Posted on May 26, 2020 in Foreclosure

The Federal Cares Act allows you to delay mortgage payments for up to 6 months if you’re suffering financially due to the COVID-19 pandemic. Pausing mortgage payments can provide some relief for people who have lost work during these times. However, there’s a lot of confusion about how you’re supposed to make those payments.

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac are making available a new payment deferral option. This allows borrowers who are in forbearance the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.

What is Forbearance?

Forbearance is a special agreement between the lender and the borrower to delay mortgage payments. When mortgage borrowers cannot meet their repayment terms, lenders can opt to foreclose on the property. A forbearance allows the borrower to miss scheduled mortgage payments for a specific period (usually between 4-12 months). This allows a borrower to avoid a potential foreclosure for missing mortgage payments and repay those missed payments at the conclusion of the forbearance period. In compliance with the CARES Act, government-sponsored mortgage loans qualify for forbearance plans.

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 Posted on April 13, 2020 in Bankruptcy

While the thought of filing for bankruptcy can be scary and intimidating for most people, it’s a way to get a fresh start for businesses and individuals facing overwhelming debt. If you are getting harassed by bill collectors, using credit cards to pay for your necessities, and you are unsure of how much debt you actually owe, you probably need to rethink your financial situation.

Filing for bankruptcy basically means that you have found yourself in a position that will take many years to repay in full the debts that you owe. Bankruptcy laws were created to provide people with a chance to start over. Whether you have made bad financial decisions or have had bad luck, you deserve a second chance.

What is Bankruptcy?

Bankruptcy is a court proceeding where a judge and trustee review the assets and liabilities of businesses and individuals who are unable to pay their bills and then deny or approve the discharge of those debts so the debtor is no longer legally obliged to pay them. However, the bankruptcy process has been streamlined so that very few bankruptcy filers ever actually go to court.

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 Posted on August 29, 2019 in Chapter 7 Bankruptcy

1). If you surrendered your vehicle and are unable to purchase a cash car or use a friend or family member’s vehicle then you will need to purchase a vehicle. We advise our clients to start looking at traditional dealerships. Try to avoid tote the note lot places. Most major dealerships can work with a Debtor post discharge to get a vehicle financed. If you do not require a vehicle move on to step two. If you can put off purchase of a vehicle for about one-year you should get a decent interest rate from any dealer presuming you follow step 2.

2). Obtain a credit card. If possible, this should be a normal credit account, not a secured card. Most of our clients find that the major banks will issue them a credit card with a small limit immediately upon completion of a Chapter 7. Pick something that you spend your money on each month – i.e. gas, groceries, utilities — pay the card off each month prior to the due date, and never have more than 30% of the credit limit outstanding at any one time. If you need to pay the credit card more often than monthly to keep from hitting the 30% we recommend that you do so. If a Debtor follows the above for approximately 1 year after the case is discharged then that Debtor would likely qualify for a reasonable auto loan less than 10% interest.

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 Posted on August 26, 2019 in Bankruptcy

1). Bankruptcy will haunt me forever – NOT TRUE

Chapter 7– A bankruptcy filing appears on a credit report for 10 years from the filing of a bankruptcy petition. Despite the reporting on your credit report your access to credit will come back very quickly, especially if you take some easy steps post discharge (See our blog post about steps to take post discharge to rebuild your credit).

When a Chapter 7 Case is filed your name and address are public record and notice is sent to the credit bureaus about the case filing. Car creditors especially will use this information to send you advertisements to purchase a vehicle the instant a case is filed. Our firm recommends that, if possible, you avoid purchasing a vehicle for about one year after a bankruptcy discharge. Instead you should focus on obtaining a credit card. Many of the major credit card companies will issue you a credit card with a small limit the instant a Bankruptcy is discharged.

If a Discharged Chapter 7 Debtor uses this credit line responsibly (never more than 30% of Credit Limit used, pay off in full end of the month) for approximately 1 year after their discharge, most Discharged Chapter 7 Debtors will qualify for a vehicle loan at a decent interest rate — less than 10%.

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 Posted on August 20, 2019 in Bankruptcy

Yes.

When a Debtor files for Bankruptcy the Automatic Stay described in Title 11 U.S.C. §362 goes into effect instantaneously without further action of the Court. The Automatic Stay is an injunction that is automatically entered by the Court upon the commencement of a Bankruptcy Proceeding. The Automatic Stay disallows any further collection attempts against you that do not go through the Bankruptcy Court first. This means that all collection actions must stop including the continuation of a pending lawsuit without further order of the Bankruptcy Court.

Most of the time when a Bankruptcy is filed a Debt Collection Lawsuit is non-suited. This means essentially that the case has been dismissed because the Bankruptcy prohibits any further proceedings.

When a Bankruptcy is completed the Court will enter a Discharge. The Discharge means that your legal liability to pay any pre-petition debt has been extinguished. In the context of a pending lawsuit, the underlying debt has been extinguished leaving nothing to renew/ or continue proceedings against. Further, the Discharge order is a permanent injunction of the Bankruptcy Court that prohibits collection of pre-petition debt. If a pre-petition Creditor were to continue its collection efforts, including the filing or continuation of a lawsuit, you would have additional remedies against the creditor in Bankruptcy Court for violating the Discharge Order.

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 Posted on August 17, 2019 in Chapter 13 Bankruptcy

Often our office charges a down payment on a Chapter 13 Bankruptcy of as little as $565.00. This consists of the costs to file the case and an additional $155.00 to our office. The Court in our district sets a "no look fee." This fee is $3,700.00 plus the costs to file your case or a total fee of $4,110.00.

What a "no look fee" means is that the Court allows that as a fee for our services without subsequent application for additional compensation. Almost all attorneys in our district charge a fee of $3,700.00 for a Chapter 13 Bankruptcy. The difference you will find between attorneys is what is charged as a down payment and what costs are included in that down payment.

90% of Chapter 13 cases filed with out office pay only the no look fee with little to no additional out of pocket expense. However, all time in our office is billed at $350.00 per hour for attorneys and $150.00 per hour for legal assistants. If your case is more complex than an average simple uncontested Chapter 13 case our office will apply for the additional compensation with the Court. Presuming approval of the Application for Additional Fees, our office will work out arrangements with you for repayment including possibly adding these amounts into the remainder of your plan. Again, 90% of case filings with our office do not exceed the Court’s "no look fee."

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 Posted on August 15, 2019 in Bankruptcy

No, you do not have to file Bankruptcy with your spouse. The Bankruptcy code allows for a married person to file and individual case, and your spouse would become what is termed a "non-filing spouse". However, you may need to provide the Court with some of their information including all of their income received in the last 6 months. This is because the Bankruptcy Code requires you to report all household income for the 6 months prior to filing.

In other words, while a spouse is not required to file a case with another spouse, they will be required to furnish certain information for the case filing specifically their income and expenses.

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 Posted on August 13, 2019 in Foreclosure

Maybe, depending on the advice of your bankruptcy attorney.

When a home is foreclosed upon in Texas, it must be sold at public auction on the Court house steps. This is true for judicial and non-judicial foreclosures alike. Judicial foreclosures (rare) require an added step of receiving a Judge’s blessing before it is posted. All foreclosure sales occur on the first Tuesday of every month on the Court house steps.

A public auction usually results in a sell that is significantly less than the value of the home versus if it were sold through traditional means. This means that most Debtors who have a home foreclosed will owe what is called a deficiency balance. This balance is the difference between what the home sold for at auction and what is owed to the Creditor on the note that was signed by the Debtor. This amount can often be significant.

In a bankruptcy proceeding this amount is treated as an unsecured claim, like a credit card. These amounts can be discharged in a Chapter 7 Bankruptcy without repayment presuming the Debtor qualifies for a Chapter 7 case. This amount can be discharged in a Chapter 13 Bankruptcy as well. Depending on the Debtor’s situation, income, and expenses, the creditor owed money for the foreclosed home may receive some distribution on their claim in a Chapter 13 Bankruptcy.

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 Posted on August 09, 2019 in Bankruptcy

Maybe, depending on the advice of your bankruptcy attorney.

When a vehicle is repossessed and sold in Texas, it must be sold at public auction. A public auction usually results in a sale that is significantly less than the value of the vehicle if sold through a dealership or private sale.

This means that most Debtors who have a vehicle repossessed will owe what is called a deficiency balance. This balance is the difference between what the car sold for at auction and what is owed to the Creditor on the note that was signed by the Debtor. This amount can often be significant. In a bankruptcy proceeding this amount is treated as an unsecured claim, like a credit card.

These amounts can be discharged in a Chapter 7 Bankruptcy without repayment, presuming the Debtor qualifies for a Chapter 7 case. A car repossession deficiency balance, because it can be so high and burdensome to repay, is a common reason for filing Chapter 7 Bankruptcy.

This amount can also be discharged in a Chapter 13 Bankruptcy . Depending on the Debtor’s situation, income, and expenses, the creditor owed money for the repossessed vehicle may receive some distribution on their claim in a Chapter 13 Bankruptcy. For a more detailed analysis of your situation, please contact our office and one of our attorneys can meet with you and discuss your options relating to a repossessed vehicle and any other credit issues that you may have. From there we can help you formulate the game plan that best fits your needs.

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 Posted on August 07, 2019 in Bankruptcy

Yes.

A Chapter 13 Bankruptcy can even help you retrieve a vehicle from a Creditor who has already repossessed your vehicle.

In order to retrieve and keep your vehicle through a Chapter 13 Bankruptcy you will need sufficient income to repay the amount that is owed on the vehicle plus interest at the LIBOR rate plus 2%. Further, the Chapter 13 Trustee, the person who collects and disburses your payments to creditors, charges a fee set by the Court at 10% of each one of your payments. This effectively makes the interest rate around 15% on the outstanding principal balance.

Further, a Chapter 13 plan can require payments on other debts, i.e. IRS, Child Support, Homes, Unsecured Creditors etc. It may be that your plan would require payments in addition to supporting the principal and interest due on your vehicle. For a more in depth analysis you can call our office and one of our attorneys will meet with you to help determine what options you have to retrieve and retain your vehicle. Time is of the essence when filing to retrieve a vehicle. Once the vehicle has gone to auction and sold and a Bankruptcy has not been filed before hand a Bankruptcy will not help you retrieve the vehicle.

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