Senate Bill 2636 (Harry Reid, D, NV), which contains a provision that would allow for the modification of home mortgage loans in bankruptcy, will be up for a vote by the full Senate next week.
I urge anyone out there to contact your Senators and urge them to pass this legislation and specifically to keep this provision in the legislation.
According to NACBA, the National Association of Consumer Bankruptcy Attorneys this is our best chance at getting real mortgage relief this year! Please ask your fellow attorneys, family members, and clients to do the same.
Obviously, this piece of legislation is strongly opposed by mortgage bankers and their allies. We need strong support from you to get this done!
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March 7th, 2008 at 3:22 am
Hay, thats good, oh and too bad for all the mortage co, who have stollen our economey and our lives, we need intervetion and help. I am so glad that alot of people can save thier homes. I wish that the sub prime lenders could be under more survalliance.I have an loan that is killing my chance to ever recoop my investment. I am hoping that the December 07 bill will be signed by our President to help us.
So anyway, to all out there having this stuggel, keep your chin up, cuz, I know it will get better, because of us The People.
April 25th, 2008 at 4:13 am
Okay, so if this passes, I pray it does. Than maybe all of us will have part of our lives back. Kool
April 30th, 2008 at 2:54 pm
Can you still file chapter 7, and let your house foreclose?
May 11th, 2008 at 12:02 am
Well, this is another example of legislation that has stalled. Instead, there are other pieces of legislation being introduced. Namely, in the House of Representatives, there is a piece of legislation introduced in April, 2008.
It is H.R. 5679 “Foreclosure Prevention and Sound Mortgage Servicing Act of 2008.”
May 11th, 2008 at 12:04 am
Brenda - Generally, you can file for chapter 7 and discharge your mortgage balance if the mortgage company doesn’t get all of its money through the foreclosure sale.
May 11th, 2008 at 4:13 am
Im in a situation similar to Brenda i guess. But I intend to have a pro shortsale my house & possibly not being foreclosed. My credit cards & loans are very high (I got in trouble with rentals) and Im hoping to chapt 7 after thats over, whether it be foreclosure or shortsale. I just got an “owner financed” house so I can provide my family a home and not under a bridge. Life can get rough!! Will this work?
May 12th, 2008 at 5:11 am
Greg - I think your plan could work. I would get some tax advice if I were you though as you might have some tax liability from the short sale of the house. The tax liability likely would NOT be something you could discharge if you file bankruptcy soon after the short sale.
May 12th, 2008 at 7:48 am
Richard, Thanks for your reply. Will the tax threat be any different if I were to file chapter 7 instead of shortsale ? By the way I have a rental house that is upside down and my primary that is also upside down. I am so bogged down by credit cards & such from trying to keep this whole thing afloat that I have to do something fast. Where might I get sound tax advice for the state of Missouri concerning a situation like this?
May 12th, 2008 at 7:58 am
Richard, Greg again… I, for some reason thought that a shortsale would be a better alternative than bankruptcy. I have no equity to be hoping for, so, if a chapter 7 would be just as well and protect me from the tax hit then thats what I’ll do. Do they come back to you for the tax amount if it is sold on the courthouse steps too?
May 16th, 2008 at 5:54 am
What happened to Richard??
May 17th, 2008 at 6:28 pm
If we’re not yet behind on our mortgage payments or car notes and we currently owe more than they’re worth how do you decide if you should file Chapter 7 or 13? It seems that 7 would be a fresher start based on the short read I’ve done so far.
May 21st, 2008 at 4:36 am
Greg - I’m still here. :-) The tax problem would exist whether there is a short sale, or a foreclosure. Bankruptcy is simply eliminating any obligation to pay anyting to the mortgage company. The mortgage company simply gets whatever they can out of the foreclosure sale (or through the short sale). I hope that answers your question.
May 21st, 2008 at 4:38 am
Beth - It sounds like a chapter 7 could work for you and if you continue to pay your mortgage payment (since there isn’t equity in your house) you can keep your house! As far as specific advice about your situation and whether a chapter 7 or chapter 13 is better, I would encourage you to talk to one of our lawyers about that. You can even submit a request for a free legal evaluation on the site. We’ll call you!
May 30th, 2008 at 8:38 am
Must you have your current taxes filed in order to file chapter 7?
June 2nd, 2008 at 4:07 pm
What do you if your attorney will not respond to your questions or situation. I have not been able to file because He just is Too Busy. Can I get my money back to go to a different attorney or do they charge you a fee eventhough it’s not your fault? All I want to do is file, have paid all my money and have all of the paperwork into the lawyer. Help Please. The attorney will not return my phone calls so I do not even know what to think.
June 12th, 2008 at 3:21 am
If I file chapter 7 or 13 will this action stop payment’s on my home? or reduce the sub-prime amount on these loans
June 18th, 2008 at 9:34 pm
Seems that legislation has not helped us very much. Unfortunately I dont think they are in touch with the consumer and how this has affected our families. Everywhere I go I hear of others who are foreclosing and filing bankruptcy. Its horrible. I never thought I would be in this situation
June 27th, 2008 at 9:27 pm
I own a business with commercial property. From business income, I hardly make up the mortgage payment. If I foreclose/short sell on the commercial property and if the lender write off the left over mortgage debt, will I be liable to receive 1099? If I receive 1099 and I declare personal chapter 7, will I be able to eliminate IRS debt? Please let me know. Thank you. Since I have SBA loan for my business, do you think the lender will negotiate the principal amount and lower it? Please help me.
June 30th, 2008 at 11:16 am
Generally you would get a 1099 in the situation you describe. However, I would consult with a CPA or tax attorney for specific advice about that.
Income tax debt is only discharged in bankruptcy in very limited circumstances.
Whether the SBA will negotiate new terms with you, I don’t know. You can always inquire. You may also want to consider restructuring your debt in a chapter 13 or chapter 11 case.