top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Not paying mortgage, possible divorce, tax penalties discharged and other questions

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    #16
    Originally posted by justbroke View Post
    I filed a Chapter 7 (non-consumer) and I was 3X the median income. It just depends on your expenses, really. Even with a non-consumer, I still had negative DMI. For over-the-median filers the expense of a home, plus 2 cars, and high property taxes, insurance, and health insurance can actually get that Chapter 7 discharge. Without *all* those types of expenses, it is nearly impossible to file a Chapter 7 being over-the-median income (unless it's a non-consumer filing).
    We are (1,389.10) in the whole trying to pay all this debt on top of regular monthly expenses. The ONLY reason we have not had to file yet is because I'm somehow getting away with not paying my mortgage which is freeing up an extra $1000 per month and because I negotiated with some of my creditors for payment plans. My husband did too. The ones that wouldn't negotiate like BOA, will likely sue me even though they told me they would likely write it off in 7 months.

    Comment


      #17
      Originally posted by womanonfire View Post
      We are not 100% about the divorce yet. Could be the crushing debt is crushing our romance so we're going to file first and see what happens. But we will be sure to talk to the attorneys about it to.
      Our financial woes brought on by the recession and then subsequent business failures caused my wife and I to split up in 2013; seven long years, a Chapter 7 for her, and a Chapter 13 for me, and we're now talking about getting back together. It is both astounding and at the same time, not surprising how financial worries can sour an otherwise good relationship. I and thinking the odds of us getting back together some time later this year are pretty good.

      I told you the above to say this, "Hang in there, if there is a chance to salvage the marriage, see the bankruptcy process through and then reevaluate."
      Latent car nut.

      Comment


        #18
        I understood what you meant, but walking away from the house "could" leave you with excess disposable monthly income (DMI) pushing you into a Chapter 13. Unless and until an attorney sits down and goes through all your numbers, it's difficult to guess about whether there would be enough money left after sale to recoup your exemption. It's certainly an additional outcome, and I'm trying to prepare you for other possible outcomes. Whether you can file a Chapter 7 will depend on your DMI, and if the United States Trustee (UST) pokes around and sees that you're walking from the house, that "could" create excess DMI (no mortgage payment).

        (One of the reasons I worry about the equity is that the Trustee will sell this at auction or under what we call a "fire sale." The amounts available to pay the commissions and other sales fees may reduce the amount left after sale. For example, if the house has a market value of $200K and you owe $150K, then there is potentially $60K in equity. At a fire sale, the bid could come in at $175K. The Trustee would pay 6% commission plus other fees which "may" make the cost to sell $15K. That would leave only $175 - $15k - $150K = $10K of equity left for exemption. In that scenario, the Trustee should have initially walked away and abandoned if they didn't think they're going to make any money)

        When you're ready, seek out 3 to 5 local bankruptcy attorneys and ask for a free consultation. You'll have to raise all these concerns during the consultation and then process their opinions. I see potential issues, but they're only potential issues (Schedule I/J issue with no mortgage payment). I'd rather you do a Chapter 7 as well, if you're not trying to save property.

        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #19
          Most bankruptcy attorneys do not do litigation at all or have very little experience with litigation. I'm sure you know it is "pay to play" and you will have to pay the retainer for the litigation upfront on top of the upfront fees for the ch7 or ch13. Extra stuff is not included. Even stuff that sounds like it's part of the normal bankruptcy like "motion to retain tax refund" is not included and you will have to pay extra.

          Comment


            #20
            Originally posted by flashoflight View Post
            Most bankruptcy attorneys do not do litigation at all or have very little experience with litigation. I'm sure you know it is "pay to play" and you will have to pay the retainer for the litigation upfront on top of the upfront fees for the ch7 or ch13. Extra stuff is not included. Even stuff that sounds like it's part of the normal bankruptcy like "motion to retain tax refund" is not included and you will have to pay extra.
            Hmmm, I wonder if this is one of those regional things; each time I needed to engage my lawyer during my Chapter 13 she sent the bill to the Trustee for payment. The only thing I paid to her was the original up front fees (which were not inexpensive).
            Latent car nut.

            Comment


              #21
              Originally posted by shipo View Post

              Hmmm, I wonder if this is one of those regional things; each time I needed to engage my lawyer during my Chapter 13 she sent the bill to the Trustee for payment. The only thing I paid to her was the original up front fees (which were not inexpensive).
              There's a difference between the fee for filing a Chapter 13, and then "special" services. Nearly every district has a set of "no-look" fees for Chapter 7s and Chapter 13s. Think of it as a menu. It allows an attorney to charge for bankruptcy services based on that menu, without the need to file an "Application" for approval of their fees. In cases where there are services provided above the normal services to get you to confirmation, in a Chapter 13, the attorney may need to seek permission if the fees are exorbitant.

              Most attorneys, for Chapter 13s, will have a standard fee for filing plus getting to confirmation. They will then have some extras such as $500-$1,000 for a lien strip on a mortgage, $250 for hearings, and other varying pricing based on what is included in your Chapter 13 filing.

              An Adversary Proceeding (AP) which is litigation, is much more different. APs are lawsuits within the bankruptcy and are "related" cases to that base bankruptcy case. Unless the attorney is sure they can collect their fee from the defendant(s), most Chapter 13 attorneys will not do an AP on contingency. They will want a sizeable retainer up front based on an estimate of the number of hours they will put into the case. Expect the hourly rate to be $250+ and the number of hours likely to be initially 25-50 hours just to file.

              So, there's a major difference between filing and confirmation fees (which can be split with some of it being paid "inside" the plan) and complaints (adversary proceedings).
              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog

              I am not an attorney. Any advice provided is not legal advice.

              Comment


                #22
                Originally posted by shipo View Post
                Our financial woes brought on by the recession and then subsequent business failures caused my wife and I to split up in 2013; seven long years, a Chapter 7 for her, and a Chapter 13 for me, and we're now talking about getting back together. It is both astounding and at the same time, not surprising how financial worries can sour an otherwise good relationship. I and thinking the odds of us getting back together some time later this year are pretty good.

                I told you the above to say this, "Hang in there, if there is a chance to salvage the marriage, see the bankruptcy process through and then reevaluate."
                That is a nice story! Congrats on your re connection and I hope that it all works out for you all this time.

                Comment


                  #23
                  Originally posted by justbroke View Post
                  I understood what you meant, but walking away from the house "could" leave you with excess disposable monthly income (DMI) pushing you into a Chapter 13. Unless and until an attorney sits down and goes through all your numbers, it's difficult to guess about whether there would be enough money left after sale to recoup your exemption. It's certainly an additional outcome, and I'm trying to prepare you for other possible outcomes. Whether you can file a Chapter 7 will depend on your DMI, and if the United States Trustee (UST) pokes around and sees that you're walking from the house, that "could" create excess DMI (no mortgage payment).
                  Ok that actually sank in so I get it now. I was up a lot last night thinking about this. I could offer to continue to pay the mortgage payment into a trust each month. That will not do anything for my past payments but going forward, I will need a place to live.

                  FYI, I have not paid the mortgage payment because the principle and interest balance is wrong, escrow is wrong, I have a right not to escrow and I didn't want to lose the fight. I have not modified for that reason. Former servicer needs correct this so that a modification can be based on the actual amounts owed. In my mind, modifying a that already needs accounting adjustments just makes for more trouble.

                  I was just reviewing this case and that doesn't sound like fun, being written a check and tossed out, especially when the exemption is so small. Of course in my case, it wouldn't be as bad. https://law.justia.com/cases/federal...017-07-14.html

                  Originally posted by justbroke View Post
                  (One of the reasons I worry about the equity is that the Trustee will sell this at auction or under what we call a "fire sale." The amounts available to pay the commissions and other sales fees may reduce the amount left after sale. For example, if the house has a market value of $200K and you owe $150K, then there is potentially $60K in equity. At a fire sale, the bid could come in at $175K. The Trustee would pay 6% commission plus other fees which "may" make the cost to sell $15K. That would leave only $175 - $15k - $150K = $10K of equity left for exemption. In that scenario, the Trustee should have initially walked away and abandoned if they didn't think they're going to make any money)
                  Do you have any cases where this happened? It basically renders the GA law and the exemptions useless if in the end, you lose them because the Trustees sells at below value. If believe if you're exempted, you're exempted and the Trustee can't take your exempt property away by any other means.

                  Originally posted by justbroke View Post
                  When you're ready, seek out 3 to 5 local bankruptcy attorneys and ask for a free consultation. You'll have to raise all these concerns during the consultation and then process their opinions. I see potential issues, but they're only potential issues (Schedule I/J issue with no mortgage payment). I'd rather you do a Chapter 7 as well, if you're not trying to save property.
                  How many attorneys did you meet with before you decided to file pro se?

                  Comment


                    #24
                    Originally posted by flashoflight View Post
                    Most bankruptcy attorneys do not do litigation at all or have very little experience with litigation. I'm sure you know it is "pay to play" and you will have to pay the retainer for the litigation upfront on top of the upfront fees for the ch7 or ch13. Extra stuff is not included. Even stuff that sounds like it's part of the normal bankruptcy like "motion to retain tax refund" is not included and you will have to pay extra.
                    The recoupment claims I have allow for attorneys fees as the are consumer protection claims, fraud, and breach of contract claims if I win. The only one that would not would be the challenge of the assignment. I believe I pay if I lose that one.

                    Comment


                      #25
                      Originally posted by womanonfire View Post
                      Do you have any cases where this happened? It basically renders the GA law and the exemptions useless if in the end, you lose them because the Trustees sells at below value. If believe if you're exempted, you're exempted and the Trustee can't take your exempt property away by any other means.
                      The Trustee doesn't take your exemption, they only give you your statutory exemption 'after the sale and cost of sale' has been computed. Thus, it is in the Trustee's and Debtor's best interest to calculate the cost of a sale of the property with respect to the exemption. If the net proceeds are less than the exemption, then the Trustee should abandon, but the debtor should also make sure that happens. if the Trustee doesn't abandon on a property that will not generate any money for the creditors, then the debtor should file a Motion to Compel Abandonment.

                      I was merely listing a case in which it turns out bad for everyone (Trustee is overly optimistic and the property doesn't sell for what they thought it would sell). Most practiced bankruptcy attorneys know how to negotiate with the Trustee on this point. It's a waste of time for the Trustee to attempt to sell when there is not enough to cover the costs and the exemption.

                      Originally posted by womanonfire View Post
                      How many attorneys did you meet with before you decided to file pro se?
                      I talked to only 2 and I did so on an emergency basis. The first said they couldn't file an emergency (skeleton) case within my 2 week timeline. The other was a so-called "bankruptcy mill" that seemed unorganized to me.

                      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                      Status: (Auto) Discharged and Closed! 5/10
                      Visit My BKForum Blog: justbroke's Blog

                      I am not an attorney. Any advice provided is not legal advice.

                      Comment


                        #26
                        Originally posted by womanonfire View Post

                        The recoupment claims I have allow for attorneys fees as the are consumer protection claims, fraud, and breach of contract claims if I win. The only one that would not would be the challenge of the assignment. I believe I pay if I lose that one.
                        That doesn’t mean the lawyer will take your case on contingency. He won’t take your case if it is a loser. And since your original attorney withdrew, it doesn’t look good. You shouldn’t have to pro se if you genuinely have a slam dunk case. If you find one that will take it on contingency or even partial contingency, take it and pay it if it is a partial.

                        Comment


                          #27
                          Originally posted by flashoflight View Post

                          That doesn’t mean the lawyer will take your case on contingency. He won’t take your case if it is a loser. And since your original attorney withdrew, it doesn’t look good. You shouldn’t have to pro se if you genuinely have a slam dunk case. If you find one that will take it on contingency or even partial contingency, take it and pay it if it is a partial.
                          I'm not sure why my former attorney withdrew because he was less than honest with me about it. I know one thing for certain, he agreed with the magistrate on the R&R, moaned about taking a haircut on his fees, and was pissed that I forced him to object to it. I sent him a nine page email tearing it apart complete with all the case law he needed to use and we went back and forth with the objection editing it to my liking before it was sent. I also wanted him to add breach of contract claims for the misapplied payments, additional RESPA violations and Fannie Mae. We met with his expert and they both agreed that the servicer breached however the damages weren't a lot and the expert said it might make the Judge mad. I disagreed. The misapplication of payments is an industry wide problem and it needs to be addressed and we had punitive damages. Anyway he withdrew after that.

                          Incidentally, the mortgage servicer announced around the same time that my attorney withdrew that it was probably going to file bankruptcy again.

                          So the rest of the story is that the attorney with the most common sense, the Judge, refused to dismiss sixteen RESPA violations and the HPA violation. Now I know that surviving a MTD does mean that the case is a slam dunk case either. I'm just saying that attorneys with their wealth of knowledge and experience are not always right. In my opinion and after reading case after case after case, if anything made mine a loser, it was the defendants pending bankruptcy.

                          I'm beginning to think I should put the time and effort into learning as much as I can, filing myself and convincing the Trustee to pursue my claims. Since my claim has survived almost 40 omnibus objections in the mortgage servicers case and the consumer creditor attorney agrees that I may have claims against Fannie, it doesn't look so bad if one looks a bit more closely at the facts. I will say having a attorney withdraw hurts though. The knee jerk reaction from anyone is to make the assumption that you made.

                          One more thing that I would like to add that is important regarding my case. I did not discover, nor did my former attorney discover, that I had a fraud claim until months after he withdrew. Had we filed with that claim, I believe they would have attempted to settle faster and for more. Former attorney also sat on the case for 7 months before filing it and literally waited until the day before the SOL would run on the HPA claim. So yeah, I have a bit of a sour taste in my mouth for some attorneys right now and I also have trust issues.












                          Last edited by womanonfire; 02-29-2020, 06:59 AM.

                          Comment


                            #28
                            It would be very cool if you could get a Chapter 7 Trustee to go down that path. Maybe you'll get an ambitious Chapter 7 Trustee, but the more seasoned ones only like "easy" money and avoid the more "litigious" litigation if they can. I don't see a Chapter 13 Trustee ever doing any real litigation so if it were a Chapter 13 (due to conversion pressure) it may be a non-starter.

                            Your issue is pervasive in the industry and is likely more appropriate as a class-action. But, I'm not a consumer-advocacy attorney and I do know that some of these are tough.
                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog

                            I am not an attorney. Any advice provided is not legal advice.

                            Comment


                              #29
                              Originally posted by justbroke View Post
                              It would be very cool if you could get a Chapter 7 Trustee to go down that path. Maybe you'll get an ambitious Chapter 7 Trustee, but the more seasoned ones only like "easy" money and avoid the more "litigious" litigation if they can. I don't see a Chapter 13 Trustee ever doing any real litigation so if it were a Chapter 13 (due to conversion pressure) it may be a non-starter.

                              Your issue is pervasive in the industry and is likely more appropriate as a class-action. But, I'm not a consumer-advocacy attorney and I do know that some of these are tough.
                              A class could never get certified against the loan server at this point. I already spoke to Tara Twomey about it. She is the consumer rep in the mortgage servicer bankruptcy case and is currently executive director for the National Consumer Bankruptcy Rights Center. I reckon she knows her stuff!

                              It's very hard to sue Fannie Mae for vicarious liability. See this article: https://www.fitchlp.com/blog/2019/08...thout-ac.shtml

                              The attorney in that case screwed up by the way if you go back to the district court's ruling. Ever read a ruling where you can tell that the judge is not very happy with the attorney? He also turned down the chance for additional discovery knowing that Fannie asserted Merrill as a defense. He should have tried to prove affirmative misconduct to get around it.


                              I'm meeting with attorney next week so I'm prepping for that. I met with one about a year ago and was all set to file Chapter 7 at his recommendation but then it dawned on me that I had an interest in my father's home and would not be able to file Chapter 7 after all. I really liked that attorney but he didn't even want to think about handling anything regarding the former lawsuit though he did mention that the Trustee might pursue those claims or let me pursue them. So since he had no problem with me pursing my claim on my own while handling my bankruptcy but then again, it was in federal court. In fact it still is in court but stayed and is just sitting there collecting dust...
                              Last edited by womanonfire; 02-29-2020, 10:27 AM.

                              Comment


                                #30
                                I wish it were certifiable as a class-action so I can get a settlement too!

                                Keep us up to date. It's very interesting.
                                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                                Status: (Auto) Discharged and Closed! 5/10
                                Visit My BKForum Blog: justbroke's Blog

                                I am not an attorney. Any advice provided is not legal advice.

                                Comment

                                bottom Ad Widget

                                Collapse
                                Working...
                                X