Monday, December 17, 2012
Thursday, October 25, 2012
The $100 Million Question. I just got served with a Foreclosure Lawsuit. What do I do ??
The $100 Million Question. I just got served with a Foreclosure Lawsuit. What do I do ??
When somebody files a lawsuit, whether it is a bank, your neighbor, or a credit card company, it is the beginning of a "fight." Somebody is trying to fight with you and take something that belongs to you. You have the following options:
1. Don't do anything [I do not recommend this]. Let them throw their arrow at you. You just sit there like a sitting duck, and get yourself killed.
2. You take an arrow from your quiver, and throw it back at them.
3. You find a friend, ask them to take one of their arrows, and throw it back at the enemy.
I recommend options 2 and/or 3. Always fight back or die trying. But never surrender.
Foreclosure is a scary process. I represent a couple of attorneys who are in foreclosure, and attorneys know the legal system, and yet they are scared of losing their homes. I can just imagine what non-attorneys must go through when they are served with a foreclosure lawsuit.
Here are some of the things I recommend homeowners do when they are served with any kind of lawsuit:
1. Doing "nothing" is not an option. It is the moral duty of every homeowner to fight for their home.
2. Read the summons and lawsuit. Never just ignore any legal papers. You have 20 days to file some kind of response.
3. File a response yourself, or consult with an attorney. There are plenty of attorneys who will give you a free consultation. My initial consultation is always FREE. You have absolutely no obligation to retain me. I will spell out in simple language all your options and remedies.
4. Defend the foreclosure lawsuit by yourself or through an attorney.
5. Start talking to the bank to give you a loan modification, principal reduction, interest rate reductions, extend the length of the mortgage, etc.
6 Do a short sale.
7. File a Chapter 13 bankruptcy, and try to get a loan modification through the Bankruptcy.
There are plenty of other options.
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. 954-358-5911. www.DsouzaLegal.com.
When somebody files a lawsuit, whether it is a bank, your neighbor, or a credit card company, it is the beginning of a "fight." Somebody is trying to fight with you and take something that belongs to you. You have the following options:
1. Don't do anything [I do not recommend this]. Let them throw their arrow at you. You just sit there like a sitting duck, and get yourself killed.
2. You take an arrow from your quiver, and throw it back at them.
3. You find a friend, ask them to take one of their arrows, and throw it back at the enemy.
I recommend options 2 and/or 3. Always fight back or die trying. But never surrender.
Foreclosure is a scary process. I represent a couple of attorneys who are in foreclosure, and attorneys know the legal system, and yet they are scared of losing their homes. I can just imagine what non-attorneys must go through when they are served with a foreclosure lawsuit.
Here are some of the things I recommend homeowners do when they are served with any kind of lawsuit:
1. Doing "nothing" is not an option. It is the moral duty of every homeowner to fight for their home.
2. Read the summons and lawsuit. Never just ignore any legal papers. You have 20 days to file some kind of response.
3. File a response yourself, or consult with an attorney. There are plenty of attorneys who will give you a free consultation. My initial consultation is always FREE. You have absolutely no obligation to retain me. I will spell out in simple language all your options and remedies.
4. Defend the foreclosure lawsuit by yourself or through an attorney.
5. Start talking to the bank to give you a loan modification, principal reduction, interest rate reductions, extend the length of the mortgage, etc.
6 Do a short sale.
7. File a Chapter 13 bankruptcy, and try to get a loan modification through the Bankruptcy.
There are plenty of other options.
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. 954-358-5911. www.DsouzaLegal.com.
Friday, September 21, 2012
What Happens After the Meeting of Creditors
The Meeting of Creditors or a 341 meeting is scheduled about 30 days after the filing of the bankruptcy. At that Meeting, the Trustee appointed in your case will ask you some questions. Usually the Meeting lasts no more than 5 minutes unless the case is unusually complicated or there are issues that come up during the questioning.
Creditors usually don't show up. The only creditors that I have seen show up are parents, brothers, sisters, ex-wives, ex-husbands, and sometimes former best friends or business partners. They hate it when you try to get rid of their debts, and they have information on you, and whether that information is relevant or irrelevant, they will spill their guts out to the Trustee.
Many times my Clients are confused, and think that if everything goes well at the Meeting of Creditors, the case is over, and they are now guaranteed to get their Discharge. Discharge, as we know is the legal forgiveness of debt, and is only given to the "honest but unfortunate" Debtor.
After the Meeting of Creditors, Creditors and other interested parties have the right to object to your discharge. Remember, you filed a bankruptcy to get rid of your debts, but other people may have other ideas and may not want you to be legally forgiven of your debt obligations. Why and Who would be objecting to your bankruptcy:
Creditors: they can object if you have committed "fraud." Fraud would be borrowing money knowing that you are never going to pay it back. For example: just days or weeks or even a few months before the bankruptcy, you go on a shopping spree, and use your credit cards like crazy buying everything in the world like paintings, expensive clothes, airline tickets, jewelry, gifts for their children, grand children or significant others, etc. I know of one person whose bankruptcy attorney told them to go and have a good time on their credit cards, and a good time they had. They went on a round the world cruise, and spent $60,000 on their American Express card, and $20,000 on their Chase card [in less than 3 months,] and then as soon as they came back, their bankruptcy attorney filed them in a Chapter 7 Bankruptcy. Wrong move !!! American Express objected to their Discharge, and then the Trustee joined the band wagon. This poor elderly couple never got a Discharge in their bankruptcy.
Trustee: A Trustee can object to your Discharge if he or she feels that you are not being honest, your are not cooperative with documents and records, you are hiding assets, or if you have transferred assets before the bankruptcy, or you are not being truthful about the value of your assets. Did you know that even a defunct..worthless corporation that you have formed is an asset in a bankruptcy. Reason: you own 100% of the shares of that corporation, and when you disclose this corporation on your bankruptcy papers, a Trustee or a Creditor can then inquire about it. But if you fail to disclose this corporation, and the Trustee or a creditor finds out, they will think you are trying to hide something. Not all Trustees will object if some defunct corporation is not disclosed. But there are some who go by the book, and will object for the sake of objecting. And they are well within their rights. The moral of the story is: be honest and disclose. If the timing is not correct, your Bankruptcy Attorney can delay the filing of the Bankruptcy.
U.S. Trustee: The U.S. Trustee works for the Department of Justice, and their job is to make sure that all of us follow the law, and that the filing of your bankruptcy is not an "abuse" of the Bankruptcy Law. The filing of your Bankruptcy may be deemed an abuse if you are making too much money, and that you should be filing a Chapter 13 and paying back some of your debts, or you never made enough money but you owned millions in assets. The U.S. Trustee wants to know how did you come to own 15 homes when you have never made more than $30,000 a year in the last 5 years. They may want to see your loan applications to see if you lied on your mortgage applications, and if you did they may turn you over to the U.S. Attorney who may prosecute you for mortgage fraud.
If none of these people/entities object in the 60 days following the Meeting of Creditors, the Court will automatically enter a "Discharge of Debtor" in your case. Once this is entered, your debts are legally forgiven and you now have your "fresh start."
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.Dsouzalegal.com. 954-358-5911
Creditors usually don't show up. The only creditors that I have seen show up are parents, brothers, sisters, ex-wives, ex-husbands, and sometimes former best friends or business partners. They hate it when you try to get rid of their debts, and they have information on you, and whether that information is relevant or irrelevant, they will spill their guts out to the Trustee.
Many times my Clients are confused, and think that if everything goes well at the Meeting of Creditors, the case is over, and they are now guaranteed to get their Discharge. Discharge, as we know is the legal forgiveness of debt, and is only given to the "honest but unfortunate" Debtor.
After the Meeting of Creditors, Creditors and other interested parties have the right to object to your discharge. Remember, you filed a bankruptcy to get rid of your debts, but other people may have other ideas and may not want you to be legally forgiven of your debt obligations. Why and Who would be objecting to your bankruptcy:
Creditors: they can object if you have committed "fraud." Fraud would be borrowing money knowing that you are never going to pay it back. For example: just days or weeks or even a few months before the bankruptcy, you go on a shopping spree, and use your credit cards like crazy buying everything in the world like paintings, expensive clothes, airline tickets, jewelry, gifts for their children, grand children or significant others, etc. I know of one person whose bankruptcy attorney told them to go and have a good time on their credit cards, and a good time they had. They went on a round the world cruise, and spent $60,000 on their American Express card, and $20,000 on their Chase card [in less than 3 months,] and then as soon as they came back, their bankruptcy attorney filed them in a Chapter 7 Bankruptcy. Wrong move !!! American Express objected to their Discharge, and then the Trustee joined the band wagon. This poor elderly couple never got a Discharge in their bankruptcy.
Trustee: A Trustee can object to your Discharge if he or she feels that you are not being honest, your are not cooperative with documents and records, you are hiding assets, or if you have transferred assets before the bankruptcy, or you are not being truthful about the value of your assets. Did you know that even a defunct..worthless corporation that you have formed is an asset in a bankruptcy. Reason: you own 100% of the shares of that corporation, and when you disclose this corporation on your bankruptcy papers, a Trustee or a Creditor can then inquire about it. But if you fail to disclose this corporation, and the Trustee or a creditor finds out, they will think you are trying to hide something. Not all Trustees will object if some defunct corporation is not disclosed. But there are some who go by the book, and will object for the sake of objecting. And they are well within their rights. The moral of the story is: be honest and disclose. If the timing is not correct, your Bankruptcy Attorney can delay the filing of the Bankruptcy.
U.S. Trustee: The U.S. Trustee works for the Department of Justice, and their job is to make sure that all of us follow the law, and that the filing of your bankruptcy is not an "abuse" of the Bankruptcy Law. The filing of your Bankruptcy may be deemed an abuse if you are making too much money, and that you should be filing a Chapter 13 and paying back some of your debts, or you never made enough money but you owned millions in assets. The U.S. Trustee wants to know how did you come to own 15 homes when you have never made more than $30,000 a year in the last 5 years. They may want to see your loan applications to see if you lied on your mortgage applications, and if you did they may turn you over to the U.S. Attorney who may prosecute you for mortgage fraud.
If none of these people/entities object in the 60 days following the Meeting of Creditors, the Court will automatically enter a "Discharge of Debtor" in your case. Once this is entered, your debts are legally forgiven and you now have your "fresh start."
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.Dsouzalegal.com. 954-358-5911
Sunday, September 9, 2012
"TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?
A "TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?
Any time an "individual" or a "business" files a Bankruptcy, a Trustee is appointed in that case. The United States Trustee who works for the U.S. Department of Justice appoints the Trustee in each and every case. In Chapter 11 Bankruptcies, the Debtor [person or individual filing for Bankruptcy] is the Trustee or Debtor-in-Possession. The U.S. Trustee supervises the Debtor, and if the Debtor mismanages or does not do what he/she or it is supposed to do.. the U.S. Trustee will ask the Court to appoint a Trustee in the case.
The Trustee is your best friend or your worst nightmare.
If you are an honest Debtor, and you follow all the bankruptcy rules (and some of the rules made up by Trustees,) then the Trustee is your best friend, otherwise, the Trustee is your worst nightmare in a Bankruptcy case..more so than your creditors.
One of the the Trustee's job is to collect all your "non exempt" assets, liquidate them for cash, and then distribute the cash prorata to all your creditors after taking out his fees for administration and fees for any attorneys he may have to hire.
Another function of the Trustee is to make sure that you are Honest, and that you are following the rules of Bankruptcy.
Bankruptcy Trustees are highly intelligent and sophisticated people. So don't try to pull a fast one over them. For example, if you live in a home that is worth $500K, and you state in your bankruptcy schedules that you household goods are worth $500..you need to be prepared for an home inspection by the Trustee or one of his staff.
Likewise they will catch you if you have transferred assets before the filing of your bankruptcy. Trustee's don't do all of this stuff from the goodness of their heart. They have a great incentive in finding assets in your bankruptcy...they get a commission based on the value of the assets they are able to collect from your bankruptcy estate. All of the above relates to Chapter 7 liquidation bankruptcies.
In Chapter 13, 12 & 11, the Chapter 13 Trustee does not want of take any of your assets. All the Chapter 13 Trustee does is object to the Confirmation of the Chapter 13 Plan, and that forces you to come up with a value of your own non-exempt, transferred, or undervalued assets, and then pay that much amount through a Chapter 13, 12 or 11 Plan. If you fail to do so, the Trustee can and will ask the Court to dismiss your Bankruptcy.
The moral of the story: In Bankruptcy you are given a "fresh start" not a "head start." A discharge is granted to only the honest but unfortunate debtor. Bankruptcy is also an "equitable" process when the rights of creditors and interested parties are as important as the rights of the person or business filing for bankruptcy. It is a two-way street..give and take.
Your Bankruptcy Attorney is constantly dealing with the whims and fancies of the Court appointed Trustees to make sure that your rights are protected, and that you accomplish your goals through Bankruptcy.
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.DsouzaLegal.com. 954-358-5911.
Any time an "individual" or a "business" files a Bankruptcy, a Trustee is appointed in that case. The United States Trustee who works for the U.S. Department of Justice appoints the Trustee in each and every case. In Chapter 11 Bankruptcies, the Debtor [person or individual filing for Bankruptcy] is the Trustee or Debtor-in-Possession. The U.S. Trustee supervises the Debtor, and if the Debtor mismanages or does not do what he/she or it is supposed to do.. the U.S. Trustee will ask the Court to appoint a Trustee in the case.
The Trustee is your best friend or your worst nightmare.
If you are an honest Debtor, and you follow all the bankruptcy rules (and some of the rules made up by Trustees,) then the Trustee is your best friend, otherwise, the Trustee is your worst nightmare in a Bankruptcy case..more so than your creditors.
One of the the Trustee's job is to collect all your "non exempt" assets, liquidate them for cash, and then distribute the cash prorata to all your creditors after taking out his fees for administration and fees for any attorneys he may have to hire.
Another function of the Trustee is to make sure that you are Honest, and that you are following the rules of Bankruptcy.
Bankruptcy Trustees are highly intelligent and sophisticated people. So don't try to pull a fast one over them. For example, if you live in a home that is worth $500K, and you state in your bankruptcy schedules that you household goods are worth $500..you need to be prepared for an home inspection by the Trustee or one of his staff.
Likewise they will catch you if you have transferred assets before the filing of your bankruptcy. Trustee's don't do all of this stuff from the goodness of their heart. They have a great incentive in finding assets in your bankruptcy...they get a commission based on the value of the assets they are able to collect from your bankruptcy estate. All of the above relates to Chapter 7 liquidation bankruptcies.
In Chapter 13, 12 & 11, the Chapter 13 Trustee does not want of take any of your assets. All the Chapter 13 Trustee does is object to the Confirmation of the Chapter 13 Plan, and that forces you to come up with a value of your own non-exempt, transferred, or undervalued assets, and then pay that much amount through a Chapter 13, 12 or 11 Plan. If you fail to do so, the Trustee can and will ask the Court to dismiss your Bankruptcy.
The moral of the story: In Bankruptcy you are given a "fresh start" not a "head start." A discharge is granted to only the honest but unfortunate debtor. Bankruptcy is also an "equitable" process when the rights of creditors and interested parties are as important as the rights of the person or business filing for bankruptcy. It is a two-way street..give and take.
Your Bankruptcy Attorney is constantly dealing with the whims and fancies of the Court appointed Trustees to make sure that your rights are protected, and that you accomplish your goals through Bankruptcy.
Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.DsouzaLegal.com. 954-358-5911.
Wednesday, August 15, 2012
Tuesday, August 14, 2012
What kind of Bankruptcy should I file ? Chapter 7, 11 or 13
WHAT KIND OF BANKRUPTCY SHOULD I FILE ?? CHAPTER 7, 11 OR 13
A Lawyer might say: it depends.
Here are some guidelines:
1. Most people can file either a Chapter 7 or 13.
2. If you are not qualified for a Chapter 7, then Chapter 13 is an option.
3. If you are not qualified for a Chapter 7 or 13, then Chapter 11 is your best bet. However, remember, if you are filing a Chapter 11 bankruptcy, then you are moving around with the big boys with lots of rules to follow, and expensive legal fees.
4. Almost anybody with a stream of income [including social security or disability] is qualified to file a Chapter 13.
5. Chapter 7 is a liquidation bankruptcy and is usually filed by individuals whose expenses exceed income, who are below the median income, who have a lot of credit card or other unsecured debt, and no assets [cash, land, equity in cars, etc.]
6. Chapter 13 filed by people who wish to pay a portion of their debt and/or who want to catch up on their mortgage or car payments and save their homes from foreclosure or cars from being repossessed or those individuals who cannot qualify for a Chapter 7 because they make too much money or because they have issues like..fraudulent transfers, receipt of large tax refunds, etc.
This is not an exclusive list. Therefore, it is important that you consult with a Bankruptcy attorney before making a decision. The one thing that I advise individuals contemplating filing a bankruptcy..do not try to do it on your own. Bankruptcy is complex. It is like jumping into quick sand. You will drown. I have seen too many instances where people have lost significant assets:
Example:
1. One case a paralegal filed her own Chapter 7 and lost her $250,000 annuity that she had purchased from the life insurance proceeds of her deceased husband. Annuities are usually exempt in a bankruptcy, however this one was deemed not exempt by a Bankruptcy judge because of the way it was set up, and timing of the purchase of the annuity.
2. A postal worker lost $360,000 of tax free municipal bonds. He thought that just because they were tax-free that they were exempt in the Chapter 7 bankruptcy.
3. One widow lost $250,000 life insurance proceeds from her deceased husband. She thought that since Life Insurance is exempt in a bankruptcy, the life insurance proceeds from her husband's policy are also exempt. He has died a few days before she filed her bankruptcy.
Attorney Dsouza practices in the areas of Bankruptcy, and may be able to assist you to plan for your bankruptcy legally. www.DsouzaLegal.com. 954-358-5911
Friday, August 10, 2012
What is a Meeting of Creditors or 341 Meeting
About 30 days after a Bankruptcy is filed, the Court schedules a Meeting of Creditors.
Really, the Meeting of Creditors is a non-event as long as all the things are done properly. The Meeting usually lasts 5 minutes or less. However, here are certain guidelines that needs to be followed:
1. Be at the Courthouse at least 30 minutes before the Meeting.
2. Don't carry excessive/metallic stuff with you when entering the Courthouse. Just carry your government issued ID/Drivers License and Social Security card. No electronic devices or cell phones are allowed in the Courthouse. If you do not have ID and Social Security card, your Meeting will be rescheduled.
3. Dress appropriately. No cutoffs, torn jeans, etc.
4. Meet with your Attorney before your meeting.
5. No talking in the Meeting Room. If you want to ask your attorney a question it is best if you go outside the room.
6. The Trustee is not your friend. Do not ever ask him questions or for guidance. You have an attorney. Speak with your attorney if you have questions.
7. All your answers must be short and to the point. For example: What is your name. The answer to this question is: My name is William Smith. An answer like this is not acceptable: Well, 20 years ago my parents called me "Chucky." Then my wife used to call me "Billy." and then when I was in South America, they called me 'Jose." This is not acceptable for two reasons: Your name is William Smith, and the second reason is that the Trustee does not care..
8. One of the questions Trustees like to ask is: what caused your financial problems that you had to file a bankruptcy. The answer must be a one-liner..such as: unemployment, divorce, child support payments, lost my second job, I got sick, etc. etc. Please no long winded stories are needed. Trustees do not have the patience to listen to you sad stories.
9. Always be honest. Don't lie. You are under oath and under penalty of perjury. Trustees are experts in what they do, and they know when you are "lying."
10. Don't ever say "My attorney told me to do it." Blaming the attorney is not going to get you off the hook from anything. Remember, you signed your Bankruptcy Papers under penalty of Perjury.
11. Don't be rude to the Trustee or argue with the Trustee. He can make your life difficult if he/she wants to. Be polite and professional.
12. Don't become emotional. Bankruptcy is not a moral judgment on what you did or what you did not do. It is purely a legal process for an honest but unfortunate person to get rid of his/her debts.
13. Most of questions the Trustee will ask you comes right from the Bankruptcy Schedules filed with the Court. You need to know your financial affairs. Therefore if the Trustee asks you: What did you buy with these credit cards. The answer cannot be: I don't know. I don't know is not an acceptable answer in any situation. You used the credit cards, and you know what you used it for. Just say the way it is. If you used it for groceries and gas and food..just say say so and move on. Don't guess or lie.
If you follow some of these basic guidelines...everything will be fine.If you have questions contact Attorney Elias Leonard Dsouza, Esq. at 954-358-5911 or visit www.DsouzaLegal.com for more information.
Tuesday, May 1, 2012
What do you recommend people do when facing a lot of collection calls and lots of financial stresss? How should they handle this situation?
There
are two ways of handling debt. One is to just live in continuous fear of your
creditors and live under stress all the time or the second way would be to do
something about it. One of the ways I suggest is if you are qualified is to
file a simple chapter 7 bankruptcy or a chapter 13 bankruptcy if you’re not
qualified for a chapter 7. And of course there is differences between the two bankruptcies, and
I’ll be able to explain to you more when I meet with you. Chapter 7 for example
is a very simple process from start to finish within 4 months it’s all over
with. And then you can move on and rebuild your credit and do all the things
that you have always wanted to do in terms of assets and finances. Chapter 13
is a streamlined but a little bit of lengthy procedure, however, as soon as you
file your chapter 13, there will be no more harassment calls, and all
collection and garnishments will stop immediately. All the stress goes away in a moment’s notice.
So, you have a choice. What do you want to do? Live in stress and destroy your
family, your marriage, and destroy your
peace of mind or do something about it and get rid of those debts.
A lot of people hear on TV and radio about services that will help you with debt settlement or debt consolidation, what do you say about those type of services?
Debt
settlement, debt consolidation, debt negotiation, these are all great, great
things. They help certain people. And the kind of people they help is who are
currently making a lot of money and have a disposable income at the end of each
month. I just want to warn you. If you think that you can do a debt settlement
and that is going to somehow magically improve your credit score, I can tell you
“That is wrong.” Once you’re late, 30 days, 60 days, 90 days, your credit is already
ruined. And just settling the debt with the creditor is not going to improve
your score. In fact, they’re going to report on your credit report that the “debt
was settled for less than full value” and that’s bad for your credit. So, if
you are under the impression that, “Oh, if I pay something towards my debt, my
credit is going to become better.” That is not correct. I suggest if you don’t
have excess amount of money, if you’re not making a lot of money, file a
chapter 7 or a chapter 13. A Chapter 7 or 13 does not affect your score any
worse than a foreclosure, or a loan modification, or being 30 days, 60 days, 90 days late. In fact
once your score is low enough, nothing you do will lower the score any more.
What is your advice for people that are afraid of creditors garnishing their wages.
The
only time a creditor can garnish your wages or take your car or try to garnish
your bank account is if they have a judgment against you. Once they have a
judgment against you, they have the right to do all kinds of bad things to you
including sometimes intercepting your tax refunds, garnishing your wages, bank
accounts, seizing your cars, etc. You need
to see me immediately if that happens to you because a bankruptcy filing will automatically
stop all these kinds of bad things that a creditor can do to you. Let’s say for
example you had an accident and there is a judgment against you because you
didn’t have insurance to cover for the damage, if you cannot pay that judgment
or make arrangements to pay their judgment, the DMV will suspend your driver’s
license. We can file a bankruptcy, get that debt discharged and get back your
driver’s license and you’ll not have to pay that debt at all. Many people don’t
know that and they drive around with suspended license. But remember, if you
get caught with a suspended license, you can actually go to jail. So don’t do
that. If your drivers license is suspended because of a judgment due to a car
accident, we can get your license back and get rid of the debt at the same
time.
So what’s happening in 2012 as far as the loan modifications with the banks? Are they more flexible? What is this current status?
Loan
modifications are not working. Very few people are getting loan modifications
and even when they get them, the payments are so high that people default
within a few months. Again, you’re taking a chance. I would say you should apply
for a loan modification as a delay tactic so that they can delay your
foreclosure or they can delay the foreclosure or filing the foreclosure case
against you. But if you’re depending on them giving you a good loan
modification, it doesn’t happen many times. In the past 7 years, I have seen
about 3 clients who have got principal reduction and that’s a very small
percentage. I have some clients that have got loan modifications but they were
not always affordable. So loan modifications are difficult to get, and even
when you get them they are not affordable. Bank of America is probably the
worst bank to deal with. They will just give you the run around for the next 8
months and then say, “Oh, we cannot approve your loan modification
application.”
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