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Since the great recession, property values have plummeted leaving many properties underwater, whereby the mortgage or mortgages on the property are greater than the value of the property. Under 11 U.S.C. 506(a) and 11 U.S.C. 1322, you can cramdown the mortgage, or mortgages, to the value of the property under certain conditions, meaning that you can “cramdown” or reduce the mortgage to whatever the value of the property is. As an example, if your property is worth $120,000.00 and you owe $200,000.00 on your mortgage, you can cramdown, or reduce the mortgage to the $120,000.00 value of the property. The balance of the mortgage that is not crammed down will be discharged along with your other unsecured debt upon completion of the Chapter 13 Plan.
First, the property cannot be your...more
If you have fallen behind on your mortgage payments, a Chapter 13 can save your home by enabling you to repay the missed mortgage payments over a 3 or 5 year period. Most people don’t have the ability to cure the mortgage default by making a lump sum payment, or by making double payments every month. Most people do have the ability to make up the missed mortgage payments over a 3 or 5 year period however.
In addition to curing the mortgage default, your unsecured debt will be discharged as well (with certain exceptions), which will make it easier for you to manage your monthly bills.
If your mortgage company has filed a foreclosure lawsuit against you, the Chapter 13 will immediately stop the foreclosure...more
Debt consolidation companies spend a lot of money creating an image that bankruptcy should be avoided at all costs, but the facts reveal that bankruptcy is a better option for most people a vast majority of the time.
A typical debt consolidation plan requires you to make a single monthly payment to the debt consolidation company in lieu of paying your debts individually. They hold that money for months and even years until there is enough money accumulated to work out settlements with each of your creditors individually. During that time period, you are not making payments to your creditors and your credit score continues to plummet.
Additionally, once you have settled your debt for less than you owe to your creditors, then you will be responsible for paying income taxes...more
On November 17, 2022, the U.S. Department of Justice put out new guidance to Justice Department attorneys regarding requests to discharge student loans in bankruptcy cases.
Pursuant to 11 U.S.C. §523(a)(8), certain student loans may not be discharged in bankruptcy unless the bankruptcy court determines that payment of the loan would impose an undue hardship on the debtor and the debtor’s dependents.
It is the undue hardship standard that has prevented discharge of student loans in bankruptcy cases for the vast majority of debtors in the past. The seminal case that sets forth the factors a debtor must show in order to prove an undue hardship is,...more
I recently received a call from a financial advisor that works at one of the largest banks in the world. One of his clients accepted a forbearance plan on his mortgage during the Covid-19 pandemic and hadn’t paid his mortgage for more than a year and owed more than $30,000 in mortgage arrears. His client was told by the mortgage company that the missed payments during the forbearance period would be put at the end of the loan.
The mortgage company however, did not honor this agreement and demanded the entire sum immediately for the missed mortgage payments. This scenario is happening to so many borrowers across the country and people are being put into foreclosure for these missed mortgage payments that they thought would be deferred to the end of the loan.
I asked the...more
As the premier bankruptcy attorney in Dutchess County, New York, the Law Offices of Thomas J. Minotti, P.C., knows financial distress is an unfortunate reality that many individuals and businesses face at some point in their lives. When overwhelmed by debt and unable to meet financial obligations, filing for bankruptcy can provide a fresh start and a chance to rebuild. However, navigating the complex world of bankruptcy law can be overwhelming without professional guidance. This is where the expertise of a bankruptcy attorney becomes invaluable. Read on to learn more, and if you’re looking for a debt relief lawyer in Lagrangeville,...more
Filing for bankruptcy is a legal process that provides individuals and businesses with financial relief when they are unable to repay their debts. While bankruptcy is often seen as a last resort, it can be a valuable tool for those facing overwhelming financial difficulties. Bankruptcy attorney services from the Law Offices of Thomas J. Minotti, P.C., in Lagrangeville, NY, can help you understand the different types of bankruptcy so you can make an informed decision about your options.more