Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

There is no live baseball tonight, with MLB players still enjoying the All-Star break, but that doesn’t mean that there can’t be any action off the field.

The Texas Rangers’ bankruptcy case has taken a couple of twists, and that could lead to the team being up for auction as soon as early August.

One of the stumbling points was whether the team could properly be sold to the second highest bidder. Major League Baseball, which likes to keep tight control over who owns their franchises, backed that procedure, which would have given them veto power over the top bidder, but the creditors predictably howled like a stuck pig.

It appears that the judge has sort of split the baby; he’s allowing a second-high bid to potentially stand, but forcing the leading bidders — a group that includes rubber-armed fireballer and former Texas Ranger Nolan Ryan — to come up with an opening “stalking horse” bid by August 4th. The judge also determined that any later bids must be raised in at least $20M dollar increments.

The Rangers are the only MLB team in bankruptcy; they also have the largest division lead of any team at the All-Star break, have recently traded with the Mariners for pitching ace Cliff Lee, and are in town to play the Red Sox at Fenway Park starting Thursday night.

By Doug Beaton

A recent survey has found that the poor economy is causing the credit ratings of individual Americans to sink to all time lows.

As of late April, more than 25% of Americans have a FICO score below 599.

Paradoxically, the number of people with perfect scores of 800-850(sounds like the SAT, doesn’t it? ) has also been creeping up; almost 18% are in this stratosphere, up form a historical average of about 13%.

And even folks with scores in the middle are getting squeezed. Florida mortgage broker Ritch Workman relates the following tale to Eileen Connolly of the Associated Press: “A customer with a score of 679 recently walked away from buying a house because he could not get the best interest rate on a $100,000 mortgage. Had his score been 680, the rate he was offered would have been a half-percent lower. The difference was only about $31 per month, but over a 30-year mortgage would have added up to more than $11,000.”

“There was nothing derogatory on his credit report,” Workman said of the customer. He had, however, recently gotten an auto loan, which likely lowered his score.

How does all this scoring affect those in need of bankruptcy? The best advice I can give is that being four months behind on a loan, being in foreclosure, or filing a bankruptcy case all have about the same affect of your score.

Filing the bankruptcy, however, has the advantage of wiping away most of the underlying problem, which allows your FICO scores to start climbing again, typically in about a year for a debtor who becomes scrupulous about paying bills going forward.

By Doug Beaton

Former Jacksonville Jaguars quarterback Mark Brunell has filed for bankruptcy, according to an article by Texas law firm Allmand and Lee.

It appears that Brunell has filed under Chapter 11 of the bankruptcy code, listing $5.5 million in assets and $24.7 million in debts.

Brunell has earned more than $50 million in his sports career, but along with his wife, still owes almost $3 million on the couple’s residence.

Brunell played for many years in Jacksonville, and earned a Super Bowl ring just last February for his role as a backup QB with the New Orleans Saints. His bankruptcy estate — fair game for creditors — includes that Super Bowl ring and also three Rose Bowl rings from his college days.

Brunell’s misfortunes appear to be tied principally to poorly timed real estate investments, and the nationwide crash in property values.

By Doug Beaton

If you have been thinking about doing business with one of those “debt-relief” firms that are advertising everywhere lately, you really need to read this New York Times article first: “Peddling Relief, Firms put Debtors in a Bigger Hole.”

If you are looking instead for real solutions, give me a call instead (if you live in Massachusetts or southern New Hampshire, that is). I’m a real person, and will talk to you on the phone about whether bankruptcy or any other type of option, like re-negotiating loans, will work for you. I’ll give you a rough idea about how much it costs, and I’ll meet you in person without charging you anything until you decide whether to hire me. I work on Route 114 in North Andover and my phone number is (978) 975-2608.

Doug Beaton.

(Photo by Steve Hebert, New York Times)

By Doug Beaton

An interesting case emanating from the western states involves a court clamping down on Wells Fargo for illegally violating the bankruptcy court’s automatic stay protections in many consumer Chapter 7 cases.

A recent ruling from a bankruptcy appellate panel in the Ninth Circuit, which covers most of the West, found that Wells Fargo was obtaining lists of every debtor in the country who filed a Chapter 7, and comparing the names with their account holders. Whenever there was a match, Wells Fargo would put a “freeze” on the account, not letting the debtors have access to their funds. Then they would send a form letter to the bankruptcy trustee, asking what should be done with the money. If the trustee didn’t write back, they just kept the funds indefinitely.

The appellate judges held that Wells Fargo’s national policy of freezing accounts violates the automatic stay; they notes that the debtors in the case in question had actually requested that Wells Fargo return the money to them, and had declared part of the account exempt on their bankruptcy schedules.

The court stated that, since no instructions were forthcoming, Wells Fargo was under an obligation to do something–either release the funds to the trustee; release the funds to the debtors after demand was made by the debtors or seek direction from the bankruptcy court. Wells Fargo did none of those things.

There aren’t too many Wells Fargo bank branches in New England yet, so this decision may not directly affect many people filing Chapter 7 cases in New Hampshire or Massachusetts. But keep an eye out for what your bank does when you file a case. If you come across a bank that “freezes” accounts automatically like Wells Fargo did, let me know about it!

By Doug Beaton