I think anyone who might be interested in keeping their house should explore Chapter 13 as an option before deciding to do a short sale or let the house foreclose. In a Chapter 13, we can take the payments that you are behind on and put them into a payment plan that will work for you. If you are in a position not able to make the future mortgage payments on your house, Chapter 13 may not be the best answer.
A short sale is when the lender agrees to take a lower price for a house than the amount owed to the lender. The main advantage of a short sale is that it protects your credit score from the damage of a foreclosure A short sale might be a good option for someone whose only debt problem is a house that can’t be sold for the amount owed. People who owe credit card debt, medical debt, car debt, and other types of debt should explore Chapter 13 and Chapter 7 before making a decision to short sale.
Amy Cochran, a short sale specialist from Cartersville, says that one of the most common mistakes she sees people make after they fall behind on house payments is that they move out of the house before the mortgage company takes any action against the house. When a house is empty, it is much more difficult to get a short sale completed.
It can’t hurt to explore all options. Weigh the pros and cons of each option before making your decision.
I recently spoke with a client who was the victim of Debt Management Company Scare Tactics. After I met with this client and confirmed that the qualifies for Chapter 7, he went home and called his Debt Management Company and asked that they stop deducting money from his checking account because he was filing bankruptcy. The representative from the debt management company responded that my client could not file bankruptcy. When my client asked, “Why?”, the debt management company representative lied to my client by saying “that anyone who owns a house can’t file chapter 7.” The debt management company representative then asked my client, “Do you own a television?” My client answered, “Yes.” The debt management company representative then lied to my client again and told him that the could “kiss the television goodbye.” As you can imagine, my client was upset and disheartened after this conversation with the debt management company lier. Fortunately, my client called me and I was able to calm his fears and set the record straight.
By telling my client that he could not file for bankruptcy, the representative from the debt management company broke the law by engaging in the unauthorized practice of law. Some debt management companies will say just about anything to get your money. Don’t let some debt management company scare you away from exercising your rights. Meet with a real attorney and find out about your legal options to obtain real debt relief.
Here is the truth about debt management companies. Credit card companies are not legally stopped from suing you for collection of the debt. In contrast, Chapter 13 and Chapter 7 prevents credit card companies from suing you for collection. Debt management companies have no power to force any creditor to accept a lower payment from you. In contrast, a confirmed Chapter 13 plan payment or a Chapter 7 discharge is binding on all creditors listed in the case. With Chapter 13 and Chapter 7 we don’t need permission from your creditors.
Taking a second mortgage out on your house to pay off credit card debt is a bad idea in most cases. In the event you need to file bankruptcy, credit card debt can be wiped out if necessary. Even in a Chapter 13 /a> plan where you are paying back all of your debt, the interest rate paid on credit card debt is zero. In contrast, the most common way to get rid of your second mortgage in a Chapter 13 /a> or a Chapter 7 is to surrrender the house to your creditor. To keep the house, all payments must be made on the second mortgage. Why would you ever want to exchange a type of debt that can be wiped out or paid back at zero percent interest for a new type of debt that must be paid back with interest and could result in the loss of your house if you ever get into a position where you can’t make the payment?
Borrowing against your 401k is a terrible idea. With Georgia Bankruptcy Exemptions, your 401k most likely will be 100 percent protected from your creditors.
One of the most common mistakes I see people make is that they will borrow against their 401K to pay off credit card debt or medical debt. Within a short period of time, they realize that they are not going to be able to make the 401k loan payment. Trying to get by, they skip other important bills like car payments and house payments. Then, they come to my office to file Chapter 13 to save the house and car. The reason I feel so bad for these people is because we could have wiped out the credit card debt and the medical debt in a Chapter 13 /a> or a Chapter 7 but now we are stuck with this 401k payment that they cannot afford.
Defaulting on the 401k loan is a bad idea because of the tax penalties. When a person defaults on a 401k loan, they will have to pay the government taxes that they otherwise could have completely avoided if they had never taken out the 401k loan to begin with.
Your 401k is meant for your retirement. Don’t ever treat it like an emergency fund.
Truth: A free consultation with me does not cost you any money. I will go over your income and budget to help you come up with a plan that works.
Myth #2: I can’t file without hurting my spouse’s credit.
Truth: Your spouse does not have to file with you. If you are not joint on any debts, your filing will not have an effect on your spouse.
Myth #3 I am going to lose everything I own. With Georgia exemptions, most people who file bankruptcy keep everything they own.
Myth #4 The creditors won’t accept my case.
Truth: We don’t need the permission of your creditors.
Myth #5 I signed a contract with a creditor agreeing that I can’t file bankruptcy against them.
Truth: This contract has no power to prevent you from filing against any creditor. We can tell them to stuff it.
Myth #6 The creditor is going to take my car.
Truth: The automatic stay prevents your creditor from taking your car. As long as you keep insurance on the car and keep your Chapter 13 /a> payments current, the Court will not allow the creditor to take your car. If you are current on your car payments and you file Chapter 7, you can reaffirm the car. A reaffirmation agreement basically says that you are going to treat the car debt as if you have never filed against them.
Myth #7: Bankruptcy will ruin my credit forever.
Truth. Not forever. Yes, bankruptcy will damage your credit but so do lawsuits, repossessions and foreclosures Think about all the famous people who filed and recovered.
Myth #8. The trustee will come to my house and I will be embarrassed.
Truth: I have been practicing in this field of law for over 11 years. I have filed hundreds of cases and I have never known the trustee to go to any one’s house.
Myth #9 I will never be able to buy a house after I file.
Truth: You can buy a house after you rebuild your credit.
Myth #10 I can’t file without my spouse’s permission.
The answer to this question depends on your situation. We can file a motion to avoid the judicial lien shortly after we file your case. The main issue is how much property do you own? I want to go over every single asset you own and make sure that they are protected by Georgia exemptions. If the value of your equity in your assets exceeds the Georgia exemptions, you may need to file Chapter 13 to protect yourself from the default judgment. Whatever you do, don’t ignore the judgment. Default judgments can lead to garnishment of your wages and/or the placement of liens on your house. Call me today for your free consultation.
In my opinion, this is a bad idea. If you are able to make your mortgage payments, do so. I recently spoke with a person who quit making mortgage payments so that his mortgage company would consider him for a loan modification. They filled out all the papers as requested by the bank for the modification. After about four months of not receiving any payments, the bank started foreclosure proceedings. The debtors never opened their mail from the foreclosure attorney and ignored a certified letter that was sent to their residence. As a result, there house was foreclosed and there is nothing they can do to get it back. Chapter 13 /a> does not lower your future mortgage payment but it can wipe out credit card debt to make is easier to pay the mortgage.
The answer to this question is that it depends on your mortgage company. Here is what the mortgage company must do in Georgia to foreclose on your house. First, they must advertise your house for four weeks prior to the foreclosure date. Normally, foreclosures are conducted the first Tuesday of each month. Holidays can mess up this general rule. Second, the mortgage company is required to send you notification of the foreclosure You should have at least four weeks notice of the foreclosure date. Notice to you is generally accomplished by sending you a certified letter. Chapter 13 /a> can stop the foreclosure and save your house. Call me today at 1-888-832-8249 for your free consultation.
For both Chapter 7 and Chapter 13 /a>, you absolutely must bring a your driver’s license and your social security card to the 341 Meeting of Creditors. If you can’t find your social security card, bring a W-2 or a 1099. If you don’t have both a state issued picture I.D. and proof of your social security number, your hearing will not be held. If you can’t find any proof of your social security number, go to your local social security office and have them issue you a letter with your social security number on it. It is also a good idea to bring proof your car insurance. Call me at 706-295-0030 if you have any questions.
If you have a first and a second mortgage, you may need to consider bankruptcy even if you are willing to let the house get foreclosed. For more information on second mortgage issues, please see my prior post.
If you have only one mortgage and you don’t have any other debt issues, you probably don’t need to file bankruptcy in Georgia. Under Georgia law, a mortgage company is required to file a
“confirmation of foreclosure” against you within 30 days of the foreclosure Mortgage companies almost never conduct a confirmation of foreclosure in Georgia. It is extremely rare for any mortgage company to pursue a deficiency on a first mortgage.