Many people who think about filing for bankruptcy often want to avoid legal costs and either look to do their case themselves or pay a petition preparation company that charge anywhere from $200 to $500 to prepare the forms. The problem with not at least consulting with a qualified bankruptcy attorney is that you are going into a very complex federal court system. It is not just a matter of a few simple forms.
If your forms and schedules are not done properly with the most up to date forms or they are not filed in compliance with the federal and local rules of procedure, your case can be dismissed within a matter of weeks of filing. Not only will you have to possibly pay the filing fee again to re-file, the court often imposes a ban on re-filing for 6 months. The court can also prohibit re-filing for an even longer time if they think your filing was an abuse of the system.
I have clients come in and end up spending even more money in the long run for me to fix the problems and properly advise them than if they would have just come to me in the first place. Petition preparation companies often give legal advice, even though they are not supposed to. They tell people that they can remove 2nd mortgage or qualify for chapter 7 filing status, only to have the client later learn that they were not properly advised.
Most bankruptcy lawyers will offer free consultations, so even if you don't hire them, you should at least get some advice before moving forward to be sure you are properly represented.
Chris Barsness, Bankruptcy Lawyer
http://www.bankruptcylawyerla.net
Wednesday, May 12, 2010
Saturday, May 1, 2010
Short sale pitfalls
These days many homeowners are realizing that loan modifications are extremely difficult to obtain, so they try to do a short sale of their home. A short sale is when you sell you home for less than what you owe the bank. The bank has to approve the sale which requires the homeowner to show a financial hardship. People assume that their real estate agent will protect them in the transaction. That is far from the truth. There are different legal issues that arise in the transaction for a short sale.
1) Future personal liability- most bank approval forms say they are agreeing to accept less than what they are owed to approve the sale, but many do not include any representation that they will not sue the homeowner down the road to get the difference between what they received and what they were owed. This means a year or two down the road, the homeowner could be served with a lawsuit when the bank thinks the homeowner may be back on their feet to collect.
2) Fraud- most bank are requiring the homeowner and the buyer to sign contracts stating that they are not engaging in some kind of side transaction. Many homeowners are approached by investors stating that they will rent the home back, sell the home back to the homeowner later, or pay the homeowner to do the short sale. If the homeowner signs this and they do something they stated they were not doing, the homeowner, investor, and real estate agents could face charges of fraud against the bank. The bank would argue that they would not have agreed to the sale if they knew there was a side deal.
Bottom line- check with a local real estate or bankruptcy attorney because a bankruptcy filing may be a better choice to walk away and eliminate personal liability or possible fraud claims.
Los Angeles Bankruptcy Attorney Chris Barsness, Esq.
http://www.bankruptcylawyerla.net
1) Future personal liability- most bank approval forms say they are agreeing to accept less than what they are owed to approve the sale, but many do not include any representation that they will not sue the homeowner down the road to get the difference between what they received and what they were owed. This means a year or two down the road, the homeowner could be served with a lawsuit when the bank thinks the homeowner may be back on their feet to collect.
2) Fraud- most bank are requiring the homeowner and the buyer to sign contracts stating that they are not engaging in some kind of side transaction. Many homeowners are approached by investors stating that they will rent the home back, sell the home back to the homeowner later, or pay the homeowner to do the short sale. If the homeowner signs this and they do something they stated they were not doing, the homeowner, investor, and real estate agents could face charges of fraud against the bank. The bank would argue that they would not have agreed to the sale if they knew there was a side deal.
Bottom line- check with a local real estate or bankruptcy attorney because a bankruptcy filing may be a better choice to walk away and eliminate personal liability or possible fraud claims.
Los Angeles Bankruptcy Attorney Chris Barsness, Esq.
http://www.bankruptcylawyerla.net
Wednesday, April 14, 2010
Obama foreclosure plan makes little impact
In a report released today, a congressional oversight committee concluded that the attempts to keep people in their homes is having little effect. The report from the Congressional Oversight Panel, created by Congress to monitor bailout spending, came as the Treasury prepared to release Wednesday its latest monthly report on the $50 billion Home Affordable Modification Program, or HAMP. That report will show that so far more than 230,000 households had been given permanent reductions in loan payments by the end of March, a Treasury spokeswoman said. That is up from 168,703 a month earlier.
By comparison, nearly eight million households are behind on mortgage payments or already in the foreclosure process.
HAMP loan modifications typically leave borrowers still heavily burdened by debts from second mortgages, car loans and credit cards, the panel noted. The typical household with a HAMP modification still must devote 59% of total income to debt service. "Most borrowers who proceed through HAMP will face a precarious future," the report said, adding that "many borrowers will eventually redefault and face foreclosure."
Even if you can get a modification, that doesn't mean that other options are not a better alternatives, such as bankruptcy, short sale, or a deed in lieu of foreclosure.
For a link to the full report of the panel, click here:
Congressional Oversight Panel: Evaluating Progress of TARP Foreclosure Mitigation Programs
By comparison, nearly eight million households are behind on mortgage payments or already in the foreclosure process.
HAMP loan modifications typically leave borrowers still heavily burdened by debts from second mortgages, car loans and credit cards, the panel noted. The typical household with a HAMP modification still must devote 59% of total income to debt service. "Most borrowers who proceed through HAMP will face a precarious future," the report said, adding that "many borrowers will eventually redefault and face foreclosure."
Even if you can get a modification, that doesn't mean that other options are not a better alternatives, such as bankruptcy, short sale, or a deed in lieu of foreclosure.
For a link to the full report of the panel, click here:
Congressional Oversight Panel: Evaluating Progress of TARP Foreclosure Mitigation Programs
Wednesday, April 7, 2010
Credit Repair After Bankruptcy - Steps To Take
Even after one files bankruptcy, there are still steps that need to be taken to improve your credit score.
1) Be sure to check with credit agencies after filing. Many people are scared to look at their credit report after filing, but you should several months after filing or discharge to be sure everything is accurate. You want to be sure the bankruptcy is listed and any discharged debt doesn't show as anything more than a bankruptcy filing.
More can be found at this article below:
RT @NYDailyNews: There is life after bankruptcy http://bit.ly/c5rWzT
http://www.nydailynews.com/money/2010/04/05/2010-04-05_there_is_life_after_bankruptcy_credit_could_thaw_in_1824_months.html
2) Make attempts to obtain credit after discharge. You can get secured credit cards by applying for that specific type of card. You simply give collateral, such as equity in a car or cash, to show the creditor they have something of value to collect if you don't pay.
3) Any debts not discharged or incurred after filing must be paid on time. Don't think that "oh well, my credit is shot anyway." If you make all your payments on time after filing, you can be on the road to financial recovery.
Chris Barsness
http://www.bankruptcylawyerla.net
1) Be sure to check with credit agencies after filing. Many people are scared to look at their credit report after filing, but you should several months after filing or discharge to be sure everything is accurate. You want to be sure the bankruptcy is listed and any discharged debt doesn't show as anything more than a bankruptcy filing.
More can be found at this article below:
RT @NYDailyNews: There is life after bankruptcy http://bit.ly/c5rWzT
http://www.nydailynews.com/money/2010/04/05/2010-04-05_there_is_life_after_bankruptcy_credit_could_thaw_in_1824_months.html
2) Make attempts to obtain credit after discharge. You can get secured credit cards by applying for that specific type of card. You simply give collateral, such as equity in a car or cash, to show the creditor they have something of value to collect if you don't pay.
3) Any debts not discharged or incurred after filing must be paid on time. Don't think that "oh well, my credit is shot anyway." If you make all your payments on time after filing, you can be on the road to financial recovery.
Chris Barsness
http://www.bankruptcylawyerla.net
Wednesday, March 31, 2010
Loan Modification Changes - Will They Help?
I am sure many of you may have heard about the recent changes and expansions announced last week to the guidelines for loan modifications. I have attached a link to the overview below:
http://www.nacba.org/files/email/Supp_Dir_10-02.pdf
Essentially, the government has heard the problems in the process and are trying to push lenders to start doing things right with more formal procedures and time frames. In addition, they want to expand modifications to homeowners in bankruptcy, provide assistance to those temporarily unemployed, provide cash payments to those who short sell or walk away, and provide more protection from unexpected foreclosure occurring during a modification review.
I must emphasize that these are only guidelines for non-GSE servicers to follow (those other than Fannie Mae and Freddie Mac) on HAM modifications only. There is no real enforcement procedure, it is more of a way to tell lenders that they must comply if they want to get the federal incentives. It took the lenders almost a year to implement the original guidelines announced last February 2009, so it is unknown what effect this will have and how long it will take.
The announcement by Bank of America that they will reduce principal on certain loans sounded like a positive thing; however, it was only done to settle certain cases brought by the Attorneys General of several states and will likely only apply to up to 45,000 borrowers who had certain Countrywide predatory loans.
To say on top of these issues, please follow our blog or visit our website to link to us on Facebook and Twitter. http://www.bankruptcylawyerla.net
Bankruptcy Attorney Chris Barsness
http://www.nacba.org/files/email/Supp_Dir_10-02.pdf
Essentially, the government has heard the problems in the process and are trying to push lenders to start doing things right with more formal procedures and time frames. In addition, they want to expand modifications to homeowners in bankruptcy, provide assistance to those temporarily unemployed, provide cash payments to those who short sell or walk away, and provide more protection from unexpected foreclosure occurring during a modification review.
I must emphasize that these are only guidelines for non-GSE servicers to follow (those other than Fannie Mae and Freddie Mac) on HAM modifications only. There is no real enforcement procedure, it is more of a way to tell lenders that they must comply if they want to get the federal incentives. It took the lenders almost a year to implement the original guidelines announced last February 2009, so it is unknown what effect this will have and how long it will take.
The announcement by Bank of America that they will reduce principal on certain loans sounded like a positive thing; however, it was only done to settle certain cases brought by the Attorneys General of several states and will likely only apply to up to 45,000 borrowers who had certain Countrywide predatory loans.
To say on top of these issues, please follow our blog or visit our website to link to us on Facebook and Twitter. http://www.bankruptcylawyerla.net
Bankruptcy Attorney Chris Barsness
Saturday, March 27, 2010
Treasury's New Attempts To Help Foreclosure & Loan Modification Problems
The Treasury announced more attempts to help borrowers in foreclosure or close to foreclosure including payments toward relocation and short sales, as well as additional help for unemployed borrowers.
It remains to be seen whether these changes will help fix the foreclosure and loan modification problems, including problems facing borrowers going through bankruptcy.
For an overview of these changes, you can read more below:
http://www.nacba.org/files/email/Supp_Dir_10-02.pdf
It remains to be seen whether these changes will help fix the foreclosure and loan modification problems, including problems facing borrowers going through bankruptcy.
For an overview of these changes, you can read more below:
http://www.nacba.org/files/email/Supp_Dir_10-02.pdf
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