot really grasp the true significance of the sentence.

There is no doubt the current laws incapacitate youth offenders insofar as locking them up forever makes it less likely that they will ever commit a crime again. But at what cost? And once an offender has been rehabilitated the need to incapacitate them dissolves. Mr. Davis, anecdotally, assures this author that he is rehabilitated, and that if he were to be released that he would engage in community education about crime—particularly of youth—and also that he would never again entertain the possibility of breaking a law.

Rehabilitation should be the stick of choice for lawmakers on the fence. In the language of the report, youth are not all irredeemably violent people. JLWOP sentences send an unequivocal message to youth offenders that they are banished from the community forever, no matter how they change or grow. Some may say that they can change and grow in prison all they want. This writer’s question to those folks, is whether that comment is born of justice, or born of anger, ignorance, vengeance, pain, or fear.

Consider this a plea with the Michigan Senate Judiciary Committee to put SB 173 to a vote, and endorsing the letter sent from HRW to the Michigan Sente Judciary Committee on December 8, 2008.

Recently, the firm has supported Knights of Columbus Cardinal Mercier Council 2723 in its latest Golf Outing,which directly helped local families in need.

We have pledged a sponsorship for Jennifer Hartlep, a Michigan attorney and runner in the 2009 Chicago Marathon, set to take place on October 11, 2009. Jennifer is running for PAWS Chicago, the City’s largest no-kill humane organization. We’re with you all the way, Jen!

Finally, Hubbell DuVall has donated to the South Oakland County Fraternal Order of Police Lodge 130.

We are committed to being active members of the community in which we live. It is a tenant of our firm that we constantly strive to work with local and regional organizations that directly confront the very real needs in our community. We will continue to post about our community involvement with the hope that we inspire others to do the same.