4 Ways to Stop a Foreclosure Auction

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bankruptcy foreclosure

If you are at risk of losing your home in a foreclosure auction, then understanding your options is critical to ensure your long-term financial health. Here is an overview of potentially feasible options:

  1. Bankruptcy
  2. Filing for bankruptcy will immediately halt the foreclosure, along with all other collection activity including calls, letters, and wage garnishment. You will then have a few months to work with the trustee to restructure your debts and keep your home. If this is not possible, then the bankruptcy foreclosure process will re-commence.

  3. Negotiate with Your Lender
  4. Although your lender will not readily admit it, the truth is that they do not want to foreclose on your property. Not because they want to give you a break, but because they are not in the foreclosure businesses. As such, it may be worthwhile to reach out — even if you have done so in the past without success — and try to work out a compromise.

  5. Short Sell
  6. If you can find a buyer for your home, then your lender may agree to a short sale. This is a transaction in which the net proceeds from selling a property are less than the debts secured against the property. Why would the lender agree to this? Because if you sell your home and give the lender 100 percent of the proceeds, they will not have to spend time and money foreclosing and then re-selling it (which could take a long time in a down market). If you head down this path, ensure that you present your lender with a reasonable offer from a qualified buyer.

  7. Assumption/Lease
  8. Your lender may be willing to accept an assumption/lease proposal. In this scenario, the party that buys your home becomes your tenant. Although you no longer live in your home, you maintain ownership and the buyer assumes the loan (debt). Getting lenders to agree to an assumption/lease proposal is difficult, but it can happen. Just keep in mind that to stop the auction foreclosure process, your lease payments (i.e. the amount you get from the buyer) must cover your home ownership costs, including mortgage, property tax, and insurance. If there is a shortfall, you must be able to demonstrate to the lender’s satisfaction that you can make up the difference. For example, if your obligation is $2,500/month and your buyer is willing to give you $2,000/month, you must show that you can top this up with $500/month from your income or another source of funds.

Learn More

To learn more, contact the Law Office of Charles H. Huber. We will give you the facts you need to make a clear and informed decision. And if you ultimately choose to file for bankruptcy, we will be there for you every step of the way, from initial filing through to successful discharge. We have over 30 years of experience with bankruptcy foreclosure cases. Our experience is your advantage!

What Could — and Probably Will — Happen if You Lie in a Bankruptcy Filing

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If you would like to save yourself a couple of minutes, then we can go straight to the bottom line right off the bat: do not under any circumstances lie on your bankruptcy filing. This includes everything from blatant untruths to “little white lies.” Do not lie, and do not listen to anyone who tells you otherwise. When things go bad, they will not be held accountable or pay the penalty: you will.

And now for the slightly longer version of why lying on your bankruptcy filing is one of the worst things that you can do — not just on your filing, but probably in your entire life. Here are the three terrifying scenarios that await you if you unwisely head down the road of deceit:

  1. Dismissal of Your Case
  2. Lying in your bankruptcy filing could lead to your case being dismissed with prejudice. What does “with prejudice” mean? In practical terms, it means that your debts could be deemed non-dischargeable, and you may be barred from filing for bankruptcy for many years. What’s more, your credit report will state that you filed for bankruptcy, even though you did not benefit whatsoever from any of the protections. Talk about adding insult to injury!

  3. Loss of Assets
  4. Do you know that speedboat that you love so much? The one that your work colleague “who knows a guy, who knows a guy, who lives next door to a guy who knows all the ins and outs of bankruptcy” told you to leave out of your bankruptcy petition because, well, “who’s going to know?” Well, the trustee is probably going to find out, because they’re experts at ferreting out non-disclosed assets. And then you’re going to lose your beloved speedboat, and your colleague at work is just going to shrug and say “oh well, that’s life!”

  5. Criminal Charges
  6. There is no way anyone should sugar coat this cold, hard truth: lying under oath, making false statements, and attempting to hide assets is fraud — and you could be charged with a federal offense. If found guilty, you could be fined up to $250,000 and/or spend up to five years in jail.

Mistakes Happen

With all of this in mind, it is also true that mistakes in a bankruptcy filing can happen. For example, some people forget to list an asset, list an incorrect value for an asset, forget to list a creditor (e.g. a distant relative to whom they owe money), or forget to list income from a minor side business (e.g. occasionally selling stuff on eBay, earning a little extra money driving for Uber, etc.).

Obviously, you want to avoid mistakes as much as possible — and working with an experienced and reputable bankruptcy attorney will help ensure that. But if a good-faith mistake happens, then don’t panic: it’s very unlikely that your case will be dismissed, your assets seized, or that you will be charged with a crime.

What you need to do — right away — is fix any mistakes by filing an amendment to your bankruptcy petition, and informing the trustee. If you are being represented by a bankruptcy attorney, then this will be taken care of on your behalf.

Learn More

To learn more contact the Law Office of Charles H. Huber. We have over 30 years of experience filing consumer bankruptcy cases. Our experience is your advantage!

4 Red Flags of a Shady Bankruptcy Attorney

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Let’s start with this: most bankruptcy attorneys are basically honest, and want to do a good job. Naturally, some are more experienced and competent than others; but that is true in any field, whether you are going into the hospital for surgery, or are taking your car in for repair (which in some cases can be more nerve-wracking and stressful than surgery!).

However — and again, just like in any field — there is a tiny minority of bad apples that should be kicked out of the profession (and eventually, most of them will be one way or another). To help you steer clear of these shady bankruptcy attorneys, here are four red flags to watch for:

  1. You’re not getting clear information and instructions.

  2. One of the most important things that you need from your bankruptcy attorney — if not THE most important thing — is clarity when it comes to information and instructions. Specifically, you need to know what documents you need to gather, and how the process unfolds from beginning to end. You should also feel empowered to ask questions at any time.

  3. Your bankruptcy attorney is MIA.

  4. Good bankruptcy attorneys are busy — just like good doctors are busy, and good car mechanics are busy. But they should never be too busy to properly file all required documents on your behalf, show up (on time) for all meetings, and inform you of any significant changes or developments in your case. In other words: your bankruptcy attorney must never forget that he or she works for YOU, and not the other way around!

  5. You’re getting unethical advice.

  6. Like all other lawyers, bankruptcy attorneys are required to act in an ethical manner, and this certainly includes the counsel that they provide you. As such, if you are getting advice that you know is crossing the line, then it is time to head for the exit — and then to the state Bar Association to share your concerns.

  7. Your bankruptcy attorney is simply incompetent.

Some bankruptcy attorneys are not necessarily unethical or unprincipled, but they are nevertheless incompetent — which means they are putting your financial future at severe risk. For example, they may not know how to challenge false credit claims, they may not be aware of current bankruptcy law (which is always changing and varies from state to state), they may not use exemptions to protect your assets, and so on. The best way to confirm that you’re working with a competent bankruptcy attorney is by ensuring that they have been in professional practices for at least a decade, and that they are listed in Good Standing in their respective state’s Bar Association (this is searchable online).

Contact Us

At the Law Office of Charles H. Huber, for more than 30 years we have taken pride in treating each and every client with the utmost in professionalism and ethics. We respond promptly to all emails and calls, and provide leadership and support every step of the way. To learn more, contact us today.

Bankruptcy for Credit Card Debt: 3 Do’s and 3 Don’ts

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bankruptcy for credit card debt

While separating do’s from don’ts is important at all times, it’s absolutely vital when it comes to dealing with unsustainable credit card debt — because the wrong information or advice can, and usually does, lead to an enormous amount of pain and suffering on all levels: financially, emotionally, and even physically. Indeed, according to Health.com, excessive credit card debt can trigger chronic stress that weakens the immune system, causes headaches and migraines, and sends blood pressure levels through the roof.

If you or someone that you care about is currently staring at an ever-growing mountain of credit card debt, then here are 3 do’s and 3 don’ts that you need to know about bankruptcy for credit card debt:

  • DO know that filing for bankruptcy will discharge your credit card debt in most cases. The exception is if it is proven that your debt was incurred through fraud, false misrepresentation, or false pretenses. In such cases, the balance will not be discharged and will stay with you.

  • DO be aware that a discharge from bankruptcy only applies to you. It will not apply to guarantors or co-signers, who will still remain liable for the debt. It is very important to keep this in mind to ensure that you do not face unexpected financial and/or personal challenges ahead.

  • DO respond promptly and carefully if a credit card company wants to classify that a debt is chargeable instead of non-dischargeable. Failing to respond in a timely manner will result in the court making you responsible for the debt.

  • DON’T be intimidated or misled by credit card companies. When they try and scare — make that terrify — you about the financial self-destruct button you will hit after declaring bankruptcy, be aware that they are bluffing. The fact is that credit card debt is considered a “non-priority claim,” which means that credit card companies are at the bottom of the list of creditors, and often don’t get a cent. So yes, the last thing they want you to do is declare bankruptcy. But this is not because it’s not in YOUR best interest, but rather because it’s not in THEIR best interest.

  • DON’T under any circumstances “rack up” credit card debt in advance of filing for bankruptcy (e.g. taking out a cash advance, buying luxury goods, going on vacation, etc.). Not only will these debts remain, but you will likely face a criminal fraud allegation. With this being said, it is typically fine to charge normal household items and cover basic living expenses prior to a bankruptcy filing (e.g. gas, groceries, etc.).

  • DON’T believe that debt settlement will necessarily lead to a “softer” credit score hit vs. filing for bankruptcy. This is a myth that many debt settlement companies perpetuate. The fact is that once a settlement is reported, it will indeed affect your credit score similar to a bankruptcy filing.

  • Learn More

    To learn more, contact the Law Office of Charles H. Huber. We will give you the facts you need to make a smart, safe decision on whether bankruptcy for credit card debt is in your best long-term interest. Our experience is your advantage!

The Pros and Cons of Declaring Chapter 11 Bankruptcy

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chapter 11 bankruptcy

Typically filed by corporations and partnerships (though in some rare cases by individuals), chapter 11 bankruptcy allows businesses with an unsustainable debt burden to propose a plan in which their debt is reorganized and restructured, so that they can eventually return to profitability. If the plan is accepted by the bankruptcy court as compliant and viable, it is executed and monitored accordingly.

As with all other types of bankruptcy filings, there are pros and cons of declaring chapter 11 bankruptcy. We focus on each category below:

Advantages of Chapter 11 Bankruptcy

  • Filing for chapter 11 bankruptcy immediately establishes an automatic stay. Creditors must cease all collection activity, including proposed and commenced lawsuits.
  • The debt reorganization plan usually includes reduced amounts owed and/or reduced interest rates, which ultimately means that debtors pay less.
  • Although they are obviously unhappy with receiving less than the full amount owed to them, creditors are generally receptive to the debt reorganization plan — especially since they are likely to get more than under a chapter 7 bankruptcy filing (a.k.a. liquidation bankruptcy).
  • As noted above, during the execution of the debt reorganization plan a business remains operational, and can honestly and in good faith communicate to concerned customers, suppliers, vendors, and other stakeholders that they plan on re-emerging from bankruptcy vs. are preparing to wind down the business.

Disadvantages of Chapter 11 Bankruptcy

  • Relative to chapter 7, the chapter 11 bankruptcy process is longer, more complex, and costlier due to additional filing, plus administrative and legal fees.
  • The court will reject a proposed debt reorganization plan if it determines that it is not viable, compliant, realistic, and if there is no reasonable expectation that a business can return to post-bankruptcy profitability.
  • The court may impose restrictions on the compensation of a debtor’s “insiders” (e.g. officers, directors, major shareholders, etc.).
  • If the debt reorganization plan is accepted, during execution a debtor will need to seek the court’s approval to perform activities that are deemed outside the ordinary court of business. (With this being said, if the requested activities are justifiable in light of the goals and objectives of the plan, then they are likely to be approved.)

Learn More

To learn more about the pros and cons of chapter 11 bankruptcy, and for a confidential consultation on whether filing is in your business’s best long-term financial interest, contact the Law Office of Charles H. Huber today. Our experience is your advantage!