In the state of today’s ailing economy, it is very common to find lenders tightening credit which in turn makes paying for your home more difficult. Once you fall behind on your payments by more than a couple of months, the banks will start collection efforts. One unpleasant thing banks do to recoup their money is initiate foreclosure to take possession of your house and sell it off. If you bank is about to launch foreclosure proceedings against your home, you should take action to keep your home.
The first thing you should do is to approach your bankers to inform them of your financial difficulties. The bank may be willing to adjust your payment plan. Alternatively, you can try asking for forbearance. Forbearance is where your banker agrees to stall foreclosure proceedings and negotiate an agreement with you. A forbearance agreement can take several forms. It may be in the form of a postponement of monthly installments or a reduced payment amount or even an extension of the repayment period.
If you default on your forbearance agreement, your banker will have the right to foreclose your property immediately. Forbearance is a good way to deal with temporary financial difficulties such as a major illness or loss of job. It is generally not a solution for longer term financial problems.
If you have already gone through the process above and you still cannot keep up with your monthly payments, the best option would be to file for bankruptcy. There are two options in filing for bankruptcy – Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is where your non-exempt assets are sold off to pay for your debts and any debts that are not settled after all your non-exempt assets have been sold will be cancelled. In Chapter 13 bankruptcy, the court will enforce a payment plan for you to clear your debts over a period of up to 5 years.
To file for Chapter 7 bankruptcy, you must pass the means test i.e. your household income must be below the average income set by your state. In addition, you also have to be current with your mortgage payments to be eligible for Chapter 7 bankruptcy.
If you are already defaulting in your mortgage payments or if your banker has already initiated foreclosure, it is advisable to file for Chapter 13 bankruptcy which is essentially a restructuring of your debts. The bankruptcy court will put you under a payment plan that is more affordable for you.
So if you want to keep your home but cannot afford to make your mortgage payments due to some long term problem, then you might as well file for bankruptcy instead of negotiate forbearance. You should not wait till the last moment to file a bankruptcy petition.
Call us at (813) 200 4133 for a free consultation on how bankruptcy can save your home from foreclosure.
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Filed under Chapter 7 (Tampa) by on Feb 22nd, 2012. Comment. 
Shopping for a bankruptcy lawyer? It would be to your best interests to interview a few potential bankruptcy lawyers who can represent you before hiring one for yourself. Bankruptcy protection can be a rather complex process so it is imperative that you hire a bankruptcy lawyer that is both competent and caring towards your case. Here are some things you should find out from a bankruptcy lawyer before hiring him or her.
Find out the obstacles he expects to encounter in filing for your bankruptcy. Do not ask a close-ended question that only requires a “yes” or “no” answer. When you ask an open-ended question like this one about the obstacles in bankruptcy, you have the opportunity to discover what the lawyer knows about the common problems in filing for bankruptcy. This is a good indication of the lawyer’s competence and experience or lack of it.
Ask if another lawyer will be handling your case. It is quite common for lawyers to delegate certain cases (or parts of cases) to junior lawyers or other employees. When you ask this question, you give the lawyer the chance to inform you of any other lawyer involved in your case. If there is (and there likely will be), then ask about the qualifications and experiences of the other (junior) lawyer. This causes everything to be above board right from the start of your petition.
Do not be afraid to ask specific questions about fees. But you should ask for the breakdown of the lawyer’s fees and not merely the total figure. This is because the lawyer would likely charge for incidental and out-of-pocket expenses as they come along. Once you know the specifics of the fee, you can decide on whether to hire the lawyer or look for someone with more reasonable fees.
When you take the trouble to find out these things before engaging the lawyer, you will ensure that you get the best legal service for your money.
If you are looking to file for bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 21st, 2012. Comment.
One of the main concerns of any homeowner is foreclosure of his or her primary home. Foreclosure is normally the course of action taken by lenders when you fall behind on your mortgage payments. Foreclosing the mortgage means the property is sold to pay off the loan taken against it. The usual option taken by home owners to avoid foreclosure is to apply for forbearance from the lender. But if forbearance is not possible for any reason, the other option would be to file for bankruptcy protection.
Can bankruptcy fend off foreclosure?
The good news is that bankruptcy can stall foreclosure for several months, giving you time to hammer out a solution with your lender that could save your home. If foreclosure proceedings have begun, bankruptcy can postpone the proceedings until the bankruptcy is completed. This happens because of the automatic stay against creditors that comes when you successfully file for bankruptcy. Automatic stay means all your creditors are ordered by the bankruptcy court to cease collection efforts from you. As such, the foreclosure process can be affected by bankruptcy but the outcome may depend on which chapter is filed.
If you file for Chapter 13 bankruptcy, all your debts (including your mortgage) will be listed together and restructured to enable you to pay them off over a period of time according to a set payment schedule. If you have a second or third mortgage, Chapter 13 bankruptcy may list them as an unsecured debt since your first mortgage is secured to the value of the home. This may eliminate the second and third mortgages on your home. The same applies if a lien is filed against your home. Filing for Chapter 13 bankruptcy may remove the lien also. All you have to do is keep up with payments towards your debts according to the payment plan in your Chapter 13 bankruptcy.
On the other hand, if you file for Chapter 7 bankruptcy, it would entail selling off your non-exempt assets to repay your debts. Your primary home is usually exempted from being liquidated. Thus, your mortgage debt that is secured by your home may be cancelled after all your non-exempt properties have been liquidated.
For a more detailed discussion on how bankruptcy can fend off foreclosure of your home, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 16th, 2012. Comment.
Filing for Chapter 7 or Chapter 13 bankruptcy can be daunting. As such, it is highly recommended that you hire a bankruptcy attorney who will help you through the process. If you are considering filing for bankruptcy, call us at (813) 200 4133 for a free consultation. We will help you through the entire process. In general, the procedure in applying for Chapter 7 or Chapter 13 bankruptcy is as follows:
1. Go through credit counseling
This is a requirement before you can make your bankruptcy petition. A credit counselor may give you other options to consider. Otherwise, he or she may advise you to file for bankruptcy.
2. Engage a qualified bankruptcy attorney
While you are allowed by law to file for bankruptcy by yourself, it is highly recommended that you hire a bankruptcy attorney (this is what most people do). You should ask for recommendations from friends or family members or check up the attorneys’ websites and online resources. There are independent rating agencies like www.avvo.com for lawyers that you can refer to in checking up on an attorney you are considering hiring.
If you need an attorney for your bankruptcy filing, call us at (813) 200 4133 for a free consultation.
3. Decide on which type of bankruptcy to file for
Your bankruptcy attorney will give you all the details of the two types of bankruptcies that are available to you. The two types of bankruptcies are called Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is liquidation bankruptcy where your non-exempt assets are sold to pay for your debts. Thereafter, any debts left unpaid will be forgiven. On the other hand, Chapter 13 bankruptcy is where you restructure your debts and repay them over a period of 3 to 5 years. There are requirements to be met to file for both these types of bankruptcies.
4. Direct all communication from creditors to your attorney
Once you have hired a bankruptcy attorney, he or she will be responsible for acting on your behalf in communicating with your creditors. Thus any communication (phone calls, letters of demand etc) from your creditors should be directed to your bankruptcy attorney. Once bankruptcy has been filed, the court will grant you automatic stay which prohibits creditors from making any more collection efforts and all creditors must abide by it. If any creditor violates automatic stay, you have the right to take legal action against that creditor. All this will be handled by your attorney.
For further information and to discuss how you can use bankruptcy to be freed from your debts, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 14th, 2012. Comment.
Bankruptcy is a provision in the bankruptcy code that allows the bankruptcy court the right to declare your personal debts (or business debts) resolved either through liquidation of your assets or gradual payment via a payment plan. With the prolonged economic recession more and more people are contemplating filing for bankruptcy to overcome their tremendous financial debts. For most people, a bankruptcy filing would be a once-in-a-lifetime experience as you would not want to have to do it multiple times. In view of that, if you are contemplating filing for bankruptcy, it would be natural to have some questions about the process. Here are some of the most common questions about bankruptcy.
Can bankruptcy relieve me of all my debts?
Most of your debts can be resolved either through payment from the sale of assets or payment plan, but some debts cannot. Some examples are child support and certain tax debts.
What are the types of bankruptcies that apply to individuals?
The bankruptcies that apply to individuals are Chapter 7 and Chapter 13 bankruptcies (named according to the sections of the bankruptcy code that govern them).
What are the differences between Chapter 7 and Chapter 13 bankruptcies?
Chapter 7 bankruptcy is known as liquidation bankruptcy and it is where the court orders you to liquidate your non-exempt assets to pay of as much of your debts as possible. The remaining debts after liquidation are forgiven. Chapter 13 bankruptcy is known as the wage earners’ bankruptcy and is technically a court-ordered payment plan where you get to keep your assets but repay your debts over a period of up to 5 years.
What effect will filing for bankruptcy have on my credit rating?
Your credit rating will show that you have filed for bankruptcy before and such a rating will be on your record for between 7 to 10 years. However, this does not mean that you would not be able to obtain credit. If you keep up your payments promptly, you will repair your credit rating and will be able to obtain credit in due course, often even before the expiry of 7 years.
Which type of bankruptcy should I file for?
There are certain prerequisites you have to fulfill in order to qualify for each type of bankruptcy. So which type to file for would depend on your personal financial situation. Generally, the prerequisite to be eligible for Chapter 7 bankruptcy is more stringent than Chapter 13. The best thing to do would be to discuss your situation with an experienced bankruptcy attorney. Call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 13th, 2012. Comment.
