Should A Reaffirmation Plan Be Signed?

A reaffirmation agreement revives and consolidates a debt back into life that could have been discharged in a Chapter 7 bankruptcy. Mostly such agreements are often made to protect a house or vehicle. In a Chapter 7 proceedings, a debtor is forfeiting bankruptcy protection in exchange for the creditor promising not to repossess the property.It seems straightforward and simple at this stage. You continue to make payments, if you want to keep using the property. A client gets to keep his property and possibly rework the terms of the new contract to make repayment more affordable. What’s so strange here?

Here is what I recommend my clients about reaffirmation agreements:

The problem is once you sign, you are in a hornets nest. One can no longer free to surrender the property without being personally liable. Anytime, you miss a payments, your creditors would come back and haunt you. Again, why to reaffirm the same terms and conditions. Why not to negotiate the terms and ask the creditors to cut down the principal and cut the monthly income in exchange for reaffirmation. Again, you have to decide if you are a good candidate for repayment and a reaffirmation would help you and not eradicating the benefits of your chapter 7 liquidation bankruptcy. An attorney must be careful that he is not enhancing your financial liabilities and that you would be continuously able to make your payments. The court, however, can still reject the reaffirmation plan, if you reaffirm it. Courts has to see and check it independently.

The rule of caution is that one should never sign the agreement unless debtor have restructured the terms to be decidedly in your favor. In other words, try to cut the principal and interest, or stretch out the payment length. Again, one can also revoke the agreement within 60 days if they change your mind.

You have leverage. Use it to the best advantage. Most creditors do not want your property and do not want to take the legal steps necessary to take it back and sell it. If you really want to keep the property, in most cases, the creditor is satisfied with you voluntarily making the monthly payment according to the terms of the discharged debt, without requiring a reaffirmation agreement.

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What constitute bankruptcy fraud?

When you file bankruptcy, you take an oath (in 341 meeting as well) that all documents filed are filed diligently and not meant to defraud anyone. Also, within the Bankruptcy court, the officials of Trustee and the Department of Justice investigates all of the paperwork filed and can ask questions in a 341 meeting.
The latest reform of 2005 had made bankruptcy simpler and information, it can, however, be easier to forget to file many documents in Bankruptcy courts and make them subject to a formal investigation.Following is a link with the IRS which gives many examples of bankruptcy fraud.

http://www.irs.gov/compliance/enforcement/article/0,,id=213766,00.html”>http://www.irs.gov/compliance/enforcement/article/0,,id=213766,00.html

How to Know If You Were a Victim of Predatory Lending? Do Your Own Audit

Today, we are going to discuss rampant issue of predatory lending and how to diagnose, if you have become a victim of predatory lending. We will give you a list of red flags, and you have to outline all these areas of red flags in a separate sheet while you show your documentation to any Attorney. Remember, and read again my post about the so-called loan forensic audits. I still, truthfully do not agree with what they do. They contact continuously and send me a “sample” forensic audit, and I consider it just a highly computerized data sheet.

I want you to save some money here. Remember, if they find any violations who is gonna sue? (Remember, who love ya baby!) Again, this is not meant to make you specialist. As usual always consult a Nevada licensed attorney. The warning signs of a predatory loan are broken down into three categories:

What Happened Before Signing?
1. What happened leading up to the signing of the loan documents? The Marketing and Sales of Mortgage Loans
2. What happened at the closing?
3. Post closing behavior of your lender.

Now, we are going to discuss all these one by one.
1. Were you a victim of aggressive solicitation of targeted lending practices?
2. Was you steered to high rate lenders?
3. Was there any door to door solicitation of home improvement or financing arranged by contractor or mobile home dealer?
4. Was there any large fee or kickbacks promised to the mortgage broker? Remember the YSP (Yield Spread Premium)
5. Was loan made or promised to mentally incapacitated, older, retired or fixed income group?
6. Was it started as a no-doc loan?
7. Was this loan in excess of 100% loan to value ration (LTV)?

The Application Process
1. Was there any falsification on loan application?
2. Was signature forged?
3. Was co signer properly introduced into the documents?

The Loan
1. Was this a high interest rate (APR)?
2. Was there high fees and closing costs?
3. Was a balloon payment involved?
4. Was there a negative amortization?
5. Was there high appraisal costs?
6. Was there an inflated appraisal?
7. Were fees highly aggressive?
8. Was there any back dating of any documents?
9. Was there a charging of duplicative services?
10. Did it require credit insurance?
11. Was there mandatory arbitration clauses?
12. Was the loan falsely identified as a line of credit or a business loan?

The Closing

1. Was there rushed loan closing?
2. Were the terms at closing different from what the borrowers thought they would get?
3. Was there a failure to give clients at the time of closing?
4. Was the right of cancellation properly disclosed?

After Closing
1. Was there a failure to pay off debts as promised?
2. Was there a flipping of the loan?
3. Was there a flipping of the property?
4. Was there abusive collection practices?
5. Was there any excessive prepayment penalty?
6. Was there any incomplete or inadequate home work done?

Finally, good news about housing market in Nevada

We hear bad news all the time about housing sector that we almost gotten used to it. Now, finally something came good on our radar screen.

http://www.lvrj.com/business/housing-analyst-predicts-increase-in-sales_-median-price-by-year-end-83571187.html

How bankruptcy handles Home Retention?

How Bankruptcy Handles Homes Retention?
Law office of Malik Ahmad offers free consultation to prospective bankruptcy clients]
This is almost a continuous question as each of my client asks this invariably every time they meet me and of course on a non stop basis. “Can I keep my home”?

Of course, you can keep you home, if you file Chapter 7 bankruptcy or Chapter 13. Home is an exempted property, especially if you have filed homestead under Nevada laws. But this retention is temporary until the opposing lender’s counsel request a motion to lift stay. Invariable, the opposing counsel files a motion to lift stay and invariable it is accepted. Now, you are back to square one and is open to these vultures again, subject of course again, to foreclosure.
Rule No. 1
Do you wish you keep your home? Are you able to pay the mortgage and continue with the pre bankruptcy obligation? If that is the case, you can keep the home. You may down the road request loan modification, but that is a different case. First, if you wish to keep your home, you’re going to have to be able to pay the mortgage. You have three choices after you file the bankruptcy.
-You can surrender the property and have no obligations to pay anyone.
-You can reaffirm the debt, and continue making the payments and still like to assure your lender that such payments would be made as agreed before.
-However, sometimes, when a homeowner is already underwater on their first mortgage, a second or third mortgage can be modified or stripped under Chapter 13.

Rule No. 2.
Let us say you can afford your mortgage, the bankruptcy process would let you keep the home via Nevada exemption. In Nevada, the homestead exemption is $550,000. If you have equity up to $550,000, you can keep your home and safeguard against creditors. A home is at risk of being liquidated in a chapter 7 bankruptcy in Nevada only if there when there is non-exempt equity which exceeds the amount allowed to be protected under Nevada state or federal law. Again, we mean primary home here.

1. Again in Nevada, it is not uncommon to file a chapter 7, AND NOT REAFFIRM ON THE HOUSE, thus discharging the debtor’s personal liability, but continue to make the house payments and continue to live in the house. The advantage to this, from the debtor’s view, is that if the debtor later is unable to pay for the house, the creditor can repossess it through foreclosure, but the personal liability of the debtor is extinguished and down the road the lender cannot come back and sue for deficiency.
2. That takes care of the deficiency issue in Nevada. We have heard of this omnipresent issue all the time, and a bankruptcy resolves this lingering issue.

What to do when you are swimming in debts?

Your debts are excessive and far exceed your income. You are either behind on your mortgage payments or can barely pay it and struggling with it all the time. You have not made a credit card payments in last so many months, or car payments, and the collectors are calling you nonstop in all parts of day and of course in the evening. They are also writing aggressive collection letters. Should you file for bankruptcy? What should you do? You are not alone: many Americans find themselves in a similar situation. The callers keep calling but the debts keep growing.

Bankruptcy is one of the alternatives available for relieving financial distress, but it is one of a very serious legal step with long standing consequences. Before you take the steps of filing for bankruptcy and how it works, explore other options with a credit counselor, and decide which course of action is best for you. Of course in such situation would call these collectors and try to work out some solutions. These collectors are out there to make money out of your miseries and of course collection is a big business. Question is that you cannot afford to pay and this nonpayment had brought you to this situation in the first place.

As usual, bankruptcy is not for everyone, and one should consider seriously the pros and cons before filing for bankruptcy. On this blog, we have innumerable articles posted which would differentiate the difference between both chapter 7 and chapter 13, and you can educate yourself and in discussion with your attorney. If you ultimately decide to seek relief in bankruptcy, you should hire a lawyer who is familiar with the federal bankruptcy laws. Given the new laws, and the concurrent changes, you will need an attorney who has stayed abreast with current and complicated changes and the complex paperwork. Please keep in mind that, since the new laws and amendments are more complicated and imposes new duties on lawyers, it is imperative that you should seek the help of a very knowledgeable attorney who is accessible to your needs and listen and considers your overall situation.

Are you a judgment proof person?
If you are, you do not need to file bankruptcy to protect your property and wages. Judgment proof simply means that you have so little money, income, and property that you would be unable to pay a court judgment entered against you. In addition, under state and federal exemptions laws, creditors are not allowed to seize certain income from judgment proof debtors, such as Social Security income, wages below certain levels, and certain personal property. If there is no point in creditor are going after you in court, there may be less reason for you to declare bankruptcy. If you believe that you may be judgment proof, discuss your situation with a credit counselor or of course a very knowledgeable attorney.

Bankruptcy is a serious matter and should be utilized as a last resort for serious debt problems. The bankruptcy will be a matter of public record meaning that a record of the filing will be available for everyone to find if they want to know about it, including neighbors, mortgage companies, landlords, and future employers. If you file a chapter 13 case, your credit cards should be torn up and will no longer be available to you. In chapter 7, you may be allowed to keep a credit card that has a zero balance, or one that you agree to reaffirm (continue to pay after the filing. You also need to pay your monthly bills as they occur. An employer is not allowed to discriminate against you for filing bankruptcy, but keep in mind that bankruptcy may nonetheless impact your employer in situations where financial stability is an issues for example, if you seek to attain new position or license. The record of bankruptcy stays for up to 8 years. Eight years is a long time in our current economic systems. Also, you need to know the various forms of bankruptcy. You should not wait until the last-minute to seek help.

Can you represent yourself in Bankruptcy?

Can you represent yourself in bankruptcy?

I got a nervous call the other day from a crying lady to talk to me urgently. She told me that her home is taxes are not accepted by the county as she had filed bankruptcy and her property is sent to foreclosure because of non payment of taxes. She filed bankruptcy through a bank mill of local attorneys who files her bankruptcy without informing her of her exemptions and the impact of bankruptcy upon her. Of course she should not have filed chapter 13 as she did not qualify for chapter 13 having not enough income. One can file bankruptcy either yourself or though a production attorney shot. Basically it would be much difference as both work would be identical. Here, the attorney mill had deprived her of her basic right of exemption. Of course you can file your own bankruptcy, and it is perfectly legal to file your own bankruptcy without a lawyer. You can represent yourself in any court. At least that is the law. Again, even in the premises of Clark County District Court, there is a help desk helping pro se plaintiffs and defendants.

The bankruptcy papers are complicated and even experienced attorneys has problems filling out properly. If you have a complicated debt situation, it becomes all the more imperative to be more knowledgeable in these matters. However, knowledge cannot be obtained by reading few posts and getting the help of a paralegal who can provide a glorified typing service. There are plethora of forms and one needs to file electronically these days. You need to file and obtain counseling certificates. If you miss a creditor, he/she can come after you and sue you again.

Do you know the basic jargon of bankruptcy. It is not something which you can learn overnight and just fill in the blank spaces. Remember attorney went to few years schools and passed the most difficult bar examination tests. You need to list all the schedules, your assets and income and also to pass the means test. There are wide variety of papers to be included in your bankruptcy petition, and even the lack of filing of one paper can cause major problems and non dischargeability of your debts. In a chapter 13 case, you need to submit a plan which is very technical and your trustee would frown upon you if you make any mistake. Also, you need to handle and answer objections from chapter 13 trustee.