Las Vegas Bankruptcy Attorney

REALITY CHECK: LOAN MODIFICATIONS RARELY INCLUDE A PRINCIPAL REDUCTION.

On August 5, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Bankruptcy Help Las Vegas, Bankruptcy Information in Las Vegas, Bankruptcy Services Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Individual Bankruptcy Las Vegas, Personal Bankruptcy Las Vegas, chapter 13, by Randy Creighton

As a Las Vegan who practices in the areas of bankruptcy and short sales, I understand and appreciate the non-stop barrage of commercials and advertisements from people and companies promising the moon, and more when it comes to loan modifications. However, with a little bit of research and good old elbow grease you can cut through the junk and find out what is reality.

The majority of loan modifications do not include a principal reduction. I will repeat in bold. The majority of loan modifications do not include a principal reduction. If this is your goal, while not impossible, I would prepare for David v. Goliath.

The reality is that the majority of loan modifications come in three different forms: (1) Lender reduces your interest rate to no lower than 2%; (2) Lender increases the term of your loan to thirty (30) or sometimes forty (40) years from the date you sign the agreement; and (3) the Lender MAY forebear on a portion of the principal, or in layman terms the Lender will not charge interest on a portion of your loan but you will owe whatever the forebear amount is at the time you sell the house or at the end of the term of the new loan. In some cases a Lender may blend these tools to modify your loan.

The goal of any loan modification is to reduce the amount due and owing on the home plus any costs relating to taxes, HOA and insurance to an amount of 31% of your gross income OR to an amount that is affordable to you.

So say for example you have gross income of $6,500/month and your mortgage plus taxes, insurance and HOA is $2,500 month, at an interest rate of 6.25%. Further, the outstanding principal balance of your loan is $400,000. In this situation, the Lender must reduce your monthly mortgage payment plus taxes, insurance and HOA to $2,015 ($6,500 X 31%). So, say taxes, insurance and HOA equal $300/month. Thus, the Lender must be able to change the terms of your loan so that a payment on the principal amount of $400,000 will equal $1,805. Here, this can be accomplished if the Lender reduces your interest to 3.5% and changes the term length of your loan to be thirty (30) years from today.

A successful modification is not always the outcome. Say in the above example the homeowner’s gross income was only $4,200. As such, the Lender must reduce your monthly mortgage payment plus taxes, insurance and HOA to $1,302($4,200 X 31%). Again, the taxes, insurance and HOA equal $300/months. Thus, in this example the Lender must be able to change the terms of your loan so that a payment on the principal amount of $400,000 will equal $1,002. This is simply not possible without either a principal reduction or forbearance on the principal of the outstanding due and owing and Lenders are very reluctant at allowing either of these options.

All is not lost, Chapter 13 bankruptcy may also be able to reduce or eliminate many of your other debts, INCLUDING eliminating your second lien on your house, freeing up funds to pay your mortgage. This is something that no loan modification can do for you. Chapter 13 can stop a foreclosure and give you up to five years to catch up on the missed payments. Many homeowners are able to catch up their missed payments if they are given the time to do so. Loan modification directly with your mortgage company will normally give a matter of months, not years, to spread out the missed payments.

Your decision should be decided knowing all your options. A good attorney can, and will, freely discuss whether workout is a better option for you.

Tagged with: Attorney • bankruptcy • bankruptcy protection • chapter 13 • chapter 7 • debt discharged • discharged • las vegas chapter 13 bankruptcy • means test las vegas

New Home Affordable Modification Program (“HAMP”) Loan Modification Guidelines Taking Effect June 1, 2010

On May 24, 2010, in Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Best Bankruptcy Lawyer Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Personal Bankruptcy Las Vegas, Small Business Bankruptcy Las Vegas, by Randy Creighton

New Home Affordable Modification Program (“HAMP”) Loan Modification Guidelines Taking Effect June 1, 2010

The federal government provided new HAMP borrower outreach and communication guidelines for foreclosure actions while a borrower is being evaluated under HAMP. Furthermore, these guidelines provide additional protection for delinquent borrowers who have filed bankruptcy but would otherwise be eligible for HAMP benefits. For a copy of the full disclosure, see Supplemental Directive 10-02.

Here are some of the key highlights from the directive include:

FORECLOSURE

Additional Foreclosure steps are required:

The servicer must evaluate the borrower’s eligibility under HAMP and determine that the borrower is ineligible before referring the borrower to foreclosure (or make “reasonable solicitation efforts”).
If foreclosure activity has already been initiated, the foreclosure sale cannot occur until after the servicer has determined the borrower is ineligible under HAMP (or make “reasonable solicitation efforts”).
The servicer must give the borrower 30 days to respond to HAMP “Non-Approval Notices” in certain circumstances before conducting the foreclosure sale.
The servicer must provide the foreclosure attorney certification in writing that the borrower is ineligible for HAMP before conducting the foreclosure sale.

BANKRUPTCY

If the borrower in active Chapter 7 or Chapter 13 bankruptcy (or attorney or bankruptcy trustee) requests, the servicer MUST consider the borrower under HAMP and can no longer decline borrower as a “proper exercise of discretion”.
If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer MAY NOT deny the borrower for a permanent modification only because of filing bankruptcy.
If a delinquent borrower has a discharged Chapter 7 and chose not to reaffirm the first lien mortgage debt is still eligible under HAMP, with the following provision added to the permanent modification agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

If you are a homeowner struggling to make your mortgage payment or feel like you’re your lender or servicer has not worked with you on a loan modification, call a bankruptcy

Tagged with: Attorney • bankruptcy • bankruptcy protection • chapter 13 • chapter 7 • discharged • HAMP • Home Affordable Modification Program • las vegas chapter 13 bankruptcy

Get Rid of Your Medical Bills Once and For All

On April 14, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Chapter 7 Bankruptcy Law Las Vegas, Personal Bankruptcy Las Vegas, by Randy Creighton

According to a recent study published by The American Journal of Medicine medical bills at the core of 50 percent of bankruptcy filings. Even more alarming is that 68 percent of consumers who filed bankruptcy had health insurance. This is because even a short stay in the hospital can generate bills in excess of $10,000 or even $100,000. With or without insurance a person is usually stuck with a large bill. Even if you don’t have much in the way of unreimbursed medical expenses, if there is a loss of time from work, the family budget is destroyed with the loss of income.

Every so oftern I get a client asking to file a “medical” bankruptcy and keep the rest of their debts. However, there is no such thing because the United States Bankruptcy Code requires that all debts be listed. Nonethless, medical bills are still subject to a debt discharge or debt restructuring under both Chapter 7 and Chapter 13 bankruptcy laws, and thus, you can once and for all eliminate medical debts in bankruptcy.

You should talk to your attorney about what kinds of bills you have, list all your bills on the paperwork that will be provided to the bankruptcy court, and discuss the options that you may have with the attorney.

Tagged with: bankruptcy • bankruptcy laws • bankruptcy protection • chapter 13 • chapter 7 • charge • credit cards • debt discharged • discharged • las vegas bankruptcy attorney • las vegas chapter 13 bankruptcy • lawyer • medical bankruptcy • secured cards

Short Sales In Bankruptcy…Possible?

On April 11, 2010, in Uncategorized, by Randy Creighton

I hear the question almost every day, can I short sale my house if I file bankruptcy?

First, lets first define what a short sale is. When you sell real estate “short,” you are asking the lender to approve the sale without receiving the full amount of their loan, very common now in this depressed real estate market. For example: you bought a home in 2005 for $500,000 with a first mortgage of $400,000 and second mortgage of $100,000. The property is now worth $300,000 and you have a buyer willing to close escrow in 30 days for $300,000. If the first mortgage agrees with the sale, they will receive about $100,000 less than their current debt and the second will receive $0. Typically the second signs off with a nominal payment such as $5,000.00.

Second, yes you can short sale your house in bankruptcy; nothing in the bankruptcy code helps and/or hurts you from getting the short sale approved. You must still go through same painful process of receiving approval from the lender to sell the home. Nonetheless, as a borrower you are not concerned with the deficiency amount due and owing after you filed bankruptcy because any deficiency will have been discharged in the bankruptcy. This fact makes it easier to get a short sale approved.

But realize that as a debtor in bankruptcy your are receiving NO tangible benefit to short selling your house. In bankruptcy any deficiency amount is discharged, or in simpler terms, you are not liable to the lender for any amount due and owing under the loan. The only parties really benefiting here is the realtor and buyer. Since all the work, worries, and monies you provide do not benefit you at all, the entire short sale process is usually done in vain.

Instead, it is usually best to surrender the home after the bankruptcy is filed. Under bankruptcy laws, there is no taxable event on a foreclosure after bankruptcy (except possibly a capital gain in rare cases in today’s economy), the lender can not report to credit bureaus foreclosure but can only report $0.00 balance, bankruptcy discharge (which by the way gets reported in all bankruptcy cases whether you keep the home or not and is generally better than foreclosure or short sale in terms of effecting your credit score), the debt is finalized as non-recourse, you avoid wasting your time and money, and you are able to stay in the property or rent it out longer.

If you have any questions please contact us.

Randy M. Creighton, Esq.

Tagged with: Attorney • bank of america short sale • bankruptcy laws • chapter 13 • chapter 7 • debt discharged • discharged • experience • Las Vegas • las vegas bankruptcy attorney • Las Vegas Bankruptcy Lawyer • las vegas chapter 13 bankruptcy • las vegas chapter 7 bankruptcy • lawyer • means test las vegas

Can I Have Money in a Bank Account When I File Bankruptcy?

On April 8, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Bankruptcy Services Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Individual Bankruptcy Las Vegas, Personal Bankruptcy Las Vegas, Uncategorized, chapter 13, by Randy Creighton

To begin, we must first recognize that there are two common types of consumer bankruptcy cases, Chapter 7 and Chapter 13, because each chapter deals with this issue differently. In a Chapter 7 all of the debtor’s property is placed into an estate which is controlled by the bankruptcy trustee. While no property physically changes hands (at least not at the beginning of the case), the trustee and bankruptcy court have broad legal power over your property. Nonetheless, an individual is allowed certain exemptions, which are found in state law. Nevada has at least 33 exemptions available. If the value of your equity in the property is below the exemption amount, then you will be entitled to keep the property. The most commonly used exemption for money in a bank account is 21.090(z) whoch exempts any personal property not otherwise exempt, including, without limitation, the judgment debtor’s equity in any property, money, stocks, bonds or other funds on deposit with a financial institution, not to exceed $1,000 in total value.

Take for example that you have $5,000 sitting in your checking account on the day you file bankruptcy. That money is property of the Chapter 7 bankruptcy estate and is no longer yours to control or use. However, you will be allowed to keep $1,000.00 but the Trustee can seek to receover the remaining $4,000.00.

During a Chapter 13 bankruptcy the debtor retains possession and control over his or her property, and is free to use any funds in the debtor’s bank account. An accounting is performed and the debtor’s property is classified as either exempt or non-exempt. Non-exempt property is not taken from the debtor (as is often the case in a Chapter 7), but the Chapter 13 debtor is required to pay unsecured creditors a sum equal to the amount of non-exempt equity. For instance, if there is $5,000 in the debtor’s bank account, the debtor may only be able to exempt a portion of the entire sum, or possibly $1,000.00. The non-exempt portion must be paid to the creditors through the debtor’s Chapter 13 plan (over three to five years).

Cash in a bank account can be a problematic issue for a debtor. Avoiding these problems is the joint responsibility of the debtor and the debtor’s bankruptcy attorney. Timing is critical to minimizing your financial exposure. An experienced bankruptcy attorney can help you maximize the benefits of the bankruptcy laws and navigate around any pitfalls.

If you have any questions please contact us.

Randy M. Creighton, Esq.

Tagged with: annual fees • Attorney • bank • bankruptcy • bankruptcy laws • bankruptcy protection • chapter 13 • chapter 7 • debt discharged • discharged • Las Vegas • Las Vegas Bankruptcy Lawyer • lawyer • secured cards • student loans

How Bankruptcy Can Help With Foreclosure

On April 7, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Bankruptcy Services Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Chapter 7 Bankruptcy Law Las Vegas, Individual Bankruptcy Las Vegas, Mortgage, Uncategorized, by Randy Creighton

If you are facing foreclosure and cannot either short sale your home or agree on a loan modification, bankruptcy may help.

The Automatic Stay: Delaying Foreclosure

When you file either a Chapter 13 or Chapter 7 bankruptcy, what is called the automatic stay springs into effect. The automatic stay immediately requires your creditors to cease their collection activities immediately, no excuses. If your home is scheduled for a foreclosure sale, the sale will be legally postponed while the bankruptcy is pending–typically for three to four months. However, there are two exceptions to this general rule:

Motion For Relief From The Automatic Stay. If the lender obtains the bankruptcy court’s permission to proceed with the sale (by filing a “motion to lift the stay”), you may not get the full three to four months. But even then, the bankruptcy will typically postpone the sale by at least two months, or even more if the lender is slow in pursuing the motion to lift the automatic stay.

Foreclosure notice already filed. Unfortunately, bankruptcy’s automatic stay won’t stop the clock on the advance notice that most states require before a foreclosure sale can be held (or a motion to lift the stay can be filed). For example, before selling a home in Nevada , a lender has to give the owner at least three months’ notice. If you receive a three-month notice of default, and then file for bankruptcy after two months have passed, the three-month period would elapse after you’d been in bankruptcy for only one month. At that time the lender could file a motion to lift the stay and ask the court for permission to schedule the foreclosure sale.

Also, and very important, the automatic stay is IMMEDIATE. So, for example, say a foreclosure sale is scheduled for 10:00 a,m, January 31, 2010. If the homeowner files for bankruptcy at 9:59 a.m. the foreclosure sale is null and void, or in simpler terms, you keep your house and the lender must re-foreclose after submitng the Motion For Relief From The Automatic Stay.

How Chapter 13 Bankruptcy Can Help

If you’re behind on your mortgage payments with no feasible way to get current, the only way to keep your home is to file a Chapter 13 bankruptcy.

Unlike Chapter 7, Chapter 13 bankruptcy lets you pay off the “arrearage” (late, unpaid payments) over the length of a repayment plan you propose–five years in some cases. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home.

Also, unlike Chapter 7. Chapter 13 may also eliminate the payments on your second and/or third mortgage.

How Chapter 7 Bankruptcy Can Help

The situation migt be that you will have to give u your home no matter what. In that case, filing for Chapter 7 bankruptcy will at least stall the sale and give you two or three more months to work things out with your lender. Options include a Short Sale.

Saving money. During a Chapter 7 bankruptcy, you can live in your home for free during at least some of the months while your bankruptcy is pending–and perhaps several more after your case is closed. You can then use that money to help secure new shelter.

Canceling debt. Chapter 7 bankruptcy will also cancel all the debt that is secured by your home, including the mortgage, as well as any second mortgages and home equity loans. So, if you were to obtain a Short Sale you do NOT have to worry about any deficiency amounts.

Chapter 7 Will Not Cancel the Foreclosure

With all this debt being cancelled, you may be wondering why the foreclosure on your home won’t be cancelled too. The trouble is, when you bought your home you probably signed two documents (at least)–a promissory note to repay the mortgage loan, and a security agreement that could be recorded as a lien to enforce performance on the promissory note.

Chapter 7 bankruptcy gets rid of your personal liability under the promissory note, but it doesn’t remove the lien. That’s the way Chapter 7 works. It gets rid of debt but not liens–you’ll still probably have to give up the house under the lien since that’s what provided collateral for the loan.

Tagged with: Attorney • bankruptcy • bankruptcy laws • bankruptcy protection • chapter 13 • chapter 7 • debt discharged • debt elimination • discharged • lawyer • secured cards

What Happens If I Forget to List a Creditor in My Bankruptcy Petition

On March 30, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Chapter 7 Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Chapter 7 Bankruptcy Law Las Vegas, Filing Bankruptcy in Las Vegas, Personal Bankruptcy Las Vegas, by Randy Creighton

When you are filing for Chapter 7 or Chapter 13 bankruptcy, it’s all too easy to forget to list a creditor or to discover, after the petition has been filed, a creditor that you did not even know existed, or leaving off the creditor was a simple error. No big deal. It happens. I try to avoid such error with my clients by obtaining the most recent credit report before filing their petition but, on occasion, certain creditors, such as medical debts, are not reported to credit bureaus. Just because a debt is not reported to a credit bureau does not mean you do not owe them any money.

As long as the error or omission is caught early enough in the bankruptcy process, it is a simple matter to add a missed or missing creditor to a filed petition. The court charges a $26 fee for such amendments, but it is worth the cost.

Further, it goes without saying that all debts and creditors must be disclosed. When you file your bankruptcy petition, you sign and testify under the penalty of perjury that you have listed all of your assets and debts. At the 341 Meeting of Creditors you likewise will swear under oath that you have completely disclosed all of your assets and liabilities.

It is, thus, very important to work closely with an experienced attorney who will take the time, and not send this task to his paralegal, to talk with you to discuss your individual situation. As part of filing bankruptcy with Black & Lobello

If you are a Nevada resident and are considering filing for bankruptcy please contact us.

Tagged with: Attorney • bankruptcy • chapter 13 • chapter 7 • discharged • Las Vegas • Las Vegas Bankruptcy • las vegas bankruptcy attorney • las vegas chapter 13 bankruptcy • las vegas chapter 7 bankruptcy

New Means Test And Median Income Numbers

On March 30, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 7 Las Vegas, Bankruptcy Information in Las Vegas, Bankruptcy Laws Las Vegas, Chapter 7 Las Vegas, Individual Bankruptcy Las Vegas, Personal Bankruptcy Las Vegas, by Randy Creighton

For bankruptcy cases filed after March 15, 2010, new means test and median income figures apply. The details are available here: http://www.justice.gov/ust/eo/bapcpa/20100315/meanstesting.htm

Tagged with: Attorney • bank • bankruptcy • bankruptcy laws • bankruptcy protection • chapter 13 • chapter 7 • credit cards • debt discharged • discharged • Las Vegas • lawyer • mean test • means test las vegas

Can the Chapter 13 trustee dismiss my case if I’ve missed a couple of payments?

On March 28, 2010, in Bankruptcy Attorney in Las Vegas, Bankruptcy Chapter 13 Las Vegas, Bankruptcy Information in Las Vegas, Chapter 13 Bankruptcy Law Las Vegas, Chapter 13 Help Las Vegas, Filing Bankruptcy in Las Vegas, Individual Bankruptcy Las Vegas, Las Vegas Bankruptcy Help, Personal Bankruptcy Las Vegas, chapter 13, by Randy Creighton

Probably. If you miss a couple of payments the Trustee will likely argue that your plan is no longer feasible — that you cannot make the payments and therefore your creditors aren’t getting paid and protected through bankruptcy.

Your best shot is to remember that old scout creed about being prepared. You’ll have to show the court that you can get back on track with your plan, or propose an amended plan with payments that are feasible for you and provide a sufficient amount to your creditors.

If the court agrees with the trustee and dismisses your case, you’ll owe your creditors the current balance on your debts — that is, what you owed at the start of your bankruptcy case, less the amounts you paid through your repayment plan — plus the interest that stopped accruing while you were in bankruptcy.

But the key is to be in constant contact with your attorney. If you cannot make a payment it is always better to call your attorney to have him or her work out the issues with the Trustee.

If you have any questions please contact us.

Randy M. Creighton, Esq.

Tagged with: Attorney • bankruptcy • bankruptcy laws • bankruptcy protection • chapter 13 • chapter 7 • debt discharged • discharged • experience • Las Vegas • lawyer • Nevada

What Bankruptcy Can Do for You

On March 24, 2010, in Bankruptcy Help Las Vegas, Bankruptcy Information in Las Vegas, Help Stop Foreclosure Las Vegas, Individual Bankruptcy Las Vegas, Las Vegas Bankruptcy Help, chapter 13, chapter 7, by Randy Creighton

Bankruptcy has a bad reputation in our culture but the truth of the matter is that, for many people, it is absolutely the best option to escape the stress of insurmountable debt and to gain a fresh financial start. Here is a list of some potential benefits to filing for bankruptcy protection:

End those harassing phone calls and letters from debt collectors during the bankruptcy process and, for those debts that are discharged, for good! Creditors and debt collectors must stop contacting you for the duration of your bankruptcy case.
Stop repossession of your property and force creditors to return property that was already repossessed.
Halt wage garnishment during the bankruptcy process.
Put an end to the foreclosure process and give yourself time to catch up on payments. Just knowing that you won’t immediately lose your home can benefit you in so many ways.
“Strip down” your second mortgage to reduce overall house payment. If the home’s value is less than or equal to what is owed on the first mortgage, Chapter 13 can be used to change the second, third etc. mortgage(s) into unsecured debt which doesn’t necessarily have to be paid in full, thereby reducing the overall house payment. Legislation is being considered right now, that may allow certain filers to “strip” the home down to its actual value which crams down both mortgages.
Dispute any claims from creditors that you believe are false or inflated to gain more from you than what they are owed.
Prevent your utilities from being cut off or, if they are cut off, require the utility company to restore service.
In a Chapter 13 bankruptcy, you may repay past-due taxes, alimony, child support, mortgage and car payments over a period of 3-5 years.
Possibly the most important benefit of bankruptcy is the allowance for the discharge, or forgiveness, of most, if not all, of your debts. Once you receive a bankruptcy discharge, you are no longer legally obligated to pay off those forgiven debts.

If you are seriously considering filing for bankruptcy protection, you may wish to consult a reputable and experienced bankruptcy attorney who can help guide you through the confusing and complicated process. Having an attorney on your side can provide you with the peace of mind that comes from knowing all your bankruptcy bases are covered.

Randy M. Creighton, Esq.

Tagged with: chapter 13 • debt collectors • discharged • fresh start • garnishments • harassing phone calls • insurmountable debt • repossession • stress • strip down

Black & LoBello Bankruptcy

REALITY CHECK: LOAN MODIFICATIONS RARELY INCLUDE A PRINCIPAL REDUCTION.

New Home Affordable Modification Program (“HAMP”) Loan Modification Guidelines Taking Effect June 1, 2010

Get Rid of Your Medical Bills Once and For All

Short Sales In Bankruptcy…Possible?

Can I Have Money in a Bank Account When I File Bankruptcy?