• Disaster

    Top Ten Independent Foreclosure Review Failures

    In 2012, the Federal Reserve and the Office of Comptroller of the Currency (OCC) ordered 14 US mortgage banks to begin individual file reviews, citing reports of servicing abuses in up to 30% of foreclosures, including illegal foreclosures, modification problems, dual-tracking issues, improper fees and other violations. Almost half a million reviews were requested. Since the scope quickly became much too large for the Fed or the OCC to oversee, the banks hired their buddies at large consulting firms to do the job — at up to $250 an hour. In January 2013, the Independent Foreclosure Review process was abruptly halted, because it was taking an astronomical amount of time…

  • Disaster

    Finally…foreclosure

    Nearly two years after we stopped paying our mortgage, our foreclosure finally happened. In reviewing the paperwork, it was in the works for 17 months. It only took 4 months for Fannie Mae to give the lender power of attorney, and we got our first foreclosure notice shortly thereafter, but then the process was stopped by our bankruptcy proceedings. After the bankruptcy was discharged, we received foreclosure notices every month or two, but the scheduled sale would never happen. This continued for nearly a year, so I had no reason to believe that the notice we got for a sale on the courthouse steps the first week in October would…

  • Disaster

    Myths about life after bankruptcy and foreclosure

    Misconceptions that bankruptcy and foreclosure are interminable sentences of doom are very common, but are outdated and not necessarily true. Here are some of the myths I’ve seen most: One’s quality of life will suffer immensely. A year after walking away from our home due to Tony’s job loss, we’re living just as comfortably as we did in the past, even on half our previous income. This is specifically because we gave up our home and declared bankruptcy. It isn’t the answer for everyone, but for us, it was the only choice to make. Renters have to live in sketchy apartments post-foreclosure. We are renting a lovely 2,000 SF home,…

  • Disaster

    Can bankruptcy keep you from getting a job?

    A couple of months ago I interviewed for a new job at a big broadcasting company. They extended a verbal offer that was contingent on successful completion of a background check. I accepted the offer, but the contingency made me really anxious. I don’t have a criminal record, and I knew there were no discrepancies in my employment history or educational background, but there’s definitely a public record of my Chapter 7, and I was concerned about its impact on my formerly strong credit history. And I had no idea whether our foreclosure would show up, since it’s been in a holding pattern for more than a year. Now, ethically…

  • Disaster

    The social stigma of bankruptcy and foreclosure

    I’m afraid that even in these times of record numbers of bankruptcy and foreclosure filings — primarily by good people with good intentions who are in bad situations through no fault of their own — the social stigma attached to bankruptcy is still alive and kicking. I was reminded of this by the blog post of a friend, who is in a rotten situation due to the economy and horrendous real estate market. He and his wife are both professionals and they have a young family, and they are facing the very real possibility of foreclosure and perhaps bankruptcy. They’ve burned through their savings and are living right on the…

  • Disaster,  Rebuilding

    The Reset Button

    After a >5-month wait, our Chapter 7 bankruptcy case was finally discharged and closed this  week. While this is an enormous relief (the reality of all that discharged debt is just beginning to sink in), everything that was legally protected by the Automatic Stay during the process can now go. The repo man came for my Mazda on Thursday, which was more of an emotional ordeal than I expected. I had to keep reminding myself that giving her up was a conscious decision I made, and it was the right thing to do, but I was awfully sad to see her go. I can’t remember the last time I didn’t…

  • Disaster

    Bankruptcy and auto loan reaffirmation

    In the process of our Chapter 7 bankruptcy, we’ve had a bit of confusion over what to do with our car loans. As with other debts, auto loans are discharged in a Chapter 7 bankruptcy. But they are secured debts, so the bankruptcy only absolves the filer of the obligation to pay and doesn’t affect the security deed. In other words, you don’t legally have to keep paying, but the lender doesn’t have to let you keep the car, either. This plays out differently in various places. Ride-through: In some jurisdictions and with some lenders, you can keep making payments on your vehicle as originally agreed. As long as it’s…

  • Disaster

    Chapter 7 bankruptcy and the presumption of abuse

    Dubya Bush’s Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the first overhaul of US personal bankruptcy law in more than 25 years, actually made filing bankruptcy much less protective, more expensive, and more difficult for consumers. It provided for the dismissal or conversion of a Chapter 7 case upon a finding of “abuse” by debtors with primarily consumer debt. Abuse may be found when there is an unrebutted presumption of abuse via the means test, or through a finding of bad faith, determined by a totality of the circumstances. Only debtors whose income is higher than the median income in their jurisdiction are subject to being found “abusive”.…

  • Disaster

    Converting from Chapter 13 Bankruptcy to Chapter 7

    Shortly after we filed our initial Chapter 13 case, Tony’s unemployment compensation ran out. We went through with the 341 hearing because it was already scheduled, and we really wanted to find a way to make it work. We accrued all of our debt with the full intention to pay it off completely, and we thought Chapter 13 would allow us some protection while paying back as much as we could given our current situation. Then we received the Trustee’s objections to our confirmation, and…there were fourteen of them. A few were not surprises; we knew our attorney had made some mistakes on the paperwork that needed to be corrected.…

  • Disaster

    The emotional side of foreclosure

    So, this is what foreclosure looks like. Chances are, there’s a house like this in your neighborhood. Sad, isn’t it? Our beloved home is currently in foreclosure limbo, stalled by the bankruptcy’s automatic stay. The lender has not tried to have the stay lifted, and our bankruptcy is far from complete, so six months after we left it, the house remains empty and unloved. I’ve been trying to think of some way we could go back and save our home, some way to tweak our bankruptcy or finances or expenses, but there simply isn’t. The fact remains: With one of us unemployed, our mortgage is simply not affordable, and the…