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Posts Tagged ‘relief’

Creditor Harassment, It’s Not Just for Breakfast Anymore

Friday, October 15th, 2010

Does this sound like you or anyone you know:  receiving calls from a creditor 22 times a day, receiving calls late at night, hearing a creditor called your neighbors, receiving a demand statement every single day for a month, or a creditor calling every hour on the hour at work?  It’s no longer something that just happens to someone else.  Almost every single person who walks into the Doan Law Firm is on the hit list of at least one creditor for whom harassing them has been taken to a ridiculous level.

The Doan Law firm is unique in that it has created a Creditor Abuse Prevention department with the specific charge of forcing creditors near and far, big and small to comply with the law.  The result is we take the heat off you.  We stand in front of the bullet.

Using the FDCPA (Fair Debt Collection Practices Act) as well as the California version, we help you give immediate notice to all of your creditors that you are represented by an attorney and that you may not be contacted.  The creditor can no longer contact you, they must contact us.  This notification has one of two effects, either the creditors stop contacting you and that’s great.  The other result is they walk through the law and we sue them on your behalf.  This results in a nice nest egg for many of our clients courtesy of their law-breaking creditors.  Either way it’s a win.

Can I keep my house in bankruptcy? Another exciting installment of “Ask Doan Law Firm” (Part 2).

Friday, October 1st, 2010

Q:  Can I keep my house in bankruptcy?

A:  In the last post we analyzed this question in a Chapter 7.  Let’s look at a Chapter 13.

Just like a Chapter 7, in a Chapter 13 you receive an automatic stay on the date of filing.  That means no foreclosure can take place without court permission, i.e., the court grants a Motion for Relief from Stay.

Chapter 13 is a bit different because you are proposing a holistic financial plan for the next 3 – 5 years.  Your intention with the house will be a driving force in the plan.  Just like in a Chapter 7, you can surrender the house.  If you do, the resulting debt will put into the pot with your unsecured debt, credit cards, medical debt, etc., and will be addressed in your plan.

If you’d like to keep the house in a Chapter 13 plan, it needs to be part of the entire plan.  That means you need to be able to pay the payment, taxes, insurance and repairs going forward.  This often works because when the rest of your debt is worked into an affordable plan payment, the house may become affordable.

The Chapter 13 plan must address any missed payments.  These are priority claims and will be given special treatment.  You need to make sure you can make a plan payment large enough to catch up the house over the 3 – 5 years of your Chapter 13 plan.

As you might guess, keeping your home in a Chapter 13 is complicated to determine; you’re going to need assistance.  Doan Law Firm has a team of Chapter 13 professionals that do only Chapter 13 bankruptcies all day, every day.  They’re very knowledgeable, caring, and are ready to help you.

Your Underwater Mortgage Doesn’t Have to be a Ball & Chain

Monday, August 2nd, 2010

California is a non-recourse state for the first mortgage on a home, meaning that the debt is tied up in the collateral, not the individual.   This means that when the bank forecloses on your home, once you turn over the collateral (your house), the bank cannot come after you for any outstanding debt.

Using an example, say you bought a house in 2003 for $800,000 by taking out a $600,000 mortgage.  You live in the house for a couple of years enjoying relative prosperity and pay off about $50,000 of the mortgage.  Then, tragedy: the real estate market crashes and the value of the home is now $250,000.  $300,000 of your mortgage is now unsecured, which means your house is now an under-secured debt.  Say you then lose your job and cannot make the mortgage payments.  After struggling to make ends meet and defaulting on your mortgage several months in a row, the bank starts foreclosure proceedings and sells your home for $250,000.  Because California is a non-recourse state, once you turned over the collateral (your house), your mortgage lender cannot collect from you.  Even if you had $200,000 in your bank account, the lender cannot touch it.  The lender assumed this risk when they approved your mortgage application, so after you hand over the house you can walk away and live happily ever after.

However, even in a non-recourse state, if you have a second mortgage that you took out after your first mortgage, you are still on the hook for that debt.  For example, say in 2003 you bought the house for $800,000 with a mortgage of $500,000.  You then enjoyed a year of prosperity followed by a few years of hardship.  After struggling to make ends meet, you decide to take out a second mortgage on your house worth $100,000.  Real estate market crashes and the house is now worth $200,000, leaving you upside-down on the house by $400,000.  If you turn over the house, you can walk away from the first $500,000 mortgage, but you’re still liable for the second $100,000 mortgage.  Since you no longer have the collateral, the second mortgage is now an unsecured debt, which you are still liable for.

Most people cannot afford to continue making payments on a mortgage for a house they no longer own.  If you default on your payments, the bad news is that the lender could get pretty aggressive about collecting on the outstanding balance.  The lender can go to court and get a judgment allowing them to collect from you through wage garnishments or a bank levy.  For someone who is struggling to make ends meet, these garnishments or levies can be brutal.

The good news is that unsecured debts can be discharged in bankruptcy.  If you simply cannot afford to continue making the mortgage payments for a house you no longer own—or if you are facing potential wage garnishments or bank levies—call the Doan Law Firm for a free, no obligation consultation to learn about how bankruptcy can alleviate this financial stress.

File Quickly….Sleep Peacefully.

Friday, May 21st, 2010

Once you’ve made the decision to file bankruptcy, there’s no time to waste.  Not making your bankruptcy a priority is like going on the Louisiana Swamp Tour and only applying the bug repellant as the boat heads home.  You prevented a few mosquito bites, but you could have come home without hundreds of painful, itchy bumps.

Delay can cost you dearly.  The decision to file, even coupled with hiring an Orange County or Los Angeles bankruptcy attorney, doesn’t give you the protection of the bankruptcy laws and court.  Only once your case is filed does the automatic stay arise.   Wages garnished, bank accounts cleaned out, foreclosures, repossessions and most liens are permanent once they occur.  The money, the house, the car, is gone forever and not even bankruptcy can return it to you.

Act quickly.  Set aside everything else and focus your attention on working with your Los Angeles or Orange County bankruptcy law firm to file now.  You can be sure your creditors are hard at work to separate you from your money before you get the protection of the court.  So file quickly and sleep peacefully.

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