Tuesday, July 30, 2013

Wrongfully Foreclosed? 4 Tips to Protect Your Rights!

      Since the collapse of the housing market in 2008, the number of foreclosures on people’s homes has dramatically increased.  However, with that increase of workload on the bank’s, not all of the foreclosures were properly done.  Now if you are the victim of a Wrongful Foreclosure, there are certain steps you must take to protect your rights. 
     First, as with any legal issue, consult an attorney immediately.

     Second, if you get served with detainer warrant, you MUST attend the hearing.  A detainer warrant is how an eviction is done in Tennessee.  After your home is foreclosed on the Bank will open a law suit to gain possession of the property.  There will be a hearing and it will be in front of a judge.  It is absolutely critical in your case to show up to this hearing and tell the judge that you were wrongfully foreclosed on.  Many strong wrongful foreclosure cases in Tennessee have been later dismissed because at that original hearing, the victim did not claim wrongful foreclosure.  There is a legal doctrine called Res Judicata, which means that the same issues cannot be litigated again in a different court.  And by failing to raise an issue out of the same fact scenario and circumstance bars that claim forever.  Now, the law in Tennessee is not settled on this issue with foreclosure, but it is not worth having to fight that battle.  Show up to the hearing!  Be sure to bring up the wrongful foreclosure at the eviction proceeding.   Hire and have an attorney there with you.
      Third, start building up a savings fund.  Because you were foreclosed on and still living in the property, you are not paying a mortgage or rent.  So start paying yourself the rent/mortgage.  For example, if your mortgage was $1,000 per month, then on the first of every month take $1,000 and place it in a separate savings account so you will not spend it.  This fund will help you in many ways.  It will help you find a new place to live and move if unsuccessful, and it will help you make bond if you sue for wrongful foreclosure.  If you sue, then the Bank is not able to sell that house or have someone living in it paying rent or a mortgage.  So to protect them, most courts will require you to purchase a bond in the amount of the year’s mortgage from an insurance company.  This account will help with that purchase. 
       Lastly, save every written communication between you and the bank, save every payment and statement, and take detailed notes on phone conversations you have with the bank.  All of this could be critical evidence in a wrongful foreclosure case.
      Tennessee laws weigh heavily in the favor or mortgage companies.  It is difficult to reverse a foreclosure once it has happened, but we have done it in the past.  Call us to protect your rights. 

Thursday, July 25, 2013

How much does a Bankruptcy Cost?

      This is a frequently asked question in the bankruptcy world.  How much does a bankruptcy cost, and how am I supposed to pay for it?
      Well first it depends on under which chapter you are filing bankruptcy.  Chapter 7 is the least expensive, but you must first qualify, and there are lots of restrictions.  Chapter 13 is next highest, but with relatively low risk if you have a job and can afford your repayment plan.  As for Chapter 11, if you have to ask, you cannot afford it.
      Currently in the Middle District of Tennessee, which consists of Nashville and surrounding counties, the filing fee for a Chapter 7 is $306, Chapter 13 is $281, and Chapter 11 is $1,213 but also with quarterly fees that depend on how much debt is owed. 
      For Chapter 7 and Chapter 13 debtors, the filing fee does not need to be immediately paid. For Chapter 13 debtors, the trustee will pay the fee for you out of your monthly payments.   For Chapter 7 debtors, they have up to 4 months to pay the filing fee; however, failure to do so will result in closing of the case without a discharge.  Thus we recommend paying the fee up front.
      The attorney fees for bankruptcy are set by the court.  Chapter 7 fees can range from $1,000 to $1,500 depending on how complicated the case is.  Some newer attorneys and high volume law firms will charge less, but like most things in life, you get what you paid for. 
      As for Chapter 13 cases, the fee can range from $2,500 to $4,000, but these fees are paid through the monthly plan payments and are disbursed by the Trustee of the case.  Also, chapter 13 fees are higher because the case lasts from 3 to 5 years. 
      Lastly, are the counseling courses.  The 2005 amendments to the bankruptcy code requires that debtors attend 2 budgeting courses.  The course holder must be a non-profit agency and approved by the Bankruptcy court.  The agencies that we recommend our clients to charge $25 for the first course and $15 for the second course.  In a chapter 13, however, the trustee will teach the second course for free. 
      At our firm, we do take pro-bono cases and will charge less fees for individuals who truly cannot afford the fee.