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Archive for the ‘Foreclosure Defense’ Category

Choosing Between Bankruptcy and Foreclosure

May 10th, 2018 at 9:04 am

foreclosureThe decision between filing for bankruptcy or foreclosing on your home is stressful. Neither is optimal when it comes to the immediate financial impact to your credit score, however, neither are late payments. Bankruptcy stays on your credit report for 10 years, while foreclosure typically rolls off in seven years. But, before you give in to losing your home, there are a few details worth considering.

Saving the Home

First, you must decide if you want to save the home. If you are behind by a month or two, contact your lender. The foreclosure process is expensive for banks. In many cases, your lender will work with you. Options to consider include:

  • Make up the late payments;
  • Restructure the loan; or
  • Request a forbearance.

The Foreclosure Option

First, consider that foreclosure is very serious to future mortgage lenders, more than a bankruptcy that did not include the house. Additionally, foreclosure will drop your credit score by 200 or 300 points. Discuss the option of a short sale instead of foreclosure with your lender. With this option, the house is worth less than the principal balance of the loan, in which case, you may owe the remaining balance. In many situations, banks waive this difference. If a short sale is not an option, some banks accept “deed in lieu of foreclosure,” where you turn the house over to the lender and owe nothing. Explore these opportunities with your lender

How Bankruptcy Can Help

There are many options when filing for bankruptcy, each with unique benefits to suit your needs. Because you own a home and have income, Chapter 13 will probably be your best option. Rather than liquidating everything, Chapter 13 allows you to restructure your debt. As soon as you file, an automatic stay is placed on all accounts, effectively stopping all debt collection attempts. The stay also halts foreclosure proceedings, which may help you catch up on payments. Next, all of the creditor and lenders then convene with an appointed trustee to create a payment plan to repay the debt. This option allows you to keep your assets, including your home, and eventually get caught up on your mortgage.

Ask an Attorney

Mortgage lenders and collection agencies send correspondence that is intimidating and overwhelming. The calls and other communication can stop now. You can begin looking forward to a brighter financial future today. Discover if bankruptcy is the right solution for you by calling a New Braunfels, TX bankruptcy attorney. The Law Offices of Chance M. McGhee will take the time to carefully examine the details of your case and give you honest feedback on which bankruptcy option is best for you. Call 210-342-3400 today to schedule your free, no-obligation consult.

 

Sources:

http://www.nbcnews.com/id/21478416/ns/business-answer_desk/t/which-worse-foreclosure-or-bankruptcy/#.WuvfQDGG_IU

http://www.txs.uscourts.gov/node

Foreclosure Defense: Saving Your Home

March 16th, 2015 at 2:17 pm

Texas foreclosure attorney, Texas bankruptcy lawyer, San Antonio foreclosure lawyer,Although the housing market is showing some signs of recovery, millions of Americans still struggle with their monthly mortgage payments. Texas is a non-judicial foreclosure state, so in most cases, the lender does not need a court order to foreclose on a residential mortgage. As a result, most Texas foreclosures are processed in under a month, leaving limited time for foreclosure defense.

Most South Texas families have very little savings, so if they fall even one or two months behind on their mortgage, it can be very difficult to catch up. Although most lenders participate in government-sponsored loan modification programs, such assistance may not come in time to save your house, and may not even come at all.

What Bankruptcy Can Do

If you received a foreclosure notice, chapter 7 or chapter 13 bankruptcy offers both short- and long-term solutions to your debt problems.

  • Automatic Stay: The instant you file, Section 362 generally goes into effect. Lenders cannot take any adverse action against you without special permission from the bankruptcy court. Even if your property is scheduled to be auctioned off, a bankruptcy filing can save your home. You do not have to prove anything in court, such as fraud or unfair lending practices. All you have to do is file.
  • Protected Repayment Period: In a chapter 13, you have either three or five years to catch up on your mortgage payments. The lender must accept your terms, as long as the trustee approves your repayment plan. In nearly all cases, the automatic stay remains in effect through the entire repayment period.
  • Lien Stripping: You may be able to remove a second mortgage. For example, a number of people financed a residence with an 80/20 mortgage. If your home’s value has dropped below a certain threshold, the bankruptcy court may classify a second mortgage as “unsecured” and discharge it.
  • Cram Down: In some instances, you may be able to reduce the amount of debt to the fair market value of the asset. So, if you owe $200,000 on a home that is only worth $150,000, the judge may discharge a portion of the debt.

If the bank still tries to take your home, the judge may refer the matter to mediation, where you will have the opportunity to obtain a loan modification.

Bankruptcy can help you stay in your family home. If you are struggling with unpaid debt, reach out to an experienced San Antonio bankruptcy lawyer today. Call The Law Offices of Chance M. McGhee at 210-342-8400.

Qualifying for a Mortgage after Bankruptcy

December 4th, 2014 at 8:31 am

mortgage after bankruptcy, San Antonio bankruptcy attorneyMany people who are considering filing for bankruptcy hesitate because they fear their credit will be ruined for years to come and future plans, such as qualifying for a mortgage to purchase a home, will be almost impossible. The good news is that most people who file for bankruptcy are able to repair and build their credit back up within a few years and are able to fulfill that dream of owning their own home.

Most mortgage lenders have certain guidelines they follow when it comes to credit issues such as bankruptcy, foreclosure history and short sales. The following is a standardized list that lenders around the country follow and include conventional lender guidelines, Federal Housing Administration (FHA) guidelines and Veterans Administration (VA) guidelines.

For Chapter 7 bankruptcy filings, there is a four year waiting period from the date of discharge for qualifications of conventional mortgages; and two year waiting period from the date of discharge for a FHA or VA mortgage qualification.

A person who filed for Chapter 13 bankruptcy must wait two years from date of discharge to apply for a conventional mortgage. For FHA or VA mortgages, there is a one year waiting period from date of discharge, which includes on time payments for that year.

If you have had a home foreclosed on, then you cannot apply for a conventional mortgage for at least seven years. For an FHA mortgage, you will need to wait three years and for a VA mortgage, there is a two year waiting period before you can qualify.

If you chose a deed-in-lieu of foreclosure option, then there is a four year waiting period for conventional mortgages, three years for FHA and two years for VA mortgage qualification.

Short sales are another option homeowners choose to avoid foreclosure. A short sale is when a homeowner sells the home for less than what is owed on the mortgage, but the mortgage holder agrees to accept that amount in order to release any liens on the homeowner. If you have had a short sale, then with a conventional lender, you will need to wait two years if the loan-to-value (LTV) amount was 80 percent or four years if the LTV was 90 percent.

For FHA loans, as long as you had no late payments on your original mortgage, you will only need to wait one year from the date of sale to apply. If there were late payments, then there is a three year waiting period. For VHA, there is a two year waiting period, regardless of payment history.

If you are struggling with what feels like overwhelming debt, bankruptcy may be an option for your financial situation, consult an experienced San Antonio, Texas bankruptcy attorney.

Property Exemptions for Bankruptcy in Texas

March 17th, 2014 at 12:12 pm

bankruptcy exemptions, Texas, federal exemptions, Texas bankruptcy exemptions, types of bankruptcy, debtLosing your job or getting expensive medical bills can have devastating effects on your budget.  Without ample savings, it can be hard to make monthly payments, and eventually you may lose your car or even your home.

However, bankruptcy can stop foreclosure, repossession and wage garnishment through selling property or reorganizing existing debts if you are earning income. However, filing for bankruptcy does not mean losing all your worldly possessions. When filing your paperwork, you may choose to use either federal exemptions or the exemptions set out by the statutes of Texas.

Both the Federal and State exemptions allow the debtor to protect equity in their primary residence. This is called the Homestead Exemption and it does not provide any protection to rental or investment properties. Under the federal exemption, you can shield up to $22,975 of equity from a bankruptcy trustee. The homestead exemption in Texas is not limited by the amount of equity in the home, but the size and location of the property. It cannot exceed an acre if it is located in a populated city, village or town.  In rural areas, the exemption can be as large as 100 acres.

Personal property, other than real estate, also has exemptions that protect it during bankruptcy based on the kinds of property. For example, up to $3,450 can be exempted for a motor vehicle under Federal exceptions.

The exemptions in Texas allow for each driver in a household to use.  But the total allowance for all types of property in Texas is mere $30,000 and double for a family. In that case it is important to have a clear idea of how you can use the most of your exemptions to cover home furniture, food, clothing, and other important supplies.

There are other exemptions that should be reviewed while filing for bankruptcy, such as, wages, pensions, insurance.  Contact an experienced bankruptcy in San Antonio today who can help you determine the best step for your finances if bankruptcy is in your future.

What is a Chapter 20 Bankruptcy?

December 13th, 2013 at 3:24 pm

piggy bankA Chapter 7 bankruptcy is a common form of bankruptcy because it excuses the filer from all eligible debts.  It is commonly referred to as a liquidation bankruptcy because debts are eliminated by the sale of property and other assets. Creditors are repaid through the proceeds of those transactions.

A Chapter 13 is also called the wage-earner’s bankruptcy.  If someone is earning an income but cannot keep up with past due payments, then a Chapter 13 bankruptcy can give them time to pay those debts. There is a repayment plan that last from three to five years and is based on each person’s income.

Occasionally there are cases when nether Chapter of bankruptcy is appropriate. While a Chapter 20 bankruptcy is not a term found in the bankruptcy code, it is a common strategy to get a fresh start.  It is the process of filing two bankruptcies right after each other to resolve difficult financial situations.  The approach is filing for Chapter 7 protection and then for Chapter 13.

The Chapter 7 bankruptcy lets you eliminate dischargeable debts which does not include child support, taxes, or student loan debts.  If your debts are too high to qualify right away for a Chapter 13 bankruptcy, the Chapter 7 bankruptcy can eliminate enough to become eligible.  That can allow you to focus the majority of your income on debts that cannot be discharged.

The disadvantages of a Chapter 20 filing is you can’t receive a discharge during the Chapter 13 part of the process.  It is also possible that a bankruptcy trustee will object to your Chapter 20 bankruptcy.  They can claim that your Chapter 13 filing is in bad faith.  If that happens, you will be responsible for providing proof that it is necessary given your situation.

If you are concerned about making your monthly credit card payments or losing your family home, then bankruptcy might be an option for you.  Talking to a legal professional can show the benefits of each Chapter based on your situation.  Contact an experienced bankruptcy attorney in San Antonio today.

Chapter 13 Bankruptcy Can Help Stop Foreclosure

June 5th, 2013 at 10:17 am

The FDIC provides some troubling statistics about foreclosures. One out of every 200 homes will be foreclosed upon. Every three months, 250,000 homeowners enter foreclosure. One child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage.

chapter 13 bankruptcy        Kerry may 15There are ways, however, to avoid foreclosure and work towards saving your home, even for a homeowner who has fallen so far behind that the mortgage lender has scheduled an auction. Filing for Chapter 13 bankruptcy will stop that foreclosure sale. When you file for bankruptcy, there is an automatic stay put into place that prohibits most creditors from continuing collection activities. This stay includes foreclosure sales.

Chapter 13 also allows you to cure the mortgage default and catch up with your loan. Many times, when a homeowner gets behind on their mortgage payments, the lender either won’t do a loan modification with the homeowner, or offers a repayment plan that is too high for the homeowner to keep up with, resulting in the foreclosure sale.

A Chapter 13 bankruptcy allows you to repay your debts over a three to five year period. For example, let’s look at a homeowner who is paying $1500 per month for their mortgage and they owe an arrearage of $15,000. Chapter 13 will spread that $15,000 over sixty months (five years) at $250 per month, meaning the homeowner will now be sending the mortgage company $1750 per month ($1500 for current mortgage, $250 for arrearage). If the court approves that payment plan, the mortgage company has to accept it. They cannot decline and foreclose.

If you are facing foreclosure, contact a knowledgeable Texas bankruptcy attorney to help save your family’s home. Email us today in San Antonio for a consultation. We can answer any questions you may have about how a Chapter 13 bankruptcy can help save your home from foreclosure.

 

Image courtesy of photostock/Freedigitalphotos

 

The Zombie Title: A New Foreclosure Nightmare

March 21st, 2013 at 8:00 am

foreclosureSince the housing collapse of 2007, foreclosures have been occurring rapidly across the nation.  Banks have been accused of lending to those who should not qualify for mortgages.  There is evidence that they have also been up to other shady practices.  Now, in 2013, there is a new horror in the housing market.

Thousands of homeowners are finding themselves trapped by a zombie title.  A zombie title is when homeowners are legally liable for “foreclosed” homes that have literally came back to life.  Banks issued notice of foreclosure only to later decide that it would be too expensive to reclaim the home, in turn transferring the title back to the homeowner.  It is an action that mirrors how homeowners abandoned their mortgages during the housing collapse.

These titles are becoming more prominent in the foreclosure process.  There is no national database to track these zombie titles but lawyers, housing court judges, code enforcement officials and others involved in foreclosures have noticed the increase.

The fallout is pretty devastating to homeowners who move out of their homes when they receive foreclosure notices.  Years from that event, people are having their wages garnished, their credit destroyed and other efforts to collect for repairs done to their homes that they don’t even live in.

If you receive a foreclosure notice on your home, don’t resign yourself to leaving right away.  Your first step should be to contact a legal professional with a background with fighting against foreclosures by filing for Chapter 13 bankruptcy.  Contact an experienced foreclosure defense attorney in San Antonio to make sure you don’t have a zombie title.

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