Tag Archives: chapter 13

Consumer Group Says National Mortgage Settlement Not Helping

The Maryland Consumer Rights Coalition recent said that the National Mortgage Settlement is not reaching enough homeowners and is not effective in keeping people in their homes. The Baltimore Sun reported that between March 1, 2012, and the end of 2012, about 14,200 homeowners received assistance through the settlement. During the same nine-month period, notices of intent to foreclose were sent out to nearly 131,000 homeowners. In February 2012, 49 state attorneys general and the federal government announced the settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, after the banks knowingly sold defective mortgages to people. “The number of Maryland families facing new foreclosures continues to dwarf those getting help under the settlement,” Marceline White, the Coalition’s executive director said in a press release. Save Your Home Struggling homeowners should know that they could be able to save their homes through Chapter 13 bankruptcy. A bankruptcy generates…
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You Can Convert a Chapter 13 Bankruptcy to a Chapter 7 if You Meet Eligibility Requirements

On Monday, we discussed the bankruptcy case of Idaho State Rep. Phil Hart-R, who may have to convert his Chapter 13 bankruptcy to a Chapter 7 bankruptcy because his debts are too high. A bankruptcy conversion is not an uncommon occurrence. In Hart’s case, he discovered that he was carrying too much debt to successfully complete the repayment plan associated with his Chapter 13 bankruptcy. Sometimes people discover their financial situations have changed and they can no longer make payments toward the repayment plan they agreed to during a Chapter 13 bankruptcy. If you choose to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy, you will need to meet eligibility guidelines, including passing the bankruptcy means test, which determines your income and expenses. You will also need to make sure you have not filed for a Chapter 7 bankruptcy during the last eight years. Occasionally, bankruptcy courts will…
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Strip Away Second Mortgages, Junior Liens in Chapter 13

I have already discussed this week how cramdowns can help debtors filing Chapter 13 who are upside down on car loans or some mortgages, but what if you are a consumer who owes more on your home mortgage than the home is worth? While you will not be able to cram down the balance of a mortgage on your primary residence, you may be able to take advantage of a process called lien stripping. Lien strips allow debtors to convert second or third mortgages on their homes to an unsecured debt by making the lender remove its lien from the property. In order to strip a second mortgage or additional liens, the balance of the first mortgage must be more than what the debtor’s home is worth. If the balance on the debtor’s first mortgage is less than what the home is worth, then he or she will not be…
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