Texas Bankruptcy Blog : Texas Bankruptcy Lawyer & Attorney : Fears Nachawati law Firm : Chapter 7, Chapter 13, Consumer Bankrutpcy : Dallas, Fort Worth, Austin, Houston, San Antonio

While the Bankruptcy Code does not permit a bankruptcy court to modify the terms of a home mortgage, a second mortgage that is entirely unsecured may be stripped away during a Chapter 13 bankruptcy.  For example, if you own a home that is presently worth $200,000 and the first mortgage balance is 200,001, any additional mortgage lien may be stripped away since that debt is not secured by any value in the home.  The debt is reclassified as unsecured, is treated as unsecured during the bankruptcy, and is subject to discharge at the end of the case.  However, if the debtor does not successfully complete the Chapter 13 case, the lien stripping benefit is lost. 

The most important part of the lien stripping process is obtaining an accurate valuation of the property.  Most courts agree that the appropriate time for valuing the property is at the time of the Chapter 13 confirmation hearing, not at the time the bankruptcy case was filed.  This may be several months after you file your Chapter 13 case.  A professional appraisal and other evidence of the value of the property are necessary for successful lien stripping. 

Lien stripping may not require both debtors to file bankruptcy.  In a recently decided case in Michigan, a married couple owned property, but only the wife filed bankruptcy.  She then filed an adversary case against a lien holder to strip away an entirely unsecure second mortgage.  The lien holder attempted to join the husband to the lawsuit, but the bankruptcy court refused.  The court granted the wife's lien stripping motion saying that, since there was no equity,  the bankruptcy estate had no interest in that property.  Under Michigan law (and in many other states) a married couple holds a home jointly as tenants by the entirety.  This is a special legal ownership status where each party owns an undivided whole of the property, as a single legal entity.  The bankruptcy court found that both spouses do not have to be included in the lawsuit even though both spouses receive the benefit of the stripped lien.  This case is currently on appeal. 

In today's economy where many homes have lost value, lien stripping second mortgages in bankruptcy is becoming commonplace.  If you have a second mortgage and need bankruptcy relief, consult with an experienced bankruptcy attorney and discuss your options.  There are many ways to save your family home using the powerful federal bankruptcy laws.

The federal bankruptcy laws promise a fresh financial start for the honest but unfortunate debtor.  Bankruptcy balances the interests of the debtor to obtain his fresh start and the interests of the creditor to see that the debtor pays whatever he can afford.  In some circumstances the debtor can complicate his bankruptcy case before he files. Free Consultation 

Mistake #1: Paying an Insider Creditor

The bankruptcy laws attempt to ensure that all creditors receive fair treatment during the bankruptcy process.  One concern is that the debtor will pay loans to family or friends before filing bankruptcy, and therefore deprive other creditors from receiving payment.  Family, friends, business partners, and other creditors who have close relationships with the debtor are called “insider creditors” and transfers to insider creditors can be avoided by the bankruptcy trustee if the transfer occurred within one year before the bankruptcy filing.  For instance, if you gave your mother $1,000 from your income tax refund as payment for a debt, and then filed bankruptcy two months later, the bankruptcy trustee can sue your mother to recover the $1,000.  To make matters worse, often the debtor could have protected the cash money during the bankruptcy and paid the debt without difficulty after the case was filed. Free Consultation

Mistake #2: Incurring Debt After Deciding to File

Some people decide to charge up credit cards or take payday loans just before filing bankruptcy.  If you have decided to file bankruptcy, do not incur additional debt.  Taking loans with no intention to repay the creditor could be fraud.  It could also be a criminal act. 

Mistake #3: Transferring Property

Some people fear that they will lose property when they file bankruptcy.  Some will give away or sell property to avoid losing it.  In most cases your bankruptcy attorney can protect your property and you will not lose anything.  However, once you have transferred an item it is no longer eligible for legal protections.  For instance, a car worth $2,000 is likely entirely protected from turnover during your bankruptcy.  If you transfer title of this vehicle to your brother before the bankruptcy, the trustee can avoid the transfer, take the car, and sell it to pay your creditors. Free Consultation 

Mistake #4: Cashing out Retirement

Most retirement accounts are entirely protected during bankruptcy.  Unfortunately, some people are unaware of these broad protections and cash out their retirement savings out of fear that it will be taken during the bankruptcy.  Sometimes the money is spent to pay off loans which can create preference issues.  In other cases the debtor converts an exempt asset (retirement funds) to a non-exempt asset (e.g. a paid off car). Free Consultation 

Mistake #5: Failing to Be Honest

This is the worst mistake of all because the bankruptcy laws do not protect a dishonest debtor.  Failure to truthfully list all of your assets, debts, income and expenses is grounds for dismissal of your case, or you may have to answer allegations of bankruptcy fraud (a federal crime). 

If you are experiencing financial difficulty and are considering bankruptcy, discuss your case with an experienced bankruptcy attorney.  Your bankruptcy attorney can advise you on the best actions to take before bankruptcy and how to avoid common mistakes.  Use the federal bankruptcy laws and protect your property. Free Consultation

Just because you filed bankruptcy does not mean you cannot buy a home in the future, but you will probably have to wait at least 2 years after your bankruptcy is discharged before a mortgage lender will approve you for a home loan. It is usually best to wait at least 2 years to qualify for a good interest rate and lower down payment. After the two-year waiting period is over, you should be able to get financing. You can usually achieve this as long as your debts are paid on time after the discharge of your bankruptcy.

Also, if you are currently facing foreclosure or too many credit card bills, it may be in your best interest to file for bankruptcy. When you file for bankruptcy, it will place an automatic stay that will suspend any collection action by creditors. Through bankruptcy you may be able to save your current home or improve your credit rating, as you will no longer be lowering it due to late payments.

If you are considering filing for bankruptcy contact bankruptcy law firm, Fears | Nachawati, by calling toll free 1.866.705.7584 or by e-mailing us at info@fnlawfirm.com for a free consultation.

There is no immigration law, statute, or regulation that specifically forbids individuals who have filed for bankruptcy from applying for naturalization. Filing for bankruptcy will not necessarily disqualify you from becoming a US citizen. Basically, the Department of Homeland Security list the following general requirements for naturalization as:

• A period of continuous residence and physical presence in the United States.
• Residence in a particular USCIS District prior to filing.
• An ability to read, write and speak English.
• A knowledge and understanding of U.S. history and government.
• Good moral character.
• Attachment to the principles of the U.S. Constitution.
• Favorable disposition toward the United States.

Depending on the circumstances, the Department of Homeland Security, in its wide discretion, may deem filing for bankruptcy as proof of poor moral character.  Therefore, it may be wise for you to consult with an experienced bankruptcy attorney to discuss the procedures and implications of filing for bankruptcy.

*For more information on naturalization visit http://www.uscis.gov/portal/site/uscis/menuitem.

You may have heard the hype from firms claiming they can reduce all of your IRS tax debt for pennies on the dollar. The reality is that most taxes can't be eliminated, but some can. But it is not as easy as it sounds. One legal and reliable way is to file for a Chapter 7 bankruptcy. Once you apply for bankruptcy, you must then pass a series of steps to see if you can discharge IRS tax debts under Chapter 7. Basically you can discharge an IRS tax debt if you meet all of the following conditions:

·         The taxes are only income taxes.

·         You did not commit fraud.

·         You did not commit willful evasion.

·         You filed a tax return.

·         The debt must be at least three years old.

·         You pass the "240-day rule."

As you can see the discharge of an IRS debt is not as simple or easy as some may lead you to believe. It is advisable to speak with an attorney experienced in bankruptcy law and you can by contacting Fears | Nachawati toll free at 1.866.705.7584 for a free bankruptcy consultation.

There are a few effective ways to stop or postpone a foreclosure or sale date on your home.  Your first step should be to contact your Mortgage Company directly as soon as you know you are behind or are about to miss a payment and speak to the Loss Mitigation department. Every mortgage company has Loss Mitigation department and they are there to help you in times of need (not that they always do help).  Let them know your current situation (such as loss of job, decrease in income, medical conditions or emergency situations) and ask them for your options.

The Loss Mitigation department of your Mortgage Company should be able to provide you a forbearance option or a modification option. BEWARE, some Mortgage Companies use their Loss Mitigation department to drag their feet until they sell your house.  Don’t let this happen to you!

If you keep getting the run-around, call our office and let us layout the options for you before it’s too late.  Call toll free at 1-866-705-7584 or e-mail us at info@fnlawfirm.com. 

Although obtaining a driver’s license is a privilege, for most people in Arlington, Texas, having a driver’s license is a necessity. You need it to drive to work and take your kids to school. There are many reasons people lose their driving privileges. Some get it suspended because of an unpaid judgment from an accident where you did not have insurance. In Texas you could have this type of suspension even if you have not been sued.

When you file for bankruptcy in Dallas the automatic stay takes effect immediately when you file and entitles you to get your driver's license back in most circumstances. Some of the circumstances when you have the right under bankruptcy law to get your license back are when it is suspended because of non-payment of a debt vs. the legitimate exercise of the state's police power as in a DUI situation.

You can get your license back through bankruptcy as long as the suspension is not the consequence of driving a vehicle while intoxicated that involved death or bodily injury. Another exception to re-instating a driver’s license is the non-payment of child or spousal support.

For a free consultation on how Arlington bankruptcy law can help you recover your driver’s license, contact Fears | Nachawati via toll free phone at 1-866-705-7584 or e-mail at info@fnlawfirm.com.

Most homeowners who file for bankruptcy in Arlington, Texas, do it to save their homes.  They are aware that by filing for bankruptcy, the mortgage lender will not be able to foreclose on their home and that any pending sale of your home will also be halted immediately. What many homeowners do not know about Dallas bankruptcy law is that bankruptcy can do more than save their homes.

In a way, when a homeowner files for bankruptcy, they can modify their loan by getting rid of a second loan on their mortgage. Currently there is no law allowing the bankruptcy court to modify a loan, but when a second mortgage is removed through a bankruptcy proceeding, it can greatly reduce your monthly mortgage. Also, even after your file for bankruptcy, and your file has been approved by the trustee, you can modify your home loan. For more clarification on how this process works, it is best to consult with an experienced bankruptcy attorney.

If you are in danger of losing your home, filing for bankruptcy can be a very powerful solution for many homeowners as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home. For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati, via toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.