Chapter 7 bankruptcy is generally a numbers game between the bankruptcy trustee and the debtor. The trustee seeks to liquidate the debtor’s non-exempt assets to pay creditors, and the debtor tries to avoid liquidation of any property. When property is identified by the trustee as non-exempt, the trustee may ask the debtor to turn over the property (or its cash equivalent). The trustee will then liquidate the property and distribute the proceeds to creditors.

The United States Trustee Program reports only around four percent of all Chapter 7 bankruptcy cases are “asset cases.” In other words, statistically only one case in twenty-five has an asset that can be converted to cash and distributed to creditors. Some common types of non-exempt assets include:

• Cash money
• Tax refund
• Vehicle equity
• Home equity
• Misidentified financial account
• Unlisted property

Whenever a non-exempt asset is found by the bankruptcy trustee, the debtor’s case comes under greater scrutiny, the case is generally prolonged while the asset is administered, and creditors are invited to file proof of claims to participate in the distribution of the asset.

The key to keeping property during a Chapter 7 bankruptcy is early identification and full disclosure with your bankruptcy attorney. Poor communication between the client and attorney is usually the cause of “at risk” property. Every bankruptcy attorney has a story about a client who informs the trustee at the 341 meeting of creditors, “I didn’t tell my attorney about this property, but. . .” This story seldom has a happy ending for the client and usually results in the loss of that property.

There are many ways to protect property during a Chapter 7 bankruptcy. Be sure to discuss all of your assets with your attorney. If you have doubts whether you have an ownership interest in property, discuss it with your attorney. The attorneys at Haines and Krieger can provide you legal options to protect your assets and avoid “at risk” property.  Contact us today for a free consultation.

The Bankruptcy Man (f/k/a BAPCPA Man) vs. Mortgantua battle takes a twist as Bankruptcy Man learns something about the mortgage industry’s–er, Mortgantua’s tricky ways.

(Note:  Bankruptcy Man cartoon re-posted by Haines & Krieger with expression permission from the creators of Bankruptcy Man.)

Help Stop Foreclosure Las Vegas!
If you’re looking for a bankruptcy hero to help you battle the mortgage industry, contact Haines & Krieger for a free foreclosure consultation.

We can help you with loan modifications, short sales, participating in Nevada’s Foreclosure Mediation Program, filing for personal bankruptcy in Las Vegas or just seeking Las Vegas bankruptcy help.

In response to many criticisms of its Home Affordable Modification Program (HAMP), the Obama Administration recently announced significant changes intended to speed the modification process and clarify eligibility. Under the new guidelines, mortgage lenders must pursue early intervention to determine borrower eligibility under HAMP, and may not refer any loan to foreclosure until the borrower has been determined ineligible for the program. New timeframes have also been implemented and homeowners can expect a modification decision within 30 days.

The new HAMP guidelines require participating lenders to use principal reduction as a primary means of reducing borrowers’ payments where loans are more than 115 percent of the current home value. Borrowers that are current on their mortgages may qualify for refinancing at a low interest, fixed rate loan insured by the FHA, provided that the lender agrees to reduce the principal for the total combined debt to no more than 115 percent of the home’s value. This provision is meant to encourage lenders to reduce principle for those property owners with negative home equity.

Another important change is a clarification that debtors in bankruptcy must be considered for HAMP. A request for consideration for a modification while in bankruptcy may be made by the debtor, the debtor’s attorney, or by the bankruptcy trustee. This provides a yet another tool for the bankruptcy attorney to save a home mortgage from foreclosure and negotiate terms that the debtor can afford. 

To qualify for a loan modification under HAMP, the borrower must:

• Be the owner-occupant of a one- to four-unit home;
• Have an unpaid principal balance that is equal to or less than $729,750 for a single-unit home (other limits apply for multi-unit homes);
• Have a first lien mortgage that was originated on or before January 1, 2009;
• Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31% of your monthly gross (pre-tax) income; and
• Have a mortgage payment that is not affordable due to a financial hardship that can be documented.

The combination of a bankruptcy and a HAMP loan modification may help some borrowers save their homes and stabilize their family finances. If you are in financial trouble, consult with an experienced bankruptcy attorney and discuss your options. Don’t be a victim of debt! Take control today and contact Haines and Krieger for a Free Consultation.

As spring begins, we provide a peek at foreclosures in Las Vegas in the latest Haines & Krieger’s Las Vegas Foreclosure Round-up:
 
1. Dip in Foreclosure Sales Lifts Vegas Home Prices: MDA DataQuick (Housing Wire)
Finally some good news for Las Vegas homeowners?  Austin Kilgore uses MDA DataQuick to provide evidence that foreclosure resales decreased
while total sales increased.
 
2. North Las Vegas Gets $677K for At-Risk Families (Associated Press)
Federal stimulus dollars arrive in North Las Vegas to aid low-income families.  The city
describes how it’ll use the funds, but any unused funds return to the federal Department of
Housing and Urban Development.
 
3. Amid Housing Downturn, Toll Downsizes Its Homes (Reuters)
Toll Brothers, Inc., builders of large, expensive houses, is building smaller houses.  Some of
these units are half the size and cost of the average Toll house.  However, they plan to return
to large luxury homes once the economy improves.
 
4. Foreclosure Mediation: ‘System Is Really A Sham’ (Las Vegas Review-Journal)
Competing accounts of foreclosure mediation inform readers that while some homeowners
feel creditors are acting in bad faith, public officials believe mediation has helped many of
the 10% of borrowers who have entered the process. Of course, at Haines & Krieger, we have first-hand experience using foreclosure mediation on a regular basis to help our clients keep their homes.  And those homeowners can attest to the fact that foreclosure mediation is definitely not a sham!
 
5. Official Says Lenders May Renege On Promises (Las Vegas Review-Journal)
Nevada’s Assembly Speaker and sponsor of foreclosure mediation, Barbara Buckley, stated
in a hearing that lenders agree to modify loans during mediation, but then fail to sign the
documents.  Other times, they give consumers revised mediation terms, or they come to
mediation without all the required documents or worse, negotiating authority.

Hep Stop Foreclosure Las Vegas
If your’e facing foreclosure and need good bankruptcy attorneys in Las Vegas, please contact us for a free foreclosure consultation.

Haines & Krieger attorneys have been at the forefront of helping Las Vegas residents deal with foreclosure problems and getting back on their feet.  So get in touch and let us help you figure out your best options for fighting foreclosure.
 

Harvard law professor and bankruptcy expert Elizabeth Warren has stated that the economic fallout from divorce is a leading cause of bankruptcy. The divorce process assigns debt, awards assets, and can significantly deplete marital assets. In many cases, one or both spouses are in a difficult financial position after the divorce. If the fall-out from your marital debt is pushing you and your spouse into divorce court, consider how a bankruptcy can alleviate the stress and simplify your finances. Filing bankruptcy before starting a divorce proceeding can be advantageous to both parties, and, in some cases, can even save a marriage.

A common problem after a divorce is the family court’s order concerning joint debt. The order will typically direct one party to pay or refinance a joint debt. Many are surprised to learn that this order does not relieve a parties’ obligation to pay the debt. The simple explanation is that the family court judge does not have the authority to rewrite a contract between you, your spouse, and a creditor who is not a party to your divorce. If your spouse does not pay the joint debt, your credit may be harmed. 

On the other hand, by filing a bankruptcy prior to the divorce, most joint debts can be legally and finally terminated either by payment or discharge. Additionally, by resolving many of your outstanding debts, it is easier to negotiate the remaining obligations between you and your spouse.

Married couples also enjoy protections in bankruptcy that single debtors do not receive. For instance, married couples often receive increased legal exemptions that protect property from creditor attachment. These exemptions may be lessened or no longer available once the divorce is finalized. In other words, what you could protect in bankruptcy while married may not be protected after a divorce.

To say that the interplay between the state family laws and the federal bankruptcy laws is complex is a gross understatement. However, many of these complexities can be avoided by filing a bankruptcy ahead of a divorce. In some cases, the couple decides to stay together after the financial strain is removed by the bankruptcy.

If you and your spouse are considering divorce, consult with an experienced bankruptcy attorney and have your finances examined. If bankruptcy is a possibility, it is generally better to proceed with the bankruptcy case prior to the divorce.  Get a Free Consultation with the attorneys at Haines and Krieger today.

Student loans are extremely difficult to discharge in bankruptcy. The bankruptcy code states that a debtor may obtain a discharge of a government-sponsored student loan only if repaying the debt would impose an “undue hardship” on the debtor and his dependents.

Proving undue hardship is more difficult than it sounds. The bankruptcy code requires the debtor to file an adversary action and have a hearing to determine whether repayment of the debt would constitute an undue hardship. At that hearing the bankruptcy court may require proof that: 1) the debtor cannot maintain a minimal standard of living and also repay the loan; 2) the debtor’s financial inability to repay the loan is likely to continue for a significant portion of the loan’s repayment period; and 3) the debtor has made a good faith effort to repay the loan. If the debtor is successful in proving undue hardship, the student loan debt will be discharged by the bankruptcy court.

Even though the bar for discharging student loans is set extremely high, it is often equally challenging for a creditor to “prove” its debt during a Chapter 13 bankruptcy case. The Chapter 13 claims process may be used by the debtor to obtain a judicial determination of what is owed. A student loan is a contract and the debtor may ask the creditor to produce the contract, to prove that the current creditor has standing to collect on the loan, and prove the current amount owed. During the claims process the burden is on the creditor to prove both that you owe the debt as well as the amount. This may be difficult for a creditor if the loan has changed hands multiple times.

While discharging your student loans may be difficult, the bankruptcy laws offer several benefits including temporary relief from the bankruptcy automatic stay and a chance to make payments through a court supervised Chapter 13 plan. Additionally, non-bankruptcy options are available including deferment, forbearance, loan forgiveness, and income contingent repayment plans. If you are experiencing financial difficulty and have student loans, consult with an experienced bankruptcy attorney and discover your options.  Contact Haines and Krieger for a Free Consultation.

Many homeowners participating in the federal “Making Home Affordable” program, a federal mortgage assistance program, have found that the program benefits have not lived up to the political promises. Homeowners have discovered that this refinance process is not only difficult, but in some cases can be destructive to their credit.

The Making Home Affordable program is a $75 billion dollar loan modification program aimed at helping homeowners refinance their mortgages to terms they can afford. The program is actually two refinance processes: first, a refinance program for homeowners with Fannie Mae and Freddie Mac loans; and second, a modification program for everyone else. The “everyone else” program is the “Home Affordable Modification Program” (HAMP). Under HAMP, homeowners who have experienced financial difficultly (e.g. a job loss or high medical bills) and are struggling with their current mortgage payments can reduce their mortgage payment by lowering their interest rate up to two percent and extending the repayment period up to 40 years. 

While the promise of refinance sounds like a blessing, the process can be both slow-moving and full of unexpected surprises. For instance, to qualify under HAMP the homeowner must, among other requirements, make all mortgage payments on time for a three-month trial period. In essence, the program requires timely payments that you can’t afford before the loan can be modified to a payment you can afford! 

Homeowners who seek assistance under HAMP are also surprised by an immediate reduction of their credit score during the three month repayment period. By applying for a home loan modification, you are announcing to the credit industry that you are experiencing financial difficulty. This can lower your credit score by up to a staggering 150 points, making it difficult to obtain other types of credit including auto loans. This initial drop can only be rectified over time.

If you are experiencing financial difficulty, educate yourself to all your legal options. Only an attorney can advise you regarding your legal options including bankruptcy, debt settlement options, and government assistance programs. The experienced bankruptcy attorneys at Haines and Krieger can help you evaluate your financial position and choose the right option for your family.  Contact us for a free consultation today.

When a consumer bankruptcy case is filed, a trustee is appointed to oversee and administer the case. The trustee does not represent the interests of the debtor and cannot give legal advice, which is the role of your bankruptcy attorney. However, it is important to cooperate with the trustee and any request for information.

The issue of a debtor’s duty to cooperate with the trustee was recently litigated in the case of In re Royce Homes, LP. 2009 WL 3052439 (Bkrtcy. S.D.Tex.). In that Chapter 7 case the trustee requested financial documents and information from a corporate debtor. In response to the request the debtor provided access to “storage facilities containing stacks of documents and old computer servers, most of which are wholly unresponsive to the Trustee’s request.” The trustee filed a motion asking the bankruptcy court to compel the debtor’s cooperation.

In deciding the matter the court cited several sections of the bankruptcy code and rules which require debtors to cooperate with the trustee. Notably section 521(a)(3) requires the Debtor to “cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title.” The court ordered the debtor to provide the specific information that the trustee had requested, rather than simply dumping documents or permitting access to records. The court emphasized the debtor’s duty to cooperate by stating, “It is well settled that a [trustee] should not be required to drag information from a reluctant and uncooperative debtor. Because of the extraordinary relief offered under the Bankruptcy Code delay and avoidance tactics are inconsistent with, and offensive to, its purpose and spirit.”

Cooperation with the trustee is an important part of the bankruptcy process. Failure to cooperate or to testify truthfully could result in a discharge, or worse. The attorneys at Haines and Krieger can guide you through this process of disclosure with the trustee and protect your interests.  Contact us for a Free Consultation today.

Effective April 1, 2010, certain dollar limits contained in the Bankruptcy Code will be increased. A full comparison of the current and changed amounts can be found by following this link. These most meaningful changes to consumer bankruptcy cases are:

• An increase of the eligibility limit for Chapter 13 from $336, 900 to $360,475 in unsecured debt, and from $1,010,650 to $1,081,400 in secured debt; 

• The federal homestead exemption increases from $136,875 to $146,450; and

• The presumption of fraud for luxury items purchased with a credit card within 90 days of a bankruptcy filing increases from $550 to $600; and the presumption of fraud for credit card cash advances within 70 days of filing increases from $825 to $875.

Many other dollar amount increases will take effect on April 1, 2010, including increases to protected educational accounts, increasing restrictions to the bankruptcy trustee’s powers under certain circumstances, and increased protection for retirement accounts. In all, these increases will make the bankruptcy attorney’s job of protecting the consumer debtor a little easier, and make the bankruptcy process more accessible. Please note that these changes will only affect bankruptcy cases filed on or after April 1, 2010.

If you and your family struggle each month to pay bills, consult with an experienced bankruptcy attorney and discuss your financial options. There are many repayment and “walk-away” options available under the Bankruptcy Code. Get the facts from a Free Consultation with Haines and Krieger.

At the conclusion of almost all consumer bankruptcy cases the debtor will receive an order from the court that discharges the debtor’s personal obligation to pay certain debts. This discharge is a court injunction prohibiting creditors from taking collection action to collect on discharged debts. Violation of this injunction may result in a contempt of court charge and serious penalties.

But what if you have a debt that you want to pay even after it is discharged?

The Bankruptcy Code provides, “Nothing contained in. . . this section prevents a debtor from voluntarily repaying any debt.” 11 U.S.C. § 524(f). You are free to make voluntary payments on all or part of your discharged debts. These payments do not invalidate the discharge order and do not create a new legal obligation. The creditor is still prohibited from contacting you in any way and cannot take any collection action against you, including sending you a bill or even encouraging your continued payments. In this case the term “voluntary” means free from creditor influence or inducement.

Any payments you make on a discharged debt are the result of a moral obligation as the legal obligation to pay the debt has been discharged by the bankruptcy court. In a Chapter 7 case, you are free to pay whomever you want. “Debtors who file under [Chapter 7] can dispose of their post-petition earnings as they choose, including voluntary repayment of debts otherwise dischargeable in bankruptcy.” In re Hellums, 772 F.2d 379, 381 (7th Cir. 1985).

If you are interested in making voluntary repayments after your discharge, discuss the matter with your bankruptcy attorney. While there are generally few down-sides to voluntary repayment, your bankruptcy attorney can discuss the pros and cons with you and help you reach the right decision for you and your family.  Contact Haines and Krieger today for a Free Consultation.