Friday, October 6, 2017

Saving Your Home from Foreclosure under Chapter 13 Bankruptcy


Chapter 13 bankruptcy can be used to save a home or investment property  from foreclosure. The filing of a chapter 13 case generally stops the mortgage foreclosure case and gives you the opportunity to propose a plan to reorganize your mortage payments. The chapter 13 case though must be filed before the foreclosure sale.

Cure Mortgage Arrearages

One typical plan provides for the catching your past due mortgage payment. The chapter 13 plan usually involves paying off the mortgage arrearage over a 3 to 5 year period in addition to making your regular ongoing monthly mortgage payments.


The Bankruptcy Court's Mortgage Modification Mediation Program

The Bankruptcy Court in Miami started a new mortgage mediation program on April 1, 2013. It has been very successful in other parts of Florida where the program was previously instituted several months ago. Under this program a mediator is appointed by the Bankruptcy Court to assist in the process and documents and communications are exhanged over a special internet portal.


Avoid Second Mortgage 

If your home has decreased in value, sometimes you are able to wipe out or "avoid" your second mortgage. For example, if you owe $300,000 on your first mortgage and $100,000 on your second mortgage and your home has gone down in value to $250,000, there is no equity or value to "secure" the second mortgage. Under these circumstances, the chapter 13 plan (and related section 506 motion) may provide to wipe out or avoid the second mortgage lien. The $100,000 debt owed on the second mortgage will be wholly unsecured and usually only receive a small dividend like the credit cards receive -- typically around five cents on the dollar.

A certified copy of the order avoiding the second mortgage may be recorded in the county public records to document that the second mortgage is void.

Thursday, October 5, 2017

Unsecured Debt in Chapter 13: How Much Must You Pay?

The amount you are required to pay back to your general unsecured creditors in a Chapter 13 Bankruptcy Case depends on various factors.  It can range from only a few pennies on the dollar to a 100% of the debt. The amount required to be paid must be the higher of the "Means Test" (projected disposable income) and the amount of the chapter 7 liquidation test.

Means Test

The amount you are required to pay back must be at least the amount of you "projected disposable income" as calculated by the "means test" used in Chapter 13.  Basically, your monthly income is calculated and your expenses are deducted, leaving the "projected disposable income."

For purpose of this test, your income is based on the income for the six months period prior to the filing of the bankruptcy case. If the income changes, higher or lower, the new figure may be required to be used. The expenses used in these test are not your actual living expenses, but they are amounts based on the IRS collection standards for certain items and actual mortgage and car loan debts.
The amount of  expenses is deducted from the income leaving the monthly "projected disposable income." Debtor with income less than median income will only be required to pay for three years, but over-median income debtors are required to pay for five years.

Chapter 7 Liquidation Test

The amount required to be paid back in a Chapter 13 case must be at least as much as the "chapter 7 liquidation test" which is the amount that could be received on a hypothetical chapter 7 liquidation of your property.

Sunday, June 18, 2017

Personal Bankruptcy in Florida

What types of bankruptcy are available?

Chapter 7 and chapter 13 are the two chapters most often used by the average consumer. Chapter 7 is typically used by those with little non-exempt property and less than median income. Chapter 13 is used by consumers who desire to propose a chapter 13 plan of reorganization to provide for their various debt over a 3 to 5 year plan of reorganization.

How does a person decide which chapter is best?

Various items need to be considered in determining whether to file for bankruptcy under chapter 7 or chapter 13. One item to be reviewed is the "mean test" which was added to the bankruptcy code in 2005. If a person has substantial property in excess of that which is "exempt," filing under chapter 13 would likely be appropriate.  Also is a person is behind with their mortgage or in a foreclosure, they would consider using chapter 13 to propose a plan to reinstate their mortgage.

Can a future employer consider my bankruptcy in a hiring decision?

Goverment employers may not deny employment to those who file for bankruptcy. Private employers may not terminate an employee because of a bankruptcy filing. Although technically a private employer can refuse to hire a person on account of a bankruptcy filing, often the discharge of debt makes a person a better candidate with his financial situation resolved.

May a person file for bankruptcy for just come of his debt?

A person is required to list all of his or her debt in the bankruptcy case. Those debts that are dischargeable will be discharged. A person though is free to voluntarily repay any debts if they should so desire.


Sunday, June 4, 2017

Chapter 7 and 13 Bankruptcy Relief

(305) 891-4055 - Free Initial Consultation - Office: North Miami - Kendall - Bankruptcy Attorney Jordan E. Bublick - 25 Years Experience - www.bublicklaw.com


Miami Bankruptcy AttorneyChapter 13 and chapter 7 bankruptcy each provides for different requirements and relief.  In general chapter 13 provides for an opportunity to reorganize your debt and chapter 7 provides for an opportunity to just discharge your debt.

Chapter 13

 

Chapter 13 bankruptcy is often used by people with higher incomes and substantial non-exempt property to formulate a chapter 13 plan to reorganize their debt while under the protection of the bankruptcy court. Under a chapter 13 plan, you are able to reorganize your secured debt (such as mortgages and car loans) as wells as unsecured debt (credit cards and personal loans).  Often you are only required to back only  10% to 20% of you unsecured debt and discharge the rest. A typical chapter 13 plan is over a period of 3 to 5 years.


Chapter 7 


Chapter 7 bankruptcy is usually used by people with lower income and little non-exempt property. Under chapter 7 unsecured debt, such as credit cards and loans, is discharged, unless it falls within the categories of non-dischargeable debts, such as student loans and some types of taxes.

Mortgage Modification


Chapter 13 bankruptcy is also used by people who are behind with their mortgages and to save their homes from foreclosure. Under a chapter 13 plan, you are able to take various approaches. You may reinstate your mortgage by catching up-to-date your past due payments over a period of up to 5 years.

Totally underwater second mortgages on residential property may be wholly avoided. Maintenance association liens may be avoided to the extent they are not secured by equity in the real estate.

Mortgage Modification Mediation


You may use the bankruptcy court's new mortgage modification mediation program ("MMM") [previously called the loss mitigation mediation ("LMM") program]  to negotiate with your mortgage company to achieve a modification of your mortgage.

Friday, June 2, 2017

Chapter 7 and Chapter 13 Bankruptcy


Bankruptcy Attorney Jordan E. Bublick is a Miami, Florida  has over 25 years of experience in filing Chapter 13 bankruptcy (reorganization of mortgages and other debt) and Chapter 7 Bankruptcy cases (discharge of debt). He has filed over 8,000 bankruptcy cases. Jordan E. Bublick has been a member of the Florida Bar since 1983 and is a graduate of the Ohio State University College of Law (JD) and the New York University School of Law (LL.M.).

Chapter 7 Bankruptcy 

Chapter 7 bankruptcy is generally used by people who desire to discharge unsecured debt and who have little non-exempt property.

Chapter 13 Bankruptcy 

Chapter 13 bankruptcy is used to reorganize mortgages and other secured debt as well as to discharge unsecured debt.

Chapter 13 bankruptcy is often used to stop a foreclosure action and proposed a plan of reorganization. Due to the decreased real estate values in South Florida, often a junior mortgage lien may be avoidable as an "unsecured debt."


Thursday, June 1, 2017

Chapter 13 Bankruptcy Plan

In chapter 13 bankruptcy, only the chapter 13 debtor is allowed to file a chapter 13 plan. That is, creditors are not allowed to propose a plan as they are in chapter 11.

Chapter 13 plans generally are designed to adjust payment of debts under a flexible repayment plan. Usually these payments are made from future wages or income. There are some mandatory provisions for a chapter 13 plan, but most are permissive.

A chapter 13 plan is usually three to five years in length. Not all secured creditors - such as an up-to-date car loan - are required to be paid as part of the chapter 13 plan. Priority claims, such as child support and alimony arrearages, may be paid through the plan. Defaults in mortgage payments may be cured in a chapter 13 plan.

Wednesday, May 31, 2017

Mortgage Modification under the Bankruptcy Court's New "Mortgage Modification Mediation" Program

The Bankruptcy Courts in Miami has program to help people get a mortgage modification and help them save their home from foreclosure as part of their  chapter 13 bankruptcy case.

The program is called "Mortgage Modification Mediation" (MMM). It is available for homeowners and certain investment property owners who are seeking a modification of their mortgage and may be facing foreclosure of the mortgages on their property.  As part of the MMM program, the Bankruptcy Court appoints a mediator to work with the debtor and their bankruptcy attorney in reaching an agreement.  MMM has been successful in about 80% of the cases in other parts of Florida that previously instituted the program. One advantage of this program is that it provides for better communication with the mortgage lender in the process of negotiating a mortgage modification. A mediator is appointed by the Bankruptcy Court to help the parties negotiate an agreement.

As part of this process, an order is issued by the Bankruptcy Court requiring your mortgage lender to register with the internet portal and negotiate with you for a mortgage modification. The documents that are needed for the mortgage company to consider the mortgage for a modification are submitted on an internet portal for better communications.   All communications between the parties is done through the MMM Portal. After the order is entered the homeowner, mortgage lender and mediator communicate and meet to mediate a modification. In the meeting, all parties must be really and able to settle all matters.