The Judicial Conference of the United States decided at their meeting in March that bankruptcy filing fees would increase in June. The Judicial Conference was formed to make policy with regard to the administration of the US Courts. The Bankruptcy Court filing fees are increasing June 1, 2014. The filing fees will increase $29, which is a huge increase from the last installment. Normally, the filing fees are only increased by $6. The new Chapter 7 filing fees are $335, up from $306 and the new Chapter 13 filing fees are $310, up from $281.00. With prices increasing in June, right now is the best time to file your consumer bankruptcy chapter 7 or chapter 13. If you are thinking of filing bankruptcy, then you need to contact an attorney as soon as possible.
The SC Department of Consumer Affairs is partnering with the US Department for Treasury in promotion of their Help for Homeowners Foreclosure Prevention Event to be held at the Columbia Metropolitan Convention Center on June 28 from 1:00pm-8:00pm. At the event, distressed borrowers will be able to discuss foreclosure prevention options one-on-one with banks, credit unions and servicers on-site or with housing counselors. The attached flyer outlines the documents that homeowners should bring to this FREE event. There is no pre-registration; homeowners are encouraged to just show up to the event.
One of the biggest concerns for clients is if they filed bankruptcy, then will they be able to get credit after the case is done?
Written by Columbia SC Bankruptcy Attorney Colleen Brunson.
The answer is YES!
Some creditors like the fact that the bankruptcy has cleared most or all of the debtor’s debt. Creditors will look at many factors to consider whether they will lend to the debtor. Usually, the creditors will look to a debtor’s income and job stability. If the debtor has a long job history with the same employer, then it will help that debtor to get credit. Don’t be discouraged if you don’t have a long job history because creditors look at other factors as well. The debtor’s income and assets are a factor in whether the creditor will lend to a debtor.
Will you be able to buy a house?
The answer is YES!
Most mortgage creditors rely on Fannie Mae underwriting guidelines. See Fannie Mae Selling Guide for Single Families.
For a chapter 7, a four year waiting period is required from the date of discharge or dismissal. Obviously, a discharge will be better than a dismissal of the case. There is an exception to the four year rule: two years from the discharge or dismissal if extenuating circumstances can be documented.
For a chapter 13, the waiting period is two years from the date of discharge or four years from the dismissal date. Again, debtors are rewarded for completing their bankruptcy plan. If the case was dismissed, there is an exception to the four year waiting period. There is a two year waiting period if extenuating circumstances can be documented. There are no exceptions permitted to the two year waiting period after the chapter 13 discharge.
If there are multiple bankruptcy filings in the past seven years, then a five year waiting period is required. A three year waiting period is permitted if extenuating circumstances can be documented and the most recent bankruptcy filing must have been the result of extenuating circumstances.
If there is a foreclosure, then a seven year waiting period is required and a three year waiting period for extenuating circumstances can be documented. The purchase of second homes or investment properties are not permitted until the seven year waiting period has elapsed. If it is the principal residence, the waiting period may be shorter.
If there is a deed-in-lieu of foreclosure or short sale, then the waiting periods are two, four, or seven years based on the loan-to-value (LTV) ratio. The LTV ratio is the ratio of a loan to the value of an asset purchased. So if the house is worth $200,000 and the loan is $175,000, then the LTV ratio is 88%. The lower the LTV ratio, then the shorter to the waiting period.
So it appears that debtors will be able to buy a house within two to four years of the bankruptcy discharge. A bit longer if the case is dismissed. I tell my clients to worry about their credit after they make it through the bankruptcy. It is important to focus on completing their bankruptcy case first.
“I never thought I would have to file bankruptcy.”
- “I never thought I would be here.”
- “I was doing fine until I got sick.”
- “I was brought up to pay my bills.”
- “I am robbing Peter to pay Paul.”
- “I could pay my bills until I lost my job.”
Everyday during consultations I hear statements like these from my potential clients. Of course, no one wants to file bankruptcy, but my clients NEED to file bankruptcy. So many clients are embarrassed or ashamed to file bankruptcy. This is the 21st century! Hundreds of thousands of people have filed bankruptcy. YOU are not alone! Things happen in life that we can’t control. Stop being ashamed and move forward. Even the most successful people in life make mistakes. The difference between them and everyone else is that they learn from them. They don’t dwell on the past and they move forward. Bankruptcy is simply a tool that can help you move forward.
Bankruptcy is just a solution to a problem and it is a right afforded by the federal government. Some benefits of filing bankruptcy are collection calls stop, foreclosure stops, tax garnishments stop, and you can breathe. We can’t always control what happens to us but we can control how we deal with it. Before you decide to deplete your retirement to catch up your mortgage payments or pay bills, PLEASE talk to a bankruptcy attorney! I can’t tell you how many of my clients told me, “I wish I would have called you months ago.” Don’t let pride or embarrassment stop you from getting advice about your financial future. Bankruptcy will allow you to stop worrying and actually sleep at night! So put aside your fear, pick up the phone and call a bankruptcy attorney right away. It might end up being the best decision you ever make for you and your family.
Columbia Bankruptcy Attorney Colleen Brunson has been helping her clients seek debt relief since 2004 . Call her Columbia Office today at 803-403-1955 to schedule your free consultation.
The Bankruptcy Filing Process.
There are a lot of people in South Carolina that have questions about the bankruptcy filing process. While it can vary depending on several factors, this post should provide some basic insights into what to expect in a typical case. Bankruptcy can be a scary and intimidating situation but working with the right bankruptcy attorney can make the whole experience smoother and less stressful.
Choosing an Attorney.
The first and most important step is to find an attorney that you feel comfortable with and who can answer your questions fully. Sometimes, clients will shop around for looking for the best deal or the biggest name. The cheapest attorneys may not be the best fit for you. Just remember the old saying: you get what you pay for!
The Initial Consultation.
When you meet with the attorney, make sure you bring with you a list of ALL your debt and the values of your assets. This will help the attorney determine the best chapter for you. After you meet with the attorney, there will be documentation needed to complete the process and you will have to complete your attorney’s questionnaire. You will also need to complete a credit counseling session and provide that certificate to your attorney. The credit counseling must be completed within 180 days of the filing of the bankruptcy. If you wait too long, then you will have to do it again. It is best to do it right before you meet with your attorney to sign your prepared paperwork.
Filing your Bankruptcy.
After you have completed the paperwork requirements and paid your attorneys fees, then you will have a signing appointment. At this signing appointment, the attorney will explain in detail all the paperwork that will be filed with the court. This is the best time to add creditors that you forgot or tell the attorney if the paperwork is incorrect. Once the paperwork has been signed, then the attorney will file the case with the Bankruptcy Court. Everything is done electronically and Bankruptcy is public knowledge. Your attorney will inform you of your case number and what will be expected of you for the remainder of the case.
After the Case is Filed.
Once your case is filed, then you will have a court hearing called the “Meeting of Creditors” or the 341 hearing. This is a very simple hearing in which you answer questions by the trustee (and sometimes creditors) about the schedules that you filed with the court. This is a relatively quick hearing.
If you filed a chapter 13, then your trustee payment is due 30 days from the date of filing. The 30 days from the date of filing may be before the 341 hearing. The trustee will usually request the plan payment be deducted directly from your pay check. After the 341 hearing, you will have a confirmation hearing that confirms your plan for you and your creditors. You usually do not need to attend this hearing unless you are not current on your trustee payment or more documentation or testimony is needed. Then, once the plan is confirmed, you just need to keep making the trustee and mortgage (if applicable) payments. A chapter 13 plan is typically 60 months (5 years). Towards the end of the case, you will receive a request for discharge that will need to be filled out and returned to your attorney. This document will have to be filed in order to receive a discharge of your debt. You will need to complete a second credit counseling called a financial management course. This course will take about two hours to complete and is supposed to educate you about making smarter choices regarding your finances. You will not receive a discharge if you do not file the request for discharge and financial management course. So even if you have paid the trustee payment over FIVE years, if these documents aren’t filed, then you don’t discharge your debt. That is why it is very important to keep your attorney’s office updated with current addresses and phone numbers. If you move or get a new phone number, make sure you inform your attorney right away.
If you filed a chapter 7, then after the 341 hearing, you need to complete a second credit counseling called a debtor education or financial management course. This course will take about two hours to complete. It may be done prior to the 341 hearing but it must be done in order to receive a discharge. Typically, a no asset chapter 7 will take about four to six months to complete. An asset chapter 7 will take longer to complete based how long it takes to sell the assets. Usually, an asset chapter 7 can take a year or longer.
The moral of the story is to pick the right attorney! If you would like to learn more about bankruptcy filing process in detail, please contact my office to schedule a free initial consultation. I am located right in downtown Columbia and offer after hours or Saturday appointments.
Changes in Mortgage Servicing Practices took effect on October 2, 2012
The $25 billion government settlement with the big five mortgage companies- Bank of America, Citigroup, Ally Financial, Wells Fargo and JPMorgan Chase, have instituted more than 300 changes in the way they service mortgages. The changes took effect on Tuesday, October 2nd. Here are some highlights of the critical changes:
- No more “robo-signing” – not having a real person look and sign the documents in order to start the foreclosure process.
- No more “dual tracking” – where mortgage companies were continuing with the foreclosure while also working on a loan modification with the borrower.
- Borrowers will have their own point of contact – one person that is handling the borrower’s account.
- Mortgage companies must treat foreclosure as the last option and must consider other options prior to a foreclosure.
What about Mortgage Assistance relief services?
This is a good time to talk about all those companies (mortgage assistance relief services) that claim to help you with a loan modification. DON’T PAY THEM! The Code of Federal Regulations prohibits the collection of advance payments and requires certain disclosures by those companies. See the code section below. Attorneys may be exempt from these requirements.
§ 1015.5 Prohibition on collection of advance payments and related disclosures.
It is a violation of this rule for any mortgage assistance relief service provider to:
(a) Request or receive payment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer’s dwelling loan holder or servicer incorporating the offer of mortgage assistance relief the provider obtained from the consumer’s dwelling loan holder or servicer;
(b) Fail to disclose, at the time the mortgage assistance relief service provider furnishes the consumer with the written agreement specified in paragraph (a) of this section, the following information: “This is an offer of mortgage assistance we obtained from your lender [or servicer]. You may accept or reject the offer. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [same amount as disclosed pursuant to §1015.4(b)(1)] for our services.” The disclosure required by this paragraph must be made in a clear and prominent manner, on a separate written page, and preceded by the heading: “IMPORTANT NOTICE: Before buying this service, consider the following information.” The heading must be in bold face font that is two point-type larger than the font size of the required disclosure; or
(c)(1) Fail to provide, at the time the mortgage assistance relief service provider furnishes the consumer with the written agreement specified in paragraph (a) of this section, a notice from the consumer’s dwelling loan holder or servicer that describes all material differences between the terms, conditions, and limitations associated with the consumer’s current mortgage loan and the terms, conditions, and limitations associated with the consumer’s mortgage loan if he or she accepts the dwelling loan holder’s or servicer’s offer, including but not limited to differences in the loan’s:
(i) Principal balance;
(ii) Contract interest rate, including the maximum rate and any adjustable rates, if applicable;
(iii) Amount and number of the consumer’s scheduled periodic payments on the loan;
(iv) Monthly amounts owed for principal, interest, taxes, and any mortgage insurance on the loan;
(v) Amount of any delinquent payments owing or outstanding;
(vi) Assessed fees or penalties; and
(2) The notice must be made in a clear and prominent manner, on a separate written page, and preceded by heading: “IMPORTANT INFORMATION FROM YOUR [name of lender or servicer] ABOUT THIS OFFER.” The heading must be in bold face font that is two-point-type larger than the font size of the required disclosure.
(d) Fail to disclose in the notice specified in paragraph (c) of this section, in cases where the offer of mortgage assistance relief the provider obtained from the consumer’s dwelling loan holder or servicer is a trial mortgage loan modification, the terms, conditions, and limitations of this offer, including but not limited to:
(1) The fact that the consumer may not qualify for a permanent mortgage loan modification; and
(2) The likely amount of the scheduled periodic payments and any arrears, payments, or fees that the consumer would owe in failing to qualify.
The bottom line.
So if they ask you for money up front, then they probably aren’t going to be able to help you. They could just take your money, then when the sale date is set, they could call you to say, “You should probably file bankruptcy to save your house.” Don’t worry though, there are places that can help you.
Look to SC HELP (South Carolina Homeownership and Employment Lending Program). This is a service that is provided by the South Carolina State Housing Finance and Development Authority and the purpose is to help you stay in your home. Best of all, you don’t have to pay them to help. So remember, beware of mortgage assistance companies that require an upfront fee to help you.
In the case that you need to discuss bankruptcy as an option to stop foreclosure, please don’t forget that I offer a free initial consultation, flexible payment terms and after hours or weekend appointments so you don’t have to miss work. Call my Columbia office today at 803-403-1955 or use the contact form on this site.
Are you caught in the credit trap?
Credit card debt can accumulate for a number of reasons: loss of income, death in the family, medical bills, or divorce. A lot of credit card debt can be very stressful and create a financial strain on your family. It seems like you can keep paying the minimum payment and it only pays the interest and not the principal. Bankruptcy may be an option to consider when seeking credit card debt relief.
Do you have a high interest credit card?
Credit card interest can really make a difference in the amount owed. If you owe $10,000 on a credit card with an interest rate of 15%, and the minimum payment is $200 a month. It would take you 32 years to pay off that one card! You would end up paying over $15,580 just in interest. (Check out the Federal Reserve’s Credit Card Repayment Calculator at http://www.federalreserve.gov/creditcardcalculator/ to find out how long it would take you to pay off your credit cards. It is a great tool to help with a budget and to get out of debt.) If you have multiple credit cards, then it could take more than a lifetime if you only paid the minimum payments.
How can Bankruptcy help?
Filing of a bankruptcy stops all the late fees, interest, and penalties that your credit card company is charging you. The credit card company must file a proof of claim that lists the amount owed on the date of filing your case. If you do decide to file bankruptcy, it is a good idea to stop using your credit cards. Payments to your credit cards ninety (90) prior to your filing of your bankruptcy could be considered preferences. Plus certain charges made on your credit card prior to filing a bankruptcy could be considered nondischargeable. That means you could still owe for those charges. It is very important to discuss all this with your attorney prior to filing bankruptcy. If you would like to learn more about bankruptcy as an option for credit card debt relief, contact Brunson Law and schedule your free consultation today.
Is your car about to be repossessed?
By filing bankruptcy your car is protected and the creditor can’t repossess once you get a case number. Bankruptcy creates an automatic stay that stops creditors from repossessing your vehicles. Even if your vehicle has already been repossessed, you have ten days to get it back by filing bankruptcy. Although you may need to pay repossession fees and storage costs before you can get the car back. So the best time to see a bankruptcy attorney is before a repossession happens. Contact my office today to schedule your free consultation if you are worried about the threat of repossession.
What are the differences between debt consolidation and bankruptcy?
Just about anyone can file a Chapter 13. There is a jurisdictional limit on your debt. This means that your secured debt can’t be more that $1,081,400 and your unsecured debt can’t be more than $360,475. If you are over the jurisdictional limit, then you are not eligible for a Chapter 13.