Facing foreclosure, should I consider bankruptcy?

On January 14, 2011, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

Yes.

Why?

Because the longer you wait to file bankruptcy, the more difficult it may be to save your home.

But the bank might modify my mortgage.

Sure, but what if the bank doesn’t modify your mortgage. While you wait for a potential loan modification – your mortgage arrears and the interest are piling up. This could potentially prevent you from putting forth a confirmable chapter 13 plan.

NY bankruptcy law just got better.

On 1/21/11 new bankruptcy exemptions go into effect (see our earlier posts Changes to NY Bankruptcy Exemptions and Federal Bankruptcy Exemptions & NY).

You should at least consult with a knowledgeable bankruptcy attorney to find out how filing bankruptcy can save your home (see our earlier posts Filing Bankruptcy to Save Your Home From Foreclosure and How Can I Use My Ch.7 Bankruptcy to Avoid Foreclosure).

We understand that bankruptcy is not for everyone. That is why we also offer foreclosure defense, debt negotiation, etc. We are simply stating that bankruptcy is an option that should be considered. At The Law Firm of Vaughn & Weber, PLLC, we don’t push our clients to file bankruptcy. We give you all of your options and assist you in deciding which course of action is best for you.

This is not legal advice!

The Law Firm of Vaughn & Weber, PLLC routinely represents homeowners facing foreclosure. We examine each homeowner’s specific situation to determine their best course of action.

We proudly assist residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, Manhattan) with their bankruptcy and foreclosure matters. We are conveniently located in the heart of Nassau County, Long Island, at 393 Jericho Tpke., Ste. 208, Mineola, NY 11501

Call (516) 858-2620 to arrange a FREE  consultation with a bankruptcy and foreclosure attorney!

Please visit our Foreclosure category to learn more about foreclosure issues.

Please visit our Bankruptcy category to learn more about filing for bankruptcy.

Stop paying my second mortgage?

On December 13, 2010, in Foreclosure, by Robbie L. Vaughn, Esq.

Can you stop paying your second mortgage?

Sure.

Should you stop paying your second mortgage?

Maybe not.

The prevailing theory is that if your home is worth less than what you owe on your 1st mortgage it is highly unlikely that the holder of your 2nd mortgage will bring a foreclosure action against you.

Well, although it may be rare, we did have a homeowner come into our office this year whose 2nd mortgage was being foreclosed although his home’s value was less than the amount owed on the 1st mortgage.  Additionally, lenders can, and some will,  “sue on the note” (bring an action against you to recover the money you promised to repay them) rather than bring a mortgage foreclosure action.

On the brighter side, we have seen 2nd mortgage payments reduced by as much as 80% a month.  Also, some lenders are willing to accept as little as 10% of what is owed on the 2nd mortgage as full payment. Additionally, if bankruptcy is an option, you might be able to “strip off” a totally unsecured second mortgage by filing a chapter 13 bankruptcy (see filing bankruptcy to save home from foreclosure).

We are often asked about paying and not paying second mortgages. Our answer: We can not advise you without knowing your specific situation and considering the particular options available to you.  So, make sure you are fully informed before making a final decision.

As always, The Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in Mineola, NY.  You can Contact us at (516) 858-2620 to speak with an attorney.


Q & A: How Can I Use My Ch. 7 Bankruptcy to Avoid Foreclosure?

On September 3, 2010, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

Bank won’t modify my mortgage, how can I use the chapter 7 bankruptcy I just filed to avoid foreclosure?

The following are “some” of the things you can do to avoid foreclosure if you just filed a chapter 7 bankruptcy:

“Maybe” filing a “chapter 20″ bankruptcy, which is a chapter 7 followed by a chapter 13, will help you.

  • make sure the ch. 7 discharge is granted;
  • some time after discharge is granted in the 7, but before the sale date of course, file a ch. 13 to force the lender to accept the current payment + the arrears spread over 36 or 60 months.
  • Note: There likely won’t be a discharge at the end of the Chapter 13. This really shouldn’t matter because you just received a chapter 7 discharge.
  • Note: You should consider “stripping off” any judgment and/or wholly unsecured liens.
  • Note: If this is investment property you can try to cram it down in a ch.13.  However, the cramdown value has to be paid off by completion of the ch. 13 plan.

If none of the above will work, you could:

  • After discharge, continue trying to obtain a loan modification from your lender (the foreclosure action will likely continue unopposed).
  • Contest the foreclosure action in state court after the stay is lifted or terminates.

This is not legal advice!

The Law Firm of Vaughn & Weber, PLLC routinely represents homeowners facing foreclosure who have already filed or need to file for bankruptcy. We examine each homeowner’s specific situation to determine their best course of action.

We proudly assist residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, Manhattan) with their bankruptcy and foreclosure matters.  

Call (516) 858-2620 to arrange a FREE  consultation with a bankruptcy and foreclosure attorney!

Please visit our Foreclosure category to learn more about foreclosure issues.

Please visit our Bankruptcy category to learn more about filing for bankruptcy.

Bankruptcy and Exempt Property

On August 13, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

What is Exempt Property?

Exempt property is property that is protected by law from the claims of creditors. However, if exempt property has been pledged to secure a debt or is otherwise encumbered by a valid lien or mortgage, the lien or mortgage holder may claim the exempt property by foreclosing upon or otherwise enforcing the creditor’s lien or mortgage. In bankruptcy cases, property may be exempt under either state or federal law. However, NY has opted out of the federal law exemptions. Exempt property typically includes all or a portion of a person’s home equity, motor vehicle equity, household furniture and personal effects.

What Will Happen to My Non-Exempt Property If I File Bankruptcy?

Non-exempt property is part of your bankruptcy estate and is subject to sale by the bankruptcy trustee (the debtor is entitled to receive any exempt portion of the sale proceeds).  However, even if your property is not fully exempt, you may be able to keep it if you pay its non-exempt value to your creditors in a chapter 13 bankruptcy.  Also, you could agree to pay the trustee an amount that would allow you to, in essence, buy back the non-exempt property.  The money that you pay to the trustee will be distributed to your creditors.  You may also be able to “trade” exempt property for non-exempt property.  Essentially, you allow the trustee to take and sale exempt property to avoid losing non-exempt property.  There are additional options available.  A knowledgeable bankruptcy attorney will be able to assist you with “exemption planning .”

We proudly assist residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, Manhattan) with their bankruptcy filings.  

Call (516) 858-2620 to arrange a FREE  consultation with a bankruptcy attorney!

Please visit our Bankruptcy category to learn more about filing bankruptcy.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan