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DannLaw acquires Zingarelli Law Office in move that will strengthen firm’s business bankruptcy practice

Founding Partner

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Marc Dann - Marc Dann Consumer Fraud & Foreclosure Defense AttorneyFounder Marc Dann and Managing Partners Brian Flick and Javier Merino are pleased to announce that DannLaw has acquired the Zingarelli Law Office, one of the Cincinnati area’s most highly respected consumer and small business bankruptcy law firms.

Atty. Nick Zignarelli, who will work with DannLaw on an “of counsel” basis, has been widely recognized for his work in bankruptcy and consumer law. He is rated 10 out of a possible 10 by Avvo, has been named a top rated bankruptcy attorney by Super Lawyers, is highly recommended by Martindale, and was awarded the Medal of Excellence by the American Institute of Bankruptcy Attorneys. “We are gratified and proud that Atty. Zignarelli agreed to affiliate with DannLaw and excited about the prospect of working with and learning from him,” Atty. Dann said.

“Nick’s experience and knowledge will be especially valuable at a time when individuals who lost their jobs and small business owners forced to close up shop by the coronavirus pandemic are staring financial devastation in the face,” Dann said. “As I’ve noted in a number of our COVID-19 updates, bankruptcy may be their best, and in some cases, their only option. Nick’s small business bankruptcy expertise will significantly enhance DannLaw’s ability to help clients utilize the law to preserve their assets and secure their financial future.”

Atty. Flick, Managing Partner of DannLaw’s Cincinnati office and Atty. Zignarelli will work together to ensure a smooth transition as the acquisition progresses. “I look forward to working with Nick as we strive to provide the best possible legal representation to new and existing clients in southwest Ohio and northern Kentucky,” he said.

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Marc Dann - Marc Dann Consumer Fraud & Foreclosure Defense AttorneyI was mildly enthusiastic about the CARES Act immediately after it was passed because it appeared to be substantially different from the stimulus plan crafted by the federal government during the Great Recession of 2008.

That package funneled trillions of dollars to the big banks and Wall Street speculators whose unfettered greed nearly destroyed the world’s financial system but did relatively little to help working and middle-class families devastated by the collapse of the housing market. By the time the economy began to turn around 10,000,000 of them had lost their homes.

By contrast, the CARES Act appears to direct $937 billion in aid to where it’s needed most: into the pockets of the more than 20,000,000 million Americans who are now unemployed and the bank accounts of small business owners who are literally hours away from losing everything they have built.

Sure, Congress doled out hundreds of billions of dollars to corporate America, including the airlines who have been ripping off travelers for decades, but the stimulus checks, enhanced unemployment benefits, and small business loan programs funded by the Act will help millions of people weather the Covid-19 storm—at least for the next couple months.

While it appears that Congress got a few things right, there are holes in the legislation that could negatively impact consumers, homeowners and small business owners. In this update I’ll identify the gaps and provide advice on who to deal with or avoid them.

Problems with the Paycheck Protection Program 

As I mentioned earlier, hundreds of thousands of small businesses across the nation are about to go under. The Paycheck Protection Program (PPP) is designed to help keep them afloat by providing forgivable loans owners can use to pay expenses including employee wages, rent, and utilities.

In concept the program is great. In practice, not so much.

That’s because the nationally chartered banks and SBA approved lenders charged with administering the program are permitted to pick and choose which applications to accept and in what order. As a result, they’ve been playing favorites. Business owners who have an existing relationship with a PPP lender go to the front of the line. Those who don’t, including minorities, are shoved to the back—if they’re able to apply at all. I’m sure you won’t be shocked to learn that Wells Fargo and other large financial institutions are telling smaller customers to hit the road and “try other banks.”  Publically owned Ruth’s Chris Steakhouse just announced that they alone sucked up $20 Million of the funds appropriated.

This type of discrimination is especially troubling in light of the fact that  Congress did not appropriate enough money to meet the needs of all the small businesses that are in trouble. When the money runs out, thousands of hard-working entrepreneurs and their employees will be doomed simply because they couldn’t access the help they were promised and desperately need.

We launched an investigation into this situation after being contacted by frustrated and infuriated small business owners. If you think something is wrong with the way a lender is handling or, more to the point, not handling your PPP application, please give us a call or email me at [email protected]

On the positive side, a number of clients have told us that smaller community banks are eager to process PPP paperwork. We’re not surprised. Over the years we’ve learned that community banks are extremely responsive to the needs of small borrowers. If you’ve been unable to make headway with a large lender, I encourage you to contact one of the community banks listed here.

Stimulus Checks can be hijacked by Judgment Creditors and banks

Stimulus checks funded by the CARES Act are already being deposited in the bank accounts of millions of Americans. That’s the good news.

Here’s the bad news: The Act doesn’t prohibit private debt collectors from garnishing stimulus money. That means if you’re behind on debt payments and have an outstanding court judgment, a private debt collector can grab your stimulus check. Attorney Javier Merino, head of DannLaw’s New Jersey office, along with consumer lawyers Josh Denbeaux and Ira Metrick just published an op-ed in the New Jersey Law Journal dealing with this issue.

If you fall in this category you should keep a close eye on your bank account and withdraw the money as soon as it is deposited. To stay one step ahead of judgment creditors you can track your stimulus payment here.

Here’s more bad news: if you owe money to the bank where your stimulus payment is being direct-deposited the bank can grab it. For example, if you have a bank account that’s been overdrawn, and your stimulus payment is deposited into that account, the CARES Act does not prevent the bank from taking part or all of the stimulus payment to pay back the debt. So far J.P. Morgan Chase and Wells Fargo have said they will not seize stimulus funds. Bank of America, Citibank, and U.S. Bank have yet to clarify their positions.

Waiver of Federal Student Loan interest is in doubt 

Federal Student Loans servicers have not been completely transparent about how they are going to implement the six-month zero interest, zero-fee forbearance included in the Act. In addition, some observers speculate that Navient, Greatlakes, and Nelnet don’t have the technology needed to properly track accounts. If you are taking advantage of the forbearance program please pay close attention to your loan statements and contact DannLaw or other attorneys if you notice a discrepancy in your account.

The CARES Act does not provide relief for federal loans originated before 2005 and private student loans 

The CARES Act does not provide forbearance for federal student loans originated before 2005 that were not consolidated or private student loans. If your loan falls into these categories you must continue to make your payments. If you are unable to do so, contact your servicer in writing and request a modification, forbearance or another type of accommodation.

Monitor your credit if you are taking advantage of the mortgage forbearance provisions of the CARES Act.

As we’ve noted in previous updates, the CARES Act provides for up to 12 months of payment suspension/forbearance for borrowers with federally-backed loans owned by Fannie Mae, Freddie Mac or insured by the FHA, VA and the Department of Agriculture. To determine if you have a qualifying loan send a request for information (RFI) to your mortgage servicer. We’ve drafted a simple RFI you can use. To obtain a copy email us at [email protected].

Please remember forbearance isn’t forgiveness.  That means you may be subject to higher mortgage payments, escrow payments, and other fees when you begin making your payments after the forbearance period. If you do take advantage of the Act’s forbearance program you should look closely at your monthly statement to make sure it is correct. You should also subscribe to a credit monitoring service and check regularly to make sure your servicer is not entering negative information on your credit report. If you notice discrepancies contact us at [email protected] so we can help protect you and determine if you have legal claims that may entitle you to financial compensation.

Bankruptcy may be the solution to your financial problems 

My parents always encouraged me to hope for the best but prepare for the worst. Today, their advice is more valuable than ever before because the COVID-19 emergency is causing unprecedented damage to our economy and levels of unemployment not seen since the Great Depression. Study after study has shown that a majority of Americans would have a difficult time meeting their obligations for more than a month or two if they lost their source of income. The ongoing crisis has validated those studies.

The $1200 stimulus checks and small business loans may ease the pain in the short term, but when that money is gone many business owners and individuals will be forced to consider filing bankruptcy in the months ahead. And while many people are loathe to do so, bankruptcy protections may provide the best option for dealing with the devastation caused by the crisis—a crisis none of us created or could have anticipated.

The fact that the courts and collection activity are essentially shut down gives business owners and individuals a unique opportunity to closely examine their financial situation and begin planning for the future—including a future that includes bankruptcy. Doing so will put you in a good position to move forward once the crisis ends if you don’t have to file and will help ensure that bankruptcy provides the maximum protection for your family and your business if filing proves to be the best alternative.

If you would like to schedule a phone or video conference with one of our experienced bankruptcy attorneys to discuss your financial future and the options that are available to you, please email [email protected]  We are here to listen, to advise, and to help.

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Marc Dann - Marc Dann Consumer Fraud & Foreclosure Defense AttorneyMany of our clients are still sorting through the various types of assistance offered via the CARES Act and the various executive orders signed by the President and the governor of the state in which they live. But learning about the programs and benefits that are now available is only half the equation. The other: deciding whether it’s in your best interest to take advantage of them.

Making those decisions won’t be easy. The CARES Act itself is more than 800 pages long and the rules and regulations the federal government is developing to implement it are only making things more complicated. Throw in the things individual states are doing and you have a nearly impenetrable mass of guidelines, requirements, and instructions that would make any bureaucrat proud.

To help you cut through the mountain of red tape that’s wrapped around the various relief packages we’ll be conducting a series of free Facebook Live legal clinics beginning this week. During the live sessions, we’ll answer questions about the CARES Act and address consumer, foreclosure, and student-loan related issues.

To participate in the clinics, please visit and like the DannLaw Facebook page. The first session will begin on Tuesday, April 7, 2020 at 6:00 p.m. EDT and will deal with the Act and a wide range of issues. You may submit a question during the broadcast or submit questions in advance by emailing [email protected].

Our second free live legal clinic dealing with student loan issues will be broadcast on Thursday, April 9, 2020 at Noon EDT. You may submit questions during the show or in advance by emailing [email protected].

Right now, we’d like to share some of the insight and info we’ve been able to distill from the rapidly evolving situation:

Housing

Borrowers whose loans are “federally backed,” i.e. insured by the FHA, VA, or Department of Agriculture or owned by Fannie Mae, Freddie Mac are entitled to a 60-day payment suspension followed by 12 months of forbearance.

Forbearance is not Forgiveness. Borrowers who take advantage of this type of relief will eventually have to pay the piper.

If you have an FHA, VA, or USDA loan, the principal and interest deferred will be rolled into a zero-interest second mortgage when the forbearance period ends. This is known as a “partial claim.” In addition, your escrow payment will be recalculated so your mortgage servicer can recoup the payments for taxes and insurance advanced during forbearance. The bottom line: if you take advantage of this benefit, your payment will increase when forbearance ends. You can learn more about the FHA’s policies here.

Forbearance is even less attractive for borrowers whose loans are owned by Freddie Mac or Fannie Mae because it is unlikely that either will adopt borrower-friendly solutions similar to those implemented by the FHA, VA, and USDA. That means servicers will do one of two things when forbearance ends: demand a lump sum equal to one year of one year’s worth of mortgage payments or offer to modify the loan in an as-yet-unspecified way.  This uncertainty means you should think long and hard about taking advantage of the opportunity to defer payment of your Freddie or Fannie loan.

There’s also a lot of uncertainty regarding non-federally backed loans. No one knows if servicers will offer relief to borrowers who lost their jobs or experienced a loss of income due to the Covid-19 crisis. The only way to find out is to ask. When you do, please remember the guidelines we laid out for communicating with mortgage servicers and other creditors:

  1. Communicate in writing when you can.
  2. If you are unable to communicate in writing, record your conversation if it is legal to do so in your state. Recording is permitted in Ohio and New Jersey.
  3. Contact us to arrange a free consultation if you are uncomfortable with the information provided by your servicer. Rule of thumb: if something doesn’t seem right it probably isn’t. Don’t hesitate to protect yourself.

Student Loans

The CARES Act enables people with federal student loans originated or consolidated after 2005 to defer payments for six months. No interest or late charges will accrue during the deferral period.

Similar relief is not available to borrowers who have Perkins Loans, private loans, or federal loans that were originated before 2005 and not consolidated thereafter. You must continue to make your payments. The only good news: most courts are staying hearings for 60 to 90-days so borrowers have some time to work things out before having a judgment issued against them.

If your student loan is in the collections process please pay attention to any service of process or other court documents that you may receive. If you don’t understand something sent to you by a debt collector, law firm, or Court seek advice from DannLaw or another attorney.

Small Business Loans

Businesses with less than 500 employees are eligible for three programs:

  1. Payroll Protection Program a forgivable loan for 2.5 times the business’s monthly payroll. These loans are available from banks or other Small Business Administration (SBA) Lenders.
  2. SBA Emergency Loans are available to businesses under distress as a result of the COVID-19 Crisis. Ten thousand dollars of the loan amount is forgivable.
  3. SBA Disaster Loans are available to businesses located in states in which a Federal Emergency has been declared.

It’s important to note that the implementation of these loan programs has been disorganized and haphazard.  Banks have been slow to develop and implement their application process and many have limited applicants to existing customers.  In addition, the transfer of funds to the SBA Emergency and Disaster Loan programs has been moving at a snail’s pace. The roadblocks and delays are incredibly frustrating at a time when many small businesses need immediate help if they are to survive the crisis. We’re constantly monitoring the situation so we can help clients receive the assistance they need.

Please visit the SBA Website for additional information about these loans.

Scams:

All individuals and small businesses should be on the lookout for fraudulent and/or criminal behavior. Here are some warning signs:

  1. SBA backed Loans can only be originated by SBA Lenders. Make sure you are providing your information to an accredited SBA Lender. There are no fees associated with applying for these loans and most businesspeople should be able to fill out the relatively simple applications. If you need help only deal with licensed CPAs or attorneys.
  2. There is no fee to apply for the stimulus checks of $1200 or more per family that will be distributed under the provisions of the CARES Act. Indeed, there is no application at all. All you need to do is to verify that your most recent tax return has all of your correct address and bank account information.

You may view our previous updates here.

That’s it for now. Be well, stay safe and if you need help or information please call 877-475-8100 or email us at [email protected]

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Marc Dann - Marc Dann Consumer Fraud & Foreclosure Defense AttorneyI’ve been involved in politics and government for over 40 years and I can say  definitively that I have not seen legislation that offers as much direct and immediate relief to distressed consumers, borrowers, small business owners and tenants as the Covid-19 stimulus package, known as the CARES Act that Congress passed on Friday, March 27.  You can read an analysis of the bill here. You can read the legislation in its entirety here.

While I’m generally pleased with the CARES Act, I do have two concerns:

First, I believe government, mortgage loan servicers and banks may make significant mistakes and cause undue delays as they implement the legislation, and, second, I worry that many mortgage, consumer, and student loan borrowers may not receive the assistance they will need to weather the Covid-19 emergency.

Here’s the bad news…

The Acts’ protections only apply to federally-backed mortgage loans.

If  you are among the more than 50% of homeowners whose mortgage is “federally related” i.e. owned by Fannie Mae, Freddie Mac or insured by the FHA, VA and the Department of Agriculture help, which I’ll describe later, is on the way. But many borrowers, including those who have recently been in default in recent years, are not eligible for relief because their loans are not owned by the listed entities. That means it’s very important to find out who owns your loan. We can help you find out or you can send a “Request for Information to your servicer. Many loans that were formerly owned by Fannie Mae and Freddie Mac or insured by the FHA have been resold. In many cases hedge funds that are not obligated to offer the forbearance of payments included in the bill now hold own the loans.

The Act does not address Private Student Loans.

If your loan is not owned by the U.S. Department of Education then you are not eligible for the 6-month, consequence-free payment holiday included in the Act. While some courts in some counties have placed stays on some collection activity, lawsuits and other collection actions involving private student loans may proceed.

The Act’s eviction protections for renters apply to a very small category of landlords

Landlords who have loans from Fannie Mae or Freddie Mac and who seek mortgage assistance are prohibited from evicting tenants. Unfortunately, the vast majority of landlords do not fall into this category.

It is important to note that the members of Congress did not carve out these exceptions because they don’t care about the people they impact. The exceptions exist because the federal government generally lacks the power to control the private creditors involved.   

Now for the good news—and there’s lots of it…

Mortgages:

Mortgage Servicers for Federally Backed Mortgages must provide a 60-day suspension of payment obligations to borrowers who claim they are unable to apy because they have been impacted they Covid-19 crisis.

Mortgage Servicers for Federally Backed Mortgages are required to agree to forbearance of up to 12 months or longer without adding additional fees, penalties or interest other than that contemplated by the original note. It is important to note, however, that the Act does not prohibit negative credit reporting during the forbearance period.

Servicers of Federally Backed Mortgages are prohibited from moving forward to foreclose or evicting anyone from now until May 17, 2020.

Student Loans:

All Payments on Federal student loans will be suspended for six months. More significantly, no interest, penalties, or fees will accrue during this time period.  The non-payments will be treated as payments for the purpose of forgiveness, loan rehabilitation or public service loan forgiveness programs.  In addition, the Act contains a very consumer-friendly provision that requires lenders to report the borrower as paying currently to credit reporting agencies. Remember these provision DO NOT apply to Private Student Loans.

Unemployment Compensation:

The Act adds $600 per week in federal unemployment benefits to the amount paid by each state. For many workers this means unemployment checks will nearly equal their normal wage. You must still apply through your state’s unemployment system.

Small Business Owners:

Small business owners can apply to banks or other SBS-approved lenders for loans to cover eight to ten weeks of expenses including payroll, rent, health insurance, sick pay and other day to day costs. The loan is forgivable if the business keeps its employees on the payroll during the period. Banks will originate and service the loans and the Government will subsidize them through the SBA. While $355 billion has been appropriated, based on my discussions with clients, the money may run out so we suggest that small business owners apply right away.

Bankruptcy Changes:

The following changes to the Bankruptcy Code will be in effect for the next 12 months:

The stimulus checks Americans receive will not be considered income for purposes of filing a Bankruptcy.

For those already in a confirmed Chapter 13 Plan, the Bankruptcy Code has been amended to allow for Debtor(s) to file a Motion to Modify their Chapter 13 based on financial issues caused by COVID to extend the term of their plan for up to 84 months/seven years.

The definition of Debtor for purposes of filing Subchapter V of Chapter 11 also known as the Small Business Reorganization Act has been expanded to include all debtors, not just those defined as a small business:

The following change to the Bankruptcy Code is permanent:

The debt limit for cases eligible to file under the new Small Business Reorganization Act under Chapter 11 (a.k.a. SBRA or Subchapter V) has been increased to $7,500.000.00

See Previous updates on this crisis and its impact on consumers here

For more information contact [email protected] or call 877-475-8100

Marc Dann

[email protected]

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I have dedicated my entire legal career to helping people who have been hurt, scammed, cheated, or victimized seek and secure justice. I’m proud to say I’ve done just that at my first small law firm, as an Ohio State Senator, Ohio Attorney General, and now as the founder of DannLaw. That’s why I seized the opportunity to urge the members of the Ohio Senate Judiciary Committee to first strengthen and then pass SB 162 which would eliminate the criminal and civil statutes of limitation for rape and sexual assault.

The changes called for in the bill are both much-needed and long overdue. I’m pleased to share my testimony with all of you and to urge you to contact your state legislators and ask them to support this important measure. You may also watch my presentation to the Committee on the Ohio Channel.

Good morning, Chairman Eklund, Ranking Member Thomas and members of the Committee. I am here today to express my support for Senate Bill 162 which would eliminate criminal and civil statutes of limitations for rape. I want to thank my State Senator Nikki Antonio and Senator O’Brien who represents the district I once held for continuing the work I and colleagues of both parties began in this very room in 2005. Passage of this much-needed and long-overdue legislation would represent a monumental step toward securing justice for victims and imposing justice upon those who have escaped punishment and evaded accountability for their monstrous acts simply because they have managed to run out the statutory clock.

I first learned about the terrible physical and psychological pain victims endure when I led the effort to pass Senate Bill 17 while serving as the Ranking Member of the Senate Civil Justice Committee. After listening to the harrowing and heart-wrenching testimony of women and men who had been sexually abused as children, both the Committee and the Senate unanimously passed the bill which included a provision that extended the civil SOL for sexual assault to 17 years.

Unfortunately, in one of the ugliest and most destructive displays of the negative impact big-money donors can exert in the state’s pervasive “pay-to-play” culture, the nation’s multi-billion-dollar insurance companies placed the pursuit of profits ahead of the interests of victims and succeeded in stripping the civil SOL extension from SB 17 when it reached the House.

I learned even more about the grave challenges victims of sexual assault endure while serving as Ohio’s attorney general. I, like everyone who has had the privilege of serving in that position, devoted much of my time to ensuring that law enforcement had the resources needed to pursue, prosecute, and incarcerate offenders. Although I’m proud of all that I, my staff, and the AGs who preceded and succeeded me have done to ensure that offenders are prosecuted and incarcerated, anyone who truly cares about victims knows we must do more than throw their rapists in jail. We must provide them with the opportunity to seek just compensation for the severe physical and psychological injuries most will suffer for as long as they live.

I applaud Senators Antonio and O’Brien and co-sponsors Craig, Fedor, Kunze, Lehner, Maharath, Sykes, Thomas, Williams, Yuko for opening the courthouse door that was slammed shut in the faces of thousands of victims in 2005.

But today, 14 years after SB 17 was eviscerated by the insurance industry, we need to do more than lift the civil SOL applicable to offenders. That’s because sexual predators like Larry Nassar, Jerry Sandusky, Richard Strauss, Jeffrey Epstein, abusive priests, and others are judgment-proof due to the fact that they are broke, dead, or both.

But institutions like the Catholic Church, U.S.A. Gymnastics, Penn State, Michigan State, and the Ohio State University along with the powerful officials who looked the other way as monsters under their control abused innocent victims can and should be held accountable. To my point, Rep. Brett Hillyer of Uhrichsville recently introduced House Bill 249 which will allow the more than 170 people abused by Richard Strauss to sue OSU. Rep. Hillyer is on the right track, but he’s not going far enough. Every victim in the state should be afforded the opportunity to seek and secure justice.

This Committee could and should provide that opportunity by amending this bill to include the elimination of the civil SOL that now protects institutions and officials who knew or should have known what was occurring on their watch.

Thank you again, Chairman Eklund, Ranking Member Thomas and members of the Committee for allowing me to appear before you today. I would be pleased and eager to answer any questions you may have.