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September 18th, 2009
September 18th, 2009
The bankruptcy myth that you can no longer stop a foreclosure proceeding by filing for bankruptcy is simply no true! Both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy will stop a foreclosure, but with different long term results. When filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy you receive a stay of all collection action. A foreclosure proceeding is a collection action. Filing of a foreclosure proceeding or going forward with a foreclosure proceeding would violate the bankruptcy stay. If a creditor wants to file a foreclosure or continue with a foreclosure, it must file a motion with the bankruptcy court to “lift” the stay. Since we are discussing a foreclosure we are of course discussing a situation where you are behind on your house note. A Chapter 7 bankruptcy will stop, but only delay a foreclosure since a the Chapter 7 bankruptcy will not allow you to get caught up on the arrearages on the house note. However, the Chapter 7 bankruptcy will force the creditor to start over with the foreclosure, which in many instances will allow you to stay in your home for several extra months. A Chapter 13 bankruptcy will allow you to set up a Plan that will require the creditor to begin accepting the monthly payments from you on the future amounts that you owe and at the same time allow you to catch up on the arrearages over a period of 3 to 5 years. As long as your Chapter 13 bankruptcy plan is confirmed and you make your payments, you will be able to keep your house. The issues of bankruptcy as a way to avoid or delay a foreclosure are too complex for any more than a very general discussion here. I provide a free 30 minute consultation to discuss whether bankruptcy is an option for you and also to assist you in deciding what type of bankruptcy is best for you. Give me a call!
The bankruptcy results in part from financial problems following a recent divorce. A Chapter 13 bankruptcy allows an individual to repay their debts over a period of 3 to 5 years. The bankruptcy is filed in the Central District Bankruptcy Court for California under Court Docket Number 09-15561.
The bankruptcy was filed on August 27, 2009 in the Bankruptcy Court for the Eastern District of Louisiana, which is the bankruptcy court that is located in New Orleans. The Docket Number for Mr. Jefferson’s case is 09-12725. The Meeting of Creditors is set for October 2, 2009 at 11:30 a.m. at the F. Edward Hebert Federal Building in New Orleans. It is extremely unlikely that the forfeiture order for $470,000 in bribery receipts will be discharged. Debts that result from criminal conduct normally must be paid. One of the biggest misconceptions about bankrputcy is that the Banruptcy Court will take your house, car and belongings when you file and sell them to pay your creditors. The truth is that most people who file for bankruptcy keep everything that they owned before they file. This is for several reasons: 1) All states have either state exemption laws or federal exemption laws that allow you to keep your belongings. Pretty much anything you use on a daily basis, clothes, furniture, your TV, computer, etc. will remain in your possession. Most states also have a homestead exemption that protects at least a portion of the equity in a house, and also an exemption for a vehicle, although these exemptions vary from state to state. 2) Even if an item of property is not specifically exempt from seizure, many times the item is not of a value that would make it worth the Trustee’s time and effort to seize it and sell it. In legal terms, the property is “not worthy of administration”. 3) Secured debt such as a house or a car has a lien on it. Therefore, for a Trustee to sell a house or a car to benefit your unsecured creditors, there would have to be enough equity in the house or car to pay off the secured creditor and still justify selling the property for the unsecured creditors. Also, for many people these days, they may have little equity or no equity in their house and or their car. The legal term for this is that the property is “encumbered beyond its value”. Get the facts. I am available to answer your questions about bankruptcy and creditor questions. |
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Jasmine Guy, best known for her role as Whitley Gilbert in the late 80′s, early 90′s TV series, A Different World, has filed for Chapter 13 bankruptcy.
Recently convicted U.S. Representative William “Bill” Jefferson, has filed for Chapter 7 bankruptcy protection along with his wife. News Feed by Bigbold and The Jurist