Mortgage Relief may be available

Did you fall behind on your mortgage because of the COVID-19 pandemic? You may be eligible for assistance. Check this site out:

Pennsylvania Homeowner Assistance Fund

Image courtesy of Master isolated images at FreeDigitalPhotos.net

"The Pennsylvania Homeowner Assistance Fund, or PAHAF, is a housing-related program funded by the U.S. Department of the Treasury to assist Pennsylvania homeowners facing financial hardship due to the COVID-19 pandemic that began after January 21, 2020, (including a hardship that began before January 21, 2020, and continued after that date). The program will provide financial assistance to homeowners for qualified mortgage and housing-related expenses to address delinquency and avoid default, foreclosure, or displacement."

If you are behind on your mortgage payments, this program might be the answer. If this doesn't work for you, you may still be able to protect your home through a Chapter 13 bankruptcy plan. 

If you want assistance, legal representation, or just want to know more about Mark Medvesky or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

Mortgage relief coming to an end ... Now what?

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

The mortgage forbearance period is coming to an end and homeowners are months behind on their mortgage payments. What happens next. The expectations are that homeowners will work out repayment plans with their lenders. Some will just extend their mortgages and add the missed payments to the back of the loan. Some will temporarily increase their payments for a period of time before it goes back to normal. Some people may be able to refinance completely and others may opt to sell in this market. I have had a couple clients go into and come out of forbearance periods successfully since this all started. But as we all know, nothing is perfect and some borrowers will find themselves unable to work out a plan with their mortgage companies. 

If working with your mortgage doesn't work, you may have another option; Chapter 13 Bankruptcy. Chapter 13 allows you to take up to 5 years to catch up on your mortgage. You will be required to start paying your regular mortgage payment and make another payment to a Trustee to pay your mortgage arrears. But, if you can do that, the mortgage company has no real say accepting the back payments over 5 years. If you find yourself out of options with the mortgage company and want to save your home, talk to a bankruptcy attorney. 

If you want assistance, legal representation, or just want to know more about Mark Medvesky or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

#bankruptcy #Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania

Another article:

 Mortgage servicers brace for fallout as Covid bailout comes to an end

"Can You File Bankruptcy If You're Unemployed? Yes, But You May Want to Wait"

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

When I first meet people to discuss bankruptcy, one of the first questions I ask is, "are you working?" If a client is not working and has no prospect of a job any time soon, I explore the possibility of waiting to file. If they expect to find a job soon or have a pending offer, I'll explore the impact of waiting. Waiting too long can push a debtor out of eligibility for filing under chapter 7 and leave them with chapter 13 as their only option.
"Can You File Bankruptcy If You're Unemployed? Yes, But You May Want to Wait" -Submitted by Rachel R - I found this article discussing other considerations when someone is unemployed. I think the author does a great job and this article is consistent with the counsel I give my clients. If you are unemployed and considering bankruptcy, this article is definitely worth the read. I'll gladly answer further questions.

If you want assistance, legal representation, or just want to know more about Mark Medvesky or Medvesky Law Office, LLC, check out my website at www.medveskylaw.com.

#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

Bankruptcy - US Supreme Court looks at a major change in Chapter 7 bankruptcies.


UPDATE: The argument took place today, March 24, 2015. Commentary indicate the court did not really seem to lean one way or the other: "Argument analysis: Navigating between Scylla and Charybdis on underwater mortgages" - http://www.scotusblog.com/2015/03/argument-analysis-navigating-between-scylla-and-charybdis-on-underwater-mortgages/#more-226396

The court's decision will be released sometime this summer.

**********************************************************************************

The U.S. Supreme Court will hear oral arguments on March 24, 2015, in two cases to determine whether a chapter 7 debtor may strip off a second (or any junior) mortgage that is not secured by the home’s actual market value.


Image courtesy of renjith krishnan at FreeDigitalPhotos.net

In Bank of America, N.A. v. Toledo-Cardona, No. 14-163, the market value of the chapter 7 debtor’s home was $77,689.00.  The first mortgage owed to Quicken Loans had a balance of $135,703.00, and the second mortgage owed to Countrywide Bank had a balance of $32,000.00.

In Bank of America, N.A. v. Caulkett, 13-1421, the market value of the chapter 7 debtor’s home was $98,000.00, the Countrywide Financial first mortgage balance was $183,264.00, and the Countrywide Financial second mortgage balance was $47,855.00.

The lower court allowed the second liens to be discharged (stripped) as unsecured debt. If the court upholds these decisions by Eleventh Circuit U.S. Court of Appeals, it will be a major change for many Chapter 7 debtors. This could give more homeowners access to relief under Chapter 7 or finally close the door on this option in Chapter 7. Of course this should not impact a debtor's ability to strip liens in Chapter 13. It will be interesting to see the results in the next couple months.

If you want assistance, legal representation, or just want to know more about Mark Medvesky or Medvesky Law Office, LLC, check out our website at www.medveskylaw.com.

 

#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

NOTE: I found this info in a blog and a deeper explanation can be found here http://bit.ly/1xOVhjx

My house is in foreclosure ... when do I have to move out?

Image courtesy of Salvatore Vuono
at FreeDigitalPhotos.net

This is another question I get often. I tell my clients not to move out until you are evicted. I have talked to them about the problem of vacant properties. Right now there seems to be too many for the banks to handle. For some people, it may take a couple years between a default in a mortgage and a sheriff's sale in the foreclosure. And in Pennsylvania, the new owner after a sheriff's sale still needs to take action to evict the occupant of the property.

There is no reason for a home owner to leave the house, allow it to deteriorate, and pay rent for a "second" home. People should know even after a bankruptcy, new bills and fees can add up as the bank works through the foreclosure process. On Philly.com there is an article that discusses the vacant home problem in the region: "Zombie houses - vacated but not foreclosed - haunt the market" (http://bit.ly/1yY77vT). You can also read my previous blog "Even in Chapter 7 Bankruptcy, returning your house to the bank isn't like taking a sweater back to the store" (http://bit.ly/1mizq2h) about staying in a home even after bankruptcy.

If you cannot stay in the home, you could consider other options like work with the bank on a short sale, rent it, or let a family member use it. But remember, the house is the owners' until it is sold at a sheriff sale or transferred through some other transaction. Use it to help you get back on track instead of being an anchor to continue to drag you down.


#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

When will I be able to buy a new home after bankruptcy?

Image courtesy of Stuart Miles
at FreeDigitalPhotos.net

"When will I be eligible to get financing for a home after bankruptcy?" is a pretty standard question I get when counseling people about bankruptcy. After talking to different loan agents and bankers, I usually tell my clients at least two years and depending on how things go maybe a little longer. This is what I've gathered from working and talking with lenders I know.

I found an article on blog.credit.com that lays out anticipated wait times in a little more detail. While I don't know much about the author, his comments seem consistent with what I've been told.

He discusses three events and different time periods one may need to wait before they will be able to mortgage a new home. He talks about bankruptcy, both Chapters 7 and 13; foreclosures without bankruptcy; and foreclosures with bankruptcy. As you may recall, I wrote about surrendering a home in a chapter 7 bankruptcy earlier this year: http://bit.ly/1mizq2h

Depending on circumstances, it could be a little as a year or as long as seven years before someone may qualify for a mortgage. It will depend on the circumstances surrounding his or her financial trouble, the institution the person is seeking the mortgage, and the type of mortgage they seek.

For a more detailed discussion of this topic, check out this article: "How Soon Can I Buy a House After Bankruptcy or Foreclosure?" http://bit.ly/1zfhYTh While there are no guarantees how long or short of a time you will need to wait after a severe financial crisis, this article may put it in perspective for you.


#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

Great life advice; why do we forget it when it comes to financial trouble?

Will Rogers is credited with saying, “When you find yourself in a hole, quit digging.” Not many people argue with this wisdom. But, for some reason, people seem to throw such wisdom out the window when they find themselves in financial problems. You will find many articles like this talking about people throwing good money after bad and people waiting too long before filing for bankruptcy.


Image courtesy of dan at FreeDigitalPhotos.net

I think people do this for several reasons. First, I think most people just want to pay their debts. They feel obligated to pay their own bills. That is admirable. Other people want to keep the credit. They know that bankruptcy will crash their credit and they will be forced to stop spending. If that spending is for business reasons or medical bills, that is scary.

Also, people seem to be eternal optimists when it comes to paying bills. They always believe the balances are temporary. They will get a better pay soon, their next job will be bigger, etc. I think their debt is almost like that of a gambler; the next hand will bring them back. But the bump never comes and people have spent thousands of dollars they could have kept to help them with their fresh start.

Keep some things in mind. Think before you use your home's equity to pay off credit cards. Remember, credit card debt can be discharged in bankruptcy; a secured loan cannot. Also, pause before you take money from your retirement funds. Again, many times, retirement money is protected in bankruptcy and is money you will need as you age. Finally, think about what happens if you do get that new bigger, better job and a huge bump in pay. You could find your bills are still too much for you to handle but you make too much to qualify for protection under Chapter 7, Liquidation and your only option is a 5-year plan under Chapter 13.

So, take the advice you probably gave to your children. If you find yourself in a hole, stop digging. Don't continue to fund debt, you can never repay if you don't need to.

Bankruptcy ... It is all in the details ...

Image courtesy of nonicknamephoto /
FreeDigitalPhotos.net

I remember the first Chapter 7 Bankruptcy Petition I filed. It was in the mid-nineties and one of the partners came into my office and said, "You wanted to try doing bankruptcy, right?" I sat at a conference table with copies of all the forms and schedules, pencils, a calculator, all the clients bills, and the code. I had to pour over the code ... pound out figures on the calculator ... and I had to understand the exemptions and how to apply them. I didn't have internet access, any special software, or even a "how to" book. But I knew the facts and details of my case and I learned the code or enough of the code to get the client through his bankruptcy.

Today, I have it much easier. Like most bankruptcy attorneys, I have specialized software, a couple "how to" books, the internet, and a network of colleagues. Even with all these tools, an attorney still needs to understand the basics. In fact, I think it might be more important to understand the code and master the facts of the case. I think it is more important because the program does the calculations and fills in the documents. Also, the software makes calculations based on selections the attorney makes. It is much easier to miss a mistake if you don't understand the details. The only way you know there is a problem is to recognize an anomaly from an answer without seeing the calculation. Attention to details is key.

I know that sounds simple enough and self explanatory. I was at a creditors meeting last week. They are not always private. While I was waiting I overheard the trustee talking to another debtor's attorney. I heard the Trustee say something like, "Do you do bankruptcy much?" Definitely not a good question. The attorney replied, "No." The trustee followed up by saying, "You used the Pennsylvania exemptions ... most attorneys in Pennsylvania use the federal exemptions..."

Not selecting the best exemptions, whether by making a wrong selection in the software or not understanding the exemption law and debtor's case, may allow the trustee to take property for the benefit of the creditors the creditors are not entitled to. This is a big deal to someone who has almost nothing and is making a fresh start with whatever is left. Knowing the details and understanding the code, even with all the modern tools, is still the important part.

Pennsylvania Real Estate - murder/suicide does not constitute an actionable material defect

This week in Milliken v. Jacono, The Pennsylvania Supreme Court decided the issue of whether the sellers were required to disclose that a murder/suicide had occurred at the residence sometime before the sale. The court determined that "purely psychological" stigmas are not material and do not require disclosure.

Part of the court's reasoning:


Image courtesy of Salvatore Vuono
FreeDigitalPhotos.net

"... Regardless of the potential impact a psychological stigma may have on the value of property, we are not ready to accept that such constitutes a material defect. The implications of holding that non disclosure of psychological stigma can form the basis of a common law claim for fraud or negligent misrepresentation, or a violation of the UTPCPL’s catch-all, even under the objective standard posited by appellant,6 palpable, and the varieties of traumatizing events that could occur on a property are endless. Efforts to define those that would warrant mandatory disclosure would be a Sisyphean task. One cannot quantify the psychological impact of different genres of murder, or suicide — does a bloodless death by poisoning or overdose create a less significant “defect” than a bloody one from a stabbing or shooting? How would one treat other violent crimes such as rape, assault, home invasion, or child abuse? What if the killings were elsewhere, but the sadistic serial killer lived there? What if satanic rituals were performed in the house?

It is safe to assume all of the above are events a majority of the population would find disturbing, and a certain percentage of the population may not want to live in a house where any such event has occurred. However, this does not make the events defects in the structure itself. The occurrence of a tragic event inside a house does not affect the quality of the real estate, which is what seller disclosure duties are intended to address. We are not prepared to set a standard under which the visceral impact an event has on the populace serves to gauge whether its occurrence constitutes a material defect in property. Such a standard would be impossible to apply with consistency and would place an unmanageable burden on sellers, resulting in disclosures of tangential issues
that threaten to bury the pertinent information that disclosures are intended to convey..."

The court also talks about time and renovations that could remove or even enhance the stature of the property. But it is clear that a seller is not required to proactively disclose such events or character assigned to the property.

That doesn't mean you cannot ask. Also, the court notes the murder/suicide in this matter was well publicized and easily discoverable by the buyers. This case shows why potential buyers need to prepare when they are looking for a home. They need to know what they want and, moreover, what will be a deal breaker. They should create a list of the
se desires and show stoppers so they don't get caught up in the emotion of a particular property and overlook a deal stopper.

My wife taught me that. She grew up in a home that had water problems in the basement. She never wants to deal with that again. So when we were looking for both of our homes, one of her first stops was in the basement. She would also look around the yard to look for signs of standing water. It didn't matter how beautiful the property, If she saw a wet sump area or saw signs of puddles around the home, it was off the list... period! Do you know how many homes that rules out in southeastern PA?

The bottom-line is, you are responsible to do some of your own research on the properties you are considering.

For a summary of this decision and a copy of the opinion, you can go here:
http://law.justia.com/cases/pennsylvania/supreme-court/2014/48-map-2013.html

Bankruptcy and your security clearance

If  you have checked out my profile here or on my website, you'll see I spent over 30 years in the military and in federal civil service in some way or another over my life. During my federal career, I've held a security clearance as high as a Top Secret and never any level less than secret. So I have had some practical experience with the entire clearance process.

While I don't know if I ever assisted anyone through bankruptcy with a clearance, I have always held the opinion that bankruptcy will not impact your clearance. When your finances are such that you have a need to file for bankruptcy protection, you will not be able to hide your financial difficulties during your security investigation. Also, if you are ignoring the problem, you will not be able to hide that fact either. By filing for bankruptcy, you show you are serious about the problem and working to get your finances squared away. So while I don't know if I ever file bankruptcy for someone with a clearance, I have been asked and this has been my counsel.

So why do I bring this topic up if I don't know for sure? Well I found this article that reinforces and/or verifies my thought.

"Will I Lose My Security Clearance if I File Bankruptcy?"
http://www.bankruptcylawnetwork.com/will-i-lose-my-security-clearance-if-i-file-bankruptcy/

The author of this article, Brett Weiss, Esq., states:

"... I have represented people who work at DOD, DIA, CIA, NSA and the White House, as well as every branch of the military. I have represented people with every possible security clearance, from Confidential to Top Secret (and the other clearances that have only letters and numbers describing them). NOT ONE has told me that a bankruptcy filing had any impact whatsoever on their security clearance, their job, or their advancement. I have even had clients tell me that their security officer told them that they needed to file for bankruptcy or they would lose (or not get) their clearance! The only requirement is that you tell your security officer before you file so that they know you are not trying to hide anything. They already know that you’re in financial difficulty–bankruptcy shows that you’re addressing the problem and fixing it..."

The bottom-line is you cannot hide your problem. Fixing it, even through bankruptcy, may help on many levels including your clearance.


#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

DIY Lawyerin' - will you really save money?

"Do-it-Yourself" Lawyerin' can be a dangerous thing if not done right. I know many people think of attorneys as affluent but I am simply a small business owner and a new one at that. I understand clients are strapped and want to save money. But I could never recommend a person go it alone. I don't mind counseling clients in a way to help them do some of the work themselves but there is definitely a risk. Furthermore, some cases should not be done without the direct assistance of counsel.

One of the most common things I find clients can do and can do well is dividing the property during a divorce. When parties are open about their finances and can negotiate with each other, they usually can do it rather well. What I consider the right way to do this is for the couple to discuss the property split. Once they think they know what they want, one of them should contact an attorney to get help drafting the agreement.

After the document is written, the drafting party passes it to the other spouse. KEY: The second spouse needs to read it carefully and then take it to their attorney to ensure it says what they think and want it to say. Also, the attorney may find issues not address at all.

This process places both parties on equal footing. At this point, adults are free to give up or hold out for what they want. This is a way to cut legal fees while protecting yourself. I've had at least one client who filed the divorce himself, used me to draft the agreement, and finished all the other filings on his own. He saved a great deal of money on all the work he completed himself.

Unfortunately, I've had several people come into my office over the last year who allowed the other party draft the property agreement and never sought an attorney review. They ended up giving up assets they didn't mean to or address issues that caused them grief months after the divorce was finalized. They swapped a few hundred dollars for an attorney review for several thousands of dollars of litigation with a questionable probability of success. What is that saying? "A penny wise and pound foolish."

I have a client that wanted to participate in the administration of her mother estate to save money on fees. We worked out a plan and she was able to do some work to cut costs and I'm earning a decent fee. It wasn't the most time efficient method but it seems the client is happy.

I've also had clients come in with of documents (forms) that some just needed a little tweaking while others needed to start from scratch.  In these cases, savings obviously varied.

Other ways you can help conserve money when dealing with an attorney are by preparing your questions and building a list of questions to ask at one time either over the telephone or during the next meeting; listen to the answers before going on to your next question; answer your attorneys' questions openly (remember we are not judging you, we are analyzing your case), and by being prepared to hear an unbiased opinion and evaluation of your case. These things can help you use your time with your attorney more efficiently resulting in lower attorneys' fees.

Of course there are cases people should have legal assistance handling such as serious criminal charges, actively contested and litigation cases, and anything people don't completely understand. Because the stakes are so high in cases like this, people really need to consider hiring a lawyer.

While there are things you can do on your own and ways to decrease costs, I would never suggest doing so without any legal counsel on any matters. Without legal counsel, you run a greater risk of missing issues; losing rights and creating a situation that will cost even more in legal fees. And clearly there are some matters a party should not do themselves at all.

Even in Chapter 7 Bankruptcy, returning your house to the bank isn't like taking a sweater back to the store

So, you filed for bankruptcy protection under Chapter 7 and you announce you are surrendering your home, what next? Well, the bankruptcy is just a pause. What you have told the bank is it can have the property once the bankruptcy is completed and discharge is granted. Your work with the bank may not be complete yet.

The bank still needs to take control of the home. The bank can do this a couple ways. The bank can commence or continue foreclosure or accept a deed in lieu of foreclosure.  Another option is a short sale where the bank allows the property to be sold for less than the debt. The best option will depend on what you want or need. If you want or need to remain in the home for some time, foreclosure might be the way to go. The drawback is the foreclosure will end up on your credit report once it is commenced. If a quick out is what you are looking for, the deed in lieu of foreclosure.

The real problem is you don't get to chose the method you divest yourself of the home. It is up to the bank on the method and on the bank's time schedule. What's worse is liabilities incurred as a result of the property may become your debt. If you have a home owners' association fees or assessments for poor care of your property, you could be on the hook.

So the surrender of a home needs to be thought out and discussed as part of the bankruptcy planning. Without planning or flexibility, you may give up some of the benefits of filing bankruptcy.