Tag Archives: Bankruptcy Lawyer

Are short sales worth the risks and is bankruptcy a better option?

 

When bad things happen to good people homes may fall into foreclosure. In too many cases, houses are not worth what the owner owes on the mortgage. This is common with people who bought their homes before the recession when prices were high. If the lender forecloses on the house it will be sold to the highest auction bidder. If the house sells for less than is owed, there may be an opportunity for the lender to sue and collect the deficiency judgment, or balance due after foreclosure. If the market is flooded with foreclosure homes, they could be sold off for significantly less than they would be worth in a healthier economy and real estate market. As foreclosure sales created more financial damage to many, the alternative method of short sales became more popular, giving homeowners an easier way out of their mortgages.

While short sales allow is a sale of your home to a new homebuyer for less money than you owe on your mortgage. If the lender bank agrees to a short sale deal, you may sell the house and be released from the mortgage lien and may go on your way to rent or purchase a more affordable home. While this sounds like a dream come true, there may be a few catches.

Here is a short list of considerations when you have the option to short sell your home:

  1. The lender bank and decision maker on your mortgage has no duty to accept a short sale deal. When you owe the money, you owe the money, plain and simple. The bank may be motivated to do a short sale if the market is flooded with upside down deals and the home is likely to sell under value at auction. Instead of fighting to then also collect the deficiency judgment against you, a lender may be more likely to work with you on a short sale deal, to get the house sold for fair market value.
  2. Even if the bank allows the short sale deal, they may not operate at the speed of business and it may be easier to lose buyers who cannot wait for a slow-moving lender bank. If the lender has a large volume of short sale deals, it may be even more difficult to get things done in a timely manner. Losing buyers and increased aggravation are possible in many short sale deals.
  3. Deficiencies are also possible with short sale deals. Even if you get more money for your house in a short sale, the amount you owe may still leave you short. It is a good idea to have a financial advisor assist you with your options to see what makes the most sense. If the short sale is still going to leave you high and dry, it may be better to proceed with a simpler foreclosure.

Short sales are long and complicated. There are more people involved in the transaction, more tax implications, more chances for something to go wrong. The more complicated the process, the easier it is for people to get frustrated and walk away from a deal.

Why would bankruptcy be a better option?

Depending on a review of your financial situation, a Chapter 7 or Chapter 13 bankruptcy may help you keep your home and avoid foreclosure. If you know you are badly upside down on your home and want to get out of your mortgage regardless, a bankruptcy can help you wipe out the amount of the deficiency judgment and give you a fresh start.

Depending on what you owe, how much you own and your income, a Chapter 7 full discharge will stop your bill collectors and wipe out all your dischargeable debts. If you do not qualify for a Chapter 7, a Chapter 13 reorganization bankruptcy will allow you to pay back a fraction of your debts over a three to five-year period, which may help you stay in your home and avoid making the foreclosure versus short sale decision.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

 

New Years Chicago Bankruptcy Question and Answer Podcast with Joseph Wrobel

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress. Click Here to Listen to the Podcast!

Sample questions answered in this 30-minute show:

  • What happens to when you are renting and file for bankruptcy?
  • What is a 341 bankruptcy meeting and when does it take place?
  • How will a spouse be affected when the other spouse files for bankruptcy?
  • Does my spouse’s income have anything to do with qualifying for a bankruptcy?

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973, he earned a JD from DePaul University Law School.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

Visit our Chicago Bankruptcy website online for more about the firm or call for more information at (312) 781-0996 or e-mail at JosephWrobel@ChicagoBankruptcy.com.

How the FDCPA and the automatic stay help stop bill collectors from harassing you

Do you enjoy being harassed by bill collectors who ask excessive invasive questions and never seem to let up? Nobody enjoys harassment by creditors. There are several ways you can protect yourself from the harassment including making them stop calling you for good if you decide that the relief offered by the bankruptcy courts will put you in a better place. If you do not qualify or feel the need to discharge debts, but you still want the harassment to stop, you should get to know the Fair Debt Collection Practices Act (“FDCPA”).

The law in the FDCPA says debt collectors are not allowed to harass, oppress, or abuse you or anyone else they contact. The following are a few of examples of harassment[i]:

  • Repetitious phone calls that are intended to annoy, abuse, or harass you or any person answering the phone;
  • Obscene or profane language;
  • Threats of violence or harm;
  • Publishing lists of people who refuse to pay their debts;
  • Calling you without telling you who they are.

The FDCPA also says that debt collectors cannot use false, deceptive, or misleading practices. These are several examples of misrepresentations about the debt at issue[ii]:

  • The amount owed;
  • That the person is an attorney;
  • False threats to have you arrested;
  • Threats to do things that cannot legally be done;
  • Threats to do things that the debt collector has no intention of doing.

It might be a good idea to print a copy of this list of harassing conduct and otherwise inappropriate behavior and keep it near your phone. If a creditor seems to step out of line, ask them for their name and operator identification number and let them know you are concerned they are violating the FDCPA and you are warning them to stop the harassment. Many will apologize and take another approach to collect a debt. If they disagree and continue causing you problems you can submit a complaint with the U.S. Consumer Financial Protection Bureau (“CFPB”) by calling (855) 411-2372. The CFPB may also take an online complaint through their website. Additionally, you can file a report with the office of the Illinois Attorney General.

The automatic stay provision in the bankruptcy code can also stop bill collectors in their tracks.

When an individual files a petition for bankruptcy protection an automatic provision of the bankruptcy kicks in – the automatic stay. While a bankruptcy case is active, the that a Chapter 7 or 13, no creditors or collectors may contact or harass the individual in bankruptcy. To learn more, read Chicago bankruptcy attorney Joseph Wrobel’s article, “Examples of the automatic stay and how it operates in bankruptcy law.”

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

[i] U.S. Govt. Consumer Financial Protection Bureau, What is harassment by a debt collector? Updated 9/15/2014.

[ii] See HNi above