The Opportunity Exists – Ken Gross Column – Jewish News – Sept 8, 2011

This applies to so many — but you need to recognize it and act on it!

The Opportunity Exists AL (9.8.2011)

Thav Gross in the Wall Street Journal ..

By ROB JOHNSON

For many entrepreneurs, phoning an attorney summons images of a ticking clock and mounting bills. Now law firms are trying to win new customers by offering deep discounts for start-ups.

Some firms are offering small businesses a flat monthly fee rather than charging them by the hour. Others offer flat rates for certain services, such as handling the paperwork for starting a company.

Many small companies say the discounts are a big help at a time when budgets are tighter than ever. Ray Case, a plumbing contractor in Ann Arbor, Mich., says flat fees from attorney Ken Gross proved precious as he journeyed through bankruptcy court, folding one company and forming another. He paid $10,000 total for at least 100 hours of work, and estimates he saved at least $15,000 over typical hourly rates.

“When you’re basically out of money,” says Mr. Case, “you can’t give an attorney a blank check.”

Born of Necessity

The impetus for these deals is simple: Lawyers need to drum up more business, but many entrepreneurs can’t afford traditional payment plans these days. “The economy has melted down, and a lot of work we’re doing is for people on a tight financial budget who can’t commit to an hourly fee schedule,” says Mr. Gross, managing partner at Thav, Gross, Steinway & Bennett PC in suburban Detroit.

Mr. Gross, whose firm started offering flat rates to small businesses in 2005, says his small-business clientele in the first half of 2010 was quadruple that in the same period of 2005. “You have situations where people got buyouts and had little nest eggs of money,” he explains. “They’re trying to replace income from the jobs they lost.”

Sadly, he says, there’s another reason demand is booming: Many small-business clients, like Mr. Case, need help with debt resolution and bankruptcy-related matters, rather than with starting up.

The deals are springing up across the country. In New York, MasurLaw offers small businesses a flat rate, starting at $500, for services such as help with launching a company. Senior partner Steven Masur says that “when the recession hit, we felt that predictable pricing would take the guesswork out of legal fees,” raising the comfort level of potential clients and fostering continuing relationships with them through their early days.

In Blacksburg, Va., Creekmore Law Firm PC introduced a plan last year that charges small businesses a flat rate of $75 a month, after an initial fee of $750. “Some small-business owners would come in for an initial consultation, find out our hourly fees and wouldn’t come back,” says Keith Finch, an associate at Creekmore. “They’d just disappear.”

Proceed With Caution

To be sure, there are some potential hazards for small businesses in going this route. Joseph DeWoskin, chair of the American Bar Association division that specializes in issues facing small law firms, advises entrepreneurs to check references and get promises in writing. Be careful, he says, of “the bait and switch, where they tell you they can do it for this price and then say they can’t.”

What’s more, you can’t expect attorneys to do everything for a flat rate. Most lawyers who offer these deals set limits for what the discounts cover. For example, Mr. Finch excludes some potentially time-consuming legal work from his small-business price, such as suing or defending against litigation, and giving tax advice.

Further, some law firms insist that their discounted services for entrepreneurs be conducted on the phone, rather than consultations in their offices, to speed up the conversations. Others want much of the work to be done via email. That might make for a distant relationship between lawyers and clients.

Some entrepreneurs, however, say that they don’t mind, since they’ve gotten used to dealing with customers that way to save time. Rafe Steinhauer, president of Benefeast LLC, a White Plains, N.Y., company that raises funds for nonprofit organizations, says long-distance contact works fine once a sound relationship is established.

“You don’t have to keep making special trips to the lawyer’s office,” he says.

Mr. Johnson is a writer in Roanoke County, Va. He can be reached at reports@wsj.com.

Thav Gross Steinway & Bennett's Financial Crisis Talk Center Launches Resource Website for Consumers and Business

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BINGHAM FARMS, Mich., Feb. 22 /PRNewswire/ — The Financial Crisis Talk Center (FCTC), a weekly radio talk show hosted by Financial Crisis Experts Ken Gross and David Einstandig of Thav, Gross, Steinway & Bennett, PC. on Detroit Sports Talk Radio 1130 AM has launched a new website, www.FCTalkCenter.com.

The new web-based financial crisis resource was created by the firm for consumers and businesses that are searching for help and need answers regarding their vital financial concerns.  Visitors to the site can find discussion forums, podcasts and in-depth information on issues relating to loan modifications, debt resolution, bankruptcy protection and tax relief.

“We created the Financial Crisis Talk Center website because we know first-hand how confusing it is for people, who are already overwhelmed by their financial situation, to find resources, information and options to help them,” said Ken Gross, Firm Shareholder.  ”We designed this site to provide comprehensive information they need to formulate a ‘go forward plan’ for a successful financial future.”

In addition, visitors can provide their e-mail address and subscribe sign for breaking news alerts relating to the country’s financial crisis, along with updates to attend free seminars offered by the Financial Crisis Talk Center team throughout SE Michigan.

Leveraging their 28 years of experience in resolving business and personal financial and tax problems, The FCTC specializes in meeting the needs of business and individual clients by providing Financial Crisis Management. For businesses, this means crafting a strategy to address delinquent taxes and the problems imposed by banks that are refusing to continue to extend credit to the business. For individuals, the firm designs strategies that include exit strategies from homes underwater, loan modifications, debt resolution, bankruptcy protection and tax relief.

Local organizations are encouraged to contact Ken Gross if they’d like the FCTC to conduct a free seminar for their members.

About Financial Crisis Talk Center

The Financial Crisis Talk Center, sponsored by Thav, Gross, Steinway & Bennett PC and hosted by Ken Gross & David Einstandig, began airing in November, 2008. The FCTC’s goal is to provide the forum and resources needed to advance forward in this difficult time and succeed. FCTC airs on Saturdays at 8:30 AM on Detroit Sports Talk Radio 1130 AM.  For more information about the Financial Crisis Talk Center, please visit, www.FCTalkCenter.com.

TGSB and Ken Gross comment on Business in the Detroit News

Small businesses in distress

Small businesses in distress

‘It’s nasty out there,’ attorney says, citing increased closures, bankruptcies in Mich.

Jennifer Youssef / The Detroit News

Many small businesses in Michigan are in danger of closing their doors this year due to lack of credit lines and decreased demand for their goods and services.

Unable to get credit from banks, an influx of small companies in Michigan, already on the brink of closure in a struggling economy, filed for bankruptcy last year. And the worst of it probably isn’t over, business experts predict.

“It’s nasty out there,” said business attorney Ken Gross, a partner at Thav, Gross, Steinway & Bennett PC in Bingham Farms. “We’re in for a very difficult year.”

Financial Crisis Talk Center – You Need a Goal (The Mike & Rita Story)

Write Your Congressman to Support the Helping Families Save Their Homes in Bankruptcy Act of 2009

UPDATE – MAY 8, 2009

BAD NEWS – THE LEGISLATION WAS DEFEATED IN THE SENATE … IT IS BACK TO THE DRAWING BOARD WHEN IT COMES TO PRINCIPAL REDUCTION RELIEF FOR HOMEOWNERS WHO ARE UNDERWATER ON THEIR HOMES.

YOU CAN STILL HELP – PLEASE SEND YOUR CONGRESSMEN AND SENATORS THE FOLLOWING EMAILS –


Please email your friends the link to this Website and encourage them to do the same. If they are outside the State of Michigan, they can find their U.S. Senators by going to the following link:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

If you’re from Michigan, write each of your Senators by clicking on the following links:

Senator Debbie Stabenow

Update – Mortgage Modification Bankruptcy Bill

As of 4-9-09 – Cram Down Bill is in Trouble …

MORTGAGE MODIFICATION, EXECUTIVE COMPENSATION LIKELY TO BE DROPPED FROM SENATE AGENDA

Senate Democratic leaders appear likely to drop several high-profile legislative issues from their agenda, including efforts to tax bonuses paid to corporate executives and giving bankruptcy judges the ability reduce mortgage payments on the primary mortgages of chapter 13 debtors, according to a CongressDaily report today. Senate aides said that the legislative agenda this year might increasingly focus on revamping financial regulations — which could reach the Senate floor in late summer — and on health care reform. The chamber will reconvene April 20 by taking up a fraud-enforcement bill that authorizes increasing Justice Department funding and authority to crack down on mortgage fraud and other crimes related to federal assistance programs. Those efforts come as more high-profile legislation sits on the back burner in the face of opposition from Republicans and moderate Democrats. Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Chairman Max Baucus (D-Mont.) have said that they have not dropped efforts to craft a bill slapping heavy taxes on bonuses for firms such as American International Group that received bailout money, but Democrats have no immediate plans to move an AIG bill in the face of White House concerns and strong opposition from the banking industry. Also faltering is mortgage cramdown legislation that lobbyists and some senators say lacks the votes to pass. Reid has said previously that he is prepared to drop the cramdown language provision from a broader housing bill if the votes are not there.

As of now, the bill has passed the House, but is being delayed in the Senate. Timing as of now looks like it will come up after the Spring Recess in mid April.

As of 3-18-2009 (No Change as of March 31, 2009)

Senate Democrat Says 60 Votes Not Likely on Cramdown Provision

A key Senate Democrat said yesterday that it was unlikely the chamber would consider a bill to allow bankruptcy judges to modify terms of a primary mortgage until after the spring recess, CongressDaily reported today. Sen. Evan Bayh (D-Ind.) said there is not enough support to prevent a filibuster of the bill that would allow mortgages to be restructured through a chapter 13 filing. “I think this is going to be probably not taken up until after the upcoming recess. But right now I think there is going be some difficulty in getting to the 60 votes,” said Bayh. Senate Majority Leader Reid said that timeframe was about right. “I would expect very soon after we get back after April recess that we’ll be working on what they [Banking Committee] report out,” he said. He is working with Judiciary ranking member Arlen Specter to narrow the eligibility for borrowers who could cram down the principal of their mortgages. Senate staffers met yesterday afternoon in an effort to work on a compromise. The House-passed version allows bankruptcy judges to consider whether homeowners were offered a “qualified” loan workout similar to a plan the Obama administration has announced to help lower the interest rate for up to 9 million families. But the House measure did not mandate that the borrower had to take such an offer if he were eligible, in lieu of cramdown – a provision advocated by the lending industry. Senate moderates are pushing for such a requirement. Bayh said he is looking to impose a sunset period for the cramdown provisions

Free Press Editorial Comment

(Click on Link for Full Story and Comments)

Economic relief
Strenghten bankruptcy laws to protect mortgage consumers

KEN GROSS • March 9, 2009

In times past, Americans were told to tighten our belts and streamline expenses. This economic crisis, however, is much different. e are in a war for survival. But if this is war — who is the enemy?
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The banks and credit card issuers are the enemy. How can banks be allowed to charge people 32% interest? How can banks have the right to bump interest rates up to 32% when you are only one day late on a payment? In the current crisis, the banks have made matters even worse. Thousands of people who have never been late on a credit card payment have seen their credit ratings ruined in the last four months.

Here’s what has happened. Your credit score is a function of your payment history, the amount of debt that you have and your available credit. When the credit crunch occurred, banks slashed the available credit lines of thousands of their customers, reducing their customers’ credit limits down to the outstanding balance on the accounts.

This action ruins the individual’s credit score because the cardholder’s ratio of debt to available credit immediately sinks to zero. Is there any doubt that the banks are the enemy? Many of these banks have taken billions of federal TARP money. Rather than using this money to ease the credit market, they have the audacity to use these funds to pay billions in bonuses to their employees.

So what is the solution?

The banks and mortgage lenders are not going to help unless it is in their financial interest. Our government, which has failed us miserably over the last decade, is finally waking up. The proposed Helping Families Save Their Homes in Bankruptcy Act of 2009 is a positive step. This legislation, which has the Obama administration’s backing, will provide two opportunities to obtain relief.

The legislation changes Chapter 13 bankruptcy law so that a person who seeks relief will have the ability to reduce the outstanding balance of their home mortgage to the fair market value of the property. More importantly, and what few people realize, is that this legislation will create an opportunity to negotiate with the lender based upon the threat of filing for bankruptcy relief without having to actually file. Every homeowner who is in a negative equity position will have a new channel to negotiate with the mortgage lender.
(2 of 2)

Presently, loan modification negotiations are very frustrating and one-sided. This law will improve the homeowner’s bargaining position. The bank will no longer be in a position to dictate the negotiations because the bank will not want to face the prospect of adverse consequences when the bankruptcy judge determines the reduced amount and terms of the renegotiated mortgage.
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In the year 2025, the textbooks will speak of two economic crises that our nation faced. The first will be the Economic Crisis of the 2000 Decade. The second will be the Great Depression. Now is the time is for each of us to marshal our resources to pursue a strategy so that when greener pastures arrive, we are not saddled with debt from the past era.

Ken Gross is a managing shareholder at Thav, Gross, Steinway and Bennett, P.C., a Metro Detroit law firm specializing in financial crisis management strategy development. Gross is also host of “Financial Crisis Talk Center,” which airs at 9 a.m. Saturdays on WDFN Radio 1130 AM. Write to him at kengross@thavgross.com