Plan Your Timing, Prepare for Your Needs

The effectiveness of your bankruptcy may turn on your timing and your needs. With this in mind, it’s important to prepare carefully and time your filing accordingly.

 

Sometimes, a consumer debtors needs to act quickly. If you’re facing the possibility of a home foreclosure, apartment eviction, or car repossession, filing immediately will activate the Bankruptcy Code’s powerful automatic stay provision. As a result, pending legal actions – such as foreclosures, evictions, or repossessions – will stop in their tracks.

 

On the other hand, a consumer debtor sometimes needs to act deliberately. In general, there’s only one shot in the bankruptcy gun. You need to hit your target the first time. Additionally, the Bankruptcy Code’s look-back provision may make you unwind certain monetary transfers that took place in the months preceding bankruptcy. In some cases, waiting just a matter of days or weeks can save you thousands of dollars.

 

Finally, it’s important to speak with bankruptcy and financial professionals to understand more clearly what your financial future will look like after bankruptcy. If you undergo a Chapter 13 restructuring, you may have to pay a portion of your monthly earnings to your creditors. Living within this budget can constrain your lifestyle in new ways. You’ll want to prepare for that change before it comes.

 

Ready to speak with the dedicated professionals and skilled attorneys at Fears Nachawati. Our Dallas-area practice is ready to serve your needs and prepare you for your bankruptcy filing. For your free consultation, talk to us today.

Bankruptcy Fraud Carries Heavy Penalties

A 89 year old decorated World War II combat veteran, suffering from cancer, was recently evicted from his home and land where his wife is buried, and his assets were seized.

What did he do to deserve this fate? He committed bankruptcy fraud.

Renn Bodecker buried $66,000 in gold and silver in his back yard in Montana, filed bankruptcy, and failed to report the hidden asset. According to an article in the Missoulian, Bodecker considered the gold and silver his retirement. Retirement money is generally protected during bankruptcy, but only when it is kept in a legally protected retirement account, like a 401k or an IRA.

Bodecker's stepson reported the hidden property to the bankruptcy trustee, who then threatened Bodecker with criminal action unless he turned over the asset and waived his homestead protection. Boedecker's home is owned free and clear, and is exempt from creditors under Montana law up to $250,000.

After Bodecker signed the waiver, the trustee seized the home and evicted him.

Boedecker says that he owes more than $109,000 to credit card companies and medical debts due to his wife's prolonged illness prior to her death. The trustee intends to sell the home and the gold and silver to pay his creditors in full. Of course, the trustee will receive a handsome sum for her work on the case as an "administrative expense."

Bankruptcy fraud is a very serious offense. Penalties can include a loss of property exemptions, denial of discharge, or even jail time. With the proper advice from an experienced bankruptcy attorney, Mr. Boedecker could have received the benefits of a bankruptcy discharge and kept his assets and his home. Unfortunately, he chose to conceal assets and is paying a heavy price for his dishonesty.

If you need financial protection from the federal bankruptcy code, contact an experienced bankruptcy attorney and discuss your case. Your attorney can explain how you can keep your assets and obtain the maximum relief from the bankruptcy laws.

 

Bank Foreclosed on Landlord. Do I need to Leave?

If financial disaster happens to your landlord, you need to protect your rights. There are several different laws and legal relationships that come into play during a foreclosure. The first principle has to do with your relationship with your old landlord. If you find out that the bank intends to foreclose on the property, the most important thing is to keep paying your rent. The landlord is the owner of the property until the bank takes legal possession through the foreclosure, and you can be evicted if you stop paying your rent.

Once the bank takes possession after the foreclosure, you still have rights. The bank is now the new legal owner and is your new landlord. You must now pay your monthly rent to the bank. The bank, as your landlord, is responsible for any maintenance issues and for returning your security deposit at the end of your lease - even if the old landlord did not transfer the security deposit. If you fail to pay your rent after the foreclosure, the bank can evict you.

Before 2009 renters could be evicted when the landlord's property was foreclosed on and ownership transferred to the lender. That's because your lease is between you and the original owner/landlord, and does not involve the lender. To combat this injustice, Congress passed the Protecting Tenants at Foreclosure Act, which allows tenants to stay after a property has been foreclosed as long as you have a valid lease and are paying your rent regularly. Even renters on a month-to-month lease get 90 days to leave. There is an exception for buyers of the foreclosed property who intend to make the property their residence. In this situation the tenant must vacate within 90 days after notice of eviction.

While the Protecting Tenants at Foreclosure Act was intended to shield tenants, the defaulting landlord also receives some protection. Since the Act places tenants in the same position with the new owner as they were with the old, the tenant generally has no recourse against a defaulting landlord. The lease survives just as there been no foreclosure. In some cases the lender will want the tenant to vacate and offer a cash buyout to leave. Many tenants believe they have no choice and accept the cash buyout.


Once the property has been through foreclosure, the landlord-tenant relationship with the old owner is severed. Many landlords who lose property through foreclosure often file bankruptcy, which discharges most landlord-tenant claims. If your landlord is facing foreclosure, protect your legal rights. An experienced bankruptcy attorney can assess your situation and help you preserve your rights during your landlord's financial difficulties.
 

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