Monday, December 14, 2009

Mortgage Scams in Philadelphia

The bankruptcy laws can help people in financial distress but there is no miracle cure in these hard times and if someone is trying to convince you otherwise, they are lying.

Philly.com published a story today that involved thirty-five (35) homeowners facing foreclosure who thought they had found an answer to their financial woes.

These innocent homeowners were told to allow a straw purchaser to buy their home and then obtain a new mortgage, stay in their home and make partial mortgage payments, and, in a year, get

their home back. These unfortunate homeowners lost their homes and ruined their credit. The only good side to this story is that the five people accused of operating the $14.5 million mortgage-

fraud scheme were charged in a 15-count indictment. These types of mortgage scams are on the rise and this particular scam devastated 35 homeowners and their families.

Financial distress is hard to deal with but there is a light at the end of the tunnel. Consult a bankruptcy attorney and see if Chapter 13 bankruptcy can help you save your home.



Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Blvd., 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Wednesday, November 11, 2009

Is Chapter 7 Bankruptcy a Solution to Foreclosure?

Chapter 7 bankruptcy is used to delay foreclosure rather than block it permanently. Chapter 13 bankruptcy is used by homeowners to save their homes.
But even if you think you'll need to give up your house, Chapter 7 bankruptcy can be a very valuable tool in the midst of a foreclosure because you can delay the inevitable foreclosure by two to four months and get all or most of your debts permanently discharged so that you have have a fresh start after foreclosure.

When you file bankruptcy, the federal bankruptcy court issues a court order called a stay. The stay bars all creditors, including mortgage lenders, from taking any measures to collect a debt unless the court holds a hearing and grants permission.

Does it make sense to forgo the inevitable - the foreclosure? The answer really depends on your situation and cannot be simply be answered Yes/No. I don't recommend filing Chapter 7 bankruptcy simply to delay foreclosure but other attorneys may disagree with that opinion and take your money. Now, if you have a ton of unsecured debt (medical bills, credit card bills, lawsuits) I would suggest that Chapter 7 bankruptcy is an option in order to obtain a fresh start with our without a foreclosure pending.

The answer to filing bankruptcy can be found in a legal test created by Judge Learned Hand. He developed a test call the cost benefits analysis. You simply look at the cost of filing bankruptcy (downside) versus the benefits of filing bankruptcy (upside) and you arrive at a logical conclusion that filing bankruptcy is either more costly or more beneficial. Judge Learned Hand created this test as a logical tool to arrive at a logical answer. Try it sometime and you will discover the right solution in your situation.

Let me know if I can help you arrive at a solution!

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.

1500 JFK Boulevard, 
Two Penn Center,
Suite 200

Philadelphia, PA 19102

(215) 854 - 6342 office

(215) 205 - 6367 cell

(215) 569 - 0216 fax

dunnelawoffices@gmail.com

www.dunnelawoffices.com

Tuesday, November 10, 2009

How much money or property can I keep in a Chapter 7 Bankruptcy?

The following is a summary of the Bankruptcy exemptions, Section 522 of the Bankruptcy Code. Bankruptcy exemptions are laws that allow a client to proceed through bankruptcy and retain all the property/cash/jewelery which is exempted.

In plain english, a client can keep everything that is protected by the federal exemption laws.

Most Important Exemptions:

1. Up to $20,200 in equity in residence
2. Up to $1,075 in wild card exemption (used for anything)
3. Up to $3,225 in motor vehicle
4. Up to $10,775 in household goods
5. Up to $1,350 in jewelery
6. Up to $2,025 in tools of the trade
7. Up to $10,775 in cash value of life insurance

So, what exactly does all this mean? Well, a client can file bankruptcy and retain
$49,425 in equity, cash and property to help them begin their fresh start.
Not Bad. The federal law is very generous and helps people through tough times either due to unemployment, medical illness, or any other unanticipated life circumstance.

By the way, the federal exemptions also exempt $1,095,000 for each spouse's retirement plan. In case your wondering, the law specifically states that the client can exempt retirement funds to the extent they are in a fund or account that is exempt from taxation under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code (”IRC”). These IRC sections practically encompass all retirement plans out there (pension plans, profit sharing plans, stock bonus plans, employee anuities, IRAs, Roth IRAs, government deferred compensation plans, plans of tax exempt orgainzations, and certain trusts). The amount they are exempt to are $1,095,000 for each spouse!

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Can I file Bankruptcy Twice or Thrice?

Legally speaking, their is no limit on how many times you can file bankruptcy. The only limitation imposed is a time restriction.

Bankruptcy can be filed every two (2) years to eight (8) years depending on the circumstances of the case, which means the answer depends upon which bankruptcy the client filed in the past.

Allow me to explain with a helpful little graph:

Chapter 7 to Chapter 7 = 8 years
Chapter 7 to Chapter 13 = 4 years
Chapter 13 to Chapter 7 = 6 years
Chapter 13 to Chapter 13 = 2 years

A common mistake in counting the 8 years between the first Chapter 7 and the second Chapter 7 is when to start counting. The following example pertains anybody that has filed bankruptcy in the past and illustrates when to start the clock to determine if you can file today.

Allow me to provide an example so you can figure out for yourself whether you are eligible to file bankruptcy today.

A hypothetical client filed Chapter 7 bankruptcy on October 22, 2002. The client received a bankruptcy discharge on January 5, 2003. This client can file Chapter 7 bankruptcy again on October 23, 2010. The time to start counting is the date the case was filed with the court.

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Sunday, November 1, 2009

LIVING WELL in PHILLY event (Philadelphia, PA)

Launching a LIVING WELL in PHILLY event. I will be writing LIVING WILL's for FREE tba. If you are interested in signing up for LIVING WELL in PHILLY - Send me an email!

Remember - Terri Schiavo - Don't let that be you. Ms. Schiavo had a cardiac arrest on February 25, 1990 which resulted in extensive brain damage and a diagnosis of persistent vegetative state (PVS). She was connected to a feeding tube on February 25, 1990 and disconnected by court order on March 18, 2005 - 15 years later. Ms. Schiavo did not have a living will.

Tell your loved ones what medical care that you would like if you are ever incapacitated by a stroke, accident or other calamity.

Please let me know if your interested in signing up for LIVING WELL in PHILLY.

Thank you.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.

1500 JFK Boulevard, 
Two Penn Center, Suite 200

Philadelphia, PA 19102

(215) 854 - 6342 office

(215) 205 - 6367 cell

(215) 569 - 0216 fax

dunnelawoffices@gmail.com

www.dunnelawoffices.com

Saturday, October 31, 2009

WAR - Saving your home is a WAR and you need an Operations Order (OPORDER)

An Operations Order describes a military operation. An Operations Order will describe the situation facing the unit, the mission of the unit, and what activities the unit will conduct to achieve the mission goals.

The following is your OPORDER to save your HOME:

1. Loan Modification:

Loan Modification is a written agreement that permanently changes one or more of the original terms of the loan, such as a rate, payment amount, maturity date, or the amount of the unpaid principal balance. Typically the loan is modified to account for the arrearage. This means the delinquency amount is added to the remaining balance of the loan and then the loan is re-amortized.

WHEN TO USE:
a) The loan is more than 12 months old and has not been previously modified.
b) Changes in the loan terms such as reduction in the interest rate, extension
of the repayment term would reduce the payment
c) The borrower has a stable income to support the new payment
d) Failure to modify would result in a foreclosure

2. Repayment Plan:
Repayment Plan is a written agreement between the borrower and the loan servicer where the borrower agrees to cure the delinquency by adding an additional amount to their monthly mortgage payment until the loan becomes current. A common repayment agreement is for the homeowner to make one and a half payments per month until the loan is up to date.

WHEN TO USE:
a) A repayment plan may be a good option when the homeowner has found themselves
in the midst of a financial crisis that has been resolved.

3. Forbearance:
Forbearance is an agreement to suspend or reduce normal monthly payments for a fixed period of time. At the end of the forbearance period, the borrower must cure the deliquency through a lump sum payment or long-term repayment plan.

WHEN TO USE:
a) The cause of the default is specific and temporary.
b) There is reasonable evidence that the borrower will be able to resume making
payments by a certain date, and will have excess income to support a
repayment plan.

4. Partial Claim or Advance Claim:
An advance or partial claim results when an investor or mortgage insurer agrees to advance funds in an amount necessary to reinstate the loan. In this option, the borrower is required to sign a promissory note in the amount of the advance.

WHEN TO USE:
a) Appropriate when the cause of the default has been resolved by the borrower
but the borrower does not have enough extra income to repay the arrearage
through a repayment plan or loan modification.


5. Reverse Mortgage:
Senior citizens who have a significant amount of equity in their home may qualify for reverse equity mortgage. The lender pays the homeowner a monthly payment which draws down the equity in the home.

6. Short Sale:
A short sale of property describes a situation where the lender agrees to accept
the proceeds of the sale of the property as full satisfaction of the borrower's
debt.

7. Deed-in-lieu:
A Deed-in-lieu of foreclosure describes a situation where the borrower voluntary
convey title of their property to the lender in exchange for a discharge of the
delinquent debt.

WHEN TO USE:
a) The property has been abandoned
b) All other loss mitigation choices have been exhausted
c) Junior lien holders are willing to waive their claims.


8. Bankruptcy:
Bankruptcy is a financial tool that can avoid or delay foreclosure of your home.
When you file either a Chapter 13 or Chapter 7 bankruptcy, the court
automatically issues an order (called the Order for Relief) that includes a
wonderful thing known as the "automatic stay." If your home is scheduled for a
foreclosure sale, the sale will be legally postponed while the bankruptcy is
pending--typically for three to four months.

WHEN TO USE:
a) If you are facing foreclosure and cannot work out a deal or other alternative
with the lender, bankruptcy may help.
b) Sometimes the only way to keep your home is to file a Chapter 13 bankruptcy.
c) The home is underwater (you owe more than it's worth) and you want to get rid
of the 2nd or 3rd mortgage in Chapter 13.

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure Defense – How to save your Home!

YOU CAN DO NOTHING which will result in the judge issuing a judgement against the debtor.
A judgment against the debtor for failing to answer the foreclosure lawsuit is also called a default judgment. Once a bank (mortgage company) obtains a default judgment, the next step in the foreclosure process is to schedule a sheriff sale and sell the property. If the homeowner does nothing, the foreclosure process takes about three and a half months from start to finish.

OR

YOU CAN CONTEST THE FORECLOSURE COMPLAINT
which will result in the the foreclosure proceeding been permanently derailed or significantly delayed. This approach benefits the homeowner.

There are dozens of justifable legal arguments that can be included in an answer to a foreclosure complaint. Drafting an answer to a foreclosure complaint should be done by a lawyer but if you cannot afford a lawyer the following website and book should help you understand how to draft an answer to a foreclosure complaint.

1. Website:

http://www.phillyvip.org/word_docs/Mortg_Foreclosure_Trng_Mats/Litigation_Trng_Mats/Foreclosure%20Defense%20Overview.pdf

2. Book:

Title: The Foreclosure Survival Guide by NOLO
Cost: $21.99
Buy online by using the following ISBN numbers:
a) ISBN-13: 978-1-4133-0910-2
b) ISBN-10: 1-4133-0910-0

Please let me know if I can be of any help.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
1500 JFK Boulevard, 
Two Penn Center, Suite 200
Philadelphia, PA 19102
(215) 854 – 6342 office
(215) 205 – 6367 cell
(215) 569 – 0216 fax
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Tuesday, September 22, 2009

Foreclosure - Don't Panic & Don't Get Scammed!

If it's too good to be true, that means it is not true and you are about to be scammed. Hundreds of "foreclosure rescue companies" are aggressively marketing homeowners that are in jeopardy of losing their home to foreclosure. These companies obtain your personal information from public records and deliberately prey on you when you are at your weakest.

They will pull you in by say things like:
1. "Don't worry, you'll get your deed back in no time"
2. "We'll buy your house right now - but just temporarily, of course"
3. "We'll pay the mortgage payments for you"

They are selling snake oil and I advise you not to believe their lies...You are much better off contacting a nonprofit housing counseling agency for "FREE." They will help you for "FREE."

Contact a nonprofit housing counseling agency in your area for "FREE" advice on foreclosure solutions.

Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure - Don't Panic & Don't Get Scammed!

If it's too good to be true, that means it is not true and you are about to be scammed. Hundreds of "foreclosure rescue companies" are aggressively marketing homeowners that are in jeopardy of losing their home to foreclosure. These companies obtain your personal information from public records and deliberately prey on you when you are at your weakest.

They will pull you in by say things like:
1. "Don't worry, you'll get your deed back in no time"
2. "We'll buy your house right now - but just temporarily , of course"
3. "We'll the mortgage payments for you"

They are selling snake oil and I advise you not to believe their lies...

You are much better off contacting a nonprofit housing counseling agency for "FREE."
They will help you for "FREE" and do that exact same thing.

Contact a nonprofit housing counseling agency in your area for "FREE" advice on foreclosure solutions.

Foreclosure - Don't Panic - Option Number 5 - Take Out a Reverse Mortgage

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you.

2. Do I qualify for a reverse mortgage?


To be eligible for a reverse mortgage, the homeowner must be 62 years of age or older, own home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home.


3. What's unique about a reverse mortgage?


You cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."
You don't make loan payments, because the loan is not due as long as the house is your principal residence.
The reverse mortgage pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home.

4. How much money can I borrow?


The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You can use an online calculator like the one on the AARP website to get an idea of what you may be able to borrow.

5. How do I find out more information?

Call 1 (800) 569-4287 toll-free, for the name and location of a HUD-approved housing counseling agency near you or click on the following word: "Reverse Mortgage."


Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Monday, September 21, 2009

Foreclosure - Don't Panic - Option Number 3 & 4 - Chapter 7 & Chapter 13

Foreclosure - Don't Panic - Option Number 3 & 4 - Chapter 7 & Chapter 13

File for Chapter 7 Bankruptcy
If you are current on your mortgage, Chapter 7 may be a good option because it is relatively quick and inexpensive. Chapter 7 will allow your mortgage payments to be more affordable and therefore prevent foreclosure in the long run by eliminating your unsecured debt.
Chapter 7 bankruptcy will wipe out your unsecured debt, such as credit cards, medical bills, and personal loans. The net effect of wiping out your unsecured debt allows you plenty of money to pay your secured debts, i.e., mortgage and car payment.

File for Chapter 13 Bankruptcy
This is a great option if you have a fairly stable income and you can afford a Chapter 13 repayment plan. Chapter 13 allows you to repay your missed mortgage payments over the life of your repayment plan which will allows you three to five years to get back on track.
You will end up only paying a fraction of your unsecured debt, such as credit cards, medical bills and personal loans. You may be able to "cram down" your car payment and end up payment the fair market value of your car today as opposed to the balance on your car loan.
Last but not least, you may be able to "strip off" your second mortgage on your home if the value of your home has decreased and the second mortgage is unsecured.


Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure - Don't Panic - Option Number 3 & 4 - Chapter 7 & Chapter 13

Foreclosure - Don't Panic - Option Number 3 & 4 - Chapter 7 & Chapter 13

File for Chapter 7 Bankruptcy
If you are current on your mortgage, Chapter 7 may be a good option because it is relatively quick and inexpensive. Chapter 7 will allow your mortgage payments to be more affordable and therefore prevent foreclosure in the long run by eliminating your unsecured debt.
Chapter 7 bankruptcy will wipe out your unsecured debt, such as credit cards, medical bills, and personal loans. The net effect of wiping out your unsecured debt allows you plenty of money to pay your secured debts, i.e., mortgage and car payment.

File for Chapter 13 Bankruptcy
This is a great option if you have a fairly stable income and you can afford a Chapter 13 repayment plan. Chapter 13 allows you to repay your missed mortgage payments over the life of your repayment plan which will allows you three to five years to get back on track.
You will end up only paying a fraction of your unsecured debt, such as credit cards, medical bills and personal loans. You may be able to "cram down" your car payment and end up payment the fair market value of your car today as opposed to the balance on your car loan.
Last but not least, you may be able to "strip off" your second mortgage on your home if the value of your home has decreased and the second mortgage is unsecured.


Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure - Don't Panic - Option Number 2- Refinance

Some homeowners will find that the best option in their circumstances is to refinance at a better rate and pay off their old loan. Although this is not a option for everyone, it should be on the 'table' as an alternative option.

Recent legislation in Congress established the Hope for Homeowners Program, effective October 1, 2008. This program authorizes the Federal Housing Administration (FHA) to insure up to $300 billion worth of refinanced loans.

That means homeowners can modify their variable and teaser rate mortgages into lower interest, fixed rate 30 year mortgages. It is estimated that this program should be a lifeline for about 400,000 homeowners.

The following website provides the FHA contact information:

http://portal.hud.gov/portal/page/portal/HUD/federal_housing_administration


Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure - Don't Panic - Option Number 1- Reinstatement of Mortgage

Negotiate a workout with the lender with the help of a free housing counselor.
You may be able to reinstate your mortgage by making all the missed payments plus fees and interest the lender charges you.

Pennsylvania law allows a mortgage to be reinstated a maximum of three times in one calendar year and allows a reinstatement to occur all the way up to one hour before the bidding at the foreclosure sale.

The following is a list of approved free housing counselors in Philadelphia.

ACORN HOUSING CORPORATION
846 N Broad St 2nd floor
Philadelphia, PA 19130-2234
Phone: 215-765-1221    Fax: 215-765-0045
Type of Counseling:
Default/Foreclosure Counseling, Prepurchase Counseling

ASOCIACION PUERTORIQUENOS EN MARCHA
600 West Diamond Street
Philadelphia, PA 19122
Phone: 215-235-6070    Fax: 215-235-7335
E-mail: eaponte@amphousing.org
Type of Counseling:
Prepurchase Counseling, Rental Counseling, Default/Foreclosure Counseling

CENTRO PEDRO CLAVER, INCORPORATED
3565 N 7th St
Philadelphia, PA 19140-4401
Phone: 215-227-7111    Fax: 215-227-7105
E-mail: centro@Libertynet.org
Type of Counseling:

CONSUMER CREDIT COUNSELING SERVICE OF DELAWARE VALLEY
1608 Walnut St., 10th Floor
Philadelphia, PA 19103
p. 800-989-2227 or 215-563-5665
f. 215-563-7020
info@cccsdv.org
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling, HECM Counseling, Rental Counseling

DIXON OF DIVERSIFIED COMMUNITY SERVICES
1920 S. 20th Street
Philadelphia, PA 19146
Phone: 215-336-3511   Fax: 215-551-4327
E-mail: demetra.hilton@verizon.com
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling, Rental Counseling

GERMANTOWN SETTLEMENT
218 W. Chelten Avenue
Philadelphia, PA 19144
Phone: 215-849-3104    Fax: 215-843-7264
Type of Counseling:
Default/Foreclosure Counseling, Prepurchase Counseling, Rental Counseling

HISPANIC ASSOCIATION OF CONTRACTORS AND ENTERPRISES
167 W. Allegheny Avenue, Suite 200
Philadelphia, PA 19140
Phone: 215-426-8025    Fax: 215-426-9122
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling, Rental Counseling

HOUSING ASSOCIATION INFORMATION PROGRAM
658-60 N Watts St
Philadelphia, PA 19123-2422
Phone: 215-978-0224    Fax: 215-765-7614
Type of Counseling:
Default/Foreclosure Counseling, Rental Counseling, Prepurchase Counseling

HOUSING CONSORTIUM FOR DISABLED INDIVIDUALS
4701 Pine Street
Philadelphia, PA
Phone: 215-528-5056    Fax: 215-528-5848
E-mail: HCDIhelps@aol.com
Type of Counseling:
Rental Counseling, Prepurchase Counseling, Default/Foreclosure Counseling

INTERCULTURAL FAMILY SERVICES, INCORPORATED
4225 Chestnut St
Philadelphia, PA 19104-3014
Phone: 215-386-1298    Fax: 215-386-9348
E-mail: ifsi@isfinc.org
Website: www.ifsinc.org
Type of Counseling:
Rental Counseling, Prepurchase Counseling, Default/Foreclosure Counseling, HECM Counseling

KOREAN COMMUNITY DEVELOPMENT SERVICES CENTER
6053-55 North 5th Street
Philadelphia, PA 19120
Phone: 215-276-8830    Fax: 215-224-8150
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling, HECM Counseling, Rental Counseling

MOUNT AIRY, U S A
6639-41 Germantown Ave
Philadelphia, PA 19119
Phone: 215-844-6021    Fax: 215-844-9167
Type of Counseling:
Rental Counseling, Default/Foreclosure Counseling, Prepurchase Counseling

NATIONAL ASSOCIATION OF REAL ESTATE BROKERS HOUSING COUNSELING AGENCY OF PHILADELPHIA
1420 W. Susquehanna
Philadelphia, PA 19121
Phone: 215-235-3737    Fax: 215-763-3799
E-mail: C21H37004@AOL.COM
Type of Counseling:
HECM Counseling, Default/Foreclosure Counseling, Rental Counseling, Prepurchase Counseling

NEW KENSINGTON COMMUNITY DEVELOPMENT CORPORATION
2513-15 Frankford Ave
Philadelphia, PA 19125-1708
Phone: 215-427-0322    Fax: 215-427-1302
Website: www.newkensingtoncdc.com
Type of Counseling:
Default/Foreclosure Counseling, Prepurchase Counseling

NORTHWEST COUNSELING SERVICE
5001 N Broad St
Philadelphia, PA 19141-2217
Phone: 215-324-7500    Fax: 215-324-8753
E-mail: nwcs@erols.com
Type of Counseling:
HECM Counseling, Default/Foreclosure Counseling, Rental Counseling, Prepurchase Counseling

NUEVA ESPERANZA, INCORPORATED
4261  N.  5th Street
Philadelphia, PA 19140
Phone: 215-324-0746    Fax: 215-324-2542
E-mail: motero@nueva.org
Website: www.nueva.org
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling

PHILADELPHIA COUNCIL FOR COMMUNITY ADVANCEMENT
100 N 17th St Ste 700
Philadelphia, PA 19103-2736
Phone: 215-567-7803    Fax: 215-567-2236
Toll-Free: 800-930-4663
E-mail: mail@philapcca.org
Website: www.philapcca.org
Type of Counseling:
HECM Counseling, Prepurchase Counseling, Default/Foreclosure Counseling, Rental Counseling

PHILADELPHIA HOUSING DEVELOPMENT CORPORATION
1234 Market St 17th Fl
Philadelphia, PA 19107-3721
Phone: 215-448-3132    Fax: 215-448-3188
E-mail: thomasroberta@hotmail.com
Type of Counseling:
Prepurchase Counseling, Rental Counseling

PHILADELPHIA NEIGHBORHOOD HOUSING SERVICES, INCORPORATED
511 North Broad St 4TH Floor
Philadelphia, PA 19123
Phone: 215-988-9879    Fax: 215-988-1297
Type of Counseling:
Prepurchase Counseling, Default/Foreclosure Counseling

UNEMPLOYMENT INFORMATION CENTER
1201 Chestnut Street,  #702
Philadelphia, PA 19107
Phone: 215-557-0822    Fax: 215-557-6981
Type of Counseling:
Default/Foreclosure Counseling

URBAN LEAGUE OF PHILADELPHIA
251-53 S. 24th St
Philadelphia, PA 19103-5529
Phone: 215-451-5005    Fax: 215-451-5006
E-mail: rwsulp@aol.com
Type of Counseling:
Default/Foreclosure Counseling, Prepurchase Counseling, Rental Counseling, HECM Counseling

Take care and good luck.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Foreclosure - Don't Panic You Have Options

The following is a list of 7 options that you can utilize in the case of a foreclosure.

1. Negotiate a workout with the lender with the help of a free housing counselor;

CONSUMER CREDIT COUNSELING SERVICE OF DELAWARE VALLEY
1515 Market St Ste 1325
Philadelphia, PA 19102
Phone: 215-563-5665    Fax: 215-563-7020
Toll-Free: 800-989-2227
E-mail: dtagliaferro@cccsdv.org
Website: www.cccsdv.org
Type of Counseling:
Default/Foreclosure Counseling, Rental Counseling, Prepurchase Counseling, HECM Counseling


2. Reinstate the existing loan by making up the missed payments, plus costs and interest;

3. Refinance the entire loan;

4. Arrange a short sale or deed in lieu or foreclosure;

5. Arrange a reverse mortgage if you have enough equity and are 62 years or age or older;

6. Delay the foreclosure sale by filing for Chapter 7 or Chapter 13 bankruptcy;

7. Fight the foreclosure in court and either stop or delay it.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Sunday, September 20, 2009

How To Successfully Plan Your Bankruptcy?

Consider the following questions so that you can properly plan your bankruptcy:

1. Do you expect an inheritance within the next year or could you get a tax refund within a couple of months? Bankruptcy property includes not only the property you have at the time of filing but sometimes property that you may acquire or get later. You are allowed enough property to start over but no more. Inheritances, tax refunds, lottery tickets and personal injury lawsuits are especially property that the court looks at although you don’t have the money the day of filing. Be sure to list these as assets or you lose them.

2. Do you expect to have major medical expenses within the next year? Maybe you want to wait until after you have these expenses to file or if you had injuries from an auto accident you may want to reconsider filing. Lawsuits are an asset that the bankruptcy court may own if you can exempt it.

3. Have you paid a creditor more that the normal monthly payment or paid someone close to you anything within the last year? This is a preferential transfer which may be avoided by the court and the person you paid may have to pay the court back. Preferential transfers are when anyone gets something for less than its fair market value just before filing. This includes giving a mortgage to an unsecured creditor or paying a creditor off just before filing or giving a car or other property to a relative or friend before filing. Transferring assets just before filing into your retirement account within 6 months or into other exempt forms is also a preferential or fraudulent transfer.

4.Do you have child support, or alimony, or is there a pending dissolution of marriage? Overdue alimony and child support can only be repaid in a Chapter 13. It is never discharged. You must be current on support or a spouse may object to the discharge and have your case dismissed or get other sanctions. You can't fall further behind with your child support if you are in a Chapter 13.

5. Do your have old tax debts? Some debts like taxes are dischargeable if you wait the proper period of time (3 years after filing the taxes). The statute of limitations for tax collection is 10 years. Also if you went crazy and charged up your credit cards just before filing they won’t be dischargeable unless you wait 90 or more days. Such credit card charges are looked at as fraud.

6. Are you unable to keep payments current on secured property? If so, a Chapter 13 is never the long term answer. You will eventually lose property that you can’t keep up the payments on. You will eventually have to file a Chapter 7, and/or surrender the property or repay the deficiency. You have to live within your budget.

7. Do you have regular income or valuable non exempt assets? If you have regular income you may have to file a Chapter 13 unless your expenses exceed your income. If you have valuable assets that you can’t exempt, you may have to file a Chapter 13 or lose them.

8. Are you able to produce a list of your debts and financial records? You need to know who you owe, how much you owe, and the addresses of your debts. Fail to list a debt or tell your attorney about it and you may have to pay it. You may also have to provide bank and tax records and copies of deeds mortgages and titles.

9. Have you filed bankruptcy within the last 8 years or had a prior bankruptcy dismissed. You may not be able to file a Chapter 7 just yet then.

10. Have you charged large amounts, sold property and not paid the lender or obtained a loan by fraud such as overvaluing assets or giving property as security that you don’t own? If you charged a large amount within 90 days prior to filing you may not be able to obtain a discharge but such a lawsuit (adversary proceeding) against you is hard to prove and win.

11. If you have bought or sold property, was the lien or mortgage properly recorded? If a mortgage or lien was not properly recorded the bankruptcy court may own it. For that reason we need the mortgages and titles of property you own or that you bought and sold within the prior 2 years.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

What is a Chapter 13 Bankruptcy?

Chapter 13 is a type of bankruptcy where you file a repayment plan with the bankruptcy court to pay back some or a portion of your debts over three to five years. Chapter 13 plans operate very much like a consolidation loan, in that, debts are consolidated into one monthly payment which is paid to a Trustee and the Trustee then pays the creditors.

The 7 major benefits to a Chapter 13 are:

1. A Chapter 13 can be used to repay certain debts that a Chapter 7 cannot, such as fraudulent debts, child support, divorce settlements, taxes less than 3 years old and student loans.

2. If you can’t finish paying the plan but you have repaid the majority of the Chapter 13 payments you can get a “hardship” discharge for having made most of the repayments as long as you have repaid what a 7 would have repaid. The plan can also be modified or lowered or increased. If your Chapter 13 is dismissed voluntarily or due to a willful violation of a court order, you may not obtain a discharge by filing another Chapter 13 for years. You may be able to obtain the stay to stop a foreclosure by proving that it will work a second time but you won’t get a discharge of your unsecured debts. If it was dismissed involuntarily due to no fault of your own, you can re-file immediately. If you were in a credit counseling plan and fail to finish paying payments you go back to owing as much as you originally owed

3. If you can’t finish the repayment, a Chapter 13 can also be converted to a Chapter 7. This is often useful if you filed a Chapter 7 less than 8 years ago and you need relief now but want to convert later.

4. A Chapter 13 protects co-signers, as long as the Chapter 13 pays the debt in full, and it allows you to keep property that you might otherwise have to turn over in a Chapter 7 liquidation bankruptcy. (A Chapter 7 does not protect co-signers and only protects joint property belonging to the Debtor while the Chapter 7 stay is in effect.)

5. Chapter 13 is often used to stop foreclosures or refinance a mortgage. After just one year after you start a Chapter 13, agency lenders (VA FHA HUD KHC) can refinance or finance a home mortgage at prime rates even while you are in a Chapter 13 if you repay on time while you are in the Chapter 13.

6. You can also avoid (destroy) a second mortgage that has no equity in a Chapter 13. However you must prove that if the house sold that no money would go to the Second mortgage.

7. You can also effectively discharge many of your debts in a 13 by reviewing your debts prior to them being approved to be paid. If you file motions to object to questionable debts then many lenders will not bother to supplement their claim or fight your objection.


Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

What is a Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy is sometimes called "liquidation" bankruptcy -- it cancels your debts, but you might have to let the bankruptcy court liquidate (sell) some of your property for the benefit of your creditors. ("Chapter 7" refers to the chapter of the federal Bankruptcy Code that contains the bankruptcy law.)

If you properly file a Chapter 7, you will no longer have to repay your debts and your debts will be “discharged”. A discharge in bankruptcy means that you no longer personally owe the debts.

Your goal in a Chapter 7 bankruptcy should be to “exempt” all of your assets so that you can keep all of your property and still wipe out all of your debts. However the U.S. Trustee will attempt to sell any assets you fail to properly “exempt”. You can’t exempt property you don’t claim which is why you must list all of your property.

In a Chapter 7, you are allowed to keep a certain amount of property that is called exempted property. The bankruptcy court and creditors cannot take “exempted” property from you unless they have a lien or mortgage on it.

For 2009 in Pennsylvania, you were allowed to keep $3,225 equity in a car, $10,775 in personal property, $20,200 in your home, a 1,075 wildcard exemption plus another $10,100 wildcard exemptions if the home exemption isn’t used. These amounts increase every year for cost of living. You also have an almost unlimited exemption for retirement funds ($1,095,000.00). It is very important to be aware that these figures are doubled for married joint filers.

The principle of a Chapter 7 bankruptcy is that the Debtor is allowed to keep a small amount of necessary exempted property to start over with and his creditors keep the rest of the property. However, with the proper pre-bankruptcy planning, it is rare that any property is handed over in a Chapter 7 case. Most people do not have any assets to hand over after they are allowed to keep their exempted property.


Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

What Will It Cost To File Bankruptcy?

If you choose us as your Attorney, we have a flat fee for an uncontested Chapter 7 bankruptcy. Almost all bankruptcies are uncontested. However, there can be additional fees under some rare circumstances.

Our flat fee is $1,4000 for a single uncontested bankruptcy petition and $1,600 for a joint uncontested petition. Chapter 7 court costs are presently $299. Your total cost is $1,699.00, but this can change. Chapter 13 court costs are $274. Attorney fees in a Chapter 13 are approximately $2,400. Attorney fees in a Chapter 13 are paid as you pay payments and are set by the court.

We DO charge for filing any adversary proceeding to discharge student loans, recover garnishments, or avoid a judicial lien filed on your property. These problems are rare but, you should always check to make sure you have not been sued and that you have no liens on your home.

We also charge a small fee if you need to file motions or proceedings to redeem property or to avoid judicial liens on real property (such motions are not included in the fees charged by us in filing an uncontested bankruptcy). Removing a judicial lien requires an additional hearing, motion, and a real estate appraisal requiring more legal work than a standard bankruptcy. A bankruptcy can get rid of a judicial lien (such as a lien resulting from a lawsuit or tax lien), but you must ask us to remove any lien before the bankruptcy is discharged and give us a copy of any such lien, your deed, and an appraisal. If you don’t tell us about it we can’t remove it.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

What documents do I need to file Bankruptcy?

Required Supporting Documents

1. A certificate of Approved Credit Counseling prior to filing;
2. Evidence of income for the prior 6 months so that your income can be
averaged including the last 60 days of pay stubs together this is a total of
the prior 7 months. Also this is household income not just your income even
if your spouse is not filing;
3. At least 6 prior months of bank statements, loan dates for secured debts;
4. A detailed list of personal property;
5. Past utility or medical bills;
6. Statement of monthly net income and any anticipated increase in income or
expenses after filing;
7. Court Orders if you have child support or Alimony obligations including the
address of the person you pay. Proof that you are up to date on your
domestic support obligations alimony child support;
8. Copies of your Deeds and Mortgages showing time stamped date of when it was
recorded;
9. Bank statements for accounts which you have an interest or signature
authority on the date you file. Tell your attorney if you are on someone
else’s bank account, car title or property;
10. Titles to all vehicles, jet skis, trailers or boats titled in your name
(again tell your attorney if you are on someone else’s car);
11. Proof of full coverage insurance if you have a loan on your car;
12. Photo Id and Social Security Card;
13. The last four years of tax returns, not your copy, the transcript from the
IRS which takes time and money to get; plus tax returns filed during the
case. If you have not filed returns you cannot file. Often we will get
these for you if you don’t have them but you must sign papers allowing us to
get them for you.

By no means is this a conclusive list of required documents but this will certainly get the ball rolling in your bankruptcy case.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

What Property Can I Keep in Bankruptcy

Most states like Pennsylvania use the Federal Exemptions which allow you to keep a large amount of your property. The federal exemptions increase with the cost of living every year.

The 2009 Federal Exemptions:

1. A home exemption for $20, 200. The exemption applies to each debtor who resides in the home and who is on the deed so it would be doubled for a married couple filing jointly if both individuals are on the deed. In that case, the home exemption would be $40,400. Bankruptcy Code Section 522(d)(1)

2. A $3,225 vehicle exemption per debtor. U.S. Bankruptcy Code Section 522(d)(2)

3. A $10,000 household goods exemption. U.S. Bankruptcy Code Section 522(d)(3)

4. An additional $1,000 general wildcard federal exemption for additional property the debtor wishes to keep. U.S. Bankruptcy Code Section 522(d)(5)

5. If the real estate exemption is not used, then ½ of it becomes a "wildcard" exemption which can be used for any property the debtor wishes to keep. U.S. Bankruptcy Code Section 522(d)(5)

6. A retirement exemption that is almost unlimited or to be exact $1,095,000 in retirement funds. U.S. Bankruptcy Code Section 522(d)(12)

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Debt Management is a Bad Alternative

Debt Management may allow you to repay your debts over time just as Chapter 13 however:

1. Debt Management companies pay themselves first and have gone out of business taking your money with them.
2. Your credit is still damaged with Debt Management.
3. Debt Management is taxed as income for any debt that is "forgiven."
4. Debt Management lacks the power of federal court orders.
5. Creditors are court ordered to a Chapter 13 and they cannot opt out or refuse to participate in a court ordered Chapter 13 repayment plan.
6.Debt Management requires repayment at 50% and a Chapter 13 may pay less than 10%.
7. 90% of all Debt Management plans fail while Bankruptcy allows conversions and hardship discharges if you cannot complete a Chapter 13 repayment plan.


Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Advantages & Disadvantages of a Chapter 13 Bankruptcy

Advantages of a Chapter 13 Bankruptcy

1. A Chapter 13 can allow you to eliminate and destroy a 2nd Mortgage by lien stripping where the 2nd Mortgage has no equity in the home. (If the home is worth less than the 1st Mortgage).
2. Only a Chapter 13 will "cure " a foreclosure.
3. By reviewing and objecting to improper claims you often eliminate much of the unsecured debt.
4. If you are unable to complete the Chapter 13, you may convert to a Chapter 7 or obtain a "hardship discharge."
5. A Chapter 13 may be paid off early by cashing in a retirement, inheritances or a mortgage.
6. Often a home can be refinanced at a lower rate 1 year after on time payments in a Chapter 13.
7. Debts such as taxes, that are not dischargeable in a Chapter 7 may be dischargeable in a Chapter 13.
8. Cosignors can be protected in a Chapter 13 not in a Chapter 7.

Disadvantages of a Chapter 13
1. Partial to complete repayment is required.
2. A typical Chapter 13 repayment plan lasts for three years or five years.
3. Annual budget reports are required.
4. You lose your annual tax refund in a Chapter 13 if your plan is less than 100% until discharge.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Qualifying for a Chapter 7 with high income

The "Means Test' has two parts in determining if you qualify for a Chapter 7:
In the first part you automatically qualify if your household (family) income for the prior six (6) months is below the average from your state and county.
However you may still qualify for Chapter 7, if:

In the second part of the Means Test, you are able to deduct for secured and necessary expenses such as child support, child card, food, utilities, medical, telecommunication, auto, insurance, etc. If you cannot afford a reasonable payment in a chapter 13 after these deductions, you still qualify for a chapter 7.

That means that many people will still qualify for a chapter 7 bankruptcy even if they make slightly over the average income if they have high necessary or secured expenses. Naturally, it would be essential to have proof in the form of documentation.

Stephen M. Dunne, Esq.
Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Saturday, September 19, 2009

How to stop creditors from harassing your family?

Sometimes Creditors become quite aggressive in their debt collection practices and continue to harass people after they have filed bankruptcy. In such cases it is always prudent to take the higher ground and offer to fax/email/mail a copy of your hearing notice to the creditor and this should stop the creditor from continually calling your home or office.

However, some creditors frankly don’t care and will continue to call you even though such behavior is illegal in the hope that you will pay by mistake. You do not have to put up with this harassment because these creditors are breaking the law.

Whether it be never ending phone calls, threatening letters, or being falsely accused of owing money, the Fair Debt Collection Practices Act (or “FDCPA”) protects consumers from abusive debt collectors. The FDCPA allows those consumers who have endured creditor harassment to sue the debt collector for up to $1,000.00 statutory damages, plus actual damages (e.g., mental anguish, phone charges, etc.), plus attorneys fees.

The best resource for finding out whether you have a valid case against a debt collector for violations of the FDCPA (or other consumer protection law) is a local consumer attorney. If you have been illegally harassed by abusive creditors, contact the Dunne Law Offices at (215) 854-6342 and speak with an attorney to determine whether you can sue the debt collector for statutory & actual damages for breaking the law.


Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Common Bankruptcy Errors

1. Tax Refunds may be lost if refunds are so large that they cannot be covered by federal exemption laws or the bankruptcy petition is filed at the wrong time. Protecting your tax refund can be accomplished with the right pre-bankruptcy planning.

2. Taxes (contrary to popular belief) can be discharged in bankruptcy if they are older than 3 years old. There are lots of different technical rules relating to discharging taxes but the most important thing to remember is that they can in fact be discharged in certain circumstances if they are older than 3 years old.

3. Failure to list creditors on your bankruptcy petition will result in a creditor not been discharged.

4. Failure to appear at your meeting of creditors with a photo id and social security card will result in your bankruptcy case been closed without a discharge.

5. Failure to take the second credit counseling course after the meeting of creditors will result in your bankruptcy case been closed without a discharge.


Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Philadelphia Bankruptcy Attorney

The Dunne Law Offices, P.C. provide affordable, experienced and accessible representation at six office locations throughout the Philadelphia area.

Some of our areas of practice include:

• Bankruptcy
• Contracts
• Corporate Formation (Corporations, Limited Liability Companies, Partnerships)
• Divorce (Uncontested)
• Immigration
• Landlord/Tenant
• Leases (residential and commercial)
• Name Change
• Small Claims
• Wills,Trusts and Estates

Reasonable Prices -- Reliable Personal Service.

• Contact us for a free 1/2 hour initial consultation.
• Evening & Weekend appointments available upon request.
• Flexible payment plans.


Please visit www.dunnelawoffices.com to learn more about the firm or simply
call 215 - 854 - 6342 to speak with us.

Dunne Law Offices, P.C.
1500 JFK Boulevard
Two Penn Center, Suite 200
Philadelphia, PA 19102
215 - 854 - 6342

WWW.DUNNELAWOFFICES.COM

DUNNELAWOFFICES@GMAIL.COM

Friday, September 18, 2009

Bankruptcy Vocabulary

What is a Bankruptcy Discharge?

The goal in any bankruptcy case is to obtain a discharge of a clients' debts. A discharge essentially means all your debt is deleted or extinguished.

What is an Automatic Stay?


Once a bankruptcy petition is filed with the court, a temporary court order called an automatic stay immediately goes into effect which temporarily stops all debt collections, real estate foreclosures and vehicle repossessions.

What is Lien Stripping?

Lien Stripping allows you to get rid of a 2nd Mortgage if the home securing the 2nd Mortgage has depreciated to the point where the home is worth less than the 1st Mortgage. The best way to explain Lien Stripping is to give an example.

Let's say you buy a home for $100K on a 1st Mortgage and a few years later the home appreciates in value up to $200K. At this point you decide to take out a 2nd Mortgage for $100K to do repairs and renovation on your home. A few years later, the real estate market crashes and your home is now worth $100K. This 2nd Mortgage on your home has no equity securing the 2nd Mortgage because the home is worth $100K and that only secures your 1st Mortgage.

In a Chapter 13 Bankruptcy, the 2nd Mortgage is treated as an unsecured debt (like a credit card) and discharged. The 2nd Mortgage is released at the end of a Chapter 13 repayment plan. This can be done by showing the Court that the home is only worth $100K (get an appraisal) and filing a motion to strip the mortgage with the court. This can save you thousands of dollars.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Monday, August 10, 2009

Virtual Bankruptcy Paralegal (Philadelphia, PA)

Please apply if you meet the following criteria:

Certified Bankruptcy Paralegal specializing in the drafting of highly-detailed Chapter 7 and Chapter 13 Bankruptcy Petitions
Experience Filing Bankruptcy petitions using Bankruptcy PRO legal software
5+ years experience working in the Bankruptcy paralegal field
Interested in volunteering to work on Chapter 7 pro bono cases
Well versed in the law of bankruptcy, both the Code and the new BAPCPA Regulations
Experienced with the Electronic Case Filing (CM/ECF) system
You love helping people get a fresh start in life
Contact Information:

Dunne Law Offices, P.C.
p: (215) 854 -6342
e: dunnelawoffices@gmail.com

Location: Philadelphia, PA
Compensation: $300 per Bankruptcy Petition
Telecommuting is ok
This is a part-time job

Thursday, May 14, 2009

FREQUENTLY ASKED QUESTIONS

1) Should I file Bankruptcy? A person should file a bankruptcy if, and only if, he or she can’t pay bills as they come due or is about to lose property or have property attached by the Court. Very few people lose any property when they file bankruptcy. In Pennsylvania, you are allowed to keep $3,225 equity in a car, $10,775 in personal household goods, $20,200 in a home, and at least $1,000 in any property that you choose in a general exemption plus ½ of the unused portion of the home exemption. For married couples, filing jointly, these exemptions are doubled. In a Chapter 13, the property that can be kept is just about unlimited as the plan pays at least what a Chapter 7 would pay. Filing a bankruptcy is generally better than having a foreclosure on your credit record. A person will often be able to rebuild credit and buy a house within 2 years after a bankruptcy. A repossession can do more damage to your credit and it may take much longer to recover. Government regulations may forever keep you from financing a home with the VA or FHA if you have a repossession for a home, but allows financing 2 years after bankruptcy. Only 7 magical items may not be bankrupted: Child Support and Alimony; taxes less than 3 years old; federally guaranteed student loans; debts due to fraud; debts due to drunk driving; debts due to intentional injuries; and criminal restitution.

2) What does it cost to file bankruptcy?
Court costs are about $299 for a Chapter 7 and $274 for a Chapter 13. Chapter 7 attorney fees at our office will run about $1,500 plus any expenses and Chapter 13 attorney fees will run about $3,000 plus any filing fees.

3) What happens when I file? When you file a bankruptcy, a Court order goes into effect immediately stopping all collection activity. This includes stopping foreclosures, attachments, garnishments, and Creditors calling you. The sooner you come in to the law office, the sooner you can get relief—and the more you can save from Creditors. You will have a 341 hearing within about 4 to 6 weeks after the bankruptcy is filed. When the bankruptcy is finally over, a discharge is issued. This is a final and permanent order to stop all collection activity and declaring the debts to be non collectable. Bankruptcy does not normally get rid of a security interest that you gave to a Creditor such as a mortgage or a standard car lien, but it does make you not liable for the debt.

4) Which bankruptcy is right for me: Chapter 13 or Chapter 7? A Chapter 13 is like a bill consolidation loan, and you normally file it to keep property and stop foreclosures. A Chapter 7 is used to completely wipe out unsecured debts and to get rid of secured debts for property you don't want to keep. Both will stop garnishments and Creditor harassment. If you earn more than the average wage for your state and size of family you will normally be required to file a Chapter 13. Usually, the only times you will want to file a Chapter 13 are 1) when you have already filed a Chapter 7 and can't file another one or 2) if you have so much property and equity that a Chapter 13 is necessary to keep that property. You may have to file a Chapter 13 if you have so much income (after you pay your normal monthly living expenses) that you can repay something to your debts. A Chapter 13 can repay child support, repay student loans, or protect a co-signer. The fortunate thing about virtually all Chapter 7 cases is that the Debtor’s assets are normally exempt, so there are rarely any assets to liquidate. Married couples with valuable assets, such as over $40,000 in equity for a home or over $7000 equity in cars (these amounts are for Pennsylvania), may want to choose Chapter 13.

5) Why file a Chapter 7? If you have substantial unsecured debts you may want to file a Chapter 7. You may also want to file a Chapter 7 if you want to surrender property and not owe for it. You can usually keep all your property in a Chapter 7, because you won't have enough equity in any property to exceed the exemptions allowed.

6) Why file a Chapter 13? You may want to file a Chapter 13 if you have secured debts and are threatened with foreclosure or repossession, if you filed a Chapter 7 less than 6 years ago, if you wish to protect your cosigner, or if you have debts that are not dischargeable in a Chapter 7 but are payable in a Chapter 13. Child support can be paid first in a Chapter 13 before secured creditors giving you the advantage of not losing a car or property but having all of your payments go to child support at the start of the case.

7) Can I convert from a Chapter 13 to a 7 or from a 7 to a 13? Yes they can be converted. Few people convert from a 7 to a 13. However if you earn over $60-$70,000 you have a strong chance that the US attorney’s office will file a 707 b motion that may force you into a 13. If you file a Chapter 13 you have a good chance that you will have to convert from a 13 to a 7. Over 3-5 years, you are very likely to miss payments and have the Chapter 13 dismissed (or have to re-file). Some Chapter 13 cases are never finished and are converted into Chapter 7 cases. If you are close to completing the plan, you may be granted a hardship discharge. Plans can also be later modified if incomes change.

8) How long will bankruptcy take? It will take about 3 to 4 months for a Chapter 7 to be final. (You will get a letter within 10 days of filing, telling you the time and date of the 341 hearing. This hearing will be held about 4 to 6 weeks after you file.) A Chapter 13 will take as long as the repayment plan takes, usually from 36 to 60 months.

9) What are the most common mistakes I can make when filing? Not showing up for your hearing and not listing all of your debts. Fail to show up at the hearing, and your case is dismissed. Fail to list a debt, and you continue to owe it. Also people often have too much in a checking account when they file or a tax refund coming. The best policy is to list all your debts and assets. Always list every debt, even if you think it is non-dischargeable, it may be discharged anyway. Even include last month’s utilities.

10) How do I qualify for bankruptcy? Can I not be approved? You qualify for bankruptcy if either your outgo exceeds your income or your liabilities exceed your assets. If you don't qualify, we will tell you when we type up the bankruptcy. You basically have to be a US citizen, reside in the state you file in, and not have filed within certain time periods (you can’t file two Chapter 7s within 8 years of each other).

11) What if the Court does not approve my Chapter 13 or Chapter 7? If there is anything wrong with your Chapter 13 or Chapter 7 bankruptcy it will usually be changed and amended. Of course, it is less costly and time-consuming to do it right the first time. If you earn so much money that you can afford a Chapter 13, you will be forced to change it from a Chapter 7 to a Chapter 13. Repayment plans often are amended.

12) How often can I file? You can file a Chapter 7 8 years after you filed your last Chapter 7 the time used to be 6 before 10-2005. The time is measured from the time of filing your first case to the time of filing of your second case. You can file Chapter 13s 2 years after a Chapter 13 discharge. You can file a Chapter 7 4 years after a Chapter 13. You can only have one bankruptcy going on at a time.

13) If I file does it mean my old bad debts are erased from my credit report? NO! What is reported is that you had a debt and that a bankruptcy was filed. Bankruptcy does not give you a good credit record or “repair” your credit record automatically. You repair your credit by paying your debts on time after the bankruptcy.

14) Can I file without an Attorney? Yes. You can file a bankruptcy yourself, and this is called “filing pro se”. You can also do dentistry on yourself, but we wouldn’t recommend it.. Considering the time and risk involved, we recommend you use an Attorney. You may lose far more in Court than what the Attorney would have cost—plus there is the extra time and effort on your part doing the work.

15) What about a Bankruptcy Mill? Filing a bankruptcy through a Bankruptcy Mill or paralegal may be even worse than doing it yourself and they often charge as much as the attorney. Many people have lost thousands of dollars with these businesses—through intentional scams or just plain bad work. Non-Attorney bankruptcy petition preparers are barred by law from providing you with any legal advice. In enacting legislation governing bankruptcy petition preparers, Congress stated: “These preparers lack the necessary legal training and ethics regulation to provide [legal advice and legal services] in an adequate and appropriate manner. These services may take unfair advantage of persons who are ignorant of their rights both inside and outside the bankruptcy system.” The bankruptcy petition preparer's role is limited by law solely to typing. Unlike an Attorney, a bankruptcy petition preparer cannot help you understand the law, advise you how to answer questions, assist you in planning, or be in Court. Federal law requires that bankruptcy petition preparers sign any documents they prepare; print on the document their name, address, and social security number; and furnish you with a copy of the document. A bankruptcy petition preparer may not sign any document on your behalf, may not use the word “legal” or any similar term in any advertisement, and may not receive any payment from you for Court fees. The bankruptcy petition preparer is also required to disclose to the Court the amount of any fee you pay. Beware of any bankruptcy petition preparer who does not comply with these requirements.

16) How much do you charge? We charge a flat fee of about $1,000 for doing a personal uncontested Chapter 7 bankruptcy. Court costs are $300. Your total cost is $1400 including credit counseling. Chapter 13 Court costs are $275. We charge a flat fee of about $2,000 for doing a Chapter 13 bankruptcy.

17) Can I pay you in payments?. For a Chapter 7, our filing fee must be paid before we file the petition. For a Chapter 13, you only need to pay the filing fee before we file the petition—sometimes, in an emergency, even the filing fee can be paid in payments to the Court. Our attorney fee is often paid by post dated checks or installments.

18) What paperwork do I need to bring to my Attorney? Bring the names, amounts, account numbers and proper addresses of all of your Creditors. You may estimate the amounts. Credit bureau reports normally don't have the addresses on them.

19) How can I get a copy of my credit report?
You can get a free credit report if you have been denied credit, are unemployed, are a victim of fraud, or are on welfare.
To get one free (if you qualify) or for a small fee (if you don't) without going through a "middle man" just contact any of the 3 major reporting services below. They will charge you between $3.00 and $8.50 depending on your state of residence.

1. Experian (TRW) at 1 888 EXPERIAN (1 888 397 3742) allows you to charge your credit report to your Visa or MasterCard over the phone.

2. Trans Union at 1-800-888-4213 or write to: Trans Union Corporation Consumer Disclosure Center, P.O. Box 390, Springfield, PA 19064-0390

3. Equifax at 1-800-685-1111 or write to: Equifax Information Service Center P.O. Box 740241 Atlanta, GA 30374-0241. For $8, you can get an immediate report online from Equifax at: http://equifax.com/resources/fcra_info_rights.html

If you decide to write to any of these services, be sure to include your: name, address, phone number, previous addresses for the past two years, social security number, birth date, employer, signature—and be sure to include your payment. (You'll have to call to get the payment amount.) Proof of identity such as a photo copy of your driver’s license will also be required. Normally you are better off if you just pay for the report.

20) Can I file jointly with my spouse?
Does my spouse have to file or sign if I want to file individually? Yes, you can file jointly. No, your spouse doesn't have to file but, if most of your debts are joint debts, he or she may want to. There is no need for a spouse to file if the debts are not in his or her name. If you are filing a Chapter 7, and the bills are also in your spouse’s name, he or she generally should file to be protected. (Co-signers are protected in a 13 with 100% plans, but are not in a Chapter 7.) There should be no additional charge for a spouse filing, but some firms charge extra. The only extra work to do in a joint filing is adding an additional name and social security number to the petition.
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Dunne Law Offices, P.C.

(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

The Means Test Calculator

The NOLO website has a very helpful Means Test Calculator on the following website:

www.legalconsumer.com/bankruptcy

The Means Test Calculator applies the formulas, regional income and expense standards, and calculations of the new "means test" that was a cornerstone of BAPCPA, the bankruptcy law (11 U.S.C. 707(b)). It uses the language and formatting of Official Form 22A -- one of several forms you would need to complete if you decide to file for bankruptcy.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Tuesday, May 12, 2009

Credit Cards and Bankruptcy

Ten Things to Think About Before Getting a New Credit Card

1. Don’t apply for a credit card until you are ready.

Unfortunately, bankruptcy may not have permanently resolved all of your financial problems. It is a bad idea to apply for new credit before you can afford it.

2. Avoid accepting too many offers.

There is rarely a good reason to have more than one or two credit cards. Having too much credit can lead to bad decisions and unmanageable debts, and it will lower your credit rating. This can make it harder for you to get other lower interest rate loans. Avoid accepting a credit card just to get a discount at a store or a “free” gift.

3. Remember that lenders are looking for people who run up big balances, because those consumers pay the most interest.

You may find that credit card companies are pursuing you aggressively by mail and phone even though you filed bankruptcy. Do not view this as a sign that you can afford more credit. The lender may have a marketing profile telling them you are someone who is likely to carry a big credit card balance and pay a good deal of interest. Or they may see you as a good credit risk because you cannot file a Chapter 7 bankruptcy again for quite a few years.

4. Interest rate is important in choosing a card but not the only consideration.

You should always try to get a card with an interest rate as low as possible. But it is rarely a good idea to take a new card just because of a low rate. The rate only matters if you carry a balance from month to month. Also, the rate can easily change, with or without a reason. Remember that even the best credit cards are expensive unless you pay your balance in full every month. And other credit terms can add to your cost, like annual fees, late charges, over-the-limit fees, account set-up fees, cash advance fees, and the method of calculating balances. Sometimes a credit card that appears cheaper is actually more expensive.

5. Beware of temporary “teaser” rates. A teaser rate is an artificially low initial rate that applies only for a limited time.

Most teaser rates are good only for six months or less. After that, the rate automatically goes up. Remember that, if you build up a balance under the teaser rate, the much higher permanent rate will apply when you repay the bill. This means that the permanent long-term rate on the card is much more important than the temporary rate.

6. If your rate is variable, understand how it may change.

Variable interest rates can be very confusing. Some variable rate terms can make your rate go up steeply over time. Read the credit contract to understand how and when your rate may change. And don’t be misled by advertisements that claim “fixed rate,” as his may mean the rate is fixed only until the lender decides to change it again.

7. Check terms related to late payment charges and penalty rates of interest.

Most credit card contracts have terms in the small print for late charges or penalty interest rates that increase if you make even a single late payment. Try to avoid cards with late fees as high as $25–$35 or penalty interest rates of 21–24 percent or higher. Even if you are not having financial problems, these terms may become important, because they apply equally to accidental late payments.

8. Get a card with a grace period and learn the billing method.

It is important to understand how you will be billed. Look for a card with a grace period that lets you pay off the balance each month without interest. If the card does not have a grace period and interest will apply from the date of your purchase, a low interest rate may actually be higher than it looks. The terms of the grace period are also important, as it may not apply to balance transfers and cash advances. And look out for different interest rates that may apply depending upon the type of charge: these usually include a higher rate for cash advances.

9. Don’t accept a card just because you qualify for a high credit limit.

It is easy to assume that because a card offer includes a high credit limit, this means the lender thinks you can afford more credit. In fact, the opposite may be true. Lenders often give high credit limits to consumers hoping that they think will carry a bigger balance and pay more interest. You must evaluate whether you can afford more credit based on your individual circumstances.

10. Always read both the disclosures and the credit contract.

You will find disclosures about the terms of a credit card offer, usually in small print on the reverse or at the bottom of the offer. Review these carefully. However, the law does not require that all relevant information be disclosed. For this reason, you must also read your credit contract, which comes with the card. This will include terms such as late payment fees, default rates of interest, and a description of the billing method. Since these terms are not easy to understand, you may want to call the lender for an explanation. Or better yet, refuse credit with too many complex provisions, because those terms are likely to work to your disadvantage.

Ten Things to Think About Before Using Your Credit Card

1. Establish a realistic budget.

Before using a credit card after bankruptcy, try paying cash for a while. This will help you learn how much money you need each month to pay the basic necessities. Don’t forget to budget for the payments on any debts you reaffirmed in your bankruptcy.

2. It is important not to use credit cards to make up for a budget shortfall.

Credit card debt is expensive. Sometimes credit cards are so easy to use that people forget they are loans. Be sure to charge only things you really need and plan to pay the balance off in full each month. If you find you are constantly using your card without being able to pay the bill in full each month, you need to consider that you are using cards to finance an unaffordable lifestyle.

3. If you get into financial trouble, do not make it worse by using credit cards to make ends meet.

If you find that you are using credit cards to get through a period of financial difficulty, it is likely that additional credit will only make things worse. For example, if you use cash advances on your credit card to pay bills, the interest due will only add to your debt burden sooner rather than later.

4. Don’t get hooked on minimum payments.

Credit card lenders usually offer an optional “minimum payment” in their monthly billing. These are usually set very low (usually 2 percent of the balance), barely covering the monthly interest charge. If you pay only the minimum, chances are that you will be paying your debt very slowly or not at all, and you may think you are managing the debt when you are really getting in over your head. For example, if you make only the monthly minimum payments to pay off a $1000 balance at a 17 percent interest rate, it will take over 7 years to pay your debt! If you are also making new purchases every month while making minimum payments, your debt will grow and take even longer to pay off. This means that your monthly interest obligations will increase and you will have less money in the monthly budget for necessities.

5. Don’t run up the balance based on a temporary “teaser” interest rate.

Money borrowed during a temporary rate period of 6 percent is likely to be paid back at a much higher permanent rate of 15 percent or more. Also be careful about juggling cards to take advantage of teaser rates and balance transfer options. It takes a great deal of time and effort to take advantage of terms designed to be temporary. Remember that all teaser rate offers are designed to get you locked into the higher rate for the long term, because that is how the lender makes the most money.

6. Avoid the special services and programs credit card lenders offer to bill to your card.

You are likely to get many mail offers and telemarketer calls from your credit card lender about special services such as credit card fraud protection plans, credit report protection, travel clubs, life and unemployment insurance, and other similar offers. These products are generally overpriced. It is best to throw out and refuse these offers, or at a minimum, treat them with a high degree of caution. And avoid “free trial” offers as you will be billed automatically if you forget to cancel the service.

7. If you can afford to do so, always make your credit card payments on time.

Be careful to avoid late payment charges and penalty rates if you can do so while still paying higher priority debts. Bad problems get worse fast when you have a new higher interest rate and late charge to pay during a time of financial difficulty. Most lenders will waive a late charge or default interest rate one time only. It is worth calling to ask for a waiver if you make a late payment accidentally or with a good excuse.

8. Know exactly when the grace period ends.

The grace period usually ends on the payment “due date,” which may change every month. Many lenders do not mail bills until late in the grace period, so your payment may be due quite soon after you receive the bill. This also means that the grace period may be less than a full month, usually about 20-25 days. Some lenders are slow in posting payments or have strange rules about deadlines (like payments received after 10:00 a.m. on the due date are considered late). Try to mail your payment well before the due date so there will be no question it gets there on time. Paying credit cards on time not only saves you interest and late fees but is a good way to improve your credit rating after bankruptcy.

9. Beware of unsolicited increases by a credit card lender to your credit card limit.

Some lenders increase your credit limit even when you have not asked for more credit. Avoid using the full credit line as your debt can easily spiral out of control. And going over the credit limit even by a few dollars can be very costly as you will likely be charged an over-the-limit fee and a higher penalty interest rate.

10. If you do take a credit card and discover terms you do not like: Cancel!

You can always cancel any credit card at any time. Although you will be responsible for any balance due at the time of cancellation, you should not keep using a card after you discover that its terms are unfavorable.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com

Your Legal Rights During and After Bankruptcy

Making the Most of Your Bankruptcy Discharge

Bankruptcy is a choice that may help if you are facing serious financial problems. You may be able to cancel your debts, stop collection calls, and get a fresh financial start. Although bankruptcy can help with some financial problems, its effects are not permanent. If you choose bankruptcy, you should take advantage of the fresh start it offers and then make careful decisions about future borrowing and credit, so you won’t ever need to file bankruptcy again!

How Long Will Bankruptcy Stay on My Credit Report?

The results of your bankruptcy case will be part of your credit record for ten (10) years. The ten years are counted from the date you filed your bankruptcy.

This does not mean you can’t get a house, a car, a loan, or a credit card for ten years. In fact, you can probably get credit even before your bankruptcy is over! The question is, how much interest and fees will you have to pay? And, can you afford your monthly payments, so you don’t begin a new cycle of painful financial problems.

Which Debts Do I Still Owe After Bankruptcy?

When your bankruptcy is completed, many of your debts are “discharged.” This means they are canceled and you are no longer legally obligated to pay them.

However, certain types of debts are NOT discharged in bankruptcy.
The following debts are among the debts that generally may not be canceled by bankruptcy:

* Alimony, maintenance or support for a spouse or children.

* Student loans. Almost no student loans are canceled by bankruptcy. But you can ask the court to discharge the loans if you can prove that paying them is an “undue hardship.” Occasionally, student loans can be canceled for reasons not related to your bankruptcy when, for example, the school closed before you completed the program or if you have become disabled. There are also many options for reducing your monthly payments on student loans, even if you can’t discharge them.

* Money borrowed by fraud or false pretenses. A creditor may try to prove in court during your bankruptcy case that you lied or defrauded them, so that your debt cannot be discharged. A few creditors (mainly credit card companies) accuse debtors of fraud even when they have done nothing wrong. Their goal is to scare honest families so that they agree to reaffirm the debt. You should never agree to reaffirm a debt if you have done nothing wrong. If the company files a fraud case and you win, the court may order the company to pay your lawyer’s fees

* Most taxes. The vast majority of tax debts cannot be discharged. However, this can be a complicated issue. If you have tax debts you will need to discuss these issues with your lawyer.

* Most criminal fines, penalties and restitution orders. This exception includes even minor fines, including traffic tickets.

* Drunk driving injury claims.

If you have debts that may not be discharged, you should discuss with your lawyer whether filing or converting to a chapter 13 may help.

Do I Still Owe Secured Debts (Mortgages, Car Loans) After Bankruptcy?

Yes and No. The term “secured debt” applies when you give the lender a mortgage, deed of trust or lien on property as collateral for a loan. The most common types of secured debts are home mortgages and car loans. The treatment of secured debts after bankruptcy can be confusing.

Bankruptcy cancels your personal legal obligation to pay a debt, even a secured debt. This means the secured creditor can’t sue you after a bankruptcy to collect the money you owe.

But, and this is a big “but,” the creditor can still take back their collateral if you don’t pay the debt. For example, if you are behind on a car loan or home mortgage, the creditor can ask the bankruptcy court for permission to repossess your car or foreclose on the home. Or the creditor can just wait until your bankruptcy is over and then do so. Although a secured creditor can’t sue you if you don’t pay, that creditor can usually take back the collateral.

For this reason, if you want to keep property that is collateral for a secured debt, you will need to catch up on the payments and continue to make them during and after bankruptcy, keep any required insurance, and you may have to reaffirm the loan.

What Is Reaffirmation?

Although you filed bankruptcy to cancel your debts, you have the option to sign a written agreement to “reaffirm” a debt. If you choose to reaffirm, you agree to be legally obligated to pay the debt despite bankruptcy. If you reaffirm, the debt is not canceled by bankruptcy. If you fall behind on a reaffirmed debt, you can get collection calls, be sued, and possibly have your pay attached or other property taken.

Reaffirming a debt is a serious matter. You should never agree to a reaffirmation without a very good reason.

Do I Have to Reaffirm Any Debts?

No. Reaffirmation is always optional. It is not required by bankruptcy law or any other law. If a creditor tries to pressure you to reaffirm, remember you can always say no.

Can I Change My Mind After I Reaffirm a Debt?

Yes. You can cancel any reaffirmation agreement for sixty (60) days after it is filed with the court. You can also cancel at any time before your discharge order. To cancel a reaffirmation agreement, you must notify the creditor in writing. You do not have to give a reason. Once you have canceled, the creditor must return any payments you made on the agreement.

Also, remember that a reaffirmation agreement has to be in writing, has to be signed by your lawyer or approved by the judge, and has to be made before your bankruptcy is over. Any other reaffirmation agreement is not valid.

Do I Have to Reaffirm on the Same Terms?

No. A reaffirmation is a new contract between you and the lender. You should try to get the creditor to agree to better terms such as a lower balance or interest rate. You can also try to negotiate a reduction in the amount you owe. The lender may refuse but it is always worth a try.

Should I Reaffirm?

If you are thinking about reaffirming, the first question should always be whether you can afford the monthly payments. Reaffirming any debt means that you are agreeing to make the payments every month, and to face the consequences if you don’t.

If you have any doubts whether you can afford the payments, do not reaffirm. Caution is always a good idea when you are giving up your right to have a debt canceled.

Before reaffirming, always consider your other options. For example, instead of reaffirming a car loan you can’t afford, can you get by with a less costly used car for a while?

Some offers to reaffirm may seem attractive at first. Let’s say a department store lets you keep your credit card if you reaffirm $1000 out of the $2000 you owed before bankruptcy. They say it will cost you only $25 per month and they will also give you a $500 line of credit for new purchases. What they might not tell you is that they will give you a new credit card in a few months even if you do not reaffirm. More importantly, though, you should understand that you are agreeing to repay $1000 plus interest that the law says you can have legally canceled. This is a big price to pay for $500 in new credit.

Do I Have Other Options for Secured Debts?

You may be able to keep the collateral on a secured debt by paying the creditor in a lump sum the amount the item is worth rather than what you owe on the loan. This is your right under the bankruptcy law to “redeem” the collateral.

Redeeming collateral can save you hundreds of dollars. Since furniture, appliances and other household goods go down in value quickly once they are used, you may redeem them for a lot less than their original cost or what you owe on the account.

You may have another option if the creditor did not loan you the money to buy the collateral, like when a creditor takes a lien on household goods you already have. You may be able to ask the court to “avoid” this kind of lien. This will make the debt unsecured.

Do I Have to Reaffirm Car Loans, Home Mortgages?

If you are behind on a car loan or a home mortgage and you can afford to catch up, you can reaffirm and possibly keep your car or home. If the lender agrees to give you the time you need to get caught up on a default, this may be a good reason to reaffirm. But if you were having trouble staying current with your payments before bankruptcy and your situation has not improved, reaffirmation may be a mistake. The collateral is likely to be repossessed or foreclosed anyway after bankruptcy, because your obligation to make payments continues. If you have reaffirmed, you could then be required to pay the difference between what the collateral is sold for and what you owe.

If you are up to date on your loan, you may not need to reaffirm to keep your car or home. Some lenders will let you keep your property without signing a reaffirmation as long as you continue to make your payments. In some parts of the country, you have this as a legal right. Check with your lawyer.

And What About Credit Cards and Department Store Cards?

It is almost never a good idea to reaffirm a credit card. Reaffirming means you will pay bills that your bankruptcy would normally wipe out. That can be a very high price to pay for the convenience of a credit card. Try paying cash for a while. Then in a few years, you can probably get a new credit card, that won’t come with a large unpaid balance!

If you do reaffirm, try to get something in return, like a lower balance, no interest on the balance, or a reasonable interest rate on any new credit. Don’t be stuck paying 18-21 percent or higher!

Some department store credit cards may be secured. The things you buy with the credit card may be collateral. The store might tell you that they will repossess what you bought, such as a TV, VCR, or sofa, if you do not reaffirm the debt. Most of the time, stores will not repossess used merchandise. So, after a bankruptcy, it is much less likely that a department store would repossess “collateral” than a car lender.

However, repossession is possible. You have to decide how important the item is to you or your family. If you can replace it cheaply or live without it, then you should not reaffirm. You can still shop at the store by paying cash, and the store may offer you a new credit card even if you don’t reaffirm. (Just make sure that your old balance is not added into the new account.)

For Example:
Some offers to reaffirm may seem attractive at first. Let’s say a department store lets you keep your credit card if you reaffirm $1000 out of the $2000 you owed before bankruptcy. They say it will cost you only $25 per month and they will also give you a $500 line of credit for new purchases. What they might not tell you is that they will give you a new credit card in a few months even if you do not reaffirm. More importantly, though, you should understand that you are agreeing to repay $1000 plus interest that the law says you can have legally canceled. This is a big price to pay for $500 in new credit.

Using Credit Wisely After Bankruptcy

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

“Disguised” Reaffirmation Agreement

Carefully read any credit card or other credit offer from a company that claims to represent a lender you listed in your bankruptcy or own a debt you discharged. This may be from a debt collection company that is trying to trick you into reaffirming a debt. The fine print of the credit offer or agreement will likely say that you will get new credit, but only if some or all of the balance from the discharged debt is added to the new account.

“Secured” Credit Card

Another type of credit marketed to recent bankruptcy filers as a good way to reestablish credit involves “secured” credit cards. These are cards where the balances are secured by a bank deposit. The card allows you a credit limit up to the amount you have on deposit in a particular bank account. If you can’t make the payments, you lose the money in the account. They may be useful to establish that you can make regular monthly payments on a credit card after you have had trouble in the past. But since almost everyone now gets unsecured credit card offers even after previous financial problems, there is less reason to consider allowing a creditor to use your bank deposits as collateral. It is preferable not to tie up your bank account.

Credit Repair Companies

Beware of companies that claim: “We can erase bad credit.” These companies rarely offer valuable services for what they charge, and are often an outright scam. The truth is that no one can erase bad credit information from your report if it is accurate. And if there is old or inaccurate information on your credit report, you can correct it yourself for free.

Avoid High Cost Predatory Lenders

Don’t assume that because you filed bankruptcy you will have to get credit on the worst terms. If you can’t get credit on decent terms right after bankruptcy, it may be better to wait. Most lenders will not hold the bankruptcy against you if after a few years you can show that you have avoided problems and can manage your debts.

Be wary of auto dealers, mortgage brokers and lenders who advertise: “Bankruptcy? Bad Credit? No Credit? No Problem!” They may give you a loan after bankruptcy, but at a very high cost. The extra costs and fees on these loans can make it impossible for you to keep up the loan payments. Getting this kind of loan can ruin your chances to rebuild your credit.

Mortgage Loans

If you own your home, some home improvement contractors, loan brokers and mortgage lenders may offer to give you a home equity loan despite your credit history. These loans can be very costly and can lead to serious financial problems and even the loss of your home. Avoid mortgage lenders that:

* Charge excessive interest rates, “points,” brokers’ fees and other closing costs;

* Require that you refinance your current lower interest mortgage or pay off other debts;

* Add on unnecessary and costly products, like credit insurance;

* Make false claims of low monthly payments based on a “teaser” variable interest rate;

* Include a “balloon” payment term that requires you to pay all or most of the loan amount in a lump sum as the last payment;

* Charge a prepayment penalty if you pay off the loan early;

* Change the terms at closing;

* Make false promises that the rate will be reduced later if you make timely payments ;

* Pressure you to keep refinancing the loan for no good reason once you get it.

Small Loans

It is always best to save some money to cover unexpected expenses so you can avoid borrowing. But if you are in need of a small loan, avoid the following high cost loans:

Payday loans

Some “check cashers” and finance companies offer to take a personal check from you and hold it without cashing it for one or two weeks. In return, they will give you an amount of cash that is less than the amount of your check. The difference between the amount of your check and the cash you get back in return is interest that the lender is charging you. These payday loans are very costly. For example, if you write a $256 check and the lender gives you $200 back as a loan for two weeks, the $56 you pay equals a 728-percent interest rate! And if you don’t have the money to cover the check, the lender will either sue you or try to get you to write another check in a larger amount. If you choose to write another check, the lender gets more money from you and you get further into debt.

Auto title loans

For many years, pawn shops have made small high-interest loans in exchange for property. A new type of “pawn” is being made by title lenders who will give you a small loan at very high-interest rates (from 200 percent to 800 percent) if you let them hold your car title as collateral for the loan. If you fall behind on the payments, the lender can repossess your car and sell it.

Rent-to-own

By renting a TV, furniture or appliance from a rent-to-own company, you will often pay three or four times more than what it would cost to buy. The company may make even more profit on you because the item you are buying may be previously used and returned. And if you miss a payment, the company may repossess the item leaving with you no credit for the payments you made.

Tax refund anticipation loans

Some tax return preparers offer to provide an “instant” tax refund by arranging for loans based on the expected refund. The loan is for a very short period of time between when the return is filed and when you would expect to get your refund. Like other short-term loans, the fees may seem small but amount to an annual interest rate of 200 percent or more. It is best to patient and wait for the refund.

What You Can Do to Avoid Problems

* If you don’t want it, don’t get it. If you have doubts about whether you really need the loan or service, or whether you can afford it, don’t let yourself get talked into it by a salesperson using high-pressure tactics. You can always walk away from a bad deal, even at the last minute.

* Shop around. You may qualify for a loan with normal rates from a reputable bank or credit union. Don’t forget that high-cost lenders are counting on your belief that you cannot get credit on better terms elsewhere. Do not let feelings of embarrassment about your past problems stop you from shopping around for the best credit terms.

* Compare credit terms. Do not consider just the monthly payment. Compare the interest rate by looking at the “annual percentage rate,” as this takes into account other fees and finance charges added on the loan. Make sure you know exactly what fees are being charged for credit and why.

* Read before you sign. If you have questions, get help from a qualified professional to review the paperwork. A lender that will not let you get outside help should not be trusted.

* If you give a lender a mortgage in a refinancing deal, remember your cancellation rights. In home mortgage refinancings, federal law gives you a right to cancel for three days after you sign the papers. Exercise these rights if you feel you signed loan papers and got a bad deal. Don’t let the lender talk you out of cancelling.

* Get help early. If you begin to have financial problems, or you are thinking of consolidating unmanageable debts, get help first from a local non-profit housing or debt counseling agency.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com