Foreclosure and Bankruptcy Answers From Experienced Debt Relief Lawyers
How do you challenge foreclosure? How can bankruptcy save your home? What debts are discharged in bankruptcy? What assets can you keep? Will bankruptcy ruin your credit?
Simply letting the mortgage company foreclose is the worst case scenario. Declaring bankruptcy is a big decision. It is normal to have questions and anxieties. Foreclosure defense and bankruptcy are also complex and fact specific. We offer this FAQ to address some of the common concerns. To get full answers to your questions, you need to sit down with an experienced foreclosure or bankruptcy attorney to discuss the unique facts of your situation.
Stamatakis + Thalji + Bonanno provides bankruptcy, foreclosure defense and other debt solutions to citizens and small business owners in Tampa, the surrounding counties and throughout Florida. Arrange a free consultation today.
- Common Bankruptcy Questions
- Bankruptcy Basics
- Common Foreclosure Questions
Common Bankruptcy Questions
What is bankruptcy?
Bankruptcy is a legal process which allows a person (a " debtor"), who owes more money than he or she can currently repay to either (a) repay a portion of the money over time under Chapter 11, Chapter 12 or Chapter 13, or (b) have the entire debt forgiven ("discharged") under Chapter 7. Under Chapter 7, a debtor may be required to surrender assets to a trustee.
Bankruptcy is also available to businesses, corporations and partnerships. Even municipal governments can file bankruptcy (under Chapter 9). After a debtor has filed a case (i.e., "petition"), creditors must stop all collection efforts against the debtor for a period of time, unless they get permission from the bankruptcy court to continue. This protection from collection efforts is referred to as the "automatic stay." The Bankruptcy Code and Federal Rules of Bankruptcy Procedure determine which chapter one is eligible to file, which debts can be eliminated, how long repayment must continue, which possessions can be kept, etc. A debtor must abide by these federal laws and rules.
What is the Bankruptcy Code?
The Bankruptcy Code is federal law. It refers to Title 11 of the United States Code (11 U.S.C. sections 101-1330).
How much does bankruptcy cost?
In most consumer or personal bankruptcies, we are able to quote a "flat-rate" fee for legal services in filing a Chapter 7 or Chapter 13 petition. Our flat-rate fees are for the usual uncontested filings. There will be facts and circumstances that may produce situations where our flat-rate fees are not applicable such as objections and adversary proceedings. However, we can let you know if your case falls within our flat-rate guidelines when we speak with you. Please also keep in mind that all of our fees are in addition to any court costs.
What happens when a bankruptcy petition is filed?
The commencement of a bankruptcy case creates an "estate." The estate technically becomes the temporary legal owner of all of the debtor's property. The estate consists of all legal or equitable interests of the debtor in property as of the date the case is filed, including property owned or held by another person if the debtor has an interest in the property. The "automatic stay" is immediately invoked at the instant of the filing of the bankruptcy case, and it prohibits creditors from taking collection action against the debtor or the debtor's property without bankruptcy court approval. The court issues a notice of commencement advising all interested parties of the filing of the bankruptcy case. This notice provides the case number, trustee, date of the meeting of creditors, deadline to file a proof of claim (if applicable) and deadline to file an objection to the discharge (if applicable).
Do I need an attorney to represent me in my bankruptcy case?
Each debtor filing an individual bankruptcy has a right to represent him or herself (pro se debtor); however, the use of an attorney is recommended. Ignorance of the law may cost an individual far more than an attorney's fee. By law, a corporation is required to have an attorney. Note: Individuals who choose to represent themselves will not be able to obtain legal advice from court personnel or from the trustee appointed to their case.
What is a pro se debtor?
A pro se debtor is one who files bankruptcy without an attorney. A pro se debtor is responsible for all proceedings of his/her case. Failure to comply with the Bankruptcy Code and Rules or with court orders may cause dismissal of the debtor's case. It is recommended that all debtors seek legal advice before filing bankruptcy.
Where can I obtain the necessary forms for filing bankruptcy?
The court cannot supply forms. Forms are available from office supply stores or legal stationery stores. Forms are also available for printing by clicking here: Official Bankruptcy Forms.
What are the current filing fees for filing bankruptcy?
| Chapter 7 | $ 299 |
| Chapter 7 - To Reopen | $ 260 |
| Chapter 9 | $1,039 |
| Chapter 9 - To Reopen | $1,000 |
| Chapter 11 | $1,039 |
| Chapter 11 - To Reopen | $1,000 |
| Chapter 12 | $ 239 |
| Chapter 12 - To Reopen | $ 200 |
| Chapter 13 | $ 274 |
| Chapter 13 - To Reopen | $ 235 |
| Chapter 15 (known as foreign proceeding (§304) prior to October 17, 2005) | $1,039 |
| Chapter 15 - To Reopen | $1,000 |
The prescribed filing fee, if paid by the debtor, must be in the form of exact cash, cashier's check or money order made payable to clerk, United States Bankruptcy Court. Additional information regarding filing fees can be found on the court's website at: Bankruptcy Filing Fees.
Can the court waive the bankruptcy petition filing fee?
28 U.S.C. 1930(f)(1) provides that the court may waive filing fee in a case under Chapter 7 for an individual if the court determines that such individual has income less than 150 percent of the income of the official poverty line applicable to a family of the size involved and is unable to pay that fee in installments. The Bankruptcy Rules do provide for individuals to pay the filing fee in installments. To pay the fee in installments, you must submit an application, and the application must be approved by the court. This form is available by clicking here: Filing Fee Installment Form.
What must I do before I file my case?
Pursuant to section 109(h)(1) you must complete and obtain a certificate from an approved nonprofit budget and credit counseling agency during the 180-day period preceding the date of filing.
What is the difference between a Chapter 7 bankruptcy, Chapter 13 bankruptcy and Chapter 11 bankruptcy?
In a Chapter 7, debtors are permitted to retain certain "exempt" property, while the remaining assets are liquidated by the trustee. The trustee will distribute the funds from the liquidation to holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 might result in the loss of nonexempt property.
Chapter 13 is designed for individuals with regular income to repay a portion or all of their debt over an extended period of time. Chapter 13 may be appropriate for debtors who seek to retain certain assets through a repayment plan.
Chapter 11 allows corporations, partnerships and certain individuals who do not qualify under Chapter 13, to reorganize without having to liquidate all assets. As in a Chapter 13, the debtor (called the "debtor-in-possession" because a trustee is not normally assigned) is required to present a repayment plan. If the plan is accepted by the creditors and subsequently approved ("confirmed") by the court, this allows the debtor to reorganize his or her or its personal, financial or business affairs.
NOTE: For further information on these Chapters, click here: General Information.
How is a debt classified as secured, unsecured, priority or administrative?
A secured debt is a debt that is collateralized by property. A creditor whose debt is "secured" has a right to foreclose or take property to satisfy a "secured debt." For example, a mortgage loan is likely "secured" by a debtor's home. This means that the lender has the right to foreclose upon and take the home if the debtor fails to make the loan payments.
An unsecured debt arises when you promise to repay someone a sum of money at a particular time, but you have not pledged any property as collateral for the debt.
A priority debt is a debt entitled to priority in payment, ahead of other debts. Please refer to 11 U.S.C. §507 of the Bankruptcy Code for a listing of such priority claims.
An administrative debt is a category of priority debt. Generally, it is created when someone provides goods or services to your bankruptcy estate after you file your petition. An example of an administrative debt is the fee charged by an attorney or other authorized professional for services rendered after the bankruptcy case has been filed.
When do I receive a discharge of my debts?
The notice of the section §341 Meeting of Creditors reflects a date by which all complaints objecting to discharge or dischargeability of debts must be filed. If the debtor has complied with all of the filing requirements, paid the filing fee in full and pursuant to section 727(a) (10) completed an instructional course concerning personal financial management, and if the debtor has filed the proper certification reflecting completion, your discharge will be entered in due course after the expiration of the date stated earlier.
See Bankruptcy Timelines.
17. What debts are dischargeable?
Generally, all debts listed on the petition are dischargeable. This includes unsecured debts such as credit card and charge card balances, medical bills and judgments that are not secured by collateral. Some back taxes can be discharged under the right circumstances.
However, certain types of debt listed in 11 U.S.C. §523 are not dischargeable. The non-dischargeable debts listed in §523 include:
- Certain taxes and fines
- Debts arising from certain fraudulent conduct
- Debts not listed in your bankruptcy petition
- Alimony, child maintenance or support, and certain other related debts arising out of a divorce decree or separation agreement
- Debts caused by the debtor's willful and malicious injury to another
- Government guaranteed student loans
- Debts caused by a death or personal injury related to your operation of a motor vehicle while intoxicated
- Post-bankruptcy condominium or cooperative owner's association fees
This list includes only examples of nondischargeable debts; see 11 U.S.C. § 523 for a complete list. Under § 523, a creditor or party in interest may also file a complaint to have their debt declared nondischargeable.
In a Chapter 13 case, the discharge is broader under 11 U.S.C. § 1328(a).
What is a bankruptcy discharge?
It releases the debtor from personal liability for discharged debts. Thus, it prevents the creditors owed those debts from taking any action against the debtor to collect the debts. Most, but not all, types of debts are discharged if they existed on the date the bankruptcy case was filed and were listed on the schedules. Some of the debts that are not discharged are discussed in question 15. Bankruptcy law regarding the scope of a discharge is complex, and debtors should consult competent legal counsel prior to filing.
Can a discharge be denied?
Under certain circumstances, 11 U.S.C. § 727 provides that the debtor's discharge may be denied in a Chapter 7 case. Grounds for denial exist when the debtor: (1) failed to keep or produce adequate books or financial records (2) failed to satisfactorily explain any loss of assets (3) committed a bankruptcy crime such as perjury (4) failed to obey a lawful order of the bankruptcy court or (5) fraudulently transferred, concealed or destroyed property that would have become property of the estate. Refer to § 727 for a complete list.
What is the role of a trustee assigned in a Chapter 7 or Chapter 13 case?
Under Chapter 7, an impartial trustee is appointed to administer the case by collecting and liquidating the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors.
Under Chapter 13, an impartial trustee is also appointed to administer the case. The primary role of the Chapter 13 trustee is to determine the feasibility of a debtor's repayment plan for the court and to serve as a disbursing agent, collecting payments from debtors and making distributions to creditors.
What is the function of the U. S. trustee?
The office of the U. S. trustee is an agency of the Department of Justice, with responsibilities that include monitoring the administration of bankruptcy cases and detecting bankruptcy fraud. It is also responsible for appointing and supervising interim trustees to administer Chapter 7 cases, overseeing the debtor-in-possession, and appointing a standing trustee in Chapter 13 cases.
What is a 341 meeting?
This meeting is referred to as the "meeting of creditors." All creditors are notified so that they may attend, but their attendance is not required. Debtors have a duty to appear and testify under oath and answer questions by creditors. This meeting is presided over by the trustee assigned to the case and is held approximately 40 days after the petition is filed. Debtors are required to provide photo identification and proof of Social Security number to the assigned trustee. A debtor's failure to appear may result in dismissal of the case. If a continuance or change in the hearing date is sought, the trustee assigned to the case must be contacted.
How long does a bankruptcy filing remain on my credit report?
A maximum of 10 years under provisions of the Fair Credit Reporting Act.
How do I get a bankruptcy filing removed from my credit report?
The bankruptcy court has no jurisdiction over credit reporting agencies. The Fair Credit Reporting Act, 6 U.S.C. § 605 is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a person's credit report after 10 years from the date the bankruptcy case is filed. You may contact the Federal Trade Commission, Bureau of Consumer Protection, Education Division, Washington, D.C. 20580; their phone number is 202-326-2222. That agency can provide further information on re-establishing credit and addressing credit problems. You can also directly contact the credit bureau(s) reporting the information – e.g., Equifax, Experian, TransUnion.
What is an adversary proceeding? What do I need to file when filing an adversary proceeding with the court?
An adversary proceeding is a lawsuit arising in or related to a bankruptcy case. It is commenced with the filing of an adversary proceeding cover sheet, complaint, summons and the filing fee of $250, if applicable.
What can I do if a creditor keeps trying to collect money after I have filed bankruptcy?
You should immediately notify the creditor in writing that you have filed bankruptcy and provide them with the case name, case number and filing date or a copy of the petition that shows it was filed. If a creditor continues to attempt to collect, the debtor may be entitled to take legal action against the creditor to obtain a specific order from the court prohibiting the creditor from taking further collection action. However, a formal motion must be filed, in accordance with the Bankruptcy Code and applicable Rules. If the creditor is willfully violating the automatic stay, the court can hold the creditor in contempt of court and fine the creditor. Any such legal action brought against the creditor will be complex and will normally dictate representation by a qualified bankruptcy attorney.
What should I do if I cannot make my Chapter 13 payment?
If the debtor cannot make a Chapter 13 payment on time pursuant to the terms of the confirmed plan, the debtor should contact the Chapter 13 trustee by phone and by letter advising the trustee of the problem and whether it is temporary or permanent. If it is temporary, the debtor should advise the trustee of the time and manner in which the debtor will make up the payments. So long as the trustee agrees, the payments can be made up over time. If the problem is permanent and the debtor is no longer able to make payments under the plan, the trustee will request that the case be dismissed or converted to another Chapter, or the debtor may seek to modify his or her plan. The determination of whether to modify the plan or dismiss or convert a case requires legal analysis. The debtor should seek counsel from a qualified bankruptcy attorney before attempting to make a decision on how to proceed in their case.
My ex-spouse has filed bankruptcy. He/she has listed me as a co-signer on a scheduled debt. What can I do? Does my divorce decree protect me?
If you are a co-debtor with your ex-spouse on a debt, the creditor can require the entire payment of that debt from your share of the marital property, even though the divorce decree assigns the debt to your ex-spouse. Depending on the terms of your divorce decree, you may be able to have certain support obligations determined to be nondischargeable by the bankruptcy court or in state court. You should seek legal advice for a thorough explanation of your rights and obligations in this area as soon as you find out that your ex-spouse has filed bankruptcy.
A company has filed for bankruptcy and owes us money. What do we do?
If you have been listed as a creditor in a bankruptcy case and you received a proof of claim form from the bankruptcy court, make sure to complete the form and file it with the court by the required date. You must attach any documentation that supports your claim. If you wish to have a conformed copy returned to you, please enclose an extra copy and self-addressed, stamped envelope. If you were not listed as a creditor, you may obtain a claim form from the bankruptcy court.
NOTE: Information regarding when a claim will be paid should be directed to the trustee assigned to the case, whose name and telephone number can be found on the 341 meeting notice.
How do I obtain a proof of claim form?
Proof of claim forms can be obtained at the clerk's office of the bankruptcy court. You may send a written request with a stamped, self-addressed envelope to the clerk's office.
What is a reaffirmation agreement?
A reaffirmation agreement is an agreement between the debtor and a creditor that the debtor will pay all or a portion of the money owed, even though the debtor has filed bankruptcy. In return, the creditor promises that, as long as payments are made, the creditor will not repossess or take back its collateral. This means that the debtor will remain personally liable on that debt.
What is a motion?
A motion is a written formal document in which the party, the movant, who is requesting an action, sets forth his or her grounds for the action requested. The party against whom the action is requested is the respondent.
How do I get a hearing date?
It is not necessary to contact the court for a hearing date. Upon receipt of properly filed documents, a hearing will be set automatically and proper notice of the hearing date and time will be given to interested parties.
Florida Bankruptcy Basics
Chapter 7 Bankruptcy begins when you file a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. Additionally you must also file the following with the court:
Why is bankruptcy a bad word?
Bankruptcy is not as complicated as it seems. While there are many rules and regulations that can be confusing without proper guidance and representation, many of the basic concepts make sense. Read below to get an idea of some of the basic questions we will ask you during your free consultation. The more credit card debt you are carrying the more likely that Chapter 7 is the bankruptcy for you. A Chapter 7 bankruptcy liquidation will eliminate all of your debt without requiring any payments by you to the creditor in most circumstances. As you already know, paying off credit cards can be difficult. If you are simply paying the minimum then it will take you decades to pay off those debts, that is only if you do not spend any more money on those credit cards. Bankruptcy is a major option for those in similar circumstance.
Chapter 7 debt liquidation: In a nutshell
During your free consultation we will ask you the following:
1. How much credit card debt do you have?
2. Do you want to save a home or car or other asset?
3. How much money do you make?
4. Do you have savings, stocks or free and clear land? If you do then you will have to turn over any nonexempt savings to the bankruptcy court. This means anything more than $1,000 to $2,000 will either go to the bankruptcy court or you will be forced to compensate the bankruptcy court.
5. Do you have a 401(k) or IRA?
6. Do you have equity in your homestead?
Chapter 13 reorganization: In a nutshell
During your free consultation we will ask you the following:
1. Do you want to save your home, investments or other assets?
2. Do you have two mortgages?
3. Are you behind on your mortgage payments?
4. How much money do you make?
If you are considering hiring a bankruptcy attorney make sure he or she has experience in bankruptcy court and make sure he or she does not also represent creditors and banks. Unfortunately, we often find that many bankruptcy attorneys who represent consumers in bankruptcy on Monday represent the banks on Tuesday. At Stamatakis + Thalji + Bonanno, we relish our job as Florida's bankruptcy attorneys.
As you see, the bankruptcy process is very complicated and provided numerous challenges to consumers not represented by experienced lawyers. Contact Stamatakis + Thalji + Bonanno today for your free consultation.
Chapter 11 business reorganization: In a nutshell
The Chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.)
Background
A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy.
An individual cannot file under Chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or if the debtor was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d)-(e). In addition, no individual may be a debtor under Chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
How Chapter 11 works
A Chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors that meet certain requirements. 11 U.S.C. §§ 301, 303. A voluntary petition must adhere to the format of form 1 of the official forms prescribed by the Judicial Conference of the United States. Unless the court orders otherwise, the debtor also must file with the court: (1) schedules of assets and liabilities (2) a schedule of current income and expenditures (3) a schedule of executory contracts and unexpired leases (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). If the debtor is an individual (or husband and wife), there are additional document filing requirements. Such debtors must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. 11 U.S.C. § 521. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a).
Common Foreclosure Questions
I am behind on my mortgage payments, what do I do?
Don't ignore the problem. It will only make your situation worse. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house. Prioritize your spending. After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses — cable TV, memberships, entertainment — that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage. Contact us immediately for a free consultation.
I am in foreclosure, what options do I have?
There are many options for you to pursue during the preforeclosure and foreclosure process. Below is a list of such possible options.
Should I open and respond to all mail from my lender or lender's attorney?
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action and important dates. Your failure to open the mail will not be an excuse in foreclosure court and ignoring these notices will only make the situation worse. Before responding, contact us immediately for a free consultation. Your lender will have an attorney working for them, so should you.
I have just been served with a summons and foreclosure complaint. What do I do? You must respond in writing and/or serve and file an answer and affirmative defense within 20 days of being served with the complaint. Any delay may make the situation you are in worse, and if a borrower or homeowner fails to do anything at all, the situation may become the worst case scenario possible. Contact us immediately for a free consultation. Florida's mortgage foreclosure process will absolutely have serious, long lasting ramifications that you may have to deal with in the future, so it is absolutely in your best interest to participate now while it is occurring. Your decision to participate now may preserve, protect and safeguard valuable legal rights affecting your future income, credit worthiness and income tax consequences. Contact us immediately for a free consultation.
If I do nothing, what will happen?
A default and default judgment will be entered, and the clerk of the court will auction your property, usually within 25 to 30 days from entry of a final judgment.
Should I use a foreclosure prevention company?
You don't need to pay fees for foreclosure prevention help use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three months' mortgage payment) for information and services your lender may provide for free. Watch out for foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home. Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney or a trusted real estate professional.
Will the foreclosure process affect my credit score?
It is hard to say exactly how many points your credit score will drop due to a foreclosure. There are numerous factors that affect your credit score. It does appear though, that loss mitigation options that do not result in the completion of the foreclosure are better for your credit score depending on which credit bureau you are looking at. However, Fair Isaac Corp. (FICO) has been quoted as saying that loss mitigation options have the exact same negative effect on a person's credit score This is so because Fair Isaac Corp. has done very little analysis distinguishing loss mitigation options vs. foreclosures, and as a result of ignorance they treat loss mitigation options and foreclosure all the same. However, TransUnion, Equifax and Experian have a little more detailed credit scoring system, so they may account for loss mitigation options. However, a benefit of short sales and other loss mitigation options is that borrowers will generally face a shorter waiting period before they can obtain another mortgage. Many lenders primarily make loans that they can sell to big mortgage players like Fannie Mae and Freddie Mac. Fannie Mae generally will not buy loans made to borrowers involved in a short sale in the past two years. That's shorter than the four-year wait time if you have a deed in lieu of foreclosure on your record, and the five-year wait time if you have a foreclosure on record. Typically, any late mortgage payments are viewed as a negative mark. Generally, negative marks will remain on a credit report for seven years. Foreclosures also remain on credit scores for seven years. The impact on credit scores diminishes over time though. Loss mitigation efforts and foreclosure are definitely better than a bankruptcy, as the filing of a bankruptcy is viewed by the credit reporting industry as an attack against all trade lines across the board, whereas a mortgage foreclosure is only an attack against a single trade line, your mortgage lender.
What if I file bankruptcy?
A bankruptcy will stop the foreclosure. A Chapter 13 bankruptcy may allow you to make up the arrearages and reinstate your mortgage, over a period of time, usually five years. It means you make a regular payment and part payment each month until you get caught up. In a Chapter 7, you will have to pay back the arrearages much quicker than five years, the foreclosure will continue. The general rule is bankruptcy negatively affects your credit score for 10 years, but sometimes the creditors on a Chapter 13 will voluntarily remove it after seven years to encourage people to file a Chapter 13 rather than a Chapter 7.
Are their income tax consequences as a result of a foreclosure?
It usually depends on whether or not your home or property has equity and what type of loan it is. If there is no equity, it is likely that the property or home will be sold for less than the mortgage amount owed. The Internal Revenue Service will consider debt forgiveness by the lender as income, and the borrower may also have income in the form of capital gains from the sell or transfer as well. However, there are several ways to offset this gain or income such as offsetting income and capital gains with losses, being insolvent at the time of the transfer and bankruptcy. Consult with an accountant. These rules are complicated, and you are advised to make a thorough examination of your personal financial situation with an experienced tax professional.
After the property is auctioned by the court clerk, do I have to get out?
Yes. The sheriff's office will physically evict you and remove you and your personal effects from the property, usually in as little as 10 to 15 days.
What can an experienced and knowledgeable lawyer do?
File an answer containing affirmative defenses, if any.
In the answer, is a denial of the lender's complaint all I need to do?
Usually not. You must state all affirmative defenses, otherwise they may be waived or may be may not be sufficient to stop the foreclosure process.
What are affirmative defenses?
They are special defenses which must be specifically alleged such as truth-in-lending violations, usury, fraud and other specific types of improper conduct by the lender, which may defeat or partially defeat the lender's claims.
Why are affirmative defenses different than just an answer with denials?
The lender has a sufficiently more difficult burden to obtain a "fast" or summary judgment of foreclosure when affirmative defenses are filed.
Can an attorney just delay the case without justification?
No. An attorney cannot cause delay solely for that purpose. But, in the full exercise of your legal rights, delay may result as a by-product of a proper defense, often caused by the plaintiff not properly and promptly responding to your attorney's rightful demands.
If I get a lawyer, does he automatically get more time to file an answer?
No, the 20 days continues to run. If a default is taken against you, it will pose, at a minimum, difficulties in getting the default set aside and allowing your attorney to use the defensive arsenal otherwise available on your behalf.
If my property is sold by the court clerk, what price will it bring?
Usually much lower than fair market value. Most of the time it is sold for the total amount of the mortgage or less.
Will I get any of the sales proceeds?
Only if there is a surplus (if the property is sold for more that what is owed in total to the plaintiff and all other mortgages and liens on the property).
If the property is sold for less than the total owed, can the lender collect the difference?
Yes, but only if the lender also obtains a deficiency judgment.
Can I sell the property and get my money out?
Yes, you can sell or refinance so long as the lender is paid prior to the foreclosure sale date.
I have lots of other questions, can I call the judge or the court for advice?
No. Judges, judicial assistants (judge's assistant), court clerks and sheriff's department employees cannot practice law or give you legal advice. They can only point out the existence of certain procedures, but cannot tell you how to follow them or how effective they will be.
Do I have the right to reinstate? (bring the mortgage current)
Not always, unless your mortgage or mortgage note specifically gives you this right. However, many mortgage lenders often voluntarily consent to reinstatement
President Obama and the U.S. Congress have designated our offices a Federal Debt Relief Agency because we help people file for bankruptcy. Contact Stamatakis + Thalji + Bonanno today for your free consultation.
