If you are buried under debt and need a way out, hiring a bankruptcy attorney in may be the best option for you. With the help of an experienced attorney, you can be victorious in your legal battle! However, before filing for bankruptcy, you should do a little research and learn more about it. You may get unreliable information from some sources, especially on the internet. This article is written by an experienced bankruptcy attorney in Long Island to clear the confusion of some myths surrounding bankruptcy.
Let’s take a look at a couple of common bankruptcy myths that you may encounter:
- Myth – Bankruptcy Ruins Your Credit
- Truth – Actually, filing for bankruptcy can save your credit. If you are mired in debt, chances are your credit has already been hit! To save your credit score in the long run, filing bankruptcy can help if it enables you to make timely payments on your obligations moving forward. Once your bankruptcy discharge is awarded, you can start rebuilding your credit.
- Myth – Filing For Bankruptcy Will Take Away Your Prized Possessions
- Truth – This question related to bankruptcy is commonly asked during a free consultation with attorneys in New York. Filing for bankruptcy doesn’t mean your car, house, and other personal assets would be automatically taken away from you. Allowing for some exemptions, personal bankruptcy can help you preserve some of your property. Pre-bankruptcy planning can be very effective in this regard.
These are the two main myths that often prevent people from filing a bankruptcy!
If you are concerned about getting out from underneath your debts, filing for bankruptcy with the right legal assistance is the right step to take. Don’t waste your precious time while stressing over these silly myths! If you are having concerns, relax and contact the Law Firm of Vaughn, Weber & Prakope, PLLC, an experienced group of bankruptcy lawyers serving the Bronx, New York, Brooklyn, Queens, Nassau County, Long Island, Manhattan, and Staten Island.
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(Bankruptcy Court -EDNY – Central Islip, NY)
Bankruptcy Court’s Loss Mitigation Program
In 2009, The United States Bankruptcy Court – Eastern District of New York adopted a Loss Mitigation Program which applies in all individual Chapter 7, 11, and 13 cases.
The Bankruptcy Court’s General Order #543 provides the following:
The term “loss mitigation” is intended to describe the full range of solutions that may avert the loss of a debtor’s property to foreclosure, increased costs to the lender, or both. Loss mitigation commonly consists of the following general types of agreements, or a combination of them: loan modification, loan refinance, forbearance, short sale, or surrender of the property in full satisfaction. The terms of a loss mitigation solution will vary in each case according to the particular needs, interests, and goals of the parties.
Loss Mitigation may be requested by a debtor or creditor. Also, the Bankruptcy Court may enter a Loss Mitigation order at any time after notice to interested parties. However, in our experience, the Debtor’s attorney typically files a motion requesting loss mitigation in an effort to obtain a loan modification for the debtor.
We currently have several clients who are participating in the loss mitigation program. The program has some similarities to foreclosure settlement conferences held in state court, but appears to move along at a much faster pace.
You can click here to watch a video entitled “Loss Mitigation and Mortgage Modification in Bankruptcy Courts.”
Additionally, you can always call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620, to speak with an experienced bankruptcy attorney.
Mortgage Forgiveness and Bankruptcy
Bank of America mortgage forgiveness and bankruptcy
Recently we have written about Bank of America forgiving second mortgages and the National Mortgage Servicer Settlement. Many homeowners facing foreclosure are anxious to find out if their second mortgage will be forgiven by Bank of America.
Well, it appears that one pattern may have emerged. Many homeowners who have already filed bankruptcy are receiving letters stating that their 2nd mortgage will be forgiven. Great news, right? Maybe. Some of these debtors are in active bankruptcy (chapter 7 & chapter 13). Some debtors have already received a bankruptcy discharge and are no longer personally liable for their mortgages. Other debtors have “stripped” their 2nd mortgages and BOA will likely receive much less than 100% of what is owed on the 2nd mortgage.
Not So Good
- It appears that BOA may receive credit, against the amount it owes under the National Servicer Settlement Agreement, by forgiving mortgages they can could no longer collect or only collect a portion of. This may lead to fewer distressed homeowners actually benefiting from the Settlement.
- There may be tax issues (the advice of a tax professional may be necessary).
Good
- Distressed homeowners who are not in bankruptcy are receiving letters from BOA stating that their 2nd mortgages are being forgiven. This will make it easier for some homeowners to avoid foreclosure.
- Debtors in bankruptcy who are paying back 100% of the arrears on their 2nd mortgages and their full 2nd mortgage payment have received notification that their loan is being forgiven. This could alleviate the need for a chapter 13 bankruptcy altogether.
- Some homeowners may find themselves with instant home equity.
Nassau County Foreclosure Attorney
If you have any questions about this or other legal issues, call The Law Firm of Vaughn, Weber & Prakope, PLLC, at 516-858-2620, for a free consultation!
+This is not tax or legal advice.
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