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The city of Detroit's Chapter 9 bankruptcy filing was approved by Judge Stephen Rhodes Tuesday, officially becoming the largest municipal bankruptcy case in the history of the United States.
Judge Rhodes issued a 90-minute verbal ruling this morning, to be followed by a 140-page written ruling, finding that Detroit's financial woes meet the legal requirements for bankruptcy under a Chapter 9 reorganization, ending months of uncertainty following the initial July 18 filing
“It is indeed a momentous day. We have here a judicial finding that this once proud city cannot pay its debts. At the same time, it has an opportunity for a fresh start. I hope that everybody associated with the city will recognize that opportunity,” Judge Rhodes said in a packed courthouse.
In a surprise move, Judge Rhodes ruled that Detroit will be allowed to cut pension payments as part of its debt repayment. Much of the city's financial predicament is due to obligations to retired city workers. The pensions will be allowed to be cut as long as they are deemed "fair and equitable" to other creditors of the Motor City.
A nine-day eligibility trial earlier this month gave the city's creditors, particularly unions and retiree groups, opportunity to argue against the Chapter 9 filing, and against reduced pension obligations in particular. Judge Rhodes found otherwise, and with Michigan Governor Rick Snyder's authorization in place, the historic bankruptcy case will proceed.

At the peak of the financial crisis the State of Michigan saw dramatic increases in the number of homeowners who were facing foreclosure.  As the foreclosures skyrocketed, the values of Michigan homes plummeted.  Michigan, as well as much of the nation, was in a death spiral.  However, due to action by the Federal Reserve and the White House the housing crises was ended and over time the surplus of homes on the market has started to decrease.  Add that to the mortgages companies willingness to hold onto some of their inventory and we now have a recovering marketplace.
As the values of homes in Michigan increase, mortgage companies are once again beginning to increase the rate of their foreclosure filings.  Homes that were once considered not to be worth the costs of the foreclosure process are now being targeted as potential money makers for mortgage companies that are once again on a mission to make a profit at all costs.  Due to this fact many homeowners are seeing themselves faced with a foreclosure on a home that they haven’t made payments on in over five years.  For many of these individuals they haven’t even known who owns their mortgage for years.  Payments were not an option.  Now they face foreclosure on their home and they need to know where to turn.  However, when they call most bankruptcy firms they are told that they are too far behind on their mortgage payments for a Chapter 13 to be successful.  They are turned away often by law firms who refuse to even take the time to sit down with them and try and come up with a solution.
I am here to tell you that for may of these individuals Chapter 13 is absolutely an option.  While it is true that a Chapter 13 bankruptcy cannot force a modification onto a bank, that does not mean that a Chapter 13 is not an excellent place to seek a modification.  A Chapter 13 plan can be filed in good faith that proposes to seek a plan modification while the Chapter 13 case is pending.  This strategy allows the Debtor to be protected by the automatic stay while the Debtor and the bank work towards a modification to save the home.  While there is no guarantee of success, this strategy is often successful in modifying the mortgage.  The bottom line, if you are told by an attorney that a Chapter 13 cannot help you because you are too far behind on your mortgage, seek a second opinion.
 
 
Second Chance Legal Services is a bankruptcy law firm located in Madison Heights, MI.  While we are located in Oakland County, we service Wayne, Oakland and Macomb County residents.  As Detroit Bankruptcy Attorneys we specialize in helping individuals escape their burden of debt in order to get a fresh start on their bright future.
Because of our small size our clients get individual attention.  You will have the same bankruptcy attorney throughout your case whether you are in a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.  Your attorney will help guide you through the bankruptcy process in order to help you get a successful discharge of your debt.
It is important to note that Macomb County Bankruptcy Attorneys, Oakland County Bankruptcy Attorneys and Wayne County Bankruptcy Attorneys all deal with the same judges and trustees.  This is because all Michigan Bankruptcies are filed with the federal bankruptcy court in Detroit, MI.  For this reason, it is important that you choose an attorney not by location but rather by how comfortable you feel with them when you meet.  If you don’t feel comfortable with their knowledge, their experience or their demeanor you should seek out an attorney that you do feel comfortable with.
If you are interested in speaking with a Detroit bankruptcy attorney from Second Chance Legal Services, please contact our office at 248-629-6367 for a free initial consultation.
 

(305) 891-4055 - Over 25 Years of Experience - Over 8,000 Cases Filed - 1221 Brickell Ave., 9th Fl., Miami, Florida - Jordan E. Bublick - www.bublicklaw.com

Chapter 7 personal bankruptcy is used to discharge your dischargeable debt including credit cards, medical bills, and unsecured loans.

Chapter 13 personal bankruptcy is used to formulate a chapter 13 plan that will reorganize one's secured (such as a mortgage or car loan) and unsecured debt (such as credit cards and personal loans). (305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases. Bankruptcy Attorney Jordan E. Bublick has filed over 8,000 Chapter 13 and Chapter 7 cases.

 The Atlanta newspaper recently published an article reporting that over 40% of homes in the metro Atlanta area are “underwater,” meaning that they are worth less than what is owed.  In such a climate, homeowners faced with years of payments on real estate with no chance for even a break even sale, much less profit are deciding to simply walk away.Abandoned homes, of course, cause neighborhood values to decline even more, continuing the downward cycle.   Presumably, at some point property values will level off but it may take years, if ever, for values to rise to pre-2008 levels.In years past, mortgage lenders would act quickly to secure their rights by initiating foreclosure proceedings against homeowners who defaulted on their loans.   We have seen far less foreclosure action in the metro Atlanta area over the past few years because lenders are worried about potential liability arising from procedural irregularities (the “robo-signing” problems) and because the federal government has put a great deal of pressure on the big mortgage companies not to foreclosure during a bad recession.Because foreclosure activity has been restricted, real estate markets in large metro areas like Atlanta have stagnated.   Thousands of homes remain in limbo – payments are not being made but foreclosures are not being processed.  Towards the end of 2012 and on-going, however, we are starting to see an uptick in foreclosure activity.Demand for housing is increasing, especially for homes in the $75,000 to $150,000 range and lenders want to clear out their inventory.   Foreclosure numbers are trending upwards and will likely to continue to do so.  As such, it may be helpful to you to  understand a bit more about how foreclosure law in Georgia works.Foreclosure law in Georgia is governed under Georgia Code Section44 Title 14. These laws are very specific about notifications to borrowers, deficiency judgments and rights of redemption. 1No Requirement for Court Involvement in GeorgiaGeorgia is considered a title theory state, which means that the mortgage lender actually holds the title to a property until such time as the borrower has paid his debt in full.  Mortgages in Georgia almost always contain a power of attorney clause which says that in the event of default, the borrower (you) authorizes the lender to sell the property at public sale in the event of default.  Again, no court involvement is required but lenders are required to provide notification of the foreclosure sale to the borrower.There are two steps required for notification:First, the lender must send you a written demand notice outlining all past due amounts allowing the borrower 10 days to pay in full. If the borrower does make this payment, the lender cannot assess any foreclosure fees.The second step is a foreclosure schedule notification which must be published for at least four consecutive weeks in the local newspaper. In addition, the borrower must be re-notified within 15 days of the sale via certified mail.Once the notification requirements are met, a foreclosure sale must only take place on the first Tuesday of the month at the courthouse steps of the county where the property is located.  If you were to visit your local county courthouse on foreclosure Tuesday you will see mortgage company lawyers auctioning off property to the general public.In many foreclosure sales, however, the only bidder for the property is the foreclosing mortgage company.  This is because a third party purchaser or investor would have to satisfy the outstanding first mortgage before taking title.   If the first mortgage debt on the property is greater than the value, a buyer would have to pay more than the property is worth to take title – obviously no one will do this, so in underwater mortgages, the lender “bids in” an offer equal to the outstanding principal balance.Deficiency ClaimsIf the lender “buys” the property for the outstanding first mortgage balance, that lender can pursue a deficiency claim against the borrower.  However, under Georgia law (O.C.G.A. Section 44-14-161(a) the only way a lender can pursue a deficiency judgment is to file a lawsuit in Superior Court asking a judge to confirm the deficiency.  This “confirmation” basically means that the superior court judge agrees that the lender’s assertion about fair market value is legitimate and that the lender’s calculations about its outstanding balance are accurate.A confirmation judgment is a very serious problem for the borrower/former homeowner.  Once this judgment is issued, the former homeowner’s assets area at risk, his bank account is subject to levy and his paycheck is subject to wage garnishment.If have received a notice of foreclosure out any deficiency claim along with the rest of your unsecured debt., it would be wise to talk to a lawyer about your options.  Ginsberg Law Offices is a bankruptcy law firm and we can counsel you about Chapter 13 – which you could use to stop the foreclosure, and Chapter 7 – which you could use to wipe.We can also answer your questions about timing and non-bankruptcy options.   We can be reached at 770-393-4985 and we are standing by to answer your questions.

1. The Georgia Attorney General’s web site contains an easy to read summary setting out the rules for foreclosure in Georgia.  You can visit the Attorney General’s site here. ↩

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