Top Reasons Why the Elderly Don’t Want to File Bankruptcy (But Should)

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Being elderly, living on a fixed income, and dealing with mounting debt can be frightening.  Although retirement funds, pensions and social security checks are almost completely protected from creditors looking to recoup their money, they can still harass you for payment and make life difficult.

 

Here are some of the most common reasons elderly people give for avoiding bankruptcy and why those reasons are invalid. 

It’s embarrassing. 

We’ve all been taught to pay our debts and not shirk our obligations.  However, in a predatory lending environment like the one we’ve seen in this country over the past 10 years, it’s far too easy for people to be taken advantage of by unscrupulous lenders who pile on so much interest that it’s almost impossible to repay the debt.  The embarrassment should be on their part—not the victim of their predatory lending. 

It costs too much money. 

Actually, many bankruptcy attorneys will take payments and in consideration of the amount bankruptcy saves you through discharged debts, it costs less than doing nothing at all. 

It ruins your credit. 

In many cases, particularly Chapter 7 bankruptcy, filing for bankruptcy can actually raise your credit score—particularly if you’ve been behind on payments for a while, or are more than 90 days late on several accounts.  If your credit score is indeed lowered, a few months of paying your now-reduced and affordable payments on time will quickly raise it. 

It sets a bad example for the children.

Taking responsibility and admitting that you are in over your head is the best example you can set, and that’s what bankruptcy allows.  If you pass away with all that debt in your name, your estate will not go to your children and family—it will go to creditors.  With that in mind, which approach do you think your family would most benefit from?  The answer, of course, is bankruptcy.  

If I live in an RV or mobile home as my primary residence and I'm behind on my payments, can I be evicted if I have nowhere else to live? Can bankruptcy prevent this?

Car Loans and Bankruptcy: What You Need to Know Before Filing

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If you think that the car dealer who sold you the car you drive was or is concerned about whether you can handle the payment, think again.  In fact, the majority of car dealers are quite happy to place a customer in a car and car loan with high interest rates and unaffordable payments for one reason and one reason alone—they still get the commission from the sale, whether that customer can afford the car or not. 

In fact, for some car dealers, there are no limits to the amount of “tweaking” that can be performed to an applicant’s application to make sure the deal happens.  Whether it’s using the entire household’s income to get the applicant approved, or encouraging the applicant to use credit cards as down payments, car dealers and salespeople are certainly not in your corner (from a wise financial standpoint) when trying to sell a car. 

Many people end up filing for bankruptcy partly due to driving a car they can’t afford.  The good news is that in most cases, if the car is repossessed, the balance that remains can be discharged (eliminated) through bankruptcy.  In cases where you need that car to drive to and from work, some auto loans can be retained despite filing for bankruptcy. 

Under Chapter 13 bankruptcy, if the car loan is less than 910 days old, you might have to pay the full value of the car loan to keep the car.  However, there is a possibility that the interest will be reduced under the bankruptcy restructuring.  If the car loan is older than 910 days, the bankruptcy court will likely provide a prorated payment amount based on the vehicle’s worth, not the amount necessary to pay off a high-interest loan.  In Chapter 7 bankruptcy, you’ll likely be given the opportunity to either reaffirm the debt, redeem the car or surrender it.  

What will happen to my car and car loan if I file bankruptcy?

Knowing the Right Bankruptcy Tools Essential to Saving Your Home

When people get into serious financial difficulty, to the point where their very home is threatened as they fall behind on loan and mortgage payments, they often turn restlessly to bankruptcy as a solution.  Unfortunately, they often only have a vague idea of how these tools can be used most effectively – and using the wrong tool can be disastrous.

The RV as Primary Residence

One complicating factor is how you define your home – if you used a loan to purchase an RV and then fall behind on that loan, what form of bankruptcy can help? The wrong choice can leave you homeless: Chapter 7, for example, won’t protect you from having the RV repossessed by your lender, even if it’s your primary (or only) residence.  Many people make the mistake of thinking that banks and other lenders can’t (or won’t) put your family on the street.  The fact is, they can – and they will - unless you use the right tools.

The Right Tools

In this scenario, Chapter 13 Bankruptcy is a much better choice.  Chapter 13 can prevent repossession/foreclosure as it enters you into a five-year plan for paying down your debt.  You’re assigned a court-appointed trustee and a payment plan is created.  As long as you make your payments, you can’t be pushed out of your home or RV.

Even better, Chapter 13 can be organized with what’s known as a “cramdown” mechanism that can help people whose homes or RVs are “underwater” – that is, worth less than they owe.  Using a cramdown provision, the filer can pay just what the home is worth plus reasonable interest over the course of the five-year period instead of the full balance of the loan, and emerge fully paid.

The right tool is essential in any bankruptcy filing.  If your financial situation has you frantically researching bankruptcy on the internet, contact a professional today for sound advice as to what tool you should be using.

Is Bankruptcy an Option if My Debt Includes Medical Bills?

The simple answer to this questions is, “Yes, you can declare bankruptcy if medical bills have caused you financial hardship.” As a matter of fact, many people have few financial issues until a medical emergency strikes.  The medical bills are what trigger their need for bankruptcy. 

If you have medical bills AND credit card debt, you include both in your bankruptcy filing.  You do not have the option to pick and choose which debts are included in your bankruptcy. All of the debts that fall under a similar classification will be included in the bankruptcy.  This means if you have credit card debt and you were able to keep up with the monthly payments (the cards are not behind or in default), but you are struggling with medical bills, it will still all be included in the bankruptcy.

The goal of bankruptcy is to help you get a handle on your finances, while also helping your creditors receive the money they are due.  In many cases, creditors receive just a portion of the total amount owed, but they must be treated fairly across the board.  One creditor cannot receive a better payment arrangement than another when it comes to a debtor’s bankruptcy.  No creditor, including any debts you have to friends and family, can receive what in bankruptcy code is known as “preference.”

Medical bills and credit card debt, as well as some tax debts and personal loans, are “general unsecured debts.” This means that under bankruptcy law, they must all be treated in the same manner.  In the end, when you file for bankruptcy, all of these general unsecured debts must be included in your bankruptcy.

Bankruptcy can be a very effective tool for helping those with medical debt.  An experienced bankruptcy expert can help you evaluate your specific circumstances.

Bankruptcy and Divorce

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One of the most common factors in divorce is financial problems.  Arguing about money with a spouse is one of the most destructive and painful aspects of any relationship.  When the financial situation is quickly deteriorating, it’s unfortunately not uncommon for the marriage to fall apart at the same time.

If you’re heading towards divorce in the midst of a personal financial meltdown, is it better to file for bankruptcy before or after the divorce? There are many factors to consider.

Before Divorce

One of the compelling arguments for filing beforehand is the clean slate bankruptcy can provide.  By having all of your financial issues settled and all debts handled one way or another, the process of dividing property and working out support is much easier.  Thus, it can often be advantageous to file for bankruptcy before you file for divorce.

At the same time, by filing for bankruptcy while still married, you can file once and save a second filing fee.  Plus, bankruptcy puts a hold on property division as ordered by a court, but not on support decrees, so filing for bankruptcy simultaneously with divorce can be very messy and chaotic, and extend the process for a longer period of time.

After Divorce

Waiting until after a divorce is granted to file bankruptcy has its own advantages.  If your combined income as a couple is too high, you may not qualify for bankruptcy, but after splitting incomes you may find it a viable alternative.

A Chapter 13 bankruptcy may not be possible if you plan to divorce, as the arrangements likely cannot be maintained after a divorce.  As a result, divorcing first and then filing for Chapter 13 is really the only workable strategy if Chapter 13 is the structuring you want.

In the end, you should consult with a qualified bankruptcy attorney before making any decisions.  Laws vary from area to area and your own specific circumstances will have an impact on the best approach to bankruptcy for you.

How does filing for bankruptcy during divorce proceedings affect support payments and property division?

Things to Ask and Look For When Choosing a Bankruptcy Lawyer

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Bankruptcy is one of those curious things that many people think they are familiar with simply because it’s mentioned so often.  You hear about bankruptcy on the news, in films and TV shows – just about everywhere.  It’s mentioned so often, that people believe they know how it works when they really don’t.  If they find themselves in difficult financial circumstances they often think about bankruptcy – but have no idea how to go about choosing an attorney to advise them.  Here are a few things that you should ask about when choosing a bankruptcy attorney.  PRINT THIS OUT AND TAKE IT WITH YOU WHEN YOU VISIT.

Expertise

Any attorney, technically, can help you with filing for bankruptcy – but you want one that focuses on bankruptcies.  Ask for their bona fides and avoid anyone who advertises in a wide range of fields.  Make certain that they’re familiar with the bankruptcy code revision of 2005 with some questions.  If they can’t answer immediately and coherently, they aren’t the right choice.

Focus

To avoid getting caught in the gears of a “bankruptcy mill” that handles a high volume of cases for low fees and with low attention and effectiveness, make certain your initial consultation is with a lawyer – not a staffer.

The Feel

Finally, only you can decide if you get the right “feeling” from an attorney – but don’t ignore that gut instinct.  It feels unscientific, but if you’re not comfortable with your attorney it won’t work out as planned.  Remember the initial consultation is as much for you to judge the attorney and decide if you want to work with them as it is for them to judge you.

The Fee

It’s not only polite to ask about the fee you’ll be paying for your bankruptcy filing, it’s essential.  After all, if you are broke, finding the money to pay a bankruptcy law firm is a natural concern.  However, no good bankruptcy law firm is going to be able to give you a price over the phone.  If a firm does, they are basically telling you that a 21 year old kid with 10k in debt is going to get the same attention and effort as a 52 year old business woman with three businesses and a warehouse.  However, once you sit in front of the law firm, you should expect a written price quote and an understanding of what is covered (and yes, most law firms offer payment plans)

Choosing the wrong bankruptcy lawyer can put you in a deeper hole.  Take your time, and consider carefully.

If my husband/wife files for bankruptcy, will I have to file too?

5 Myths About Bankruptcy You Should Know

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Despite the plethora of information available online, there are still bankruptcy myths circulating that are just that—myths.  With something as important as bankruptcy, it’s important to understand the facts and learn how to distinguish them from fiction.  

1.       Everyone will know I’ve filed.

While it is true that bankruptcy is a public record and is searchable as such, unless you are a high-profile individual, it is unlikely that anyone in your circles will know that you’ve filed for bankruptcy.  The number of people who file each month in any given city or area often makes it impossible for the media to focus on printing names; although in some smaller communities, the newspapers still do this.

2.       If I file Chapter 7, I don’t have to pay back any of my debts.

This is certainly a nice thought but it’s a myth, nonetheless.  Certain debts such as alimony, child support, student loans and fines for criminal acts must still be paid, even after filing for Chapter 7.

3.       If I file bankruptcy, I’ll lose my house, car, possessions, etc.

It is important to know that each state provides exemptions to bankruptcy filers, allowing them to keep a considerable amount of their property—up to a particular value.  A bankruptcy attorney will be able to explain in detail what you may or may not lose in the process of filing. 

4.       I can kiss credit goodbye if I file. 

Although for 2-4 years, you might only qualify for subprime loans, there are still many lenders who are more than happy to provide credit to people who have filed for bankruptcy—even Chapter 7 bankruptcy. 

5.       If my husband/wife files, that means I have to file, too. 

This situation is highly dependent on whether both spouses are liable for the debt.  If both names are on most debt, then yes, it would make more sense for both spouses to file.  However, if only one spouse’s name is on a considerable amount of debt, that spouse can file, leaving the other spouse’s credit unscathed.  

5 Steps To Recovering From A Bankruptcy

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Once your bankruptcy is completed, you have a unique opportunity that not many people get—the opportunity for a fresh financial start.  The best way to use this opportunity to your advantage is to make the right financial choices from this point forward.

1. Create a budget and stick with it.

Making a livable budget is the first (and most important step) to getting back on track financially after a Chapter 7 or Chapter 13 bankruptcy.  Showing your potential lenders that you have learned your lesson and are able to make smart financial choices is best done through living within your means and knowing where your money is going at all times.

2. Learn to live on cash (or your debit card) again.

After a bankruptcy, cash is your friend.  Not only does cash allow you to stick to your budget better (since it’s a tangible reminder of how much you have to spend each month), it also helps you get out of the credit habit.  This doesn’t mean that you should avoid credit entirely, though—in fact, you’ll need to re-establish some credit in order to get your credit score back on track after the hit it takes from bankruptcy. 

3. Pay your bills on time, every month.

Keep in mind that even the small bills will show up on your credit report and affect your score. 

4. Keep a close eye on your credit report.

The only way to ensure that your credit is getting back on track is to watch it closely.  A good way to do this is to sign up for a credit monitoring service. 

5. Get a credit card and use it wisely. 

The only way to re-establish your credit is to obtain credit and use it wisely.  While it might be difficult to obtain credit initially after your bankruptcy has been discharged, many cards offer low credit lines to people with poor credit with the opportunity to raise those credit lines after demonstrating over a period of a few months that it will be used wisely.  

Help! My Car Is Being Repossessed!

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Without your car, how would you get to work? How would you get your children to school? If you fall behind on your car payments, you may have the repo man at your door.  You can give in and let him take it or you can protect yourself.  A bankruptcy protection plan can help you keep your car and get your payments back on track.  It can also keep the repo man away from taking your vehicle!

When you file for bankruptcy protection, you receive what is called an “automatic stay” on collection of your debts.  While the stay is in effect, your car cannot be repossessed. 

Here is how bankruptcy has more protection for you if you decide to file a Chapter 13.

• You can your reorganize your payments and spread them out over the course of your payment plan.  This can give you 30 to 60 more months to pay for your vehicle and you get to keep the car as long as the bankruptcy payments are being made to the trustee.
• If you are upside down on your loan or you owe more than the vehicle is worth, you may be able to pay less than you owe.  For example, let’s say you owe $10,000 on your car but your car is worth $7,000.  You may be able to reduce the amount you owe in your reorganization plan.
• If you think your vehicle is not worth keeping, you can include the amount you owe in your reorganization plan and walk away.

Here is something you should never do---let the bank repossess your car and think you are no longer responsible for the debt.  When banks repossess vehicles, they usually sell them at car auctions.  If they get less than you promised to pay for the car, the bank may come after you again for the rest of the money.  You may face a garnishment or a lawsuit for the amount still owed on the vehicle, even though it was repossessed by the bank.

Most people who are having trouble making their car payments are also having trouble paying their other bills.  Filing for bankruptcy can help you keep your car and begin to reestablish your financial future.  But if you wait, you could end up with judgments and garnishments.  We are here to help you consider your options and protect your assets, including your vehicle.  

Common Questions About Bankruptcy

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Bankruptcy is the last option for some people and many have questions about what will happen to them.  Here are some of the most common questions we hear:

Will I lose my home/car?

That is a question that has to be answered individually.  Florida has some of the most lenient exemptions laws when it comes to your home.  In a Chapter 13 Bankruptcy you can even wipe out a second mortgage or home equity loan.  When it comes to your vehicle, you can also exempt $1, 000 of equity in your car.  You may also choose not to include your car in your bankruptcy and continue making the payments on your own.  There are exceptions and the answer also depends on whether you file a Chapter 7 or a Chapter 13. 

How long does it take to file bankruptcy and wipe out my debts?

The length of time it takes to file largely depends on you.  If you come to us on a Monday, in some cases we can file by Friday.  You may want to talk to us and think it over before filing.  Some clients wait a long period of time before actually filing a bankruptcy.  This can hurt you in the long run because interest and fees are accruing on your debts.  As to the time it takes to wipe out your debts, if you file a Chapter 7 bankruptcy, it usually takes three months for the debts to disappear.  Chapter 13 is a repayment plan that takes three to five years on average. 

I am embarrassed by my financial situation.  Will my neighbors/friends/coworkers find out I have filed bankruptcy?

Bankruptcy records are public and anyone can go online or down to the federal courthouse and see if you have filed for bankruptcy.  Unless you are a celebrity or applying for a high profile job that requires a credit check, it is unlikely if anyone will know if you filed bankruptcy unless you tell them.  However, some publications do run bankruptcy filings and someone may recognize your name.

Can my creditors still call me after I have filed bankruptcy?

NO! Once you have filed for bankruptcy protection, they must stop all collection proceedings until the case is settled.

Every situation is different and the only way to get an answer that will ease your mind is to talk to us about your situation.  We have helped hundreds of clients protect their assets and financial future. 

Can Bankruptcy Help My Tax Debts?

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While some people who file bankruptcy are burdened with credit card debt, some are burdened with debt to Uncle Sam for past due income taxes.  Tax debt can be included in a bankruptcy, but there are rules and in most cases, you will have to pay your taxes.  To understand the difference in the way tax debt can be discharged, you have to understand two most common types of bankruptcies.  Chapter 7 wipes away all of your debt and you are no longer obligated to pay it.  Chapter 13 reorganizes your debt and puts you on a plan to repay your debts.  If income tax debt is included in a Chapter 13 payment plan, it is considered a priority debt and must be paid before other debts. 

Some people have misconceptions about tax debt and bankruptcy.  Here are three common myths.

1. Myth: Income tax debt is never discharged.  Fact: If you file a Chapter 7 and you have tax debt that is more than three years old and your taxes were filed on time, in some cases that debt can be discharged. 
2. Myth: Interest and penalties will continue to accrue if I put my income tax debt in a Chapter 13 payment plan.  Fact: You will have to pay all of the interest and penalties up until the time you filed your Chapter 13 but you will not be assessed any additional fees after you file.  The accrued interest and penalties will be included in your bankruptcy. 
3. Myth: Filing bankruptcy will wipe out any liens from the IRS.  Fact: If the tax lien is not secured, it will become a priority debt and it must be paid in a Chapter 13.  It is not dischargeable in a Chapter 7.  If the IRS has filed a secured claim, it cannot be discharged.

Most other types of taxes do not qualify for discharge if you file bankruptcy.  These include estate taxes, gift taxes, sales taxes or fuel taxes. 

Tax law is very complicated and sometimes there are exceptions to what can be discharged that are unique to the client.  Even if you cannot include you tax debt in your bankruptcy plan, getting relief from your other debts will help you pay your taxes.  You will not know what you can do about your tax debt until you consult with a bankruptcy attorney.  We have helped hundreds of clients determine how they can handle their tax debt.  

Life After Wage Garnishment: Can You Live on Less?

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Some people are living paycheck to paycheck with no savings to rely on if there is a crisis.  Those people may also be behind on their bills and are facing judgments from their creditors.  In some cases, that person may be unaware that a creditor has gained a judgment to garnish their wages until they see less money in their paycheck.  If this happens to you, can you live with up to 25 percent less of your paycheck? What bills will not get paid if this happens to you? How will your family survive?

You can protect yourself and your wages from garnishments.  Filing bankruptcy can keep creditors from getting your money and help you get back on your feet.  You may also be able to keep many of your assets.  You have two bankruptcy options:

• Chapter 7:  This will wipe out your debts.  If you are worried about keeping your house or car, you can file to keep them by asking for an exemption.  This is called the “fresh start” bankruptcy because you are no longer responsible for paying the debts included in the bankruptcy. 
• Chapter 13: This is like a debt reorganization that protects you from your creditors.  Basically, you will be able to pay off your debts, often at a reduced interest rate and keep your property.  If you are a homeowner, there is a program that can eliminate your second mortgage or home equity loan and just pay off your first mortgage.  In a Chapter 13, you will be making a monthly payment to a bankruptcy trustee for three to five years. 

What happens if you wait too late to file for bankruptcy protection? Garnishments can proceed and you could be forced to live on less.  That could cause you to get behind in your other bills like your mortgage or car payment.  A bankruptcy protection plan keeps your assets and money safe from creditors. 

Deciding to file bankruptcy is a decision that should be well-thought out and discussed with your family.  It is not an easy process and it’s not an option for everyone.  Our firm has helped hundreds of South Florida families avoid wage garnishment.  But you must not wait until the wolves are at the door before you protect your assets.  

You Can Get Relief From Your Second Mortgage

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Homes need maintenance and often homeowners don’t have the money to do expensive upgrades like adding a new cooling system or fixing a leaky roof.  Home maintenance can be costly and taxing.  You have to hire a contractor, check on permits and then live through the hassle of living in a home that is under repair.  Many will be forced to take out a second mortgage or get a home equity line of credit to meet their financial needs. 

Sadly, some homeowners not only face a home that needs repairs (and the headaches that go with it) but they also owe more on the home than it is worth.  Loan modifications may be out of the homeowner’s reach due to their credit problems.  Short sales can take months and leave the homeowner searching for a new place to live.  Many homeowners don’t want to leave and invest in the repairs in anticipation of living in their homes for the rest of their lives.  But circumstances such as a lost job, health crisis, divorce or other crisis may have impacted their ability to pay their bills. 

A faster option than a short sale or lengthy bank negotiation for a loan modification is available to homeowners that may seem like a miracle.  A homeowner can get out of the second mortgage or home equity line of credit and still keep their home.  It’s called “stripping the lien” and it’s one of the benefits of a Chapter 13 Bankruptcy that may be possible for your situation. 

Here’s how it works: Once you file a Chapter 13 Bankruptcy, the trustee overseeing the plan can eliminate the second mortgage or home equity line of credit if your home is worth less than your first mortgage.  But that’s not the only benefit.  If you are behind on your first mortgage, the bankruptcy trustee can give you up to 60 months to catch up on your payments—without paying any interest!  Here’s another benefit—this can also apply to third mortgages.  However, it does not apply to first mortgages.

In addition, a Chapter 13 Bankruptcy can eliminate other debts you may owe such as credit cards.  This will give you additional money to help catch up your mortgage payments.

You don’t have to lose your home because of a crisis or credit problems.  Our firm has helped hundreds of clients work through their financial challenges and keep their home with options that are right for them.

Florida Leads The Nation in Vacant Foreclosures—How to Avoid Losing Your Home

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If you are going through a foreclosure or if you are on its brink, you are not alone.  According to RealtyTrac, a real estate research firm, Florida has the most vacant foreclosures in the country—about 55,503 of the total.  A vacant foreclosure is when a family leaves a home empty because they can’t pay the mortgage.  Even though the economy seems to be improving, some families are still struggling to hold on to their homes.  Many don’t want to file bankruptcy for fear they will lose their home.  They wait too long and they end up facing foreclosure anyway.

Your home doesn’t have to become a vacant foreclosure or sold on the courthouse steps.  And you don’t have to be afraid of bankruptcy.  We at the Bankruptcy Law Clinic have had a lot of success working with clients with a new loan modification program.

Here’s how we could help you with a loan modification inside of a Chapter 13 Bankruptcy:

1. No more endless rounds of duplicate or “lost” paperwork.  The loan modification is included inside of a Chapter 13 Bankruptcy which has its own very extensive paperwork requirements.  You can be sure, with the power of the U.S.  Federal Bankruptcy Court involved; banks will keep better track of the paperwork provided or risk receiving sanctions (fines) from the bankruptcy court.

2. Balance of power has shifted.  In a normal loan modification, you send your paperwork away and the bank eventually gets back to you with a proposed modified interest rate, term, monthly payment, etc. and you can basically take it or leave it.  When you do it in a Chapter 13 Bankruptcy, WE CREATE the proposed loan modification with the terms we’ve created and the banks must react to what we have created. 

3. Prompt response.  We’ve all heard the horror stories of people being in loan modification programs for years, with the bank rejecting their loan modification for numerous reasons, sometimes even after they have successfully made their trial payments.  With the U.S.  Bankruptcy court taking an active interest, you can be sure that your bankruptcy and loan modification will move swiftly.  The new lower mortgage is reflected in the first payment in a Chapter 13 Bankruptcy, which is typically sent only 30 days after your bankruptcy is filed.  One month vs.  two years?  I know which one our clients prefer! 

4. No additional upfront fees.  Depending on the law firm and the complexity of your case, some law firms charge from $1,500 to $3,600 for a loan modification.  When you do your loan modification inside of a Chapter 13 Bankruptcy, no additional upfront legal fees are required beyond what you already are paying for your bankruptcy.  

5. All the normal benefits of a bankruptcy.  When you do a bankruptcy, you eliminate all your unsecured debts, which means in addition to a lower first mortgage, we may be able to strip and eliminate your second mortgage and your Home Equity Line of Credit.  We will also eliminate all the credit cards, car repos, medical bills, payday loans and other bills that prevent you from getting the fresh start you deserve. 

This is not an easy process.  But it is one that we do for our clients, allowing them to stay in their homes, eliminating their debts and giving them the fresh starts they deserve.

What Homeowners Should Know About Foreclosure Defense

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Many homeowners across the nation are finding themselves in a difficult predicament and facing foreclosure on the home that they have worked so hard to attain for their family and loved ones.  Receiving a notice of intent to foreclose can be a devastating event; however, not all hope is lost.  Foreclosure defense is a way of actively fighting back against the lender to either stall the process of foreclosure or stop it altogether. 

Since banks have significantly changed the way in which they conduct business, working with your lender during times of financial distress is not as easy as it used to be.  Through mortgage securities, lenders package and sell pools of mortgages to investors and only act as “servicers” who collect payments and issue default notices.  The system is set up in such a way to where these servicers (that you think of as your lender) are making money by foreclosing on your home and losing money in working with you to modify the terms of your mortgage.  Put simply, foreclosure defense has become a necessity if you want to keep your home. 

 

Mortgage defense consists of a process in which an attorney who understands the laws and regulations around the mortgage and lending industry requires your lender to prove they have the right to foreclose on your home.  This works as a stalling tactic, especially since many lenders have already sold the mortgage to an investor as part of a mortgage pool, and might have difficultly proving on paper that they own the mortgage. 

This process often reveals errors on the part of the lender, such as an inability to produce the original note or proof that they have participated in “robo-signing” of documents.  Such errors allow the homeowner additional time to get caught up financially, which often results in saving their home.  

My wife recently lost her job and we will be unable to pay our Chapter 13 bankruptcy payments. Is there any way we can get the bankruptcy court to lower our required payments?