Bankruptcy (Financial) Services
With over 30 years of experience in consumer and small business bankruptcy law, our attorneys have the expertise and experience to explain the various types of bankruptcy available to individuals under the Bankruptcy Code. We will evaluate your financial circumstances and help you make the best decision to overcome your financial hardships and emerge with a positive outlook for your financial future.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is what many people refer to as a financial “fresh start,” or liquidation bankruptcy. It is a legal and viable option for anyone overwhelmed by debt to clear their debt and start over. The Chapter 7 process releases a debtor from personal liability of certain debts which are known as “dischargeable debts.” Dischargeable debts (also known as “unsecured debts”) typically include credit card bills, medical bills, utility bills, collection accounts, etc. Chapter 7 prevents the creditors owed those debts from taking any action against the debtor or the debtor’s property to collect the debts. It also prohibits creditors from calling or communicating with the debtor regarding the debt. Chapter 7 is generally meant for individuals with limited income who do not have the ability to pay back their debt.
Chapter 13 Bankruptcy
Chapter 13 is often referred to as the “wage earner’s bankruptcy,” or reorganization bankruptcy. It is designed for an individual debtor who has a regular source of income. It allows those with income to repay all or part of their debts as an alternative to liquidation. The most attractive feature of Chapter 13 is that it gives individuals a chance to keep their home and pay the mortgage under a settlement plan. Chapter 13 acts like a consolidation loan. It allows the debtor to propose a plan to repay creditors over a period of time, usually three to five years. Individuals will have no direct contact with creditors while under Chapter 13 protection.
Bankruptcy, Foreclosure and Deficiency Judgements
We understand that bankruptcy is not for everyone. We offer additional legal services to help clients who are trying to resolve a potential bankruptcy due to real estate debt issues. It can be beneficial to have an attorney provide you with legal advice on your options concerning the foreclosure process and any potential debt issues than can result from a settlement with a lender.
Short Sale – when a homeowner sells a home for less than they owe on their mortgage. A short sale can only occur if the lender agrees to accept less than what is owed on the mortgage. A short sale is initiated by the homeowner in an effort to avoid foreclosure and relieve themselves of the mortgage. Short sales can be complicated by title liens, overdue fees (association or homeowner), involvement of multiple loans or liquid assets that would cover the defiency owed to the lender. While a lender might allow a short sale, they might not release the seller from person liability on the debt still owed and pursue a deficiency judgement.
Mortgage Modification – a lender may agree to restructure the terms of your mortgage to make it more affordable. An interest rate reduction and extending the term of the mortgage are examples of loan modifications. A homeowner concerned with foreclosure might purse a mortgage modification as an alternative.
Deed in Lieu of Foreclosure – in order to avoid a foreclosure, a homeowner may tranfer ownership of their home to the lender, releasing them from the mortgage. It’s important for a homeowner to understand the pros and cons of a dead in lieu of foreclosure. A transfer of ownership might not relieve the borrower of their obligation to pay the balance owed on the mortgage.
Our attorneys can also provide legal advice or representation to homeowners interested in refinancing, a reverse mortgage or debt negotiation.