Dec 28

People love their house — there is just no question about it. All day long people call and tell stories about how they are upside down (owe more than their house is worth) in their home and they just want to save it, but they hear from their cousin (who by the way is a bus driver) that”after you file bankruptcy that you never have good credit again” (which could not be further from the truth). They will talk to me about two different plans. The first is that they want to purchase the property for less than what they owe the bank. Which is known as a “Short Sale” The second plan is that they are going to refinance the property into someone else’s name and purchase it back in one year. In general, neither one of these plans work and here is why:

1. A bank will not accept less money for the house WHILE YOU ARE STILL THERE. While you think they are getting nothing — you are wrong. The bank is getting your house for exactly what you owe. The way the process works is that the bank will sell the house to themselves at a sheriff’s sale — even if no one else bids. They will sell the house for exactly what you owe on it. Therefore, even though you think they got nothing, they did. They got an asset for their balance sheet and the asset is of the same value as what you owed. The bank will sell the house after they have evicted you, and had time to review the value of the property. This is the only time you would be able to offer them less (yes, that is correct — you could buy the house for less, but not until they kick you out). This may seem counterintuitive but the banks share-holders are only looking at the balance sheet, not the real world application. And they refuse to believe your house is worth less until one of their workers says it is the case. The other part of the story is that for every rule there is an exception. If I was going to try to buy the house for less I would contact the bank’s attornies in WRITING. I would courtesy copy the bank and I would attach a valid appraisal that indicates what you believe to be the value of the property. I would also include proof that you have the ability to refinance the property.

Dec 21

Bankruptcy is a legal proceeding afforded to people who are unable to handle a financial crisis. Bankruptcy is available so that you can have a fresh start.

Bankruptcy comes in two varieties: Personal Bankruptcy (which is sometimes called Consumer Bankruptcy) and business bankruptcy. A Personal Bankruptcy (Consumer Bankruptcy) is the right to discharge a debt by an individual or a married couple. This is usually what people think of when they hear about filing bankruptcy.

The business bankruptcy is what a major corporation or business will file when they want to file bankruptcy. This type of filing is usually a Chapter 11 Bankruptcy. These are very complex cases, and often to go to a bankruptcy attorney who specializes in this specific subcategory for bankruptcy information.

There are two types of Consumer Bankruptcy options available for an individual or married couple, a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. There are specific forms and information needed prior to filing bankruptcy. What follows is some of the information you will need to fill out on the documents required for filing bankruptcy.

• Basic contact information including name, address, social security number of you and your spouse.

• General information about real estate you own and the value of the property and its assets.

• Information and lists of all your debts — who you owe, and the creditors claim that you owe.

• Lists of any leases or contracts that are still current you are a party to including residential, car and business leases.

• Information about your current income.

• Lists of your current expenses including utility bills, entertainment resources, business operational costs, etc.

• Statement of financial affairs including income from employment, payments to debtors, repossessions, foreclosures, and returns, closed financial accounts, etc.

There are many other important aspects to filing a Chapter 7 or Chapter 13 Bankruptcy that will be covered during your initial consultation at the Second Start offices. For more information please use the resources on this web site or call 800-SAVED-ME.

Dec 21

Filing Bankruptcy on your own

I spend most of my day answering different Bankruptcy questions for individuals. On given days I may speak to as many as fifty or sixty people. When I am speaking to people they often ask if they can file bankruptcy on their own. Now I am sure in your daily life you have heard people say that they can do all sorts of things that they would never be able to do. I love those Holiday Inn commercials where there is a character doing all sorts of strange things like flying an Airplane. When the character is asked “are you a pilot” he answers “no but I did stay at a Holiday Inn”. Bankruptcy is very technical. If you miss one detail you may not be able to discharge some debt. You can get barred from court for a period of time if you file to many times or if it is done incorrectly.

At the end of the day Bankruptcy is Cheap
My office rarely charges more than $900.00 as an attorney fee to get rid off anything under $100,000.00 in debt. This is for unsecured debt only. If you don’t know the difference between the two call me and we can talk about it. If you don’t know the difference between the two this is just one more reason to hire an attorney for your filings. If you have had problems with attorneys before, and who hasn’t, then find someone who is straight forward and is willing to explain all the possible options to you.

Only a Bankruptcy Attorney
When you find an attorney make sure it is a Bankruptcy Attorney. You wouldn’t go to a dermatologist to have Heart Surgery. I have six attorney’s who work behind me in both Michigan and Illinois and without those attorney’s I could never sit on the phone and have the opportunity to help so many people. They all practice bankruptcy. Bottom line “can you file a bankruptcy on your own?” not if you want it done right.
Dec 14

Chapter 13 Bankruptcy was designed to enable individual debtors the option of applying a percentage of their future earnings to a portion of their current debts over an extended period of time. Chapter 13 authorizes the wage earner to keep the property (like your home and
car) while consolidating and reorganizing debt, allowing the debtor a reasonable opportunity to arrange installment-payments of what is owed out of future income. The debtor is protected from creditors by an “automatic stay” (an injunction against the continuance of any action by any creditor against the debtor or the debtor’s property) while the plan for repayment is developed and carried out. Debtors who file for Chapter 13 Bankruptcy agree to pay some portion of their debts over a three to five year period.

In order to qualify certain documentation and information must be provided to the attorneys at Second Start before the filing of your case.

• Copies of your state and federal tax returns for the past two years.
• Copies of the last six months of pay stubs, proof of income, or profit and loss statement for both filing and non-filing spouse.
• Copies of all leases.
• Copies of all rental agreements with tenants.
Affidavits from anyone providing monthly support payments.
• Copies of any divorce judgments or documents providing for domestic support or child support obligations.

Dec 7

In a January 25, 2007 Detroit Free Press article by reporter Frank Witsil, the economic crunch facing the metro Detroit area — and similar Midwest areas — is reaching all time highs, particularly in the area of home foreclosures. While home foreclosures do not automatically equate to individuals filing more personal bankruptcies — it is, indeed, possible to save your home from foreclosure by qualifying and filing a Chapter 13 Bankruptcy.

The figures Witsil used for his piece were provided by RealtyTrac, a company that follows mortgage rates across the country.

The Freep’s article also stated: “RealtyTrac noted that nationwide, foreclosure filings were up — by 42% — but that increase was dwarfed by the Michigan numbers, which showed 127% more filings in 2006 than in 2005.”

Home foreclosures are indeed a national epidemic. But Chapter 13 Bankruptcy filing will indeed stop an individual from losing their home. You will get to continue living in your house while you work out a payment plan to catch up on your arrearages.

If your house payments are more than a month behind, your lender has probably already started foreclosure proceedings. As time passes, thousands of dollars in penalties and legal fees can be added to the balance you owe. And every single day extra interest is added!

There are programs to help stop foreclosure regardless of your situation. With the right help, virtually any foreclosure situation can be successfully resolved. When facing foreclosure, time is of the essence. You must ACT fast to protect your rights.

We have helped hundreds of homeowners to stop foreclosure — and we can help you, too.

Dec 7

Filing for bankruptcy in Michigan or Illinois or anywhere else in the United States for that matter, requires one to realize that they are really involved in a big game of Monopoly. If you don’t believe this let me tell you that the game goes on whether you think it is occurring or not.

When you are playing a game, you know it. If you don’t think that your mortgage company is in on the game you are wrong. They penalize you when you are not timely and they even chastise you by having someone call to ask where the payment is.

“How do I know I am winning or losing?”

The answer is very basic. Just check your credit score. The reality is that most people are taking this whole event so personally that they are unable to see the game being played in front of them and that is what the biggest player in the game the credit card companies want you to do. If you understood how important debt is to your credit score you might appreciate this more fully. The debt to equity ratio is one of the key components of a credit score. By reducing your debt you actually increase your score. The easiest way to reduce it is to file bankruptcy and not only limit your debt but eliminate it all together. You might file bankruptcy if you were in Detroit or Chicago or anywhere else you are in the United States.