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    Considering CH7...shaky on lawyer

    My condo has about $250k on the mortgage valued at $150k which takes up about 80% of my monthly (2 pay checks on a bi-weekly rate) income when paying only the mortgage and condo payment. I have put in a request for short sale and just this past week the bank has given me the terms of the short sale that they want. It's come to about $10k total in promissory notes and it says specifically that the bank/investor/insurance/others that take a loss can still come after me for the deficit of the 1st and 2nd mortgage (both with same bank).

    I'm going to try to get the bank to forgive the deficit amount but if they don't foreclosure & bankruptcy are my next option. I do have other debt but am currently only paying the minimum.

    I went and talked with a lawyer yesterday about possible bankruptcy and I'm a bit shaky on using him for actually proceeding if bankruptcy is certain. The first thing I'm shaky about is the amount of money that is involved on paying for a lawyer. He said he'd charge just short of $2k for everything. Secondly, in March of this year my state increased the mean for single debtors which he gave me wrong information about which makes me a bit more shaky of proceeding with him (shouldn't this be one of the obvious signs of whether or not someone can do CH7 bankruptcy). Third, how do you now which lawyer to trust in terms of their ability to represent me in a bankruptcy?

    As of right now I'm gonna see if the bank will forgive the difference, but being big guy vs little guy it wouldn't make much difference for them. I really don't see any point in proceeding with a short sale that the bank can pop up and demand a $100k difference for later.

    Anyone got any advice?

    #2
    Sounds like you are a candidate for bankruptcy and a search for a few more lawyers.
    Golden Jubilee was a year-long celebration held every 50 years in which all bondmen were freed, mortgaged lands were restored to the original owners, and land was left fallow: Lev. 25:8-17

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      #3
      A basic rule {if you will} on this site is, always speak with 2 or 3 lawyers before making a decision on representation.

      Comment


        #4
        My personal analogy is that searching for the right atty is like dating; you don't pick the first "significant other" you find, it usually takes dating several to find the one you want to make a commitment with. (I'm sure someone else has thought of it like that, so I won't copyright it...)
        Talk to several before you make a decision. I think we are about to end up with the first one we talked to. At the time we first talked to him, we didn't really know how he compared to the others out there, so it took some time and other interviews to realize he knew what he was talking about. Good luck.
        1/15/10 Filed ch7 2/18/10 314 meeting
        2/22/10 Report of No Distribution
        4/20/10 Discharged 5/20/10 Closed!

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          #5
          We talked with the first attorney Thursday, walked out of the office and looked at each other and said "Time for the yellow pages again". He just didn't seem to know ANYTHING! Everything we asked him he wanted to research and get back to us. He looked about 12 and we had no confidence. Have another appt Tuesday.

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            #6
            We decided that rule of 2-3 is good. First attorney was a dud, so back to the yellow pages. I think you have to feel complete confidence in them or it isn't a match.

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              #7
              You should visit more lawyers, but don't base your decision on the fee. More people get in trouble with bad lawyers when they go with the cheapest option.

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                #8
                Originally posted by HHM View Post
                You should visit more lawyers, but don't base your decision on the fee. More people get in trouble with bad lawyers when they go with the cheapest option.

                Also, some attorney's attract your attention with low initial fees and then charge you for everything in the BK - you end up with a much higher bill. As they say, buyer beware.

                My attorney was not the least expensive or the most expensive, but he had the most experience with my type of case - I gladly paid his fee. He was worth every dime. He knew the UST was going to be involved, but I was able to file a successful Ch 7 because he had me properly prepared by making sure to have all my documentation BEFORE the UST asked for it. His strategy was bury the UST in paperwork - and it worked. I don't think I would have been successful with an attorney that did not have the experience. Experience is what you are paying for IMO.
                Filed CH 7 9/30/2008
                Discharged Jan 5, 2009! Closed Jan 18, 2009

                I am not an attorney. None of my advice is legal advice in any way..

                Comment


                  #9
                  Bankruptcy Vs. a Debt forgiveness of $100K - That's a Slam Dunk - Bankruptcy!! As the deficiency will be deemed Income on your Tax Return. Don't let anybody try to tell you different, as it is the IRS Tax Laws. Whew! that 100K sure would 'leap' you into a higher tax bracket.

                  As HHM stated, don't pick the cheapest one. Hope you have a list of questions prepared to ask during your Free Consultations which Good Attorneys provide. If not on your list, add a ? for each during Consult - what does your initial fee include. You might get so far as to request a Blank Contract to read. Also, ask if the specific Attorney will be attending your 341 hearing.

                  I knew we had a good BK Attorney when after retaining him, I asked him if we could wait until we were below the State Median Income and he said sure. Along with the Free Consult, I've had one other face-to-face meeting and we converse via emails every two weeks. He is very prompt in answering my questions in the email.

                  Choose the Attorney who doesn't 'skirt around' your questions and you feel comfortable using him/her. In my opinion, if a Free Consult is with a Paralagel, I wouldn't waste my time on the Consult. If the Attorney doesn't have time for a Free Consultation, he dang sure won't have time to answer any questions which may/will occur during your proceedings.

                  Good Luck!

                  Comment


                    #10
                    Thanks for the replies. I'm gonna talk with a few lawyers and see if they can give a more reliable consultation. He charged me $80 for the first initial consult, which I didn't mind cause I know that he won't be the best choice. Anyone have any good questions that I should ask to help decide on a lawyer?

                    LuciluS I did consider the tax consequences and if I did get the debt forgiveness of $100k then my total taxes would be close to close to $45,000. For some reason I'd rather take the higher taxes than go into bankruptcy, I'd have to work out a payment plan with the IRS but it would be better than bankruptcy in my opinion. Could you explain why you'd choose bankruptcy over debt forgiveness?

                    Anyone have experience with 2 names on a property (no longer together) in CH7 process?

                    Comment


                      #11
                      I wrote a long, long statement and lost it..darn it.

                      Last time in Public Accounting Sector for me was in the early 90's. But I did a quick search on short sale of home and foreclosure. I'm not so sure you would owe taxes on the full $100,000 nor possibly the $45,000 as the Publication 544 spells out the costs basis of home (Condo), plus the fair market value = gain/loss. IRS wouldn't allow an individual to make installments on over $10,000 without some lien in place in the early 90's. However, times have changed & new laws enacted & supposedly more to help those near foreclosing. As I said, I briefly looked at it so read Publication 544 on the IRS website.

                      I'm just making some presumptions here k? I'm guessing you may have around $20k-$30k in CC Debt as you state you are paying the monthly minimums. Able to manage that amount if filing Ch. 7 and living in Maryland (high cost of living state). What's rent & utilities going to cost you.

                      Ex and I owned a Condo as a Summer home once. I inherited it years ago. Knowing what I know, now, I wouldn't own a Condo or a home where Association fees are charged. BTW, did you know if you decide on Chapter 7 & forclosing on Condo, stop paying hoa fees, as HOA dues not paid BEfore Discharge, are reduced to zero in a Chapter 7. After discharge, they are your responsibility until foreclosure is complete.

                      Now you bring up the EX..Is she on the mortgage for the Condo? If you file a Chapter 7 & include the foreclosure of the mortgage, they will go looking to her for the monies.

                      I know this to be true. I had a CC in my ex's name & we both though his name was removed in 2005. Our divorce decree clearly states I am responsible for the card. At the time, banks were charging to use Bill Pay so I used a free online website to pay my bills & didn't print the statements. So had no clue, his name was not removed. Came time to think about filing Ch. 7 & tried to get his name removed..too late. My credit was already tanked. BK Attorney told me to let EX pay for that specific CC. That was late last Sept. I wasn't going to let that happen as he was very close to my family as we were married 32 1/s yrs. Now, my twin sister married him this past Jan. after her husband of 30 yrs passed away last year. We worked out arrangements for me to pay him after our Ch. 7 is finalized.

                      I'm wondering if you should consult a Real Estate Attorney as maybe a short sale, possibly whole or 1/2 forgiveness of remaining mortgage & then gee, lord only knows lol! you would owe 1/2 and your ex would owe 1/2 of the rest. Or possibly Attorney might say it's wise to attempt removing EX from Mortgage. I foresee this way taking a long time to accomplish, but should keep your Credit Score at an even level.

                      I guess the question is how long are you able to afford making the Condo payments along with your other bills. Are you willing to wait out the complexity of your Condo? I used the word complexity as the mention of EX changes turns of events. Or, do you want a True Fresh Start, not caring about the hit your Credit Score may take, and file a chapter 7?

                      Luci

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                        #12
                        Thanks for the info. I pulled up the 544 publication and will be going through it shortly.

                        The mean here for a single person in Maryland is $55k a year (increased March of this year)...and the only thing that would make me go into bankruptcy is the condo. A quick look of my current debt:

                        Condo - $250k
                        CC (I only have 1 CC that I use out of 2 total)- $6k
                        Auto - $5k
                        Student Loan (just finished in spring) - $70k

                        I have no other outstanding debt and have always made payments on time until recently paying my mortgage due June 1 a bit late (savings are pretty much gone). Even the only negative mark I have on my credit is from the co-sgined car my EX had that I found abandoned...had to pay a few thousand on top of the Carmax buy offer to just get rid of the loan.

                        The monthly payment for the condo itself is $2k (not including utility) and that takes up 80% of my monthly income. I've been trying to get an OK from the bank for a short sale for probably 5 months and now that I do there is a catch.

                        Renting in my neck of the woods for a 1br place is probably gonna be $1,500 with utilities included for a decent place to safely park my car at night.

                        Well as for the EX...the only way I can contact with her is through email and even then I rarely (1 out of 10 emails) get a response back...but it does give me a good chuckle that she's the bitter one after what she wanted. Got a POA (after many attempts) for the condo but she won't accept any promissory notes as written in the POA. She isn't really up to date with the condition of the condo finances either. When it comes to reliability or even rationality...I'm not confident at all with her.

                        I can't really take her name off the mortgage. The value has tanked and my attempts of refinancing and getting her off the property have yielded no progress...so waiting to see what happens with the condo isn't really an option. It will be interesting to see what she does when she gets word of whats going on when I figure stuff out myself...also gives me another chuckle

                        How long can I afford to make the payments of the condo? If I make the past due July 1st payment I will only have enough to pay the 1st mortgage payment and will result in having zero money in the bank. Needless to say...it seems down hill from here.

                        So far I'm gonna try to talk with a real estate attorney on Monday and see if they have any helpful info on short sale options and consequences.

                        I'm pretty young (just turned 27...or maybe I just think I shouldn't be going through this) and makes me feel a bit bummed out that as hard as I've tried to keep everything going smoothly its come to this. My parents keep telling me to relax but its a bit hard right now. Starting a fresh start is a good idea...but the credit side effects bum me out when I've just finished school and will put back lots of things I wanted to do.

                        Comment


                          #13
                          O Sweetie! You are younger than my son

                          I know this is a BK Forum and some may get mad, But Do Everything In Your Power First Before Filing Bankruptcy!! A Chapter 7 remains on your Credit Report for 10 yrs and I think a 13 is for 7 years.

                          With your wife being uncooperative, I truly do think in your extra time it needs to be spent with a Real Estate Attorney. He will be the one in communication with either your ex-wife (who seems to be irresponsible) or her Attorney.

                          ((((((((((((((((SENDING GOOD VIBES YOUR WAY!)))))))))))))))))))

                          I always like to know the outcome of one's dire needs. So You may PM or make a post in the General Talk Section.

                          Good Luck Young Man!

                          Luci

                          Comment


                            #14
                            inacorner:

                            For Your Further Reading Pleasure scoot on over to Foreclosures:

                            HHM has a Stickie on 'Short Sales'. You might also want to peruse some of the Threads over there also.

                            Might aid you with questions for the Real Estate Attorney. Also, 'google' short sale vs. forelosure credit. Just what I read your Credit is going to take some kind of negative 'hit' unless Attorney can wheel and deal with your Mortgage Cos.


                            Luci

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