Yes, if youre behind on your mortgage, the bank can foreclose while youre in bankruptcy. There are two common situations in which foreclosure can take place during a bankruptcy.
1. Youve fallen behind on mortgage payments: While filing bankruptcy will temporarily stop foreclosure, it wont get you out of paying the mortgage. If you file bankruptcy owing past due mortgage payments, the foreclosure process will be disrupted, but only temporarily. The bank will file a motion asking for permission to foreclose and there wont be a whole lot your attorney can do to stop them. Despite what you may have heard about the broad protections of bankruptcy, filing a case doesnt give you a free house.
Matt and Jamie Rae Danielson are an Iowa couple who recently, according to news articles, won their home free and clear of any encumbrances because of a quirk in their state homestead laws, and after making only one mortgage payment. The clear title on the $278,000 appraised home was awarded the Danielsons in 2009 after an appellate court ruled that the mortgage was void without the signature of both spouses. It seems the State of Iowa has homestead laws dating back to 1888 that declare mortgages are not valid until they are signed by both spouses.
When the Danielsons applied for the loan, both had good high paying jobs that resulted in grossing a six figure income for the family. At the time of closing, Jamie was out in the field working and Matt couldnt raise her on her cell phone.
New reports highlight some interesting information about two topics near and dear to those who have filed or are considering filing for bankruptcy: underwater mortgages and student loan debt. Here’s a look at what kind of picture the latest numbers paint.
Students Don’t Need to Default to Be Behind on Loans
The Institute for Higher Education Policy released a report last week showing that two-fifths of those who borrowed money for educational purposes fell behind on their payments at some point in their first five years of repayment. So what does this mean?
Widespread repayment difficulties: These numbers may not even reflect the current rates of repayment difficulty, given that graduates in the last few years have faced a much tougher job market than those who graduated five years ago.
Old measures may be inadequate: Traditionally, studies on student debt have focused on the rate of default rather than delinquency. Loo
Volumes have been written on the inadequacies of BAPCPA. Lawyers hate it and so do clients once they realize the document production requirements. Michael Scott from The Office offers a slightly less bureaucratic approach:
Debt settlement companies are companies that have been formed in order to settle debt for debtors at a fraction of what is owed to creditors. A controversy has recently risen within the debt settlement industry when debt settlement companies asked for money up front before providing a settlement service. There has been so many complaints nationwide about the problem that Congress responded by passing new legislation in 2010 that directly dealt with the debt settlement industry.
In effect, the new laws passed prevent debt settlement companies from charging an advance fee before providing any services.
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