Archive for the ‘Bankruptcy Strategies’ Category

Fresno Bankruptcy Help: Strategic Mortgage Loan Defaults

Tuesday, September 22nd, 2009

Surprise! “I’m just going to walk away from my mortgage.”

According to a recent Los Angeles Times article, strategic mortgage loan defaults Los Angeles Times, have become a perplexing problem for mortgage lenders as well as the national credit bureaus — homeowners just walking away from their homes even though they have not missed a payment.

It’s a problem they don’t seem to understand. It appears from research more homeowners are making strategic decisions to simply walk away from the mortgages – especially in states like California where homeowners are more likely to be upside down (more than the home is worth).

Although a perplexing problem to mortgage companies and credit bureaus (who get paid to predict who will repay a loan or not — thats what credit score sare intended to accomplish). With some homeowners, even those who have never missed a payment (usually a good indicator that they will pay their mortgage and other debt obligations) are seemingly acting irrationally by just walking away (and from my experience not looking back) from their homes.

The Times article makes perfect sense to me.

As a bankruptcy attorney, I’m on the front lines of people making difficult financial and life decisions in a unprecedented time. The economic down cycle has hit California and the Central Valley especially hard.

Across the board, I talk with people having to choose how they will handle job loss, pay and overtime reductions, medical and family disasters and other causes of financial distresses. Almost to a person each person struggles with making a decision to file bankrutpcy or letting their home go into foreclosure, so I understand those homeowners who make a “strategic” decision to walk away from their home — even if the all knowing, all powerful credit bureaus don’t.

Bankruptcy Secrets… Strategy #4

Thursday, July 9th, 2009

Revaluing Cars and Other Secured Debt In A Chapter 13 Case

This is a similar strategy as Strategy Number #3, but it applies to car, boats, RV and other secured personal property (where they have the right repossess the property).

There are two important requirements.

First, this must be done in the context of a Chapter 13 bankruptcy.

Secondly, you must have purchased the property 2 ½ years from the date you filed bankruptcy.

The concept is simple: if you bought a car 2 ½ years ago, you owe $25,000.00, but its market value (look it up on Bluebook.com) is $10,000.00 it is possible to “revalue” this property at the $10,000.00 level, and through your Chapter 13 plan, repay the $10,000.00 (at either your contract interest rate (what you were paying) or 10% interest (whichever is cheaper) over 60 months or the 5 years of the plan.

So, in this hypothetical you would pay (not including interest) approximately $166.00 per month versus the amount your were paying on the $25,000.00 loan.

If your car, boat or other secured asset has depreciated in value since purchase (over 2 ½ years ago) in relation to the amount currently owed, you can keep the property at a much lower monthly payment. This is a great benefit to getting your monthly budget back on track. Again, talk to your attorney about this possibility if you considering Chapter 13.

Disclaimer

Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal  Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our offices at: (559) 228-1500 to schedule a consultation.