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Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
New mortgage modification rules make it easier to combine a mortgage modification, including under HAMP with a Chapter 13 Bankruptcy. Combining a HAMP mortgage modification may be beneficial to many homeowners.
The filing of a chapter 13 bankruptcy generally stays all foreclosure and collection actions by mortgage companies and other creditors. This allows a person to formulate a chapter 13 plan to reorganize their financial situation.
A typical homeowner who owes more on their home than it is valued at will propose a chapter 13 plan to avoid their second mortgage lien and categorize it with other unsecured claims, such as credit cards. The homeowner will also file a HAMP mortgage modification request if they haven't already file it. The chapter 13 plan will provide for payment of the estimated and anticipated HAMP modified mortgage payment. The chapter 13 plan provides also provides for a percentage dividend to unsecured creditors.
Filing for a HAMP modification together with a chapter 13 bankruptcy may increase the likelihood of obtaining a HAMP modification for various reasons, including the increased feasibility of making the new payment for the first mortgage, as the second mortgage is avoided and categorized as an unsecured creditor. Also, as the HAMP is being filed in the context of the chapter 13 case, it may receive more prompt review by the mortgage company.
A typical HAMP modified mortgage payment is calculated as 31% of the homeowner's gross income. The 31% amount would cover principal, interest, taxes, insurance and associations.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
Whether a business is incorporated or not can have a dramatic impact on the outcome of a bankruptcy case, especially in Chapter 7 cases where the bankruptcy trustee has the power to sell non-exempt assets. Successfully filing a business bankruptcy in Nebraska depends on understanding the important difference between incorporated and unincorporated business assets.
Let’s assume a debtor owns a paint store that has $100,000 of liabilities and $25,000 of inventory and another $25,000 of receivables. Looking at the business as a whole it is apparent that the business is insolvent—it has $50,000 of assets (the inventory plus the receivables) but $100,000 of debt. If I were to ask you what the business is worth you might be tempted to reply that it is worth nothing since there is twice as much debt as there are assets. Nothing could be further from the truth.
If the paint store is not incorporated, the bankruptcy trustee will see $50,000 of assets to liquidate and will probably order the debtor to cease business operations and demand immediate possession of the store. In an unincorporated business entity the business assets are not connected to the liabilities—they are separate and distinct things. To the business owner they are connected, but not to the bankruptcy trustee. The trustee has the power to sell the assets and to pay a pro-rata distribution to all of the debtor’s creditors, not just the business creditors. In the process of liquidating the assets, the business is destroyed and the debtor is left to find another career.
In an unincorporated business entity the business assets are not connected to the liabilities—they are separate and distinct things.
Quite a different outcome is achieved by the debtor who incorporated the business. In the above example, the debtor does not own the inventory or receivables. Rather, the debtor owns stock in a company that owns $50,000 of assets and owes $100,000 of debt. The stock of the company is worthless in this example and the trustee will not liquidate the business.
So, does this mean that a debtor should immediately incorporate their business before filing bankruptcy? The answer is probably yes, but incorporating a business to protect the assets does not automatically fix the problem. First, transferring $50,000 of free and clear assets to a new corporation merely creates another non-exempt asset, namely, stock in a company worth $50,000. The assets may have been transferred, but the liabilities were not. Creating liabilities in the new company takes time as old debts get paid off and new debts are created in the new company. This can be a slow process. Also, the Chapter 7 Trustee is empowered to undo transactions through what we call the Fraudulent Conveyance Act—defined as a transfer of assets from one person or entity to another without receiving equivalent consideration in return. So, if assets are not carefully transferred and new debts are not correctly incurred by the new company, the Trustee may claim the entire transfer to be a sham and go after the assets.
The point of this discussion is not to advise debtors how to transfer assets to evade the long reach of the bankruptcy trustee, but rather to warn potential debtors of the inherent danger of taking an unincorporated business into Chapter 7. Careful planning is required, and unincorporated business debtors may want to consider filing a Chapter 13 payment plan instead of risking income generating assets in the Chapter 7 liquidation process.
How long a bankruptcy case lasts depends on which chapter you file. Chapter 7 bankruptcy can eliminate or discharge eligible debt within a matter of months. Chapter 13 bankruptcy can help you repay debt obligations within an average of 3 to 5 years. Since each person’s situation varies, the length of your case may also [...]
This is the case of Gail Sanders who lives on 60th St. in Chicago, Illinois. She is interested in filing a Chapter 7 bankruptcy to eliminate credit card debt. Gail has never filed bankruptcy before. She is not a homeowner. She is renting. Her landlord is St. Edmunds Commons. She has a yearly lease which+ Read MoreThe post Chapter 7 Fresh Start Recommendation appeared first on David M. Siegel.
If you own a home and file for Chapter 7 bankruptcy, your lender might ask you to sign a reaffirmation agreement. Here’s what it means, and why you may want to think twice.
When you file for Chapter 7 bankruptcy, your personal responsibility for paying your mortgage will be wiped out.
That doesn’t mean your mortgage disappears, however. What it does mean is that your can’t be held responsible for any shortfall if you fall behind and the lender sells the property at a loss.
In California, you can’t be held liable for the shortfall on a first mortgage anyway. But in New York as well as elsewhere, without a bankruptcy discharge the lender could sue you for the deficiency.
Confused? You’re not alone.
Home Loans – Two Obligations
When you take out a mortgage, you’re actually doing two things: signing a Promissory Note and a Mortgage (which in some places is called a Deed of Trust).
The Promissory Note is a document that obligates you to repay the debt with interest over time, spelling out your rights and responsibilities.
The Mortgage, however, is merely a document that serves as a lien against your property. It’s filed as a public record so that you can’t sell without satisfying the Promissory Note.
More to the point, it is the Mortgage that the lender will use to foreclose on the property in the event that you fail to live up to your obligations under the Promissory Note.
Chapter 7 Bankruptcy Affects Only One Document
When you file for Chapter 7 bankruptcy and get a discharge, your personal responsibilities under the Promissory Note are wiped out.
The Mortgage, however, remains unaffected. The lien stays against your property, and the lender will use it if you don’t make your payments.
In that way, you’re still sort of liable on the Promissory Note. If you don’t care about keeping the property, don’t make payments. But if you want to keep it, you need to keep sending your money.
Reaffirmation – A New Promise to Repay
Rather than voluntarily making payments on the mortgage after you file your Chapter 7 bankruptcy case, you or your lender may look at a process called reaffirmation.
Reaffirmation is a legal term, but it loosely means a new promise to repay a debt after bankruptcy that otherwise would be wiped out. You and the lender sign an agreement that’s approved by the bankruptcy judge, and it becomes binding on you after your case is completed.
See also:
The agreement may also signed by your bankruptcy lawyer if you’ve got one, but that’s not necessary. Your lawyer’s signature may quicken the process by eliminating the need for court approval, but lots of lawyers won’t sign them (for example, I do not sign reaffirmation agreements).
In addition, a fair number of bankruptcy judges won’t sign a reaffirmation agreement because it’s not necessary in order for you to keep the property.
If you’re hellbent on reaffirming the mortgage, be prepared to face some tough questions in your quest to convince the judge that it’s a good idea to do so.
Why You May Care About Reaffirming Your Mortgage
If you discharge your personal liability to the mortgage company in Chapter 7 bankruptcy, they may not let you refinance with them in the future. But you do realize that there are lots of other banks out there, right?
After you discharge your mortgage obligations, the lender isn’t allowed to report your payments to the credit reporting agencies. Of course, there are other ways to prove to the world that you’ve been making your payments.
Aside from those two reasons, I have no idea why you’d want to reaffirm a mortgage debt. After all, you’re still allowed to pay the mortgage after bankruptcy,
See also:
How Long You Have To Reaffirm A Debt
A reaffirmation agreement must be signed by both parties and approved by the bankruptcy court before the discharge is entered.
Once the discharge is entered, the bankruptcy judge doesn’t have the authority to sign the agreement.
If you’re going to do it, best to get the process started as soon as the case is filed.
What If You Want To Reaffirm After Bankruptcy?
You can’t reaffirm your mortgage once the bankruptcy case is over without jumping through some additional hoops.
You’re going to need to make a motion to the bankruptcy court to reopen your case for the limited purpose of entering into a reaffirmation agreement.
Some courts will allow you to do so, others will not permit it.
A Tool For Limited Use Only
Reaffirmation is seldom a good idea, and for a mortgage it can be a downright stupid one.
That said, I’m sure there are some situations that call for reaffirmation of a mortgage. I don’t think I’ve seen one in nearly 19 years of practicing bankruptcy law, but there’s always a new twist to be considered.
If you’re looking to go down the reaffirmation rabbit hole, talk with your lawyer first. If you filed for Chapter 7 bankruptcy on your own, this would be a good time to sit down with an attorney if only to review your options with respect to the mortgage.
Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing chapter 13 and chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
Miami Bankruptcy Lawyer - Practice Limited to Bankruptcy
Jordan E. Bublick is a Miami personal bankruptcy lawyer who's practice is limited to chapter 13 bankruptcy (reorganization of debt) and chapter 7 bankruptcy (discharge of debt).
Jordan E. Bublick has over 25 years of experience in filing personal bankrupty cases and has over 25 years of bankruptcy experience and has filed over 8,000 bankruptcy cases.
The firm offers a free initial consultation.
Chapter 7 bankruptcy allows a person to discharge most types of debt while keeping his "exempt" property.
Chapter 13 bankruptcy allows a person to propose a plan of reorganization. It is often used to stop a mortgage foreclosure and to catch the mortgage payments up-to-date. It is also filed to use the Bankruptcy Court's new Mortgage Mediation program in which the parties meet to negotiate a modification of the mortgage.
Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
One of the hottest topics in South Florida is the real estate "short sale." Actually a short sale is nothing new, but it now quite the vogue. A short sale basically means that the mortgage lender (or lenders) agree to satisfy its mortgage lien and allow the transfer of the real estate in exchange for receipt of less than the full amount of the amount due on its mortgage loan. In a short sale, the real estate is sold to a buyer who obtains a new mortgage. As the net proceeds of the sales price is less than the full amount due on the mortgage lien(s), the mortgage holder(s) must agree to accept a "short" payoff in exchange for release of its mortgage lien.
Despite this basic definition, there is more involved with the short sale and whether it is actually beneficial to the homeowner facing foreclosure. The fact that the internet is full of courses, books, and seminars offering to turn out "short sale experts" should in and of itself advise caution.
It is been my experience so far that many homeowners facing foreclosure seek out the "short sale", but do not entirely understand the process or many of its implications. Some do not even seem to understand where they stand on various issues even after a "short sale" supposedly took place. Apparently, one of the short sale's greatest boosters, at least at present, is the real estate broker or other "third party negotiator" who would earn a commission upon the closing of a short sale.
At this time, it seems that substantially more are failing to achieve a short sale than are those who have achieved one. Many seem to seek out the short sale as almost a holy grail and advise that they are in the "process of a short sale", but few have actually advised that they have completed one. Many seem to indicate frustration in the attempt to communicate with the mortgage lender(s) and/or actually complete a short sale.
Apparently the most difficult item in the short sale process is communicating with the lender and any second mortgage holder, such as a "home equity loan." In addition to the agreement of the first mortgage holder, the agreement of any junior mortgage holders must also be obtained. Outstanding judgment or tax liens may also be an issue as the buyer would need to receive clear title.
One of the most important issues in the short sale is whether the homeowner is actually released from liability for the "short" or unpaid amount. If the mortgage company and/or the second mortgage company do not release a person from liability for the unpaid portion, the benefit of a short sale to a homeowner may be questioned.
Another important issue is the federal income tax consequences. If the unpaid mortgage debt is forgiven, "discharge of indebtedness income" may be implicated. Discharge of indebtedness income basically involves the recognition as income for federal income tax purposes of the discharged mortgage debt. But there are various exceptions to the recognition of discharge of indebtedness income, such as the insolvency exception or discharge in bankruptcy. Although a form 1099 may be issued as to the homeowner/seller to the IRS, one of the various exceptions to the rule may apply and income taxation on the discharge amount may not be due. A complete analysis of this issue should be completed before one commits to undertake a "short sale."
Many seem to seek out the short sale to "save their credit." One should try to get the best understand possible of whether a short save will actually save or protect one's credit from the reporting of a foreclosure. In general, a credit reporting agency may report accurate information on your credit report. Although a "foreclosure" may not be reported on one's credit, a mortgage delinquency may. One may question the effective difference.
A short sale may be in the mortgage lender's supposed "best interest." But one should realize that many lenders may be under contractual or regulatory restrictions that may not permit them to agree to a short sale. Furthermore, one may actually be communicating with the lender's loan servicer and not the actual mortgage lender.
In any even a short sale usually takes several weeks to pursue and one needs to furnish substantial documentation, including personal financial information such as paycheck stubs, bank statements, 401(k) statements, and tax returns. One may also need to furnish information about a hardship.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for October 17, 2013 JCPenney stock falls over false bankruptcy rumor Puerto Rico Denies Bankruptcy And Takeover Rumors Park Cities’ Bank Holding Company Files for Bankruptcy
A federal grand jury returned a 24-count indictment on former Enron Executive Jeffery Adam Shankman, 46, that included concealing assets with bankruptcy fraud. He is expected to make his appearance before a U.S magistrate judge upon turning himself in to authorities. His charges include purposely hiding assets from creditors and the bankruptcy trustee who was [...]
Unfortunately many Michigan families have seen a drop in their income due to a reduction in work hours or a decrease in their pay. They may even be performing a job beneath their skill set due to a sluggish job market. These circumstances are termed “underemployment”. The creation of many more part time jobs in [...]The post Dealing with Underemployment in Michigan appeared first on Acclaim Legal Services, PLLC.
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