By Ryan C. Wood
As a fan of the reality series American Chopper I recently heard that the series was being revived. I searched for when it would air and to my dismay I also read that Paul Teutul Sr. filed for bankruptcy under Chapter 13 of the Bankruptcy Code in New York. I have watched every episode of American Chopper and know all the ups and downs of the Teutul family as aired and the various lawsuits. It is hard to read that Paul Teutul Sr. filed for bankruptcy protection under Chapter 13. It seems he is having problems with his home and a fraud lawsuit was filed against him. Unfortunately the OCC Choppers headquarters was previously sold and a portion leased back to OCC Choppers. Things have not gone well for quite some time. I hope Mr. Teutul gets the relief the Bankruptcy Code provides us all when things do not go as planned.
As a bankruptcy attorney that has filed hundreds and hundreds of bankruptcy cases and worked for a Chapter 13 Trustee I am all too familiar with how life works for real people in the real world. It is not easy and just because things are good for ten years does not mean it will continue. Seeking the relief the law and the Bankruptcy Code provides can happen to anyone. I know it can happen to anyone no matter what choices are made on an individual basis day in and day out. What is lost in the mix is none of us have control over how all of our choices play out in the real world. Natural disasters and other happenstance of life uncontrollable circumstances force people to choose relief under the Bankruptcy Code all the time and few talk about these unfortunate realities of life. How many livelihoods of people or their businesses have been destroyed due to hurricanes in the United States over the years? How many livelihoods of people and businesses have been wiped out due to natural fires or earthquakes? How many livelihoods of people or their businesses have been taken away overnight by circumstances that are absolutely out of their personal control?
As a bankruptcy attorney I see these unfortunate realities all the time and that is why bankruptcy exists. Some form of bankruptcy or debt relief has existed for thousands of years. This is not a recent development in law. The current version of bankruptcy relief is the current version.
The stigma of filing bankruptcy is all too real still and I have advocated for years via various blog articles and other forums to not hate the player but to hate the game. Bankruptcy is perfectly legal and good for all of society. There must be a release value to let the pressure out when for whatever reason debts build up and become unmanageable. We can all argue about the causes of choosing to file for bankruptcy protection until the end of time. Many of the circumstances that lead to unmanageable debt are perfectly legal too these days. Prior to 1978 the obscene credit card interest rates banks can now charge we not legal due to most state usury laws. That all went away though and now we have 30% interest rates for credit cards that any person can get and use very easily. What if interest rates were more regulated and limited to just 10% like most state usury laws provide? How many less bankruptcy cases would there be? With this one change I believe the number of bankruptcy cases would be reduced dramatically. We had it right long ago. An 8% return in the stock market for retirement purposes is said to be a good return. A 30% guaranteed return would be astronomical for any normal human. There are payday loans and vehicle title loans that are as high as 1,000% interest. If someone is seeking a payday loan or a loan on their already paid in full vehicle can they really afford 500% interest or more for the money they are receiving to most likely pay for housing or food? I doubt it but that is the reality we have today and it is perfectly legal for reasons I do not know.
When you read about bankruptcy the real questions that should be asked are what parts of our society and our laws created these circumstances that led to the bankruptcy filings rather than focusing on what that individual or business did that led to the bankruptcy filing. During the mortgage meltdown there were thousands upon thousands of people that just wanted to own a home that received loans to purchase homes that before that period of time and today they would never qualify for. Was it there fault lenders, appraisers and real estate professionals did not communicate to them that the loan was interest only and would adjust up to a payment they could and would not be able to afford in three to ten years depending upon the type of loan? No, they were not properly informed and it was not their fault individually. If it was an individual problem it would not have happened all over the United States and to thousands upon thousands of people who just wanted a piece of the American Dream. They just trusted those they dealt with at the time of purchase and the rest is history. So what is happening now that is affecting thousands upon thousands of people and the choice to file bankruptcy is an unfortunate reality?
These are the questions about bankruptcy you should be researching and not focus on the stigma bankruptcy or discriminate against someone that chose to file for bankruptcy protection.
Status of Paul Teutul’s Chapter 13 Bankruptcy Case As of March 14, 2018
There has not been a ton of action in the case since the original petition was filed. The petition mistakenly provides Paul Teutul, Jr. as the debtor and there are some other peculiar things about the schedules filed, but I will not speculate as to why they are like this. Time will tell. The 341 meeting of creditors is scheduled for March 28, 2018. The Chapter 13 Plan proposes to pay $2,448.81 for 60 months (five years or the maximum length a plan can be) for a total pot of money of $146,928.60. The Chapter 13 Plan proposes to pay M & T Bank pre-bankruptcy missed mortgage payments of $80,000 and taxes owed to Town of Crawford totaling $51,230.98. The Chapter 13 Plan of debt adjustment was amended twice and now includes a request for loss mitigation regarding Mr. Teutul’s home. This is no surprise since others have reported he was having some issues with the loan on the home and foreclosure proceedings had begun. Hopefully Mr. Teutul is successful and works out a way to save his home and move on with life with the relief bankruptcy provides.
The Chapter 13 Plan provides the following regarding loss mitigation or more commonly known as loan modification:
PART 8 LOSS MITIGATION AND NONSTANDARD PROVISIONS
8.1 Any nonstandard provision must be entered here. If this Part conflicts with any earlier Part except Part 1.2, this Part controls.
8.2 Loss Mitigation:
X By checking this box and completing this section, the Debtor requests loss mitigation pursuant to Local Rule 90-19-2, which governs a court-ordered loss mitigation program, pursuant to which parties may deal with issues such as a loan modification, loan refinance, short sale, or surrender in full satisfaction, concerning the Debtor’s Real Property Used as a Principal Residence.
Property: 95 Judson Road, Montgomery, NY. Creditor: M&T Bank. Loan: XXXX5760 First Mortgage
The Debtor estimates the value of the Real Property used as Principal Residence to be $ 0 .
The Debtor hereby permits the Secured Creditor(s) listed above to contact (check all that apply):
XX The Debtor directly.
XX Debtor’s bankruptcy counsel.
___ Other:
Debtor is not required to dismiss this bankruptcy Petition during the loss mitigation discussions. The Debtor shall submit an order granting loss mitigation if no objections are received within the requisite notice period. See http://www,nysb.uscourts.gov/loss-mitigation and http://www.nysb.uscourts.gov/sites/default/files/ch13DebtorInstructions.pdf
