Archive for the ‘Chapter 13’ Category

How Home-Loan Modification Plan Works with Chapter 13 to Relieve Stress, Stop Foreclosure

Bankruptcy Attorney Helping with Home Loan Modifications

Serving Home Owners in Tacoma and throughout Pierce County, Washington

Homeowners have the opportunity to combine loan modifications under the Obama Administration’s HAMP (Home Affordable Modification Program) with Chapter 13 plans that can eliminate or greatly reduce most other debts. This strategy was made much more feasible by recent changes in the mortgage modification program directives that prohibit mortgage companies from discriminating against homeowners who are in bankruptcy cases.

It is sometimes possible to obtain a loan modification before filing a bankruptcy case and then file the bankruptcy, under Chapter 7 or Chapter 13, to deal with other debts. But homeowners can also submit a loan modification request after a Chapter 13 bankruptcy case has been filed, and incorporate the proposed modification into a Chapter 13 plan to be approved by the court once the mortgage company agrees to modification.

A substantial portion of first mortgages are eligible for HAMP relief either as Fannie Mae or Freddie Mac related mortgages (GSE Loans) or as the mortgage servicer has agreed to participate in HAMP (non-GSE Loans).

The filing of the Chapter 13 petition stops any pending foreclosure sale. It is not unusual for non HAMP lenders or other lenders who offer internal modification or workout programs to process those while proceeding with foreclosure at the same time. Homeowners should know that they can continue to seek mortgage modification and file a Chapter 13 to stop a foreclosure. This removes the pressure of the impending foreclosure from the modification process

I often get calls from homeowners who want to file their Chapter 13 petition the next day to stop the foreclosure. It usually can not be done that quickly as there are documents to gather, forms to complete, credit counseling requirements, and fees to pay. Homeowners need to allow adequate time to prepare for a Chapter 13 bankruptcy filing, even if it turns out that it is not necessary.

Contact us today to discuss your debt options with an experienced Tacoma bankruptcy attorney.

Chapter 13 Bankruptcy Stops Foreclosure

Experienced and Knowledgeable Bankruptcy Attorney Helps Stop Foreclosures

Helping Homeowners in Tacoma and Pierce County

The current economic situation is result of years of reckless and predatory lending, leaving hundreds of thousands of individuals in danger of losing their homes. Even hard-working people can encounter situations which may affect their ability to pay their mortgage in a timely manner.

Many issues can be contributing factors such as job loss, medical illness or injury, marital difficulties, unforeseen repairs, tenant problems, or even a death in the family. Just one of these situations can have a direct impact on making home mortgage payments.

There is more and more evidence that the real estate industry has been rife with fraudulent and predatory lending practices. Because of this evidence, courts that once rubber-stamped foreclosure actions are now beginning to shift their sympathies towards homeowners. Homeowners and their bankruptcy attorneys are taking advantage of this change in judicial attitude, and challenging foreclosure actions in many different ways.

In order to raise a defense to the foreclosure action, you must bring the issue before a judge. In Washington, foreclosures typically take place outside of court (these are called non-judicial foreclosures) and you have no automatic means to mount a legal challenge.

To have your defenses ruled on by a judge, you have to file a lawsuit, alleging that the foreclosure is illegal for some reason, and asking the court to put the foreclosure on hold while it reviews the case.

Homeowners may have several different types of defenses available. Those include challenges to the bank’s legal authority to hold the foreclosure, violations of the federal Truth In Lending Act, violations of statutory foreclosure requirements, unconscionability, predatory lending and fraud.

Individuals may also use a Chapter 13 bankruptcy proceeding to save their home from foreclosure. Chapter 13, Adjustment of Debts of an Individual With Regular Income, also known as the Wage Earner Plan, is designed for an individual debtor who has a regular source of income, that enables the debtor to keep a valuable asset, such as a house, and allows the debtor to propose a “plan” to repay creditors over time – usually three to five years.

The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 filing.

Whether you are a homeowner who has experienced a loss of income, injury or illness, have a mortgage you can no longer afford or you are an investor who can no longer sell for what is owed on the mortgage, a foreclosure can have severe personal and financial repercussions.

Many people lose everything in a foreclosure only to later learn that they could have saved their home if they had only pursued the rights available to them under the law.

Contact us today to discuss your circumstances with an experienced bankruptcy attorney. Discover ways you can save your home from foreclosure.