San Diego Bankruptcy Attorney Blog

A San Diego Bankruptcy Attorneygives 5 Tips to Avoid Property Foreclosure

TIP 1: STAY CURRENT. It goes without saying that the best and most sure way to avoid property foreclosure is to stay current on your mortgage(s). You might be able to keep yourself “current” (for credit reporting purposes) if you reach out to your mortgage holders and advise them that you must make a reduced payment for a month or two. If you pay them at least something, they may be less inclined to report you as behind (and thus move toward foreclosure).

TIP 2: PAY IN DESCENDING ORDER OF THE LIENS. If you must begin to be late or miss payments, pay the secured (and partly secured) mortgage holders first. That is, with property values declining, ask yourself how much your home is really worth. If its value is $300,000 and you owe $325,000 on the first mortgage and $75,000 on the second, the second mortgage is wholly unsecured. If you had a third mortgage or HELOC on the house, it would be even more junior than the second mortgage. When it comes time to avoid property foreclosure through strategic choices, understand that the unsecured mortgage holders, if they pursue bankruptcy, will have to pay off all the mortgages or liens superior to their own. Thus, in the example, if you home were foreclosed by the 2nd mortgage and $300,000 was fetched at auction, the second mortgage holder would have to pay the first $325,000. Why would they do this? They probably wouldn’t!

TIP 3: FILE A BANRUPTCY. A Chapter 13 bankruptcy allows a debtor (assuming you have income to fund it) to take all the arrears owed on any liens on the home for which some amount is secured and pay them off over 60 months, interest free, even over the bank’s objection. Chapter 13 is therefore a very strong tool in your arsenal of options to avoid property foreclosure.

TIP 4: STRIP A SECOND LIEN. If you file a Chapter 13 and any of your junior mortgages/liens are wholly unsecured (as the 2nd and the HELOC would be in the example above), these junior liens need not be paid in full (and possibly not at all depending on your income minus expenses) at all and will even wholly extinguish (or discharge) after 60 months have passed. This can save you tens or maybe hundreds of thousands of dollars. When your bankruptcy concludes, you should then be in a position to avoid property foreclosure because you will no longer be strapped with the payment obligations on the now-extinguished junior liens.

TIP 5: GET A LOAN MODIFICATION. Most lenders will want you to miss some payments before they consider granting you this relief. Essentially it is a wholly new contract; it is like buying the house again, except you are the buyer and you are the seller. Everything is new. You will avoid property foreclosure, then, by starting the clock all over. Consult your lender’s website. Due to the recent housing market crisis, most lenders are posting loan modification options on their homepages; you will be required to furnish them information about your income and expenses. Your goal will be to show that your house is upside down and you have about $200 extra every month after paying your bills. You might think you have to show that you are in the negative every month, but this is not attractive to the lenders: shoot for that $200 in the black every month and you will have a greater chance of success.

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!

A San Diego Bankruptcy attorney discusses: What do I do if I receive a notice of eviction?

In California, a notice of eviction is generally called a “Notice to Quit” or a “Notice to Pay Rent or Quit.” The term “quit” can be read loosely as “leave the rental” (i.e., quit the lease contract). If you receive a notice of eviction without language saying that you can cure the problem by paying rent, you may be compelled to move out. If your notice of eviction declares a right to pay rent or quit, then surely paying rent will get you back in good standing. There are many laws associated with tenant/landlord issues and you would be wise to consult an attorney or, at the very least, literature of legal resources, to understand your complete rights and obligations. Nonetheless, a notice of eviction does not necessarily mean you must move out immediately. You should have the right to challenge the notice of eviction. Perhaps, for instance, heat or electricity was not provided or you had to pay for your own repairs on the property. In such an instance, you might be entitled to deduct certain expenses from the rent owed. This would limit the amount of rent paid. The landlord may not be legally able to evict you for such a withholding. Finally, if you get a notice of eviction, you can wait for the unlawful detainer (the legal term for a court case where the relief sought is eviction) and answer and defend it in court. You might also consider, when faced with any type of notice of eviction, including a foreclosure or trustee’s sale of your home, a bankruptcy. A bankruptcy creates an automatic stay, thereby buying time to get your affairs and/or legal defenses in order. A notice of eviction can be a scary thing, but you do have rights. Be sure to investigate them. Speaking to a lawyer is your best bet.

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!

A San Diego bankruptcy attorney ansswers: What do I do if I receive a notice of foreclosure?

First, you must understand that every situation is different. If you receive a notice of foreclosure, you should probably consult someone (an attorney, most wisely) so you can relay the specifics of your situation. Indeed, your goals with respect to your home are crucial. A bankruptcy can help you save your home – whether you’re current but your other bills are dragging you down, whether you’ve received a notice of foreclosure, or whether a trustee’s sale date for your home has been scheduled…even if it is scheduled for tomorrow. A notice of foreclosure might also be meaningless. If your second mortgage, for instance, is wholly unsecured, they might still send out a notice of foreclosure, but in all likelihood, they will not move toward foreclosing on the home. Why would they? If the second mortgage is unsecured, they’d have nothing to gain in foreclosing. In sending out the notice of foreclosure, however, they might be trying to motivate you to get back on track paying, or at least paying them something. In any event, your particular situation is riddled with specifics only you can address.

Whatever you do though, if you receive a notice of foreclosure, you should figure out your next move. You might be strategically defaulting , in which case the notice of foreclosure was anticipated. But since most people want to keep their homes, if you receive a notice of foreclosure, you should be asking yourself, “Okay, what now? I think I need to talk to someone.”

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!

A San Diego bankruptcy attorney addresses foreclosure in San Diego questions

Text: Q: How do I stop foreclosure in San Diego?
A: There are only two real ways to stop foreclosure in San Diego: pay the arrears or file for bankruptcy (Chapter 13, generally)

Q: What if I cannot pay the arrears all at once?
A: Then your only real option is bankruptcy. Indeed, you might be in a situation where you can start making double payments moving forward – thinking that will stop the foreclosure – but the truth is, the bank holds the cards. If the bank wants to stop the foreclosure to allow you to pay double payments, then, great…and good luck. But if not, your only option to stop the foreclosure with money is to pay the arrears all at once.

Q: Why can bankruptcy help stop the foreclosure, then?
A: Chapter 13 has lots of great benefits for the debtors (including lien-stripping and cramdowns) but the greatest of them all might be the ability to stop foreclosure. The way that Chapter 13 does is that the payment plan through the bankruptcy filing actually includes all your past due arrears, spread out over sixty months.

Q: So, how does that work?
A: First, the “automatic stay” is implemented which ceases collection efforts and will stop foreclosure, by law. Second, assume you pay $2500 per month for your mortgage and that you are eight months behind. Well, to pay all at once to stop foreclosure would cost you $20,000 cash, plus fees probably. But if you file for Chapter 13 and spread those payments out of the next five years, your house payment is only $2833.33, going up only $283.33 for the next five years. This can be a real lifesaver!

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!

A San Diego bankruptcy attorney answers the question: Does Bankruptcy Help Home Modification?

Home modification (also known as “loan modification”) has an interesting relationship with bankruptcy. For the most part, before a home modification is even considered by the lending institution, the homeowner has to be three months behind on the payments. If you are planning to get behind on your payments for the purpose of effectuating a home modification, it is strongly recommended that you put aside the cash you would otherwise be paying the mortgage with so that, in the event the home modification does not go through, you will be able to catch up on the arrears. Generally, however, the home modification effort is undertaken by the homeowner out of necessity, not out of strategy. In any event, a failed home modification will put a homeowner in the position of having to make tough choices. If the arrears are able to be paid at all once, then doing so is the best choice – provided the homeowner wants to remain in the home. Otherwise, the choice becomes: do I walk away from the home altogether and accept the consequences (this should only be employed if the home is secured exclusively by purchase money, see Civil Code section 580(b); California is a non-recourse state), or, do I walk away from the home and file for Chapter 7 (probably the most commonly chosen option), or do I work to keep my home and file for Chapter 13 (where I can spread the arrearages over a sixty month repayment plan)?

Another aspect of a home modification to consider is that if you file for bankruptcy immediately after securing a home modification, you might still be in your grace period and the bankruptcy can disrupt the home modification before it becomes “locked in.” Be careful with that. Additionally, if you are told you are close to qualifying for a home modification, do be careful opting for bankruptcy at that time because – as bankruptcy can provide a fresh start and often leave you with significant extra money in your wallet every month that you were, before the bankruptcy, paying to creditors – the extra money might change your financial situation so beneficially that the bank will not accept your home modification request. Finally, always keep in mind that because bankruptcy is a great way to start anew, it is much preferable to lose a home and then file for bankruptcy than to file for bankruptcy and then lose a home. In this latter situation, you cannot discharge the associated debt (as there must be at least eight years between bankruptcy discharges via Chapter 7) and your credit will be viewed more favorably if the more recent item on your credit report is filing for bankruptcy and getting a good fresh start, as opposed to filing for bankruptcy and then subsequently losing a home, despite the fresh start.

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!

A San Diego bankruptcy attorney talks short sale

Although the details are still “being fine-tuned,” it looks like the government may be dipping its feet into the short-sale process pool, in a continuing effort to mitigate the troubles in the real estate sector. Since it is short on specifics currently, just keep it at the back of your mind to learn how it all unfolds. Here’s one link:. What it seems to be is a government program similar to the HAMP (Home Affordable Modification Program) where incentives are given to lenders, but here, they include incentives to the seller. Issues such as fraud prevention and the treatment of junior lien-holders remain unresolved. Look for some type of government announcement on the program as early as April 2010. If you are foreclosing or about to foreclose, this could be welcome news. Or if you are contemplating buying, this could be another incentive to dive in.

If you have questions regarding Bankruptcy in San Diego County, including Carlsbad, San Diego and surround cities in San Diego County please contact us at (760) 579-7322 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Diego Bankruptcy Attorneys. After you have spoken with one of our San Diego bankruptcy attorneys, we can schedule you for a free face to face appointment in our Carlsbad bankruptcy office. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Deigo consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Southern California!