San Diego Bankruptcy Law Firm. 877-GOBK619

This blog is updated by San Diego Bankruptcy Law Firm. The blog is designed to educate consumers about their rights under the Bankruptcy Code.

Bankruptcy can STOP FORECLOSURE, ELIMINATE DEBT AND PROTECT YOUR ASSETS! Call us for a free consultation at 877-GOBK619 or 619-260-1800. Visit us at

We are a debt relief agency and help people file for Bankruptcy under the Bankruptcy Code.

Tuesday, December 20, 2011

Preparing For Bankruptcy

by Adrian Lapas, Eastern North Carolina Bankruptcy Attorney
Link to article:

When you are considering a trip, usually, you make substantial preparations in anticipation of that trip. You make travel arrangements; you make sure you have a place to stay; you make reservations for any activities in which you wish to participate. You will often make significant plans and preparations for any “big” event. Bankruptcy is no different. It is a significant life event that demands some thought and preparation before you embark on it.

In talking with potential bankruptcy clients, it seems that a lot of them wait until the last minute before contacting a bankruptcy lawyer to find out how bankruptcy may help them. While visiting a bankruptcy lawyer most likely does not rank high on most people’s “bucket list,” if you are struggling financially, it most likely makes sense to determine if and how bankruptcy can help you sooner rather than later.

So, how can “preparing” for bankruptcy help? First, you will need to have the fees for the lawyer and for the court available. For now, for a chapter 7 filing, just the filing fee is $306.00. Additionally, before you file, you must complete a consumer credit counseling session and get the certification that must be filed with the court. If you “fail to plan” for your bankruptcy filing by finding out what you need ahead of time, when your car is on the verge of getting repo’d, you may not have the time and/or money to retain a bankruptcy lawyer.

Second, you can carefully go over your income and expenses and see where the trouble lies. Certainly a bankruptcy lawyer can help you identify the problem (with appropriate information) but you also need to know how you got into this financial mess. Some problems are easy to identify–temporary loss of income; extraordinary medical bills; overspending for a bit, etc. Bankruptcy can assist in overcoming those past problems but you need to be aware of the problem so that you can avoid it in the future. Bankruptcy is designed to be a “fresh start.” You can greatly assist in obtaining that “fresh start” by breaking or modifying some of the habits that perhaps got you here in the first place.

Third, make sure you know who you owe and how much. Find out if there is any collateral associated with the debts and gather up loan documents. Your lawyer will need this but, more importantly, you need to know your own financial picture. Credit reports are freely available and can be a big help. Also, if lawsuits or foreclosures have been filed against you, make sure you have that paperwork–all of it! It is important!

Finally, change your mindset. In dealing with individuals facing financial problems, it is often much more difficult instead of dealing with distressed businesses. That is because a business looks at assets and liabilities and can make a rational decision as to whether keeping an asset is worth the corresponding liability. Understandably, people are attached to their “things.” But, after all, they are just “things” and you have to consider carefully whether retaining a “thing” is worth the potential stress and headache. As an example, if you suffered a decrease in income and you have two relatively late model cars. No one wants to give up one or two cars but sometimes it is better to surrender a vehicle or two in order to keep your house (if that is important to you). There will be some emotional attachment to some “things” but it is imperative that you do this. Determining what is important to you is important for your bankruptcy lawyer in setting achievable goals for your bankruptcy filing.

Finally, do some research. There is a lot of information about bankruptcy that is freely available. However, you should exercise extreme caution in considering the information. Not that the information is inaccurate (some info may be outdated or simply inapplicable) but it takes an experienced profession to know what is appropriate and what is not. But, by familiarizing yourself with some basic bankruptcy information, you will be in a better position to appreciate and assist your bankruptcy lawyer in setting realistic and achievable goals.

After all, the real goal of a bankruptcy filing is a “fresh start.”

Tuesday, December 13, 2011

Unpaid Bills Land Some Debtors Behind Bars

Unpaid Bills Land Some Debtors Behind Bars

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Although debtors' prisons are illegal across the country, it's becoming increasingly common for people to serve jail time as a result of their debt.

Collection agencies are resorting to some unusually harsh tactics to force people to pay their unpaid debt, some of whom aren't aware that lawsuits have been filed against them by creditors.

Take, for example, what happened to Robin Sanders in Illinois.

She was driving home when an officer pulled her over for having a loud muffler. But instead of sending her off with a warning, the officer arrested Sanders, and she was taken right to jail.

"That's when I found out [that] I had a warrant for failure to appear in Macoupin County. And I didn't know what it was about."

Sanders owed $730 on a medical bill. She says she didn't even know a collection agency had filed a lawsuit against her.

"They say they send out these court notices, and nobody gets them," Sanders says.

She spent four days in jail waiting for her father to raise $500 for her bail. That money was then turned over to the collection agency.

Similar stories have been reported in Indiana, Tennessee and Washington.

Here's how it happens: A company will often sell off its debt to a collection agency, generally called a creditor. That creditor files a lawsuit against the debtor requiring a court appearance. A notice to appear in court is supposed to be given to the debtor. If they fail to show up, a warrant is issued for their arrest.

Beverly Yang, a legal aid attorney with Land of Lincoln Legal Assistance, says most debtors don't know their rights.

In fact, she says, some judges don't even know debtors' rights, which could result in the debtor being intimidated into a pay agreement.

"I've seen this even when I'm standing in the court room as the legal aid attorney," Yang says. "The judge will ask if they can pay, how about $150 a month. How about $75 a month? How come you can't even pay $50 a month? Did you apply for a job last week?"

Leveraging Payments

The Federal Trade Commission received more than 140,000 complaints related to debt collection in 2010. That's nearly 25,000 more than the previous year.

Yang says some creditors are eager to use harsh tactics. "Whatever the creditors or the creditors' attorneys can do to leverage some kind of payment, it will help their profits enormously because they have, literally, millions of these."

Kevin Kelly, president of the Illinois Creditors Bar Association, says members of his organization only issue warrants in extreme situations.

"There's an assumption in what you're saying that we'd rather throw them in jail than work with them," he says. "And I don't find that to be true at all."

Sometimes it's the debtor who's keeping information from the collectors, Kelly says. That prevents important documents from getting to the right place.

He says most collectors want to make reasonable arrangements, but it's difficult when the vast majority don't respond to the notices sent to them.

Illinois Attorney General Lisa Madigan thinks more can be done. It's illegal in Illinois for people to be sent to jail because they're in debt. But Madigan thinks some creditors are abusing the law.

"You wouldn't be in that predicament if you didn't have debt," Madigan says. "But for being in debt, you wouldn't be in prison. And that essentially equates to being thrown in jail, debtors' prison."

She says courts need to be certain they have correct information to serve notices. Madigan also says judges need to be properly educated in these proceedings to prevent a debtor from needlessly going to jail.

The Illinois attorney general also says the state is investigating agencies that it thinks are abusing the law.

As for Sanders, she has a remaining balance of about $160 on her medical bill. But at least she now knows she won't have to go to jail for it.

Thursday, December 8, 2011

Bankruptcy is the Best Way to Save Your Home

Bankruptcy is the Best Way to Save Your Home
by Brett Weiss, Maryland Bankruptcy Attorney
Link to article:

You want to save your home. Which is the best way to stop a foreclosure, get caught up on your monthly payments, and save your home? Is it loan modification? A workout? Or a bankruptcy?

A recent article, “The Home Ownership Experience of Households in Bankruptcy” by Professor Sarah W. Carroll, of the University of Pennsylvania Law School and Wenli Li, of the Federal Reserve Bank of Philadelphia, provided the first in-depth analysis of the home ownership experience of home owners in Chapter 13. Its conclusions mirror what most bankruptcy attorneys’ personal experience has been: Chapter 13 is one of the most effective ways to let you save your home.

The study followed homeowners who filed for Chapter 13 between 2001 and 2002 in New Castle County, Delaware, from the time of their filing to October 2007. (Since most Chapter 13 plans last five years, this was a fair trial period.) After analyzing the data, it found two important results:

First, the Chapter 13 filing was not always the solution: 27.9 percent of filers lost their houses in foreclosure despite filing for bankruptcy. This is typically a result of poor cashflow. If job loss, or illness continues and there is not enough money coming into the household, the house will be lost regardless of filing bankruptcy or not. Many of the homeowners in this group will end up converting their cases to one under Chapter 7, so that they can wipe out any personal liability for the mortgage(s), as well as most of their other debts.

However, when compared with homeowners who did not file, debtors who filed for bankruptcy were able to stay in their homes for, on average, 27.7 additional months, over two years. This figure includes those who ended up losing their homes.

So, if you’re behind on mortgage payments, consider a Chapter 13–it may let you stay in your home a lot longer than other options.

Tuesday, November 15, 2011

San Diego Bankruptcy Law Firm to Offer Free Bankruptcy Services to San Diego Veterans.


San Diego Bankruptcy Law Firm to Offer Free Bankruptcy Services to San Diego Veterans.
PRWeb – Wed, Nov 9, 2011...

San Diego Bankruptcy Law Firm is proud to announce that it has agreed to offer free bankruptcy services to San Diego veterans by partnering with Thomas Jefferson School of Law Veterans Legal Assistance Clinic.

San Diego, CA (PRWEB) November 09, 2011
San Diego Bankruptcy Law Firm, located in Mission Valley, is proud to announce that it has agreed to offer bankruptcy services to San Diego Veterans free of charge. San Diego Bankruptcy Law Firm has partnered with Thomas Jefferson School of Law Veterans Legal Assistance Clinic. The Veterans Clinic will pre-screen eligible veterans and refer those who qualify to San Diego Bankruptcy Law Firm.

San Diego Bankruptcy Law Firm was founded by Thomas Jefferson School of Law alumni Todd F. Williams and Scott M. Schlegel and is managed by Maureen A. Enmark. “We were looking for a way to give back to our community and veterans have been particularly affected by the downturn in the economy. This is our way of saying thank you for their service,” says bankruptcy attorney -Todd Williams.

The Veterans Clinic provides limited legal assistance, as well as full service legal representation, to the residents and alumni of Veterans Village of San Diego. Thomas Jefferson School of Law students represent the veterans under supervision of the law school faculty. Veterans Village is a highly successful, residential program that provides housing, substance abuse, mental health, and job training services to formerly homeless veterans.

Bankruptcy can help veterans by stopping foreclosure, eliminating debt and protecting assets. “Sometimes filing bankruptcy is all it takes to provide a little breathing room that will help veterans get back on track,” says bankrupcy lawyer -Scott Schlegel.

The Veterans Clinic will pre-screen potential candidates and refer those who qualify to San Diego Bankruptcy Law Firm. According to Steve Berenson, a professor at Thomas Jefferson School of Law, who runs the Veterans Clinic: “we hit our capacity fairly quickly each semester and have to turn away some cases that we might otherwise be able to handle.”

“This is not the first time San Diego Bankruptcy Law Firm has stepped up to help San Diegans in need,” says Maureen Enmark. When Kerry Steigerwalt’s Pacific Law Center closed its doors, San Diego Bankruptcy Law Firm offered to take over cases and charge the client only the remainder of what they owed to Pacific Law Center.

San Diego Bankruptcy Law Firm is a Better Business Bureau Accredited Business with an A+ rating. They are located in Mission Valley and can be reached at 877-GOBK619 or 619-260-1800. You can also visit their website at

Thursday, October 27, 2011

Why Bankruptcy is NOT a Dirty Word

By: Michael Goldstein
Link to article:

Unfortunately, in recent years many debt consultation companies, loan modification companies and real estate and mortgage brokers have attempted to mislead the public into thinking that bankruptcy is a dirty word and can end your credit life. These companies are trying to create the propaganda that “bankruptcy” is a word best whispered to yourself in the center of a Middle East war zone. The truth of the matter is that bankruptcy is actually the best course of action when you are struggling with debt and bills you can not handle without some form of assistance.

I am not going to sugar coat bankruptcy because if you are in debt no matter if it is credit card or mortgage issues; it is not a great place to be in. However, bankruptcy law is the Federal sponsored and regulated course of action to help consumers get out of their debt and start their lives again. Unlike bankruptcy, debt consultation companies, loan modification companies and real estate and mortgage brokers are not sponsored or regulated by the Federal Government.

Bankruptcy law is as old as our country. In fact, the concept of bankruptcy was so important to our Founding Fathers that they gave Congress the power to create bankruptcy courts and rules in Article III of the United States Constitution. The drafters did not wait until Article Ten or Twenty but added it as early as Article three in the U.S. Constitution.

If bankruptcy was such a terrible thing to do, the Federal Government would certainly have removed it from the laws and not sponsored it. Congress would certainly not have amended the rules in 1978, or again in 2005 to add more complexities to the Bankruptcy code or Title XI. So, the little dirty word is not
bankruptcy, rather all of the other marketing schemes to get you to spend more money are the dirty parts of the consumer debt business. As a consumer debt attorney, and a founder of a debt relief agency, I would suggest you go right to source to fix your debt with a bankruptcy counsel rather than waste both time and money with companies that are not sponsored by the Federal Government, or that must follow specific rules and regulations to ensure consumers and creditors are treated fairly and equitably.

If you are thinking about entering into a Debt Settlement program you need to be very careful. Based upon what I have seen as a consumer debt advocate over the past ten years, I am personally aware of only a few companies out of the many that advertise debt settlement on the internet that I would trust to try to resolve a debt for my friends and family.

The key to remember in all of this is that if you feel that your debts have spun out of control and you can not catch up with your credit card payments, or mortgage payments, or some other form of debt, your best bet is to set up an appointment and speak with a bankruptcy lawyer today and find out what options are available to you.

Occupy San Diego


Banks had their bailout. Isn't it time for yours? If you can't get a principal balance reduction or a loan modification, bankruptcy might give you the relief you have been searching for. If you are having trouble with house payments, credit card bills, medical bills, repossessions, or foreclosure, let us help you.

Attorneys Maureen Enmark, Scott Schlegel and Todd Williams will work hard to make sure you understand your options and rights under the law. We want to start helping you today. We have an A+ rating with the Better Business Bureau and take a look on our website for testimonials from satisfied and relieved clients.

Your first appointment is free and completely confidential even if you decide bankruptcy is not the right choice for you. We offer Saturday and evening appointments and free parking at our easy-access Mission Valley location.

Friday, October 21, 2011

Don't use your retirement account to pay off creditors

"Keep Your Nest Egg" by Douglas Jacobs

Link to article:

Don’t take money out of your retirement account to ease a temporary economic crunch.

Difficult times come and go; and sometimes they seem insurmountable. When that happens, it might appear wise to tap into the 401k or the IRA and borrow or take some of the funds. Don’t do it!

I see bankruptcy clients every day who have used their 401k or their IRA to cover bills. They come to see me after they have reduced or spent all of their retirement! It’s too bad they didn’t see a bankruptcy attorney or competent financial adviser before that money was gone.

Almost all retirement accounts are considered exempt property. That means that even after filing a bankruptcy, you’ll still have it. But your debts, or most of them, will be gone.

Your retirement account is probably the only hope you have for the future. None of us will work forever, and if you deplete the account today, you may well find yourself unable to retire; or not able to afford anything more than a meager existence at that time. And don’t expect the Social Security system to bail you out. At the top rate, the monthly pay-out is barely enough to afford reasonable housing and food, much less travel money to see the grandkids or go fishing.

You should also remember that any money you withdraw from a retirement account gets taxed now. And there’s a 10% penalty for early withdrawals from an IRA. Those taxes won’t go away in the bankruptcy. Not only will you lose an exempt asset you could have kept, but you will incur a new debt too.

So, don’t deplete your retirement. Leave it for when you really need it. See a competent bankruptcy attorney in your state before you make the decision.

Thursday, October 20, 2011

Number of Californians entering foreclosure jumps in third quarter

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A big August surge in foreclosure actions by Bank of America and Bank of New York sent the number of California homeowners entering foreclosure to levels not seen in a year.

The third-quarter jump in notices of default, the first formal step in the foreclosure process, came after such filings had dropped to a three-year low earlier this year. Defaults were up 25.9% from the prior quarter, according to according to San Diego-based DataQuick, a real estate information service.

Banks have fired up the foreclosure-processing machinery in recent months after a long lull as they tried to negotiate settlements with regulators over faulty foreclosure practices. That slowdown created a backlog after a slew of investigations were launched following last year’s so-called robo-signing scandal, where banks used improper practices and documents to foreclose on troubled homeowners.

“Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively,” DataQuick president John Walsh said in a statement.

California properties received an estimated 71,275 notices of default during the three months ended Sept. 30, with some properties receiving multiple notices due to more than one loan. The majority of those loans were from the peak bubble years of 2005, 2006 and 2007, when lending practices were at their loosest, DataQuick said.

Separate third-quarter data released earlier this month by the Irvine-based firm RealtyTrac showed the number of homes entering foreclosure surged in states where repossessions take place largely outside of the courtroom. These nonjudicial states include California, Nevada, Arizona, Oregon and Washington.

Experts said that these Western states would experience any foreclosure surge first, as it is easier to get the process rolling again in these places.

While more California homes entered the foreclosure process in the third quarter, the number of homes taken back by banks continued to decline, according to DataQuick. The number of filed trustees deeds -- which are the papers that record the repossession of a home -- declined 8.4% from the prior quarter and dropped 14.3% from the third quarter of 2010. A total of 38,895 trustees deeds were filed in the third quarter.

Experts said that banks are probably waiting for some kind of settlement to be hammered out before really picking up the pace on foreclosures again. The increase in new California proceedings comes as talks over a broad foreclosure settlement by state attorneys general with the nation's five-largest mortgage servicers have experienced setbacks -- dragging on far longer than expected.

California recently stepped out of those discussions, declaring it would pursue its own path.

Monday, October 3, 2011

You Just Got Sued–What Should You Do?

by Dana Wilkinson, Attorney at Law

Link to article:

So far this morning, I’ve gotten two calls from clients who received suit papers over the weekend. Credit card companies (or the debt buyers who bought the accounts) have filed civil suits in state court, seeking a judgment for the amount owed. One of the suits was accompanied by a letter from the law firm that filed the suit, insisting that the client contact them immediately. Getting sued is a scary thing. So, should you hit the panic button? What does it mean, and what can you do?

A civil suit is nothing more than a request that a court decide that you owe the plaintiff money. That’s it. You are being put on notice, and you have the right to respond and dispute that you owe the money, or that the amount is incorrect, or that you don’t owe that particular claimant. It is not an arrest warrant (there are no debtors’ prisons in this country–remember 9th grade civics class?).

If you don’t file a response to the suit (called, appropriately enough, an Answer) the court will usually find in favor of the plaintiff, granting them a civil judgment in the amount they requested. If you don’t respond, you don’t usually have to attend court. Once the court grants the plaintiff a civil judgment, however, you may effectively lose the right to challenge that the amount is correct, or that you actually owe the money. As far as I know, the effect of a civil judgment in all fifty states is to become a lien on real property that you own in that jurisdiction. But that’s pretty much it. If you don’t dispute that you owe the debt, a judgment is pretty much a piece of paper that says you owe what you already knew you owed.

What comes after a judgment is granted depends on where you live and what you own. If you want to know how a civil judgment will affect you and your property, you have to consult a lawyer in your state. There is no other way to be sure, so I’m not even going to generalize here. Go see someone who can tell you about your situation. Don’t rely on your internet research skills or your brother-in-law (unless your brother-in-law is a lawyer) because every state is different, and your situation is not exactly like anyone else.

In fact, my advice to my two clients this morning was different. One is what lawyers call “judgment-proof.” That means what it sounds like–a judgment doesn’t change anything, because there is nothing the judgment creditor can do, no property for the judgment creditor to take, that will change anything for my client. The second client, who owns real property, may need to respond differently.

Bankruptcy may also be a solution. A bankruptcy can stop a suit that has been filed, and prevent a judgment from being granted. Bankruptcy can also sometimes alleviate the affect of a judgment that has already been issued. Whether is is necessary or advisable, again, depends on your situation. Only an experienced bankruptcy lawyer can tell for sure.

Oh, remember that letter I mentioned, insisting that my client contact the creditor’s lawyer immediately? The language of the letter suggested that dire consequences could result if she did not contact them. Leaving aside whether the letter is itself actionable, if you get such a letter (or phone call), remember that they are trying to get you to pay them money. Their stock in trade is to create a sense of urgency, and stampede you into making a commitment that you wouldn’t otherwise make. Again, your best defense is to consult with someone who is on your side, who can tell what you really need to worry about, and what is, as my Daddy used to say, “all bark and no bite.”

And, as a final note, don’t delay. It may be tempting to just stick your head in the sand and wait to see what happens, but remember what part of your anatomy that strategy leaves exposed. (If you need a reminder, see photo above.) Check it out, and make sure you know what can happen, and what you can do about it. You may be pleasantly surprised by the advice you receive.

Facing Foreclosure? How Bankruptcy Can Help

Link to article:

Many Americans fall behind on their mortgage payments. Some lenders and mortgage companies may be willing to work out deals with the homeowners, such as a short sale or loan modification. Most lenders are not. In that case, the lender will most likely begin the foreclosure process, as set out in the mortgage contract. The foreclosure process involves the creditor repossessing and usually selling the house at a public auction. The proceeds from that auction are used to repay the mortgage and any legal costs.

The foreclosure process takes time. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. This gives the homeowner some time to consider alternatives to foreclosure, such as a loan forbearance, short sale, or deed in lieu of foreclosure. Should all of these alternatives fail, bankruptcy may help in several different ways.
How to Delay Foreclosure with an Automatic Stay:

Bankruptcy and foreclosure are both words that the average person dreads hearing. If you are facing foreclosure, however, bankruptcy can become a tool to help you keep your house.

Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an "automatic stay", that directs your creditors to immediately cease their collection attempts, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.

There are two exceptions to this buying time rule:

If the Lender Files a Motion to Lift the Stay: Unfortunately, the lender can file a motion to lift the stay, which asks permission from the bankruptcy court to continue with the foreclosure sale. If this is granted, you may not receive the extra three to four months of time. However, bankruptcy normally still postpones the sale by about two months or more, or even longer if the lender does not act fast in filing the motion to lift the stay.

If the Foreclosure Notice has Already Been Filed: Most states have laws that require lenders to give homeowners a certain amount of notice before selling their property. A bankruptcy's automatic stay will NOT stop the clock on this advance notice. For instance, California law requires a lender to give the homeowner at least three months notice before selling the home. If a California resident receives this three month notice, and then files for bankruptcy two months later, the three month period would have passed after being in bankruptcy for only one month. As a result, the lender could file a motion to lift the stay and ask the court's permission to schedule the foreclosure.
How to Use Chapter 13 Bankruptcy to Help You:

What Chapter 13 Means for Bankruptcy and Foreclosure: Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments, or "arrearage". You can propose the length of time for repayment, but keep in mind that you'll need sufficient income to pay BOTH your past due payments AND your current mortgage payments at the same time. So long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.

2nd and 3rd Mortgage Payments: Chapter 13 can also help eliminate payments on second or third mortgages. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Under Chapter 13, unsecured debt takes last priority and usually does not have to be paid back. This recategorizing process is possible if your first mortgage is secured by the entire value of your home since this means that there is no remaining equity in your home to secure the second and third mortgages.
How to Use Chapter 7 Bankruptcy to Help You:

Chapter 7 bankruptcy also cancels all the debt secured by the home, including mortgages and home equity loans. Furthermore, Chapter 7 goes a step further. Thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner's default. This tax law applies to the 2007, 2008, and 2009 tax years. However, the new tax law does NOT cancel the homeowner's tax liability for the lender's losses at foreclosure if:

* The loan is not a mortgage or was not used for home improvements (like a loan used to pay for a vacation or automobile). The mortgage or home equity loan is secured by property other than your principal residence (like a vacation home or rental property).

Cautionary Notes about Chapter 7:

You Could Still Lose Your Home : All of this debt and tax liability forgiveness is great, but note that Chapter 7 will not keep you from losing your home. Chapter 7 forgives your debt, and that is all it does. When you enter into a mortgage, you are agreeing to use your home as a type of collateral in case you default on your payments. Chapter 13 enables you to pause action on that lien, while you catch up on your payments; hence, you may save your home. Chapter 7 forgives your debt, but it will not lift the lien, and hence will not lift the foreclosure on your home. Therefore, you will probably still lose your home.

You Could Lose Other Valuables: Because the courts typically want to make the creditors whole again from their loss, the bankruptcy trustee may award money from the sale of certain other valuables of yours to the creditors. For example, if you have a valuable wedding ring that's value exceeds the dollar amount you are allowed to keep during bankruptcy, under the "jewelry exemption", you could lose your wedding ring.

You May Not Be Eligible: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that anyone whose average gross income for the six-month period before the bankruptcy filing exceeds the state median income for the same sized household is ineligible for Chapter 7 bankruptcy. Additionally, if your income is sufficient enough for you to pay your living expenses AND fund a reasonable Chapter 13 repayment plan, you are also ineligible for Chapter 7.
How Bankruptcy Will Affect Your Credit:

Although bankruptcy and foreclosure are both extremely damaging to your credit, sometimes filing bankruptcy can be a wise choice when trying to rebuild credit. A foreclosure not only damages your credit score for years, but you are still left with the mortgage debt. Most mortgage creditors will not consider you for future mortgages if you have a foreclosure on your credit history. In contrast, bankruptcy lets you start fresh. It still is damages to your credit, but because you are debt free, you immediately begin rebuilding good credit sooner.

Although bankruptcy has a few negative consequences, and may not save you from losing your home, it can be the best option in starting fresh with no debt, getting back on your feet, and saving money.

Worst Case Scenario: Losing the House, but Also the Debt

Sometimes bankruptcy can't prevent the loss of your home, so you may start to think that a bankruptcy filing is pointless. There are other benefits to filing for bankruptcy besides the interplay between bankruptcy and foreclosure, however.

Even if you can't keep your home, bankruptcy can help to shovel out from under mortgage debts and tax liability. This is an important first step towards getting back on your feet. Bankruptcy can also help you to put away money for the tough times ahead.

Wednesday, September 28, 2011

Bill to Improve U.S. Trustee’s Power To Protect Homeowners in Bankruptcy Revealed

by Elizabeth Brennon on Sep 23, 2011
Link to article:

Just last year, more than one million Americans lost homes to foreclosure, and the foreclosure crisis is only expected to worsen. Distressed homeowners facing bankruptcy and foreclosure deserve to be treated fairly. Banks should not attempt to profit from these hard times with improper mortgage fees and other types of fraud. Apparently, however, this is exactly what may have been happening.

The United States Trustee Program and Executive Office of the U.S. Bankruptcy Trustee (EOUST) are part of the Department of Justice. The U.S. trustee oversees the administration of federal bankruptcy cases and works to protect the integrity of the system. Recently, EOUST reviewed 10,000 proofs of claim filed with bankruptcy courts by mortgagees or mortgage servicers.

Errors found in the claims included mortgage servicers charging unsubstantiated fees, overstating the amount homeowners owe on properties, and providing inadequate documentation to the bankruptcy court.

The U.S. trustee discovered that the errors in claims submitted by mortgage providers were both more serious and more frequent than the mortgage servicing industry previously asserted. Specifically, mortgage servicers claimed such errors occurred in less than one percent of bankruptcy cases. EOUST, however, discovered errors were occurring at 10 times that rate.

Although the U.S. Trustee Program attempted to combat these patterns of defective and fraudulent filings, those efforts have been slowed by legal challenges to the trustee’s power and authority to take such actions. Mortgage servicers are challenging the trustee’s ability to act on bankruptcy filers’ behalf by asking for additional documents or requesting sanctions for incorrect or fraudulent filings. Essentially mortgage servicers don’t believe the U.S. Trustee has the power to hold them accountable for their actions.

The Fighting Fraud in Bankruptcy Act

These legal challenges by mortgage servicers prompted three Senators, Patrick Leahy (D-Vt), Richard Blumenthal (D-Conn.), and Sheldon Whitehouse (D-R.I.) to sponsor legislation to strengthen and clarify the U.S. Trustee’s power to protect homeowners in the bankruptcy system from fraud. In late May the Fighting Fraud in Bankruptcy Act of 2011 (S. 1054) was introduced on the Senate floor, and the bill has now been referred to committee.

Senator Leahy explained the importance of the bill this way: “As Congress looks at ways to mitigate the foreclosure crisis to reduce its impact on homeowners and the economy, I hope all Senators can agree that the foreclosure process for Americans should be a fair one and one in which there is accountability for fraud or other misconduct. And I hope we can all agree that the integrity of our judicial system is something worth protecting.”

The Fighting Fraud in Bankruptcy Act has four main goals. First and foremost, it clarifies that the U.S. Trustee has the power and duty to take action when abuse of the bankruptcy process by creditors is detected.

In conjunction with this power, the Act authorizes the trustee to conduct audits and investigations to confirm creditors are acting in accordance with the law. If fraud or misconduct is detected, the Act allows the bankruptcy court to correct errors or impose sanctions for misconduct. These actions can be taken in response to a motion by the trustee, or the bankruptcy court may make its own motion.

Finally, the Act mandates that mortgage servicers certify under penalty of perjury that foreclosure actions against deployed and active duty military homeowners comply with the Servicemembers Civil Relief Act (SCRA). The SCRA serves to protect those in the military by staying foreclosure actions if they are currently deployed, and requiring manageable and stable interest rates for military servicemembers. A report by the Government Accountability Office (GAO) found that among only two of the 14 large mortgage servicing organizations that supplied data to regulators, 50 foreclosure cases violated the protections of the SCRA.

If the Fighting Fraud in Bankruptcy Act passes into law it will hopefully clarify and strengthen the U.S. Trustee Program’s power to remedy creditor abuse. This may prevent mortgage servicers from unfairly profiting from homeowners facing bankruptcy and foreclosure by submitting incorrect or fraudulent claims.

If you are overwhelmed by debt, or struggling to keep your home, contact an experienced personal bankruptcy and foreclosure attorney. A knowledgeable lawyer will work to protect your rights and advocate on your behalf throughout any bankruptcy or foreclosure proceedings.

Number of college grads who end up filing for bankruptcy jumps 20% over past five years: report

Wednesday, September 14, 2011

Link to article:

These days, book smarts may not add up to financial success.

The number of bankruptcy filers who have college degrees has swelled more than 20% over the past five years as the impact of the economic downturn broadens, a new study showed.

Those with just a high school diploma still account for the biggest proportion of bankruptcy filers, making up more than a third of them, according to a report by the Institute for Financial Literacy.

But bankruptcy filers with college diplomas climbed to 13.6% in 2010 from 11.2% in 2006. Those with an associate's or graduate degree also climbed, while those with just a high school diploma slipped.

"There's this mythology out there that if you go to college and you get a degree, you're going to do financially better," said Leslie Linfield, the institute's executive director. "I think this data is starting to erode at this myth."

Last year, personal bankruptcies rose to 1.5 million, according to government data.

While bankruptcy filers are becoming better educated, they're also increasingly well-heeled. The percentage of filers making more than $60,000 jumped 66% in the past five years, the survey showed.

Linfield pegged the trend largely on big losses in white-collar jobs. More consumers surveyed blamed a reduction of income or job loss as a reason for their financial distress.

Still, the biggest reason for their money problems remained being overextended on credit - more than 70% of filers gave that as the main cause.

A particularly worrisome trend, Linfield said, is that bankruptcy filers are aging. Consumers aged 45 to 54 made up the highest proportion of them in 2010, a shift from the prior year, when those aged 35 to 44 held the top spot.

That could leave many older Americans in a tight financial spot as they approach retirement.

"At 54, do they really have enough time in front of them to start over?" Linfield said. "They are at risk."

The group surveyed more than 50,000 debtors in credit counseling or money management courses.

Monday, September 26, 2011

Marriage, College, Job Won’t Ward Off Bankruptcy

September 13, 2011, 3:15 PM ET
Associated Press
By Eric Morath
Link to Article:

A wedding ring, college degree and a well-paying job: the American dream or a recipe for bankruptcy?

Some of the factors often associated with financial success are increasingly becoming correlated with personal bankruptcy filings, a study released Tuesday by the Institute for Financial Literacy found.

The study found that from 2006 to 2010, bankruptcy filings increased among college graduates and those earning $60,000 a year or more. What’s more, last year, 64% of bankruptcy filers surveyed were married—a number that also increased from five years ago.

“The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum—including college educated, high income earners,” said Leslie E. Linfield, executive director the institute. “While less educated, low income individuals continue to represent the typical bankruptcy filer, this report underscores sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups.”

The survey collected responses from some 50,000 of individuals that filed for bankruptcy in the past five years. All respondents had sought credit counseling.

The study found that those holding a bachelor’s degree accounted for 13.58% of filings last year, up from 11.2% in 2006—a 21% increase. Those holding high school degrees still accounted for the largest percentage of filers, 36.27%, but their proportion of all filers fell by 8.6%.

Those most at risk for a bankruptcy filing were individuals who attended college but did not complete a degree, the study said. They accounted for 28.7% of filings last year.

“This we suspect is because they have all the burdens of school related debt and none of the rewards of an actual degree,” the study said.

While those earning less than $20,000 per year accounted for nearly 40% of all filings, higher-income earners saw their ranks grow in the past five years, the study found.

Those earning $60,000 or more accounted for 9.2% of all filings last years, up from 5.5% in 2006, a 67% increase.

The study found that the number of filers who were married jumped above 60% in the past five years, from 57.2% in 2006. That out paces the 50.3% of U.S. adults that are married, according to the Census.

Based in Maine, the Institute for Financial Literacy is a nonprofit organization that promotes effective financial education and counseling.

Renting to the Foreclosed

Renting to the Foreclosed

By Marilyn Kennedy Melia

Published September 26, 2011 |

Article link:

Investors are buying foreclosed single-family homes and renting them out -- and they often rent them to families who have lost homes to foreclosure.

"Families that have gotten used to single-family property living typically prefer renting a home as opposed to an apartment," says Evan Gentry, president and CEO of G8 Capital, a Ladera Ranch, Calif., private equity fund that has bought 3,000 homes, leasing many to renters.

Investors -- individuals and large-scale funds -- are buying with the aim of offering the houses for rent because selling at a quick profit isn't possible.

Families who have been through foreclosure are not alone in preferring a backyard to an apartment courtyard, says Claire Williams, 2011 president of the Michigan Association of Realtors. "Transferees are looking to rent the home they've left and rent another where they're relocating. They don't want to sell because of the decline in values," Williams says.
Finding Properties

Neighborhoods that have been hit hard by foreclosure or big price drops are especially likely to have single-family homes for rent, says Mike Bowman, owner of Century 21 Mike Bowman, in Dallas.

Moreover, there could be an increase in single-family homes for rent. In August, the Obama administration called for studying how homes owned by Fannie Mae and Freddie Mac could be rented.

One idea being studied, says Josh Fuhrman, senior vice president of the nonprofit Homeownership Preservation Foundation, is for banks to acquire a property and quickly sell to an investor who could then rent it out -- possibly to the family who never left the house, even after foreclosure proceedings began.

Many of the current homes for rent are managed and listed by real estate firms, Bowman says. Additionally, the same channels that list apartments, such as, are likely to advertise homes for rent, says Aaron Murray, vice president of G8Capital.
Meeting Landlords' Requirements

Investors buying vacant properties often know families recovering from foreclosure are a significant force in the market, and many have adjusted their requirements for eligible tenants. "A careful review of someone's credit history can often help landlords determine the difference between someone caught upside down on a home or who had a temporary job loss versus someone who has a long history of late or nonpayments," Murray says.

Bowman says he advises renters to prepare a letter explaining the circumstances that led to foreclosure and how they have recovered financially.

Some landlords "still insist on a credit score of 720," says Williams. But in some areas, she says, landlords realize the market demands more flexible standards.
Setting Rent Rates

With today's low mortgage interest rates, it's possible foreclosed families could pay more in rent than someone with good credit and cash for a down payment would pay for his or her monthly mortgage payment, says Christopher Thornberg, founding principal of Beacon Economics, a Los Angeles real estate and economic consulting firm.

Many families, not just those who have been through foreclosure, says Williams, find that renting is the only financially viable option for them -- either because they can't sell a former home, have poor credit or fear further home price declines.
Planning to Purchase?

When house prices stabilize, Gentry says, their firm and others might offer plans for renters to buy the houses they occupy.

One such method, called "lease option to buy," involves charging a renter a premium on top of the regular rent rate. The premium, which may be $100 or more monthly, guarantees the renter can buy the home at a certain price at a certain date -- for example, two years after the contract is signed.

Another method is the "contract purchase" whereby the renter pays the investor holding the house a mortgage payment for a few years, with the agreement that in a certain number of years, such as three or four, the renter will get a mortgage from a regular lender and be able to assume ownership from the investor. The mortgage payments paid during the contract period are used to reduce the purchase price when the renter gets regular financing.

"It depends on individual circumstances whether these plans will work for the family," says Barry Zigas, housing analyst for the Consumer Federation of America.

For one thing, "people often misjudge that they'll be in a house for a certain amount of time. In this volatile job market, you could find you need to move," Zigas says. He believes individuals are in a poor position to predict what house prices will be.

Moreover, he likes to see part of the premium on a lease option contract to be put in escrow, allowing the money to be used toward the down payment on the purchase.

Individuals should call a housing counselor, says Fuhrman, to analyze whether these purchase plans are viable for them.

Wednesday, September 21, 2011

Medical Bills, Debt Sends Many into Bankruptcy

By Cynthia Hsu on August 31, 2011 8:46 AM

Link to article:

What would you do if you were saddled with high medical bill debt? Would you declare bankruptcy? With the rising cost of healthcare, it seems that high medical bills and bankruptcy are starting to go hand-in-hand.

About 20% of Americans cite medical bills as the reason behind their bankruptcy when they seek financial consulting, according to a recent study by CredAbility.

This is an increase from just a few years ago, when about 12-13% of Americans cited medical debt as the reason behind their bankruptcy, according to The New York Times.

Why? With the rough economy, more Americans have gone through periods of unemployment, leaving gaps in their medical insurance coverage.

Plus, Americans who purchase insurance themselves might opt for cheaper plans with lower premiums in an effort to save money.

Lower premiums, however, often mean that there are high deductibles, making consumers more vulnerable to incurring high costs before their insurance kicks in, The New York Times reports.

It also seems medical debt is simply the kind of debt that Americans feel obligated to pay off. Some might even turn to opening up a new credit card, according to The New York Times.

This, unfortunately, may only lead to more debt.

Is bankruptcy right for consumers who are weighed down by medical bill debts?

It could be, but consumers should do their due diligence and carefully research their options before considering bankruptcy. There are alternatives, such as debt management plans that allow credit card holders to pay off their debt over a set period, reports The New York Times.

And, consumers looking to erase their medical bill debt through bankruptcy will need to figure out which bankruptcy is right for them. Is it Chapter 7, which erases many debts but may liquidate a consumer's assets? Or Chapter 13? Consulting an attorney to discuss your medical bills and bankruptcy might be a prudent option, as bankruptcy law is complicated and can be difficult to navigate without some expert guidance.

Tuesday, September 20, 2011

If you are facing foreclosure, San Diego Bankruptcy Law Firm can help protect your home.

It is common for people to fall behind on their mortgage payments. If you find yourself in this position, there are ways you can find relief.

Filing for bankruptcy can delay foreclosure.

When a person files for Chapter 13 or Chapter 7 bankruptcy, they usually receive immediate protection from creditors through a special court order known as an “automatic stay”. This means creditors must immediately stop their collection attempts.

If a foreclosure sale has been scheduled for your home, it will be postponed until the bankruptcy is finalized. Sometimes there are exceptions to this rule, so it is important to contact San Diego Bankruptcy Law Firm so we may discuss all of your options. Your initial consultation is free.

Filing for Chapter 13 bankruptcy can help you avoid foreclosure and keep you in your home. Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments.

A short sale can stop foreclosure.

It is important to remember a short sale can stop foreclosure, but it also has serious tax and credit consequences. In addition, some lenders and mortgage companies will refuse to do a short sale. Filing for bankruptcy can help you keep your house.

A short sale is when lender agrees to take less than the total amount owed on the loan in a voluntary sale to a third party. But a short sale is anything but short—it is usually a very lengthy and complex process.

Contact San Diego Bankruptcy Law Firm to help you through this process or negotiate a short sale settlement.

San Diego default filings surge in August

San Diego default filings surge in August
The month-to-month increase was largely due to two major banks

By Lily Leung, Reporter - Real estate

Link to article:

Monday, September 19, 2011 at 12:56 p.m.

SAN DIEGO COUNTY — The number of default notices, the first step in the foreclosure process, ballooned in August, largely due to activity from Bank of New York Mellon and Bank of America, figures from La Jolla-based DataQuick show.

Bank of New York Mellon filings in San Diego County increased from 76 in July to 403 in August, or 430 percent. Meanwhile, Bank of America pushed through more than two times as many defaults during that same time period.

The two lenders, known as beneficiaries in public records, accounted for the bulk of the county’s most recent month-to-month increase. Notices rose from 1,274 in July to 2,094 in August, or 64.4 percent. That’s the largest month-to-month percentage increase since December 2008.

Similar jumps were evident throughout the state, including Los Angeles and Orange counties.

"It appears they're working through their backlogs of delinquent loans," said DataQuick analyst Andrew LePage. "But why and why all of a sudden. It's not clear."

In a statement, Bank of America spokeswoman Jumana Bauwens said the company has been seeing "continued increases" in foreclosure referrals in several parts of the U.S. due to the backlog of foreclosures that were on hold in late 2010 and early 2011.

What does August's sudden upsurge in default notices mean for county home values?

That also is unclear, said LePage of DataQuick.

"We don't know the magnitude and duration" of filings in the months ahead, he said.

The number of trustee deeds, which signal a foreclosure, also increased last month. There were 835 foreclosures in August, up 4.6 percent from July.

Friday, June 24, 2011

Kerry Steigerwalt's Broke Law Firm Trying to Make Deals -SAN DIEGO READER

Kerry Steigerwalt's Broke Law Firm Trying to Make Deals
By Don Bauder | Published Wednesday, June 22, 2011 SAN DIEGO READER

link to Article:

1. David Weil: Former Steigerwalt crony has started a new bankruptcy firm. 2. Kerry Steigerwalt: Thousands of his clients paid but received no service. 3. Gary Sehnert: Local attorney helped stiffed Steigerwalt client.
On March 24, San Diegan Laura Perry received a letter from Kerry Steigerwalt’s Pacific Law Center, once San Diego’s best known, most notorious, and most aggressively advertised law firm. Perry, 73, had paid $2000 to the firm to handle a Chapter 7 bankruptcy for her. She had received no service — one of thousands who allegedly paid money up front but got little or no legal help.

The Steigerwalt law firm, which went out of business last year, offered her a refund amount of $252, to be paid in installments. “The agreed amount will be paid, but [the firm] is financially unable to pay it ‘today,’” lamented the letter, which included a check for $42 signed by Steigerwalt. Perry’s attorney Gary Sehnert, who successfully handled her bankruptcy after Steigerwalt’s lawyers failed to act, advised her not to cash the check. “Once you do that, then they can argue that you agreed to the settlement,” says Sehnert, who did not charge her for any of his work.

On April 18, Perry got a second letter, fretting that the law firm’s “financial condition has worsened.” She would not get the promised April check. She also got a solicitation phone call from one Joe Rivera, representing the law firm, who wanted her to take a lowball settlement of $105. “I said that is a rip-off,” says Perry. “Every time I think of [this] it makes my blood pressure rise.” Rivera would not reply to my questions.

Pacific Law Center was founded by Larry Majors, a nonlawyer convicted felon who vamoosed from Texas after a judge called a law firm he operated “a borderline criminal enterprise,” according to a 2009 San Diego lawsuit, since dismissed. After getting into trouble running several law firms, Majors set up Pacific Law Center in 1993 with his son Austin Majors, also a nonlawyer, as executive director, according to the lawsuit. Steigerwalt, who had been with the public defender’s office for 6 years and in private practice for 18 years, took over the firm in 2008 and attached his name to the front. The firm specialized in drunk driving, personal injury, defective product, loan modification, and bankruptcy cases. Taking over the Pacific Law Center “was the worst decision of my life,” says Steigerwalt, who once again has his own firm. “It cost me millions.”

That April 18 letter to Laura Perry stated, “Vendors and creditors of [the defunct legal institution] claim the firm owes them more than $3 million.”

The sum could be larger than that. Steigerwalt hired the Chicago law office of J. Kevin Benjamin, who set up a Mission Valley office. Steigerwalt pays Benjamin $250 to take over each client who has not been provided service. Benjamin explains to the people that he is not replacing the shuttered law firm. He will take the case himself for a very low fee of, say, $395 for a Chapter 7.

Benjamin says he saw the closed law firm’s records: there were more than 6000 people who had paid some money and not received their service — a number that Steigerwalt, although conceding the firm is insolvent, says is too high. “Some had paid in full, some had not,” Benjamin says. Depending on the average amount shelled out, the money owed to nonserviced clients could exceed $3 million, he says. And that doesn’t include vendors and other creditors.

San Diego attorney Scott Harris feels sorry for “all the people that got screwed, that paid $1500 to $3000 and never got service. Lawyers at [the law firm] had retainer agreements that permitted them to get out of the liability responsibility on the cases they were handling.”

In his frequent trips to San Diego, Benjamin and an assistant handle “70 to 100 people a week who had paid and not gotten services,” he says, asserting that he is losing money on the arrangement. Initially, “people were calling every five minutes. I had to get a separate receptionist and a different line. Some were saying I was a crook. I said, ‘I don’t have your money.’” Clients thought that the up-front fees paid to Kerry Steigerwalt’s Pacific Law Center were paid to Benjamin, and that wasn’t so. He must stress to each cuckolded client that he is not taking over the Steigerwalt firm or the clients’ files. He has to begin every case anew. “This has been going on for a year, and I am debating if I will do it anymore.”

Benjamin says that investigators from the U.S. trustee’s office in San Diego, which oversees bankruptcy cases, have been looking into Steigerwalt customers who did not get served. The probers went over Benjamin’s files and interviewed one of his assistants. “They have their own investigation going of Kerry Steigerwalt,” Benjamin says. “They were asking us about Kerry and about our own operations.” Also, Benjamin says he talked briefly with an agent of the Federal Bureau of Investigation who later checked with Benjamin’s lawyer. But the subject of those inquiries was loan modifications, in which Benjamin is not involved. Steigerwalt’s firm got into the controversial loan modification business.

Steigerwalt says he is not aware of any Federal Bureau of Investigation probe. As is traditional, the agency will not confirm or deny the existence of a probe. The U.S. trustee’s office, while not confirming a formal investigation, did reveal that it has been actively involved, stating: “The U.S. Trustee’s office responded to inquiries from individuals who had concerns about their legal representation in bankruptcy cases after the closure of Kerry Steigerwalt’s Pacific Law Center.”

“Benjamin is making a grand effort to do what is right,” says Sehnert. However, “It would be really nice to have an accounting of that $3 million.” He notes that the check that Laura Perry received was from “Kerry Steigerwalt’s Pacific Law Center Client Trust Account.” Money in client trust accounts belongs to clients, not to the lawyers, who should follow strict accounting procedures, he says. However, a former member of the firm says that in this instance the money paid up front did not have to go into client trust accounts.

Meanwhile, a firm named Golden State Law Group is now advertising heavily, à la Steigerwalt’s deceased enterprise. Golden State’s marketing director is Austin Majors, former executive director of Pacific Law Center. After Steigerwalt’s firm closed, Golden State was launched by two former members of that concern, Don Bokovoy, who is going into semiretirement, and David Weil. On its website, Golden State says it is responding to “unanswered complaints with Kerry Steigerwalt’s Pacific Law Center. Many of Mr. Steigerwalt’s clients have called Golden State Law Group seeking help with their bankruptcy case after complaining to Mr. Steigerwalt that they paid him a retainer to file their bankruptcies and he has, in many cases, failed to do so.” Those who unsuccessfully went to Benjamin’s Chicago law firm “felt cheated and scammed,” says the website.

Steigerwalt says he is disappointed by the criticism, given Weil’s and Bokovoy’s “involvement in the bankruptcy department at [Kerry Steigerwalt’s Pacific Law Center].”

Benjamin is more succinct: Golden State “can go fk themselves

Wednesday, May 11, 2011

Foreclosures Crush Home Prices...Down 30% Plus"

Foreclosures crush home prices
By Les Christie, staff writer May 10, 2011: 5:01 PM ET

Click This Link to Read the Article:,0_

NEW YORK (CNNMoney) -- Home prices continued to plummet during the first three months of 2011, falling 4.6% from a year earlier.

The U.S. median price, according to the National Association of Realtors (NAR), dropped to $158,700 for a single family house. Condo prices fell even harder -- 10.4% to $152,900.

0Email Print The median home price has now slumped 30% from its 2006 high of $227,100, and prices have fallen nearly 7% so far this year.

"We're seeing prices dropping faster than they did in 2010," said Pat Newport, an analyst with IHS Global Insight. "That's troubling. Falling home prices precipitated the recession and are slowing the recovery."

NAR blamed much of the latest price drop on sales of foreclosed properties. These "distressed" property sales accounted for 39% of the market, up from 36% from a year earlier.

Distressed properties, often in poor condition and are priced to move, sell for about 20% less than conventional home sales.

Those sales attract speculators, investors and cash buyers who gravitate toward lower priced homes, said Lawrence Yun, chief economist for NAR. (How to buy a foreclosure)

The market for distressed properties may further expand over the next few months. Falling prices have sent more mortgage borrowers underwater, owing more on their mortgage balances than their homes are worth. That makes them more likely to default on loans.

"That's a key problem," said Newport. "There are a lot of bad loans in the foreclosure pipeline and we don't know how many strategic defaults [people walking away from their mortgages] will result."

Of the 153 home markets covered by the report, Honolulu recorded the highest median price, $579,300. San Jose, Calif., the heart of Silicon Valley, was second at $545,000, and Anaheim-Santa Ana, Calif. was third at $511,800.

The lowest priced markets were in the Rust-Belt: Youngstown, Ohio ($55,400); Lansing, Mich. ($64,400); and Toledo, Ohio ($64,900).

The biggest losers were Gulfport, Miss. (down 22.8% to $99,400); Akron, Ohio (off 21.4% to $74,900); and Salem, Ore.(down 20.6% to $153,500).

Check out prices in your home town

Wednesday, March 9, 2011

Filing for Bankruptcy could save your home from foreclosure

Filing for bankruptcy could save your home
For some struggling homeowners, desperate step could stop a foreclosure


By the time the foreclosure notice arrives, most struggling homeowners figure they are out of options. But there is one more step, often overlooked but sometimes effective: bankruptcy.

It's not a move to be taken lightly. But the impact — especially on your chances of getting a loan — may not be as dire as many consumers assume. In fact, homeowners facing foreclosure may be able to improve their credit with a bankruptcy filing.

Bankruptcy is not the best first choice for anyone struggling to pay the bills. The first step is to approach lenders or others to whom you owe money and see if you can work out a more affordable payment plan. If you're unable to do so on your own, an accredited credit counselor may be able to intervene with lenders on your behalf.

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Life Inc.: Yes, smart guy, you have to pay taxes NFL labor dispute is typical, only with way more money ConsumerMan: Fat fingers and phone fraud Homeowners facing foreclosure also have several options to minimize the long-term impact on their credit — even if they ultimately lose the house. If the lender agrees to a short sale, for example, you may be able to sell your home for less then you owe. In a so-called "deed in lieu" of foreclosure, you give the lender the deed to your home and avoid a formal foreclosure proceeding. By doing so, you'll avoid the devastating damage to your credit brought by a foreclosure.

If none of those steps work, bankruptcy may provide relief for the worst case of a foreclosure judgment - and inflict less damage to your credit.

"In the eyes of lenders, you're making an attempt to pay back what is owed and keeping up with your payments," said Raquel Price, a bankruptcy attorney in State College, Pa. "With a foreclosure, you simply just walk away after not paying for a period of time."

Bankruptcy laws, after all, were established to provide an orderly process for people in financial trouble to reorganize their debts, start fresh and rebuild their lives.

Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"Most people who file bankruptcy don't file because they are poor managers of credit," said John Ulzheimer, president of consumer education for "Most people file because of some other incident that is out of their control - like a divorce, or loss of job, or the death of an earner in the family or some major medical event that zaps out their savings."

With home prices falling, unemployment near 9 percent and wages stagnant, the volume of fillings continues to rise. Last year, some 1.5 million consumer filings were reported — up 9 percent following double digit gains in each of the previous three years, according to the American Bankruptcy Institute.

As government mortgage relief programs have fallen well short of their goals and lenders struggle to find solutions, bankruptcy has become a potent weapon for those hoping to save their home from foreclosure.

Last year, foreclosure filings were reported on a record 2.9 million homes in the U.S., up nearly 2 percent from 2009 and 23 percent from 2008, according to RealtyTrac. More than one in five homeowners with a mortgage owe more than their house is worth, according to the latest figures from CoreLogic. That number of so-called "underwater" mortgages is expected to increase if home prices continue the current trend of edging lower.

A bankruptcy filing won't guarantee you'll be able to keep your home. But it stops the process and buys time while the court reviews your finances and tries to work out a payment plan with lenders.

The mortgage industry supports the current bankruptcy process because it frees many borrowers from some unsecured debts, making it easier for them to support a home loan. But the industry has strenuously fought legislative proposals to change the law to allow judges to alter the terms of a mortgage, including writing down the principal owed — a process known as a "cramdown."

Contrary to widely-held belief, bankruptcy doesn't necessarily leave the filer without access to credit.

"I hear that every day from people coming to my office: 'I thought it takes seven years to rebuild your credit,'" said Michael Fakhoury, a bankruptcy attorney in Poughkeepsie, N.Y. "It's not true."

Credit card offers
Though the record of a filing typically remains on your credit report for seven years, many filers begin getting credit card offers within a year or two after the process is completed.

Personal bankruptcy takes two forms. In a so-called Chapter 13 bankruptcy, debts are consolidated and a payment plan is arranged — typically over three to five years. This process allows you to retain assets like a house or car and some savings (the rules vary somewhat state to state). Chapter 13 is required for those whose income falls above a "means test." Once you've filed, you're not allowed to file Chapter 13 again for another two years.

A Chapter 7 bankruptcy discharges most forms of debt — usually within six months. To qualify, you have to be current on secured debt payments such as a mortgage.Some debts, including student loans, alimony or child support, can't be discharged. With Chapter 7, you can't file again for eight years.

Once the process is complete, credit card companies will likely come calling again within a year or two offering credit, according to Fakoury.

Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices"They know that you don't have any more debt — you just got rid of all your debt," he said. "So you're a good credit risk."

Opening new accounts and establishing a solid record of timely payments will help improve your chances of getting more credit, according to Ulzheimer.

"The most predictive item on your credit report is the item that's less than 24 months old," he said. "So if you can start populating your credit reports with good things, you're going to accelerate your score improvement much more aggressively than if you just sat there and waited for your score to improve as you put time between yourself and the bankruptcy filing."

Getting a mortgage after a bankruptcy filing is a little tougher, largely because underwriting guidelines have tightened for all borrowers since the housing bust. To qualify for a so-called "conforming" loan backed by government mortgage sponsors Fannie Mae or Freddie Mac, you'll need to wait four years after a bankruptcy filing.

But you'll be ineligible for seven years after a foreclosure — another reason it might make more sense for some homeowners to file for bankruptcy rather than wait for a foreclosure.

For an FHA-backed mortgage, you may be able to qualify within three years of a foreclosure, or two years after completing a bankruptcy. For Chapter 7, the clock on FHA eligibility starts when your discharge is complete, usually within six months of the filing. For a Chapter 13, you'll have to wait two years after the payment plan is completed, usually three to five years.

Lenders are also going to want to know why you ended up in bankruptcy court, according to Chad Smith, senior vice president of sales at Lending Tree, a mortgage lender.

"Most underwriters are going to want to know what happened in a detailed letter of explanation," he said. "If it’s a life event, that's going to be reflected differently than if it's excessive spending."

Filling for bankruptcy won't guarantee you'll be able to save your home. For some homeowners, the financial hole is just too deep.

"That is a very hard talk to have with them — explaining that no matter what I try to do they won't be able to sustain their residence," said Price. "For some clients that is a very tough thing to accept."

Wednesday, March 2, 2011

Calif. distressed homes sell at 39% discount. OC Register


According to RealtyTrac, there were 211,839 foreclosure-related sales in 2010 in California – a third-party sale of a distressed property that occurs while the property is actively in some stage of foreclosure, from default to bank-owned.

According to the Irvine-based foreclosure tracking firm’s year-end study:

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The state’s 2010 foreclosure-related selling pace was 42% below 2009 and 30% below 2008. Nationally, foreclosure sales were 31% below 2009 and 14% less than 2008′s pace.
California foreclosure sales accounted for 44 percent of all sales in 2010, the third highest of any state but also down from a peak of 57 percent in 2009. Fourth quarter foreclosure sales in California accounted for 45 percent of all sales, up from 40 percent in the third quarter. foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008.
The average selling price of a California foreclosure-related home was $251,693 – that is a 39% “foreclosure discount,” the percentage difference between average sales price of foreclosure sales vs. average sales price of non-foreclosure sales. Nationally, the foreclosure discount was 28%
These discounts in California ranged in 2010 from 46% for bank-owned properties to 29% for homes sold before lenders seized a property. National foreclosure discount was 36% for bank-owned homes and 15% for homes sold before lenders seized a property.
RealtyTrac notes: “Foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure — the result of a bloated supply of foreclosures and weak demand from homebuyers. The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices.”

DataQuick: San Diego foreclosures up 34% in January

From The San Diego Union Tribune:

Foreclosures and mortgage defaults in San Diego County both increased in January, after three consecutive months of drops, Wednesday's DataQuick Information Systems numbers show. The upticks could signal an incoming wave of distressed properties coming onto the market in coming months, experts said.

Foreclosures rose to 959 in January from 715 in December, a 34 percent increase, the largest monthly jump since December 2009. Year-over-year, foreclosures fell from 986 in January 2010, or 2.7 percent.

There were 1,548 mortgage defaults in January, up slightly from 1522 in December, or 1.7 percent. Year-over-year, that number is down from 1,741 in January 2010, or 11.1 percent.

DataQuick spokesman Andrew LePage said the monthly jump in foreclosures could partly be due to "a little catch-up" after some banks froze foreclosure activity following discoveries of robo-signing, the practice of approving loan paperwork without proper review.

LePage added that monthly fluctuations in both data sets are normal given factors such as the role of government mortgage programs, lender log-jams and new housing laws, he said.

"We don't expect any smooth trend lines going forward," LePage said. But there's "more catch-up to come," he said.

Bob Kevane, president of the San Diego Association of Realtors, agrees more foreclosures are in the pipeline.

He's heard local lenders saying they plan to stop delays in foreclosure processes and complete more of them this year, leading him to believe foreclosures will increase at the rate seen last month.

In DataQuick's previous report in December, foreclosures and default notices in the county fell to their lowest levels in three years. However, industry experts warned not to read too much into that, given the expectations of a shadow inventory of distressed homes and an increase in short sales.

Lily Leung: (619)293-1719;; Twitter @LilyShumLeung

Thursday, February 10, 2011

Foreclosures Ramp Up 30% of mortgages are underwater

San Diego Bankruptcies Sure to Increase says Bankruptcy Attorney from The San Diego Bankruptcy Law Firm.

CNN: Foreclosures Ramp Up, 30% of Mortages Underwater.

According to CNN:

By Les Christie, staff writerFebruary 9, 2011: 10:48 AM ET

NEW YORK (CNNMoney) -- Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.

Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from

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Now 27% of homeowners with mortgages owe more than their homes are worth. That's up from 23.2% a quarter earlier.

That will surely lead to higher foreclosure rates soon. That's because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow's chief economist, Stan Humphries.

Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.

The so-called "robo-signing" events of the fall also forced the number of underwater mortgages higher.

When banks' foreclosure paperwork came under scrutiny, many halted all repossessions until they could straighten things out. With foreclosures no longer being cleaned out of the system, more homes stayed underwater rather than moving on to foreclosure.

10 foreclosure hotspots
The moratoriums have been only temporary, however, and the defaults that had been stopped up in the foreclosure pipeline could come out in a gush over the next few months.

And any bump in the number of foreclosures adds to the likelihood that more homes will be dumped onto an already bloated market. That would just further depress home prices, continuing the vicious cycle that has plagued the industry for several years.

Friday, February 4, 2011

Rich, Famous & In Foreclosure (Nickolas Cage, etc.)


Rich, famous . . . and in foreclosureStar status won't pay the mortgage -- and some celebrities have seen the foreclosure epidemic firsthand. Here are 5 who lost their homes.

Related topics: homes, home financing, foreclosure, property taxes, luxury

How does Nicolas Cage get behind on his mortgage payments? The same way other rich and famous people do.

"They've stretched themselves higher than they probably should have," says John Anderson, owner of Twin Oaks Realty in Minneapolis and a National Association of Realtors expert in foreclosures. Some couldn't keep up when the rates on their adjustable rate mortgages shot up, Anderson says. Price drops at the high end of the market were so steep that a sale wouldn't cover the debt. In other words, high-end homeowners face the same problems that plague the rest of us.

Buy a foreclosed home

Find the best home mortgage rates
Here are five of the biggest names on the of list homeowners falling to foreclosure. We've included a bit of info about the current markets where these stars once lived. -- you know, in case you'd like to hunt for a foreclosure deal in one of those tony neighborhoods.

Nicolas Cage
The star: He's an Academy Award-winning actor (for "Leaving Las Vegas"), nephew of multiple-Oscar-winning filmmaker Francis Ford Coppola and the former son-in-law of Elvis (he was briefly married to Lisa Presley).

The house: Make that "houses." In November 2009, Cage lost two New Orleans homes -- one in the French Quarter, the other in the Garden District -- worth a combined $6.8 million, according to a report. Cage was behind $5.5 million in mortgage payments, and he owed $151,730 in property taxes to the city of New Orleans. Regions Bank paid $4.5 million for the properties.

MSN Real Estate: Need a zero-down mortgage? Look outside the city
The market: One in 720 homes in Orleans Parish had foreclosure filings in November 2010, according to RealtyTrac. The average foreclosure sales price in the city was close to $110,000.

Erin Moran
The star: She's best known as Richie Cunningham's freckle-faced little sister Joanie on the 1970s sitcom "Happy Days" and co-star of the spinoff "Joanie Loves Chachi."

The house: Los Angeles County court records posted on the entertainment website show that Moran, also known by her married name Erin Fleishmann, owed $315,930 on the Palmdale, Calif., home. The Bank of New York Mellon Trust bought the house at auction for $291,150 in July 2010. According to TMZ, Moran stayed in the home after losing it to the bank and was evicted.

The market: Palmdale, just north of Los Angeles, posted foreclosure filings in November 2010 on one in 80 housing units. The average foreclosure sales price was around $154,000.

Lisa Wu-Hartwell
The star: Viewers of Bravo's "Real Housewives of Atlanta," may remember Wu-Hartwell from the first season as one of the network's touted "six fabulous women from Atlanta's social elite." Hubby Edgerton Hartwell, the former Oakland Raiders linebacker, made frequent appearances.

The house: According to court records posted on, the couple borrowed $2.9 million to buy their suburban mansion in June 2007. Just more than two years later, Bank of America paid $1.9 million for the house at a foreclosure sale at the Forsyth County, Ga., courthouse, after the Hartwells defaulted on their adjustable-rate mortgage.

Is it time to refinance?
The market: RealtyTrac reports there were foreclosure filings on one in 248 housing units in Forsyth County in November 2010. The average foreclosure sales price was around $210,000.

Lenny Dykstra
The star: Nicknamed "Nails," the former Major League Baseball pro was an outfielder for the Mets and the Phillies during the late 1980s and early 1990s. After filing for Chapter 11 bankruptcy in 2009, Dykstra -- in a move many found ironic -- started an online financial advisory firm in 2010 called Nails Investments.

The house: Dykstra bought the 6.5-acre property in Thousand Oaks, Calif., from hockey pro Wayne Gretzky for $18.5 million in 2007, according to the Los Angeles Times. He lost the house in a Ventura County foreclosure sale in November 2010 to a winning bid of $760,712, the newspaper reported. Dykstra owed about $12 million to JPMorgan Chase.

MSN Real Estate: Find a foreclosure
The market: One in 201 homes in Ventura County received a foreclosure filing in November 2010, according to RealtyTrac. The average foreclosure sales price was in the neighborhood of $382,000.

Veronica Hearst
The star: The name is Hearst's claim to fame. She's the widow of newspaper heir Randolph Hearst and stepmother of Patricia Hearst, who was kidnapped by left-wing guerrillas in 1974.

The house: Located Manalapan, Fla., near Palm Beach, the Villa Venezia was originally built for the great-grandson of railroad tycoon Cornelius Vanderbilt. According to The Palm Beach Post, the 52-room, 28,000-square-foot mansion sold to New Stream Capital for $22 million at a Palm Beach County auction in February 2008.

The market: One in 211 housing units in Palm Beach County received a foreclosure filing in November 2010, reports RealtyTrac. The average foreclosure sales price was about $137,000.

Thursday, January 13, 2011

Banks repossess 1 million homes in 2010

With foreclosures rising, bankruptcies will too. If you are facing foreclosure, a san diego bankruptcy attorney can stop the foreclosure immediately, eliminate your debt and protect your assets. Credit counseling and loan modifications don't stop a foreclosure. If you have questions, contact a San Diego Bankruptcy Lawyer at the San Diego Bankruptcy Law Firm. 619-260-1800.

Click this link to view the article:

NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.

The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.

One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.

For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.

The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.

However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.

Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.

The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.

Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.

Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.

One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.

California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.

More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.

RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

Copyright 2011 The Associated Press.

NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.

The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.

One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.

For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.

The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.

However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.

Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.

The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.

Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.

Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.

One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.

California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.

More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.

RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

Copyright 2011 The Associated Press.