I Have A Foreclosure/bankruptcy Question
Has anyone ever heard of Tony Youngs?
His material has a script for the homeowner in foreclosure. The script tells them that bankruptcy is a temporary state for the mtg co and that once the bankruptcy (I'm guessing this is for C13) is filed and the payment plan is executed (which includes garnishment of the required debt to repay the debtors), that the foreclosure atty will file a 'release of automatic stay' after 15 days with the trustee to get your house released from the bk and then they will go ahead with the foreclosure auction. It further says that if the house has 30% or less equity, it is released to the bank and auctioned off as planned.
I have never been thru bk myself. I would like to tell the homeowners the truth, does this sound right to any of you? I did not think that banks had that authority to do this. I thought the whole purpose of bk was to protect your home (in a homestead state like AZ).
DB:
Nice to meet you.
My take is YES and NO...
to be more clear.
YES
b/c most BK 13 debtors(85% or higher) usually fail to keep the repay plan. In addition most of these homeowners try to use the BK to stall (stave off) the foreclosure auction.
While I'd say the letter is too literally and not a guarantee of every homeowner's BK experience it does sound like a GOOD motivater to do biz with YOU as the RE Investor.
NO
b/c it depends on the debtor's ability to maintain the replayment plan. No lender can simply get a Stay Lifted by the Trustee...They must show CAUSE and even a not too sharp debtor can get another Stay especially if(as your take on the letter suggests): the Lender's atty just requested it???
Hope this helps!
Derrick Ali :-D
OK, that gives a little better explanation. The way that his script is worded, the mtg co can, at their whim, go for the 'release of automatic stay' without cause.
Now, for Ch7, does this mean that the home HAS to be sold to re-pay the debtors?
Thanks.
Can anyone give any more information on the Ch7 portion of this? What happens to the home when ch7 is filed?
All property of the debtor at the time of the filing (and certain other property to be received in the future) becomes the property of the bankruptcy estate once bankruptcy is filed. This means that the bankruptcy trustee will take control of this property for purposes of satisfying the creditors. HOWEVER, there is certain property which is either excluded or exempt which the debtor will be able to keep. Property or asset exemption are determined based upon the situation, income and the laws of the debtors state. The best way to determine which property to keep requires a detailed analysis their situation.
As for real property in many states, dependent upon which exemption scheme is selected and the debtors circumstances, they may exempt up to $100,000 in equity. When calculating their equity they should use a value that is based upon a forced liquidation as opposed to the best selling conditions to arrive at a value for their home. Once they determine this value, subtract the amount owed plus selling and transfer costs from the value to calculate the equity.
JohnMichael,
Wow, that was a great answer! I believe that exemption in AZ is in the homestead act. Thanks for the clarification.
db
Quote:
On 2004-08-05 10:56, JohnMichael wrote:
All property of the debtor at the time of the filing (and certain other property to be received in the future) becomes the property of the bankruptcy estate once bankruptcy is filed. This means that the bankruptcy trustee will take control of this property for purposes of satisfying the creditors. HOWEVER, there is certain property which is either excluded or exempt which the debtor will be able to keep. Property or asset exemption are determined based upon the situation, income and the laws of the debtors state. The best way to determine which property to keep requires a detailed analysis their situation.
As for real property in many states, dependent upon which exemption scheme is selected and the debtors circumstances, they may exempt up to $100,000 in equity. When calculating their equity they should use a value that is based upon a forced liquidation as opposed to the best selling conditions to arrive at a value for their home. Once they determine this value, subtract the amount owed plus selling and transfer costs from the value to calculate the equity.