California has recently enacted landmark legislation that intends to end many lender abuses in the forelcosure process. This legislation is generally referred to as the Homeowner Bill of Rights. Among other things, this legislation may give homeowners the right to sue their lender for failing to adhere to certain standards of fairness in dealing with borrowers who are behind on their payments. The legislation also intends to end "dual tracking" - the confusing, all-too-common situation where the lender is discussing modification with the borrower, but simultaneously pursuing foreclosure. Many borrowers have lost their homes while they thought they were being reviewed for a modification.
It remains to be seen how this legislation, which takes effect in 2013, will effect homeowners. Will lenders be less aggressive about foreclosures? Or could it have the opposite effect that it was intended to, and result in lenders refusing to consider borrowers for loan modifications so they can put them on the "single track" to foreclosure? Luckily, the Bankruptcy Code already provides many options to stop a foreclosure immediately, even if you are applying for a loan modification. In addition, bankruptcy allows you to strip equity lines and second mortgages when the house is worth less than the balance of the first mortgage. These powerful features of the Bankruptcy Code, in conjunction with the Homeowner Bill of Rights, put consumers on much firmer ground than they were on at the beginning of the housing crisis. Have questions about using bankruptcy to stop or delay a foreclosure, while wiping out other debts that make the mortgage payment unaffordable? Contact us for a free consultation.
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The nation's biggest mortgage companies reached a $25 billion settlement in February with state officials regarding their wrongful practices and disregard of homeowner rights. Unfortunately for homeowners, this settlement cleared the way for banks to address their backlog of foreclosures - particularly foreclosures the banks had repeatedly postponed or delayed initiating.
Lenders initiated foreclosure on 12% of the loans behind in payment in June — the highest level since the first half of 2009. Analysts have been expecting an increase in foreclosures - particularly foreclosures on homes that have been in default for quite some time. RealtyTrac estimates 700,000 homes will be foreclosed by lenders this year. Fortunately, the bankruptcy process allows individuals and families more time to try to save their homes by automatically staying a foreclosure upon the filing of most bankruptcies. While the foreclosure process is stayed, you can continue to work to obtain a loan modification through your lender yourself or with the assistance of an approved counselor. If addition, you can also propose a plan to the court to reinstate your mortgage by paying the past due amounts over time. If you are in danger of foreclosure, contact us today online or call us at 650.259.9200 to set up a free bankruptcy consultation. We can explain how you can use the bankruptcy process to wipe out unsecured debts, freeing up funds so you can afford your mortgage and car payments. We offer flexible payment plans and competitive rates to make our services very affordable to you. -honakerlegal One of the common questions from clients is whether they will be able to use credit cards again immediately after bankruptcy. The answer? It depends. Initially, it is unlikely you will be able to obtain a high credit limit. The most likely option to get restarted is a secured credit card.
This raises is an important issue though. What if you didn't really *need* credit? What if you had established a personal savings account after you stopped paying high credit cards bills, and instead saved up an adequate fund to handle emergencies? Is it really worth paying 1000s of dollars a month in bills you can't afford so you can afford the supposed privilege of being able to borrow more? We advise our clients to establish a savings account no later than the time they file bankruptcy, and make "payments" to their savings account in the amount they were paying towards their credit card bills before filing - usually just to cover interest, fees, and penalties. The result? Many can save very substantial amounts of money that are adequate to cover their needs in an emergency. And best of all? It's their *own* money. If there is no emergency, you can simply continue to save. It is much better to have your own money than to have the right to borrow money from someone else at high interest. More questions about how bankruptcy could get you on the path to savings? Contact us for a free consultation. It is stressful not to know what your options are when you have been served with a collections lawsuit. Bankruptcy attorneys realize that the sooner you contact us, the more options you will have to manage your financial problems. Accordingly, to help you preserve your options, we are offering a free attorney consultation within three business days. Please call us at 650.259.9200 or send us a message to request a free consultation within 3 days.
For anyone filing bankruptcy, it is extremely important that you know and list all of your creditors. This means you should save the collections letters you get and all statements, even if you cannot afford to pay them and may need to file bankruptcy. If you fail to list all your creditors, it is possible that the debt might not be discharged. And if all your creditors are not listed when your first file, at minimum, you will have to make amedments to your bankruptcy forms. Good preparation helps keep the process much less stressful. If you would like to make an appointment for a consultation with this office, we suggest that between the time you make the appointment and the actual consultation, you gather a list of all your creditors and their addresses.
Where Do You File Bankruptcy if You Live in San Mateo County? Alameda County? The San Jose Area?3/22/2012 One of the most common questions this office gets is where a bankruptcy case is filed. Where the case is filed can have a significant impact on the administration of the case. Different judges have different policies, procedures, and customs. If you live in the San Francisco Peninsula (for example Daly City, San Mateo, South San Francisco, Pacifica, Redwood City, or San Bruno) or the City of San Francisco, your case will be probably need to be filed in San Francisco, and you will need to appear at least once at the courthouse downtown to give testimony. If you live in Alameda County or Contra Costa County, the case will probably be filed in Oakland. If you live in Santa Clara County, your case will probably be filed in San Jose. This office regularly represents clients in all three of these courthouses. As a practical matter, when you use an attorney your bankruptcy documents will be filed with the court electronically. However, complex rules apply to determine what law applies to a particular case. Individuals who lived out of state in recent years may need to use their prior state exemptions, or federal exemptions. Questions? Contact us for a free consultation.
We regularly talk to individuals who, despite filing or intending to file bankruptcy, state that they want keep second homes without giving it any thought. They should put more thought into it, because they may be missing an opportunity to create a budget that will keep them from ever having to file bankruptcy again.
To the extent it is feasible for the person to pay and the expense is justifiable (justifiable is a lower standard than "personal best decision"), this is the filer's call and there can be a lot of factors that might shape the decision. But oftentimes, a simple framework should be to ask whether this property is - to you - really worth the balance of loans that can't be discharged or modified in bankruptcy. How about that house in Daly City that's in foreclosure that is generating negative cash flow and needs a new roof? The ones your friends are renting from your for a below-market rent? They always pay on time, right? Do you really have the means to subsidize their housing expenses? When a person files bankruptcy, they should understand their values and what is important to them. Most people value their own family's financial security Fortunately, the opportunity to strip some second and third mortgages or equity lines means these sort of choices don't always have to be as difficult. With a lot of property, you may be able to keep it by only committing to pay what it is actually worth, and you may be able to afford that by renting the property for fair rent. It was reported in the news today that Bank of America made a "side deal" with the government related to the "robo-signing" scandal. If you missed the news, robo-signing is a catchy name for lying, cheating, and stealing automatically (robotically) while thinking only about profits.
As part of the side deal it cut with the government, Bank of America will give some borrowers principal reductions. We'd speculate that the real result of this program will be "almost all talk, almost no action." That remains to be seen. But what many may not be aware of is that some borrowers - including those who used "80/20" purchase loans - may be able to get the equivalent of a 20% principal reduction of their total mortgage debt by stripping their second mortgage lien in Chapter 13 bankruptcy. If you are interested in how this process works, and whether you might qualify, contact us for a free consultation. The bankruptcy discharge is a powerful remedy to eliminate old debts - and preserve crucial assets like most retirement plans and the family home. The goal of the bankruptcy process, through the discharge, is to give you a "fresh start." A discharge alone, however will not get many people on the right path.
From the beginning of each client relationship, we try to work to develop a bankruptcy exit plan. Filing bankruptcy without a concrete financial plan for future years is a bad idea. Are you thinking about filing bankruptcy? The opportunity to start over only comes along so often. Work with an attorney and professionals who will help you make the most of your fresh start. Key issues that needed to be decided include maximizing retirement contributions, knowing what obligations should be reaffirmed or modified, and planning future spending and borrowing in a way that is most likely to keep you from ever needing to file bankruptcy again. Filing bankruptcy "stays" actions to enforce a lien against your property. As a result, in the vast majority of cases, as long as you are in the bankruptcy process, the mere filing of the bankruptcy petition automatically stops a lender from foreclosing on the home. How long? Generally speaking, until the court allows it to go forward after the bankruptcy filer is given notice and an opportunity to oppose the foreclosure - or the case is closed or dismissed.
Moreover, in San Francisco Bay Area bankruptcy courts (the Northern District of California courts), procedures have been implemented that allow a Chapter 13 bankruptcy plan to be confirmed while a loan modification is pending. In addition, the Chapter 13 bankruptcy laws allow you to catch up on the amount you are behind on a mortgage over as many as 60 months, even if there is no mortgage modification. This is called "reinstating the mortgage" or "curing arrears through the plan." Suppose a San Francisco County home foreclosure is scheduled for a Tuesday. Properly filing a Chapter 13 bankruptcy petition on, say, Monday afternoon typically allows the qualifying individual or couple the ability to begin, continue, or in some cases re-start the process of applying for a home mortgage loan modification - while eliminating the threat of an immediate foreclosure. In the Bay Area, until a final decision is made on the loan modification, Chapter 13 debtors who comply with their obligations under the Bankruptcy Code may be able to continue to prevent the foreclosure by paying roughly a third of their monthly income to their lender, even if this amount is much smaller than the first mortgage payment. Where there is no mortgage modification available, there is another option: the individual or couple may reinstate their first mortgage over as many as sixty months by making partial payments to pay back the amount they were behind. In the Bay Area, Chapter 13 bankruptcy filers may be able to pay the new mortgage payments that become due on the mortgage directly to the lender, avoiding the expense of having a third party trustee administer those payments. These are powerful options to deal with the first mortgage on your home. In addition, in some cases second mortgages or equity lines can be discharged and "stripped" entirely, along with other debts like credit cards and medical bills. This can free up necessary cash to pay the modified mortgage payment, or - where no modification is offered by the lender - the original mortgage payment. It is important to work with someone who understands these procedures. Filing a bankruptcy petition without help from a qualified attorney increases your chances of having your case dismissed. If you have to file again, the "automatic stay" may end after a short period - or never go into effect unless you can persuade the court to make an exception. Get it right the first time. |
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