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Foreclosure of Home / House / Real Estate

Protecting Your House From Liquidation in a Bankruptcy

October 5, 2016 by TomScottLaw

If you own a home, Indiana law allows you to protect a portion of the equity in that home. A liquidation analysis determines what would be available for creditors after you deduct the cost of sale and other expenses.
We recently discussed several aspects of bankruptcy with Christopher Holmes and Jess M. Smith, III, partners at Tom Scott & Associates, P.C. The discussion covered several topics, including being “judgment proof,” protecting your house from liquidation in a bankruptcy, home equity exemptions, some benefits of filing a Chapter 13 “100% plan,” common reasons people file for bankruptcy, a deficiency balance on a debt, an example of how an ex-spouse can impact a bankruptcy, and conduit mortgage payments. Below is Part 1 of 2 of the transcript of that conversation.


Q: In regard to a person’s financial situation, what does it mean to be “judgment proof?”
Chris Holmes: Some people have too much debt and maybe they’re on Social Security or they have no income. Those individuals are what we call “judgment proof” because creditors can’t make them pay if they don’t have wages to garnish. A person’s take-home pay must exceed $217.50 per week before they can be garnished. In addition, some sources of income, like Social Security and veteran’s benefits, are exempt—off-limits—from garnishment. If those individuals don’t have any real estate or they have less than $10,250 in tangible personal property, there’s nothing a creditor can take from them to liquidate, to pay on the debt. Sometimes I tell people that they don’t even need me, if they have a strong enough stomach to withstand the calls, the letters, and being dragged into court periodically.
Jess Smith, III: On the other hand, I had a woman come in to see me recently and she hardly has any income, but her name is on the deed of an ex-boyfriend’s piece of lien-free real estate that is worth $90,000. Therefore, she had to pay 100% of her debts to protect that property. She said, “Well, I better go out and find a job first.” She was behind on her residence and thought she could get rid of her other debt and just keep her residence, but she found out her name is on this other piece of property.
CH: Sometimes people come to us, creditors are hounding them, and they don’t have the ability to pay them back. Most people would prefer to file a Chapter 7 bankruptcy and just wipe the slate clean, but we have to evaluate their home and compare it to what’s owed on it. If you own a house in your name only, Indiana law allows you to protect $19,300 of equity in that home. So let’s say you have an $80,000 house and you only owe $30,000 on it, so there’s $50,000 of equity. You can only protect $19,300, which leaves just under $30,700 of non-exempt equity. In a Chapter 7 bankruptcy, the trustee has the power to take that house, sell that house, pay the commission for the sale, give you your $19,300 equitable interest that’s protected, and use what’s left over to pay back some of your debt.
Q: So how do you avoid that?
CH: For those people, if they want to protect their house, I ask them if they have a rich relative or a retirement account or some resources to tap. We do what’s called a liquidation analysis to determine what would really be leftover for the creditors once you factor in the cost of sale and some other things. I had a case where a woman couldn’t afford to come up with money herself, but she had a rich uncle who stepped in and gave her a sum of money equivalent to what the trustee wanted to prevent him from taking and selling her house. Otherwise, what most people have to do is file a Chapter 13 bankruptcy plan to pay back to their creditors, over a three- to five-year period, as much or more money than they would have received had the house been taken and liquidated.
Q: Are they paying the full amount of the equity or a certain percentage on the dollar?
CH: What we can do is factor in not only the mortgage and the exemption, along with the cost of sale. We figure out how much would the trustee in a Chapter 7 have received for doing all of that work and liquidating—the trustee gets a percentage of every dollar they collect for the creditors—so we can subtract that amount out. What’s left over is a reduced amount that has to be paid or distributed amongst all of the creditors during that three- to five-year period.
Q: Are those all of the factors that go into the liquidation assessment?
CH: Sometimes there are some other things, like certain taxes that have to be paid first in a Chapter 7, so we factor that in, which reduces the amount even further that somebody would have to pay to protect their home from liquidation.
Q: In a general sense, would you say it’s better to file for Chapter 13 bankruptcy and keep your house rather than to file a Chapter 7 and lose your house?
CH: It depends on the debtor. Maybe they don’t even care. They might live in a terrible neighborhood and don’t like their neighbors, or they’re tired of raking the leaves and mowing the grass. It’s rare, but I’ve had a client who said, “Fine. Mr. Trustee, take my house, sell my house, and give me a check for my equity amount.”
Q: Tell me a little more of the specifics about this woman who had her name on the deed of her ex-boyfriend’s house.
JS: Her first issue is that, because she is between jobs, she is behind on the regular mortgage payments for her residence. She owned her own home and had a half-interest on this other house, so she was going to have to file a Chapter 13 to catch up on the overdue payments on her home. Then, when she lost her job, her car got repossessed, because she couldn’t pay for it. I don’t know which came first, the job loss or the repossession, but she just had the car repossessed and she thought she had a citable deficiency of about $15,000. In other words, after the car was repossessed and sold, they’re coming after her for that $15,000. I explained to her that because of the equity she has in the non-residential real estate, she would likely have to pay the deficiency on the car she just lost. So she said, “I understand that and I knew that, so I’ve got to get a job to make this all work.”
Q: Who owns the other half of that non-residential property?
JS: An ex-boyfriend that put her name and his name on the deed about 20 years ago when she had loaned him some money.
Q: So your recommendation to her was to not file for bankruptcy?
JS: Not until she has some cash flow that can fund a Chapter 13.
Q: Why did she want to protect the ex-boyfriend?
JS: I’m not sure, but she was very adamant that he should not lose that real estate because of her.
Q: Could she have taken a different, less-friendly approach regarding that other property?
JS: She could have filed a Chapter 7, but it wouldn’t help her cure the arrearage on her residence. We’ve agreed she’s going to eventually file a Chapter 13.
Q: Would you have to meet the best-interest-of-the-creditors test if she didn’t care if that other property was taken and sold?
JS: Yes, because a Chapter 13 trustee is not going to liquidate it. I have the same issue in another case I have in which a woman is in what’s called a “100% plan.” She has to pay everyone back, because she has $50,000 to $60,000 equity in a residence. In addition to that equity, she was also try to cure the arrears on it, because she had one health issue after another after another. The ongoing mortgage payments were being paid by the trustee, but she wasn’t making enough to do that and pay for the car she wanted to drive. She had visions that she was going to refinance the mortgage outside of the bankruptcy. So, I filed an amended plan that says we surrender our interest in the house, but we now want to pay for the car and pay the balance of the attorney fees, and chop the payment way down from about $1500 a month to $400 a month. I now have an objection from the trustee saying we haven’t met the liquidation test on the equity of the house.
Q: Even though she’s surrendering the house?
JS: We haven’t fought it out yet, but it drew an objection.
Q: What is the objection based on?
JS: Because she could sell her real estate and pay off the mortgage and there would still be money for other creditors creditors. That’s what the trustee said. At least on paper, there’s a ton of equity here. She has a son and his fiancé who’ve said they want to refinance it, but the trustee wants money for the creditors.
Q: For clarification, what exactly is a 100% plan?
JS: Every creditor that files a claim will get paid in full.
CH: So, in that Chapter 7 liquidation, there would have been enough money to pay back every single penny of all of the debt. In a Chapter 13, to prevent the sale of the house, you have to make sure that every single penny of that debt gets paid, to protect the equitable interest in the real estate. The benefit of the Chapter 13 then could be—because I’ve had people ask, “What benefit is it for me to file Chapter 13 bankruptcy if I have to pay back everybody in full?”—first of all, once they’re under the protection of the Chapter 13 bankruptcy creditors can’t call, can’t write, can’t sue, can’t garnish. Also, as soon as we file the case, no more interest can accumulate, no more late charges can be imposed or attorney fees assessed. And, those creditors have a window of opportunity—about four months from the date of the filing of the case—to file what’s called a Proof of Claim. So if somebody wants to get paid, they have to file a claim with the bankruptcy court before what’s called the bankruptcy Bar Date. If they don’t file a claim by that date, they don’t get any money.
Q: So, it puts the onus on the creditors to do something to get paid?
CH: Right. We had an extraordinary Chapter 13 case not too long in which we had a high-income dentist making enough money to pay everyone in-full. The total of her unsecured debt to be paid through the plan was around $106,000. So we came up with a plan payment that over 60 months she would pay every single penny of that debt, without any interest or late charges. But—and it’s the only time I’ve ever seen it happen—not one single creditor filed a claim. So, whereas she would have had to pay the entire $106,000 through this plan, she got out of the plan with a discharge on all $106,000 of debt and didn’t have to pay one penny on any of that debt, because not one of those creditors was on-the-ball enough or smart enough to file a claim.
Q: If there were no payments to be made, did the discharge come immediately?
JS: Actually, after payment of attorney fees and trustee fees; after the claims deadline.
CH: I had a Chapter 7 case in which the trustee decided the debtor had an asset that legally could not be protected, so the trustee wanted to take and liquidate it. The trustee sent out a notice to all of the creditors to file a claim, because there would be money available for them. Not one single creditor filed a claim, so the trustee sent out a second notice that said, “I’m going to have money for you if you file a claim.” Again, not a singular creditor filed a claim, so the trustee had no one for whom to collect some money, so he could not and did not take the property that had been subject to liquidation. The debtor got to keep the property, because for whatever reason, creditors did not file a claim. Those are anomalies, but when you do as many cases as we do, you see more and more of those kinds of unusual situations.
Part 2 of Conversation: Common Reasons People File for Bankruptcy

Filed Under: Chapter 13, Chapter 7, Foreclosure of Home / House / Real Estate

Property You Can Protect When You File for Bankruptcy (Interview Part 2 of 3)

April 26, 2016 by TomScottLaw

Retirement accounts are exempt from creditors when filing for bankruptcy, but an inherited IRA is not. A recent ruling extending the time to cure arrearage might help you save your house after a tax sale.

Editor: We recently discussed the changes in the bankruptcy laws with Christopher Holmes, Jess M. Smith, III, partners at Tom Scott & Associates, P.C., along with associate attorney Andrew DeYoung. Below is Part 2 of 3 of the transcript of the conversation.

Q: Can you mention some of the things you can protect and some that you cannot protect when filing for bankruptcy?

Chris Holmes: Real estate. If it is your residence, you can protect up to $19,300 of equity. If it’s a joint filing and the property is owned jointly by a husband and wife, they can protect up to $38,600. Sometimes, when only one of them files, the property owned by a husband and wife is totally off limits to the creditors. That comes in handy sometimes.

Q: Based on cases you’ve dealt with, what are examples of the types of property people will include in their bankruptcy filing?

Jess Smith, III: The cash value of life insurance polices.

Andrew DeYoung: 401k accounts. IRA accounts. It can be as general as the clothing on your back. It’s what the exemptions apply to.

CH: But inherited IRAs are not exempt.

JS: It’s complicated and that’s why you should consult with an attorney.

CH: In general, retirement accounts—IRAs, 401Ks, defined benefit pension plans—are exempt, off-limits, no matter how much money is in there. But there was a recent decision where someone inherited a person’s IRA. The person who had the IRA died; someone inherited the IRA. The person who died could have protected that in its entirety from his or her creditors, but when it was inherited by the recipient—the debtor— it wasn’t off-limits to the creditors. It became subject to being taken and liquidated for the benefit of the debtor’s creditors.

Q: Was this decision a case you worked on or a precedent-setting case?

CH: It was a precedent-setting case in the 7th Circuit Court of Appeals in 2013, Clark (debtor) v. Rameker (trustee), in which a decision was made by the judges that an inherited IRA is not exempt in certain circumstances. (ed., The Supreme Court affirmed this decision by unanimous vote in 2014: Funds held in inherited Individual Retirement Accounts are not “retirement funds” within the meaning of 11 U.S.C. §522(b)(3)(c) and therefore not exempt from the bankruptcy estate.)

JS: And there was the case of someone buying a new car on the eve of bankruptcy to protect the lien, or affecting the lien. If the creditor does not affect the lien on the title, sometimes the trustee can take the car itself.

CH: Right. I recently had a case where right before the people came in to sign the paperwork, just two days before, they went out and bought two cars. So I had to change the paperwork and their list of creditors, but then the problem was that we had to know for certain that the creditor had put their lien on the title to each vehicle—and they had to do that within 30 days of whenever the people got the car. Otherwise, in a Chapter 7 bankruptcy, or even in a Chapter 13, the trustee could void the lien, take the car and liquidate it. Unless we did something else to prevent that, we would have to wait 91 days from the transfer of the title to file the bankruptcy. Otherwise, it creates what’s called a “preferential transfer.” With that situation, a trustee could set aside that preferential transfer and try to confiscate and liquidate that car.

There is another recent precedent-setting case that has changed in bankruptcy law. Previously, when a house had been sold by the county treasurer for delinquent taxes, the debtor had one year to redeem the property—pay the taxes plus a rate of interest—to keep the house from going to the tax sale purchaser. In the bad old days, we would have to tell people, "You’ve got to file a Chapter 13 bankruptcy before the tax sale to get the benefit of the three- to five-year Chapter 13 plan, to cure that real estate tax arrearage and save the house. If the tax sale had occurred, we couldn’t use a Chapter 13 plan to give them three to five years to cure that problem. They still had this one-year statutory redemption period, but luckily one of our judges, Judge Carr, ruled that you can now use a Chapter 13 plan after the tax sale has taken place to force everyone to back off for three to five years, to give that debtor ample time to cure that arrearage. So that is a new development we can use to save houses after tax sales.

Part 1 of Interview: What’s New in Bankruptcy Law in Indiana

Part 3 of Interview: Accruing Post-Petition Interest on Unpaid Federal Taxes

Filed Under: Foreclosure of Home / House / Real Estate, Personal Bankruptcy in Indiana, Property & Asset Protection, Taxes, Vehicles Tagged With: 401k, Inherited IRA, IRA, Life Insurance, Pension Plans, Preferential Transfer, Statutory Redemption Period

Foreclosure, Second Mortgage, and Bankruptcy

September 4, 2015 by TomScottLaw

Avoid Foreclosure and Keep Your HouseWhen foreclosure of a house is a threat, many homeowners seek debt relief through bankruptcy. A fairly common theme in this type of situation is the presence of a second mortgage. Another common aspect in this scenario is that homeowners are unaware of the second mortgage on their home. How does this happen?
We recently discussed foreclosure and second mortgages with Christopher Holmes and Jess M. Smith, III, partners at Tom Scott & Associates, P.C. Below is a transcript of that conversation.
Jess Smith: We’ve recently had several clients come to us with a foreclosure problem. We’ve been ready to file their bankruptcy, thinking they only have one mortgage on the property that is under water, and it turns out they actually have a second mortgage, because they’ve been in trouble before and entered loss mitigation. They basically granted a second mortgage that is now held by the U.S. Department of Housing and Urban Development (HUD) with no minimum payment and no interest. But, the loan is due either in 30 years or upon sale of the house or upon refinancing of the existing note. The majority of people who come to us to get help with their first mortgage have no recollection of this second mortgage.
Q: These are secured loans?
Chris Holmes: Yes, these are secured loans. They were behind right before closure so they took the arrearage and made it into a note and second mortgage with no payment due.
JS: So they don’t get a monthly bill. They didn’t do a loan modification on the original mortgage, they default on it again, and so they’re sitting here in a foreclosure and they bring in the foreclosure documents and we have to tell them they have a second mortgage. If we can prove they are still under water with the first mortgage, we can get rid of that HUD mortgage in Chapter 13.
Q: Can you expand on the different types of second mortgages you can acquire other than from a bank?
JS: What was probably more common 10 to 15 years ago was when people would get what was called an 80-20 mortgage. If they didn’t put enough money down to qualify for a certain loan, so they would get a loan for 80% of the total amount financed and then get a subsequent loan for 20% of the amount financed, in order to get the lower rate on the first mortgage. So they would have two mortgages basically granted at the same time when they purchased the house.
CH: Instead of borrowing 100% from the first lender, the lender would let them borrow 80% as a first mortgage. They would then borrow the other 20% and turn that into a second mortgage. The loans were then recorded within minutes or seconds of each other. We saw that quite a bit 10 to 15 years ago. Now, we hardly see that at all.
Q: Are there any other agencies besides HUD that provided those types of second mortgages?
JS: It’s usually just the Department of Housing and Urban Development. I think the way these mortgages are created is when the homeowner gets in trouble the first time, HUD will cut a check to the original lender to bring the debt as current; they’ll restructure the interest rate and the payment terms, but HUD just doesn’t give the default amount to the lender. They hold that as a second mortgage. Most people either just forget about it or they have so many pieces of paper shoved in their face – when they know this is how much I have to pay on the first mortgage – they have no recollection that there is a second mortgage out there. So they come see us very late in the foreclosure process.
Q: You mentioned that they may not even be making payments on the HUD loan. What are the various types of terms that could be applied to that second loan?
JS: Typically, the terms are no interest, a maximum maturity of 30 years, or the loan becomes due upon sale of the real estate or the refinancing of the first mortgage.
Q: If it is a no interest loan, does the borrower need to be making monthly payments on that amount?
JS: They are not required to, but the odd thing is that they can get rid of it in Chapter 13 bankruptcy. if when they file the bankruptcy they owe more on the first mortgage than what the house is worth.
Q: What exactly does “get rid of” mean in regards to the second mortgage?
JS: Basically, a lien strip.
CH: It’s called a motion to avoid a wholly unsecured mortgage. So as long as we can persuade the judge that the value of the home is exceeded by the payoff on the first mortgage, there’s no equity to which the second mortgage can effectively attach, because they are wholly unsecured, the law says you can get rid of, or as we say, strip, or avoid that – turn them from a secured creditor into an unsecured creditor, so down the road when the house is to be sold, there is no need to pay that second mortgage. It’s wiped out just like a credit card debt is wiped out.
Q: is that for both Chapter 7 and Chapter 13?
JS: That’s only available in Chapter 13.
CH: That’s one of the primary reasons we recommend Chapter 13 for some people in that circumstance. In a Chapter 7, you’re stuck with that second mortgage. Only in Chapter 13 do we have the clout to get rid of it.
JS: I met with a gentleman earlier today whose house on the east side of Indianapolis is up for Sherriff’s sale in a couple of weeks. He can’t find his foreclosure complaint. All he brought in was the notice of the sale. I went to the state court chronological case summary, and the Department of Housing and Urban Development is named as a defendant in the foreclosure. So, before we file the case, I have to see if there is a second mortgage, and if there is, I need to pay real close attention to what his house is worth to see if there is the possibility of eliminating this debt he didn’t even know he had.
Q: In a Chapter 7, they’re going to lose the house?
CH: It’s either make arrangements to pay all mortgages to keep the home or surrender the home to get rid of the debt.
Q: In a Chapter 13, is that second mortgage, which you’re stripping from being secured, rolled over into the pool of creditors so that you’ll still eventually pay pennies on the dollar for that amount?
JS: It’s converted into unsecured debt – lumped together with credit cards and medical bills, etc. – that you might eventually pay anywhere from 1-cent to 100-cents on the dollar. It just depends on what your income ability is to pay back back the debt. But it is converted to an unsecured debt.
Q: Is there a lesson a reader might learn from this case? Why is he filing for bankruptcy?
JS: The gentleman is about 50 years old and currently employed as a machine operator. He earns about $45,00 a year. His wife, who is not filing for bankruptcy, is employed by the government. She earns about $50,000 annually. The primary reason for his financial problem is that he and his wife don’t communicate about income and expenses. The house and the mortgage are both in his name. Her money is her money and his money has to pay for the house. They’ve only had the house for three years, so maybe they just bought too much house. I suspect it is a pattern of lack of communication that has put them in this spot, because he doesn’t seem to know much about her bills and expenses, but she makes over half of the household income.
Q: Did this gentleman come in to see you at you at your East Indy office?
JS: Actually, he came into the North Indy office, because it’s open on Saturday.
If your mortgage lender is threatening foreclosure on your house, contact us to discuss possible options that will allow you to stay in your home while you work to get out of debt.
Additional Resource from HUD: Avoiding Foreclosure

Filed Under: Chapter 13, Foreclosure of Home / House / Real Estate, Mortgage, Property & Asset Protection Tagged With: 2nd Mortgage, 80-20 Mortgage, Arrearage, Chronological Case Summary, Department of Housing and Urban Development, HUD, Lien Strip, Loan Modification, Second Mortgage, secured debt, Unsecured Debt, Wholly Unsecured Mortgage

If my home has a second mortgage, can I file bankruptcy on just one of the mortgages and still keep the house?

September 14, 2013 by TomScottLaw

Thanks for submitting your question. You can accomplish different goals if you declare bankruptcy, so you need to consider all of the details of your lenders’ promissory notes and mortgages, along with your complete financial and credit position, to determine your best course of action.
This answer to your question does not consider your specific case, but covers the general issues involved in a situation like this. You may want to consult with a bankruptcy attorney to ensure your case is handled to meet your goals.
When you purchased your home you signed two pieces of paper with each lender – a promissory note and a mortgage.

  • The promissory note is just that — a promise that you will repay the debt.
  • The mortgage is a "lien" (or encumbrance) that provides a means for the lender to get some or all of its money back, if you do not pay on the promissory note.

When you purchased your home, you very likely made an agreement with the lender which says something like, “I agree to pay you each and every month on the promissory note and if I do not pay, then you can foreclose on my home.”
Foreclosure is the legal action of proving to a judge that you did not keep up your promise and asking permission for the court (through the local sheriff) to sell the real estate to the highest bidder at auction and “foreclose” everyone else’s interest in that real estate.
Please keep these concepts in mind as we very briefly skim the surface of bankruptcy.
There are primarily two chapters of bankruptcy that deal with consumer debts, called Chapter 7 and Chapter 13.
An individual only qualifies for a Chapter 7 if his or her income is low enough. With regard to a house with mortgages in Chapter 7, a debtor can usually do one of two things: 1) keep the home; or 2) surrender the home. If a debtor keeps the home and is current on payments, the debtor will usually “reaffirm” the debt by signing a “reaffirmation agreement.”

  • The reaffirmation agreement keeps the debtor on the hook so to speak, and requires that the debtor continue to make all payments in the normal fashion as though the bankruptcy had never occurred.
  • If the debtor does not sign a reaffirmation agreement then the personal requirement to continue to make payments in the “promissory note” will go away, but the lien rights under the mortgage do not go away. In other words:
    • If you do not sign a reaffirmation agreement and stop paying for your home, the lender can never collect any more money from you on the promissory note as that debt has been eliminated by the bankruptcy.
    • However, the lender could still foreclose on the real estate to try and get some of its money back from the sale.

So to answer your question regarding a Chapter 7 – “Presuming that you do not have significant equity in your home, you are current on your mortgages, and your income is low enough to qualify for a Chapter 7 filing, you would be able to keep your home if you would like. The law requires that we list ALL your creditors, including the first and second mortgage lenders, in the bankruptcy (whether you want to reaffirm the debt or surrender the debt).
You would need to continue making payments on both mortgages if you wanted to keep the home.”
Regarding Chapter 13 – almost any individual can file a Chapter 13 bankruptcy (with certain restrictions that your attorney should know under Section 109e). Individuals must file a Chapter 13 if their income is too high, or if they filed a Chapter 7 in the prior eight years (or a Chapter 13 in the prior 6 years).
BUT, some people file a Chapter 13 for other reasons besides the mandatory ones, including, but limited to:

  1. Saving a home that is in foreclosure
  2. Lowering payments on an auto that does not have favorable lending terms
  3. Paying back taxes without concern for future penalties or IRS levy
  4. Protecting assets from being sold in a Chapter 7
  5. Protecting co-debtors from law-suits

But there is another reason why someone MIGHT want to file a Chapter 13, and that is in limited circumstances we might be able to remove a second mortgage.

  • In a situation where the balance owed on the first mortgage is higher than the value of the home, we can try to strip off a second mortgage. The law allows it, and the only reason that I say “try” to strip off the second mortgage is that the lender may think that the value of the home is higher than we do.
  • So, if the payoff on the first mortgage is $150,000.00 and the fair market value of the home is only $100,000.00 then a Chapter 13 will allow us to strip off the second mortgage and treat it like any other unsecured creditor (like a credit card or medical bills).

In a Chapter 13 bankruptcy, the law requires that you remain in Chapter 13 for 36 to 60 months, depending on your income, but when the case is complete you will only have one mortgage on your home – and yes you get to keep the home.
So, with all that being said, while we are available to answer any of your questions via phone or email, we would suggest instead that we meet in person to go over the details of such a complex issue. Feel free to send us an email or contact our office at 317-255-9915 to schedule a free consultation at one of our three convenient locations.

Filed Under: Chapter 13, Chapter 7, Foreclosure of Home / House / Real Estate, Mortgage, Personal Bankruptcy in Indiana, Property & Asset Protection, Questions About Bankruptcy

What happens if I do not declare bankruptcy?

July 5, 2013 by TomScottLaw

Our office often works with creditors to try and negotiate a lower settlement on claims and has reached great success. Our office oftentimes has a greater success in non-bankruptcy workouts because the threat of bankruptcy is always on the creditors mind when we negotiate.
Creditors know that our office has filed thousands of bankruptcies and that if they do not settle then there is a good chance that they will get nothing (or much less than we have offered).
In order to have a successful non-bankruptcy workout, we like to see a limited number of creditors (as any single non-cooperative creditor may ruin the whole deal for everyone) and a source of funds (such as borrowing from a friend or taking a hardship loan from retirement).
We recently had a client settle on four claims for less than $17,000 when he owed over $70,000. He did not want to file and was able to borrow from a retirement account. Our fees for saving him $50,000 was less than $2,000.

Filed Under: Credit Score, Creditors, Foreclosure of Home / House / Real Estate, Property & Asset Protection, Questions About Bankruptcy, Wage Garnishment

Does my house being in foreclosure affect my ability to file?

July 5, 2013 by TomScottLaw

Filing for bankruptcy may delay (Chapter 7) or prevent (Chapter 13) you from losing your primary residence to foreclosure. If you are at a point where you need more information about the affect foreclosure might have on your ability to file for bankruptcy, you probably should contact us right away. We can help you.

Filed Under: Foreclosure of Home / House / Real Estate, Property & Asset Protection, Questions About Bankruptcy

What if I own other real estate property?

July 5, 2013 by TomScottLaw

Real estate property other than your primary residence may not be considered as exemptions in a personal bankruptcy case, but every case is different, so your situation would need to be looked at in more detail.
For a free consultation about your circumstances, please contact us.

Filed Under: Foreclosure of Home / House / Real Estate, Property & Asset Protection, Questions About Bankruptcy

Does applying for a loan modification affect my ability to file?

July 5, 2013 by TomScottLaw

Filing for bankruptcy after you have applied for a loan modification may jeopardize your application.
Applying for a loan modification after you have filed for bankruptcy can be a very complex process that includes notifying the court, so it should only be done after consultation with your bankruptcy attorney.
For immediate assistance, please contact us.

Filed Under: Creditors, Foreclosure of Home / House / Real Estate, Mortgage, Property & Asset Protection, Questions About Bankruptcy

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  *Disclosure required by 11 U.S.C. § 528(a)(3): We, the law office of Tom Scott & Associates, P.C., are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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