Speak With a Bankruptcy Attorney if You Plan to Buy a House in the Future

As a bankruptcy attorney, we hear a lot of questions about mortgages. Understandably, people want to know if they will be able to buy a house, refinance, or keep their current home if they file for bankruptcy. While bankruptcy does provide much-needed debt relief, it isn’t for everyone, so it is important to consider what your total financial goals are before pulling the trigger.

Here is what you need to know –

Your credit will be impacted.  When you file for bankruptcy, it will negatively impact your credit score.  However, you must consider what the alternative is.  For example, if you are maxed out on all of your credit cards, have a lot of loans and are making payments late – your credit score is probably already taken a significant dive.  It is common for people that had scores in the 700s to drop into the 500s simply by being overextended and making late payments. If you are in this situation or will be shortly, you’re going to have a lower credit score regardless of whether or not you file for bankruptcy.

You’ll have to rebuild.  As a bankruptcy attorney, we regularly provide clients with suggestions for how to rebuild their credit.  This is an important part of the process.  Once you have filed, you will need to get new credit accounts that you can use and pay on time in order to see improvement in your credit scores.  Most people have to start with a prepaid credit card where you put money on it, use it, and repay it.  While this is borrowing money from yourself, it will start to give you positive credit history again.  Most lenders require three trade lines (credit accounts) showing a good history in order to approve you for a mortgage loan.  Keep this in mind if you want to buy a house in the future so that you can set yourself up for success.

Time heals all wounds (and credit history).  If you wait long enough, the negative effects of filing for bankruptcy will dissipate as long as you have new and positive credit history.  You can ask for the bankruptcy record to be removed from your credit history after seven years though many FHA and VA lenders will give you a mortgage loan two to four years after filing a Chapter 7. Traditional lenders may require a waiting period of four years or more.

Current mortgages.  If you have a home loan now, you can typically stay in your house as long as you continue to make your mortgage payments.  Otherwise, you can discharge this debt but will have to move out.  If you want to stay in your home and refinance your loan, we can help to negotiate with the lender as part of the bankruptcy process, and you may be able to have your payments reduced, at least temporarily.  This may make it possible to make staying in your home affordable. 

To learn more about your mortgage options, call and speak with a bankruptcy attorney.

Seniors: Speak With a Bankruptcy Attorney Before Giving Up!

Senior citizens often need a bankruptcy attorney in order to protect their freedom and independence.  It is common for seniors to run into financial difficulty.  Careful planning is often not enough to prevent financial troubles because life has a way of throwing curve balls.  For example, monthly retirement payments may be lower than expected, stocks that you received dividends from may no longer be paying out, and medical bills may have caught you by surprise.  These are only a few examples of the many unknowns that when they happen, can leave seniors in a financial jam. If this sounds like you – you’re not alone. 

We work with a lot of seniors that are worried that they will have to give up their home in order to take care of debts and stop the collector calls.  After living in your home for decades and working hard to pay down the mortgage, you shouldn’t have to walk away while in your retirement years.  Don’t give up hope because we can help.

In a Chapter 13 bankruptcy, you can have a payment plan that will prevent your creditors from pursuing further collection, and you can stay in your family home.  In this scenario, we can help you to create a plan after reviewing how much money you have come in every month and what your true expenses are.  This is different than when you file for a loan.  Instead of only looking at your debt payments, we want to know what you spend on groceries, gas, medication, doctors, etc.  In order to capture a true picture of your financial situation, we need to know every detail. As a bankruptcy attorney, we will then work to create a plan for settlement and repayment.

When you file a Chapter 13, you are proposing to repay some of your debts but not all of your debt.  Once we determine how much money you have to apply towards debt payments every month (after living expenses and bills) we will propose to make a set payment amount on a monthly basis.  It will be disbursed amongst your various creditors for a period of a few years.  Any debt that remains will be discharged or eliminated.  For example, if right now you should make $950 in monthly debt payments and owe a total of $45,000, we could propose that you only pay $300 a month for three years which equals $10,800.  

The court will decide whether or not the plan for repayment is acceptable. Your creditors will also have the opportunity to protest, but most of the time they are happy to get something instead of not getting paid at all.  As a bankruptcy lawyer, it is our job to demonstrate why you should be able to file for a Chapter 13 and why the repayment plan is the best you can do.  Once it goes through, your creditors cannot come after you for any more money and you will be able to live comfortably in your home.   

What You Should Know Before Hiring a Bankruptcy Attorney

If you are in over your head with debt, a bankruptcy attorney can help.  When financial circumstances become overwhelming, there are ways you can address them in order to get back on your feet.  While bankruptcy used to have negative associations, the down economy has led many people to consider it as an option.  One thing you should evaluate is the level of stress your current debt load and financial situation is creating in your household.  Is that stress worth continuing the struggle and dealing with non-stop debt collection calls?  Many people find a huge sense of relief when the calls and letters finally stop. 

Before you hire a lawyer, there are certain things you need to know.

Bankruptcy Law is a Specialty

Just because someone is a lawyer does not mean that they know how to handle bankruptcy cases.  Yes, they can research it but that time will be added to your bill.  Why spend more money than you have to when you can work with an expert that can complete the paperwork and proceedings with efficiency?  Working with an expert attorney will also give you the advantage of learning about certain areas of the law that others may be unaware of.

There Are Several Types of Bankruptcy

There is no one size fits all bankruptcy solution.  There are several chapters within the bankruptcy code that you can file yours under.  A skilled bankruptcy attorney will be able to discuss your current financial situation with you and make a recommendation for what is likely the best way to file.  For example, there are liquidation bankruptcies where assets are sold in order to pay creditors and bankruptcies that are designed to pay creditors back over time with a set payment plan.  The type that you file should be based on your current financial capabilities and your goals.  

You Can Typically Keep Your Home

Unless you have a staggering amount of equity in your home, you can typically maintain ownership of it even when filing bankruptcy.  If this is your goal, let your attorney know right away so that they can create a legal strategy in order to accomplish it.  Even if you are facing foreclosure a bankruptcy may be able to stop the proceedings and allow you to continue living there.  

Share the Details

When speaking with your bankruptcy attorney, be sure to provide any and every detail about your financial situation and your goals.  This way they can create a legal strategy that will be successful.  If the hearing officer or judge feels that you are untruthful about your financial situation they may not approve the bankruptcy in the first place.  Transparency matters in this situation. 

Ask About Fees

Any time you hire a lawyer you should ask what they will charge and how they will bill you.  It is important to enter a relationship with a mutual understanding.  This will also help you to budget for anything that you need to spend. 

If you are considering filing bankruptcy, The Travis Law Firm can help.  Schedule your consultation by calling (951) 274-9501.

A Bankruptcy Attorney Can Help to Stop a Foreclosure

If you are facing foreclosure, a bankruptcy attorney can help stop the process.  It is important to consult with a lawyer right away if you feel that the bank is about to start a foreclosure action.  Once they have filed a motion to foreclose with the court it is more difficult to stop the process.  The Travis Law Firm helps families throughout California to stay in their home while navigating through bankruptcy proceedings. 

There are two main types of bankruptcy, a Chapter 7 and Chapter 13.  Once you file with the court, an automatic stay is put in place so that your creditors cannot continue their collection action until the court has sorted things out. This is a huge benefit for families that want to find a way to stay in their home but are overwhelmed by the constant collection calls and being behind on their bills. 

Consulting a bankruptcy attorney is the first step in the process.  We can make recommendations on which type of bankruptcy you should file based on your current financial situation, needs and goals.  Filing correctly is essential for stopping foreclosure and time is of the essence so do not delay in contacting us. 

Chapter 7

A chapter 7 is the most commonly known bankruptcy because it liquidates your assets in order to wipe out your debts.  In this scenario, the court appointed trustee will review your documents to determine how much money your creditors would receive if your assets were sold off to pay them.  It is understood that they will not get what is owed to them but hopefully they get something.  If you have a lot of equity in your home, the trustee may require it to be sold.  Typically those facing foreclosure do not have a lot of equity so selling it would not help the situation.  When this is the case, you can request for it to be exempt from the proceedings.  The trustee will make their determination in part based on your ability to keep paying the mortgage.  If your other debts were wiped out could you pay your mortgage on time?  If so, you have a good chance of being able to keep your home.  

In this scenario, the lender will often take the amount that you owe in back payments and interest then attach it to the end of the loan.  This allows you to make payments on time going forward.  Once your bankruptcy is finalized you still have to make these future payments on time.  If you don’t there is nothing stopping the lender from foreclosing again. 

Chapter 13

This type of bankruptcy allows you to create a settlement plan and make payments to your lenders.  They typically have to agree to a reduced payoff amount and your bankruptcy attorney will make a proposed payment plan to the trustee.  This plan needs to be realistic, and the trustee needs to feel confident in your ability to make the payments over a period of time.  This usually lasts for three to five years.  If you want to keep your home, the payment should be included in your ongoing monthly payments. 

To learn more contact The Travis Law Firm by calling (951) 274-9501.

A Bankruptcy Attorney Helps Clients File a Chapter 7

If you need to clear up debt, a bankruptcy attorney can help you to file a Chapter 7 bankruptcy where all or most of your debts are canceled. Working with an experienced lawyer will help to protect your rights as once you file, all of your financial affairs are in the hands of the court.  This includes your debts and your assets.

To start the process, you will need to fill out a variety of forms with your lawyer.  These documents will list out your personal information along with how much money you are currently making, your living expenses, property, debts, and any property that you want to have exempted from the filing.  This may include your primary residence if you want to continue living there and paying the mortgage.  You will also need to document your financial history for the past two years including if you purchased, sold, or gave away any property.  This is the courts way of understanding your case and ensuring that you aren’t trying to hide any additional property or assets.

Once the paperwork is filed, and the fees are paid, an automatic stay will be placed on your debts so that creditors cannot foreclosure or try to collect outside of the legal proceedings.  This is an excellent way for homeowners to avoid or postpone a foreclosure. It should also stop the harassing phone calls.  Your bankruptcy attorney will make sure of it.

The court will appoint a Bankruptcy Trustee to oversee the proceedings.  The trustee’s job is to make sure that your creditors receive as much money as possible through the liquidation of your assets.  They will review your paperwork to determine what, if any, non-exempt property is available for liquidation and if any recent financial transactions can be undone in order to free up additional cash.  Very often, there are no real assets to liquidate.  If there are, the trustee will order them to be sold and designate how the proceeds are to be distributed among creditors.

The trustee will also hold a creditors meeting where your creditors have the opportunity to speak, make a case, and request additional funds.  This is the time where you will be asked questions by the trustee and typically the only time you have to go to court.  It is important to have your bankruptcy attorney at this meeting in order to help you through the questioning process and challenge the creditors if necessary.

If you have secured debts, such as an auto loan, you will typically have to give the creditor the collateral the loan was secured with.  For example, you may need to return the vehicle.  If the property or asset is exempt then, you may be allowed to continue making the loan payments and keep the vehicle or home. If you don’t continue making the payments, the creditor can still come after you in the future.  As a bankruptcy attorney, we can explain the proceedings in detail during your initial consultation.  Call us today to schedule yours.