Loss of a job, divorce, medical emergencies and predatory lending practices put many at risk of losing their homes. Every year I help rescue dozens of families from the perils of foreclosure. In my experience, I have learned that the first mistake not to make when in danger of losing your home is to rely on the bank. Although it is required by both federal and state law for lenders to make a good-faith effort to provide options to homeowners facing foreclosure, the truth is most banks and mortgage companies have neither the resources nor the incentive to help you. Despite what they may promise, banks rarely resolve or refinance loans for borrowers who are already in default on their mortgages.
Fortunately, the law provides a way to stop foreclosure. It is Chapter 13 bankruptcy. Filing for Chapter 13 bankruptcy stops the foreclosure process and allows you to repay past due mortgage payments over either a three-year or five-year period. In a Chapter 13 bankruptcy, you can catch up on your back payments while you continue to make your regular mortgage payments.
In New York State, the average foreclosure process lasts approximately 15 months from the date of the missed payment to the sale of the home at auction. Filing for bankruptcy protection stops the foreclosure at any stage up until the auction. Although you may have ample time to stop a foreclosure, the longer you wait, the more difficult it will be to catch up in a Chapter 13 plan.
For a free consultation to find out if you are eligible for Chapter 13 bankruptcy protection, call Buffalo foreclosure attorney Thomas Denny at (716)800-1234.
Many times I am asked the question, “How long does bankruptcy stay on your credit report?” While a Chapter 7 will remain on your credit report for ten years and a Chapter 13 for seven years, bankruptcy is not necessarily a death sentence. In fact, it can improve your credit.
As a bankruptcy attorney, I use a credit report that displays my clients’ current credit scores, along with an estimate of what their scores will be in approximately one year after bankruptcy. In most cases, their scores increase an average of 125-140 points. The rare exception is the client who has been current on his or her payments but is simply overwhelmed with debt. The majority, however, are in default on all or most of their debts when they file for bankruptcy.
The fundamental reason bankruptcy raises your credit score is that it lowers your debt-to-income ratio. To calculate your debt-to-income ratio, you divide your debt payments by your gross monthly income. The lower your debt-to-income ratio, the more willing creditors are to lend you money. Since all or most of your debts are now discharged, after bankruptcy, you have more disposable income to pay new debts. The fact that bankruptcy can improve your credit may explain why bankruptcy filers often get offers for credit cards and car loans within weeks after their cases are closed.
Credit is not indicative of your character or worth. It is simply a measure of your ability to borrow money, i.e., incur new debt. Bankruptcy is intended to give debtors a fresh start by freeing them from the burdens of debt. Thus, it puts them in a better financial position – one in which they may not have to continue to borrow money to make ends meet.
To find out if the Law Office of Thomas Denny can help better your financial situation, call (716) 800-1234 to schedule a free consultation.
Filing for bankruptcy creates an automatic stay under which all collection actions, including repossession of an automobile, are stopped. The lender has the option, however, to apply to the court to have the stay lifted to protect its security interest.
Nonetheless, in bankruptcy you can elect to reaffirm your car loan and keep your car if you can demonstrate that the car is necessary and that the payment is reasonable.
Contact Buffalo bankruptcy attorney Thomas Denny for additional information.
The law strictly prohibits an employer from terminating you or denying you employment for filing bankruptcy or for not having paid a debt that is dischargeable in bankruptcy.
Furthermore, you cannot, solely because of bankruptcy or insolvency, be denied a federal student loan, a drivers license, or a professional license.
For further information regarding bankruptcy discrimination and your rights under the law contact Buffalo bankruptcy attorney Thomas Denny.
If yours debts are in both your names, both you and your spouse should file. Otherwise, it is not necessary to have a bankruptcy noted on both of your credit reports.
If you choose to file alone, however, your spouse will not be relieved from his or her share of any debts discharged.
Buffalo bankruptcy attorney Thomas Denny represents both individuals and married couples filing jointly.
The “means test” is a formula used to determine who can and cannot file for bankruptcy protection under Chapter 7. The law requiring a “means test” was enacted in 2005 to deter wealthy debtors from filing for Chapter 7 bankruptcy.
If you are filing for bankruptcy in Buffalo and your income is less than the state median of $57,683, or if more than 50% of your debts are business-related, you will not be subject to the means test.
If, as a result of the means test, you cannot file under Chapter 7, you may still be entitled to file for bankruptcy protection under Chapter 13.
Student loans are generally not dischargeable in bankruptcy “unless excepting such debt from discharge . . . will impose an undue hardship.” The legal test for “undue hardship” is very strict.
Also exempt from bankruptcy protection are domestic support obligations and income taxes less than three years old.
In a Chapter 13 bankruptcy however, a debtor may benefit from a temporary partial reprieve from his student loan obligations. In Chapter 13, the debtor is required to pay a minimum of 5% of his or her unsecured debts over a period of 3-5 years. The percentage allotted is dependent on several factors, including the amount of the debtors’ income left over after deducting allowable living expenses. In a Chapter 13, student loans are treated as unsecured debts. Although, at the end of the plan, the debtor will still be liable for the unpaid balance, during the 3-5 year duration he or she will only be required to pay the percentage allotted to unsecured debts of his or her student loans, which may be as little as five cents on the dollar.
Prior to filing for bankruptcy, Buffalo bankruptcy attorney Thomas Denny will advise you precisely which of your debts are dischargeable and, if filing Chapter 13, what percentage of your disposable income will be payable to unsecured creditors..
For a free consultation, call (716) 800-1234 or fill out and submit the form below:
Although bankruptcy will remain on your credit report for ten years from the filing date, by eliminating all or most debts, it may actually help your credit.
In addition to improving your debt to income ratio, bankruptcy may allow you to qualify for an FHA or VA-insured mortgage in as little as two years.
As your counselor, Buffalo bankruptcy attorney Thomas Denny will provide guidance on how to establish new credit and improve your credit rating.
Approximately 20 to 40 days after filing for bankruptcy you will be required to attend a ”meeting of creditors.” There, the trustee will review your petition and ask questions about your property and finances. The proceeding takes approximately 15 minutes and, although it is a called a “meeting of creditors,” very rarely do creditors actually attend.
Unlike many lawyers who send associates to take their places, Buffalo bankruptcy attorney Thomas Denny personally represents each and every one of his clients at the meeting of creditors.
Filing for bankruptcy places an automatic stay (a stop) on foreclosure proceedings. Under Chapter 7, however, after several weeks, the mortgagee (the bank) will likely apply for and be granted relief from the stay and be allowed to continue the foreclosure proceeding.
Chapter 13 provides a way to avoid foreclosure altogether by forcing the bank to allow you to pay the past due amount, over time, in addition to your current mortgage payments.
Contact Buffalo bankruptcy attorney Thomas Denny for more information on how bankruptcy can stop foreclosure.