Comments for The Bricks Law Group

Comment on Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Filing by Peter Bricks

Peter Bricks — Mon, 06 Jun 2011 18:23:33 +0000

Brian, I am sorry to hear about your wife’s bout with cancer. As to your question, you have apparently been discharged in bankruptcy without reaffirming the note. As such, you can no longer reaffirm the note, which means this creditor cannot bind you to any personal obligation on the note.

Therefore, in short, yes, the creditor can work out a modification with you, but they can no longer have any recourse other than taking back the property.

However, please note that if you do refinance the house and take out a new note, that note will not be subject to the bankruptcy and discharge.

Comment on Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Filing by Brian

Brian — Sat, 04 Jun 2011 18:00:20 +0000

I keep seeing this when I search “any post discharge home modification is only binding as to the creditor�s lien rights”. We have completed a CH7 BK in August of last year due to my wife going through cancer for over a year and our home was then discharged. We have been paying the mortgage still in order to stay, but have not reaffirmed. However, the monthly payment is still too large for us to stay in the house. We were wanting to try and do a modification, but I see that under “11 USC 524 prevents the debtor and creditors from entering into an agreement after bankruptcy for a debt that was discharged in bankruptcy”. So my question is, what does the section mean which states that “any post discharge home modification is only binding as to the creditor�s lien rights”? Does this mean we can do a modification without reaffirming and no recourse besides the debtor taking back the property if we stop paying after a modification? Thank you for any feedback.

Comment on What Happens After You File Your Chapter 7 Bankruptcy Case? by Bankruptcy and Bad Credit Scores: How Does Your Filing Affect Your Future?

Bankruptcy and Bad Credit Scores: How Does Your Filing Affect Your Future? — Tue, 24 May 2011 00:59:07 +0000

[...] is obvious to ask and the answer is predictably that bankruptcy is not good for your credit. A Chapter 7 bankruptcy remains on your credit for 10 years, and a Chapter 13 remains on your credit for seven [...]

Comment on What Happens After You File Your Chapter 13 Bankruptcy Case? by Planning for Bankruptcy: Be Aware of the Chapter 13 debt limits

Planning for Bankruptcy: Be Aware of the Chapter 13 debt limits — Mon, 09 May 2011 13:56:06 +0000

[...] Chapter 13 bankruptcy is an attractive option to many debtors, particularly those with either disposable income or significant equity assets. However, before you file for Chapter 13 bankruptcy, you must be aware of the Chapter 13 debt limits. [...]

Comment on How Much Do You Have to Pay Your Unsecured Creditors in Chapter 13 Bankruptcy? by Chapter 7 and 13 Differences: Which Bankruptcy Chapter Should You Choose?

Chapter 7 and 13 Differences: Which Bankruptcy Chapter Should You Choose? — Sun, 24 Apr 2011 22:00:11 +0000

[...] to retain secured collateral (typically a house or a car) over the long-term and needs to devise a chapter 13 plan to get caught up on the [...]

Comment on What Happens After You File Your Chapter 7 Bankruptcy Case? by Chapter 7 and 13 Differences: Which Bankruptcy Chapter Should You Choose?

Chapter 7 and 13 Differences: Which Bankruptcy Chapter Should You Choose? — Sun, 24 Apr 2011 21:59:55 +0000

[...] solutions cannot accurately be made without understanding and comparing� the difference between Chapter 7 and Chapter 13 bankruptcy. This is because a bankruptcy is very different depending under which [...]

Comment on What Happens After You File Your Chapter 13 Bankruptcy Case? by Bankruptcy and Debt: How Business Debtors Can Avoid the Means Test

Bankruptcy and Debt: How Business Debtors Can Avoid the Means Test — Thu, 07 Apr 2011 13:18:33 +0000

[...] disposable income, the debtor is presumed to be able to pay enough to its creditors through a Chapter 13 repayment plan rather than be eligible to discharge its debts through a Chapter [...]

Comment on What is the Means Test? by Bankruptcy and Debt: How Business Debtors Can Avoid the Means Test

Bankruptcy and Debt: How Business Debtors Can Avoid the Means Test — Thu, 07 Apr 2011 12:55:29 +0000

[...] means test for bankruptcy is used by the court to determine whether a debtor(s) has disposable income to pay [...]

Comment on Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Filing by Peter Bricks

Peter Bricks — Wed, 06 Apr 2011 20:38:45 +0000

Marilyn, when you do not reaffirm a debt in chapter 7, it is discharged. As such, you are not liable for any deficiency, and it makes limited sense to do a short sale given those conditions. I’m not stating a golden rule on this topic as there are some minor advantages to doing a short sale (for instance, does your property have HOA dues?), but for the most part, it’s not worth bothering with.

I’ve actually written a blog on this very topic, which you can read at the link below. The pertinent part is copied and pasted below the link to the whole article:

http://www.brickslaw.com/bankruptcy/short-selling-house-bankruptcy-rarely-sense/

For example, let�s say the debtor owns a house worth $130,000 and has a mortgage at $150,000. The house has negative equity, so if the debtor was not filing bankruptcy and wanted to get out from the house, the debtor would have to either sell it for a $20,000 loss and pay the difference at closing or get the bank to approve a mortgage short sale to forgive the deficiency.

However, now take the same numbers, but put the debtor in a chapter 7 bankruptcy. In this scenario, the debtor does not have to worry about trying to get a short sale approved to cover the deficiency, because the debtor can simply choose not to reaffirm the mortgage within the bankruptcy. By not reaffirming the mortgage, there is no balance owed to the bank, and the debt is discharged in the bankruptcy. Since the debt is discharged in the bankruptcy, then there is no incentive for the debtor to work a short sale, as the debtor can walk away without financial repercussions as to the note at any point.

Comment on Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Filing by marilyn chagarrua

marilyn chagarrua — Wed, 06 Apr 2011 20:16:08 +0000

My question is in regards to the loan modification after a chapter 7 filing. I did not reaffirm the debt in the bankruptcy and want to know if i am personally liable for any deficiency if I do a short sale?