What is a deed in lieu of foreclosure? Can you execute a deed in lieu of foreclosure after Chapter 7 discharge? Is a deed in lieu of foreclosure a good thing or a bad thing? Find out from noted Philadelphia bankruptcy and foreclosure lawyer David M. Offen. If you are facing foreclosure or fear foreclosure is imminent because you have not paid your mortgage, you are not alone. Many homeowners find that through no fault of their own, their mortgages became unaffordable.  Call us at (215) 789-4749 for your free, no-obligation consultation. We have helped thousands of clients solve their financial problems. When we meet we will explain all of your options, including executing a deed in lieu of foreclosure after filing Chapter 7. Deed in Lieu of Foreclosure Definition A “deed in lieu of foreclosure,” also called a “mortgage release” or a “deed in lieu” for short, is a legal document executed by the mortgage lender and the homeowner. The mortgage lender accepts the homeowner’s surrender of the property and promises not to foreclose on the property. Once the mortgage lender and homeowner execute a deed in lieu of foreclosure, the property belongs to the mortgage lender and they may evict the homeowner and sell the property. Often a move-out date is specified so that the property changes hands smoothly, without need for further legal proceedings. The homeowner can also negotiate for a release from future financial responsibility for the property, such as a deficiency judgment. Requirements of a Deed in Lieu of Foreclosure A mortgage lender will not accept a deed in lieu of foreclosure from just any homeowner. The homeowner must show in good faith that they can no longer afford to pay the mortgage. The mortgage lender may require proof of inability to pay, such as: Recent pay stubsRecent filed tax returnsRecent bank statementsAn accounting of monthly expensesA letter explaining why the homeowner can no longer afford to pay the mortgage, called a “hardship letter.” What Constitutes a Hardship Warranting a Deed in Lieu? A “hardship” is a financial setback that is no fault of the homeowner. For example, if the homeowner gets reduced work hours or loses their job, suffers a serious medical condition or injury, gets divorced, or is affected by a natural disaster, they will be able to negotiate a deed in lieu. Once the mortgage lender agrees to a deed in lieu, in most cases the homeowner will sign a grant deed in lieu of foreclosure, which transfers title to the mortgage lender, and an estoppel affidavit. The estoppel affidavit includes all terms of the agreement, including whether the homeowner will be responsible for the deficiency balance on their account following the sale of the property at auction. Benefits of Negotiating a Deed in Lieu of Foreclosure The primary benefit of a deed in lieu is that the property transfers to the mortgage lender in an orderly fashion, without the expense and stress of legal proceedings. Under most circumstances, executing a deed in lieu takes only months while foreclosure proceedings can take years.  While a foreclosure proceedings may delay eviction, eventually the homeowner must leave the property if they cannot pay their mortgage. When negotiating a deed in lieu, the homeowner can ask for a delayed move-out date or a short-term lease of the property. Almost as important, the homeowner can negotiate a release from responsibility for the deficiency balance on their account, and also negotiate the date by which they must vacate the property. Last, a deed in lieu of foreclosure is less damaging to the homeowner’s credit score than a foreclosure. A deed in lieu will remain on a homeowner’s credit report up to four years, while a foreclosure can remain for up to seven years. Drawbacks of a Deed in Lieu of Foreclosure The primary disadvantage of a deed in lieu is that some mortgage lenders will not grant homeowners a release from responsibility for the deficiency balance. Here’s where a Chapter 7 discharge helps. If the homeowner files Chapter 7 bankruptcy and indicates that they wish to surrender the property to the mortgage lender on their Statement of Intention, and the Chapter 7 case concludes successfully, the homeowner is discharged of the deficiency on their account following the sale of the property at auction. This means that the homeowner is not responsible for the deficiency balance on their account regardless of whether the mortgage lender would have released them or not. Following Chapter 7 discharge, a homeowner can avoid foreclosure by letting the mortgage lender know they wish to transfer the property through a deed in lieu. This saves time and money for the mortgage lender, so it is likely they will agree. Another disadvantage is that a homeowner executing a deed in lieu must generally wait three years before obtaining a mortgage, and must be able to show lenders a positive credit history during that time. Bear in mind that there is an income limit to filing Chapter 7 bankruptcy. How a Bankruptcy & Foreclosure Lawyer Helps If you filed Chapter 7 bankruptcy and surrendered the property to the mortgage lender, you do not have to worry about the mortgage lender pursuing you to collect a deficiency balance. However, having some control over when you must leave the property is greatly advantageous to you. Let an experienced bankruptcy and foreclosure lawyer help you deal with real property you cannot afford and get you the best terms possible. David M. Offen has over 20 years’ experience helping people struggling financially and facing foreclosure. He will assess your complete financial situation and advise you as to all possible options, including a deed in lieu, a short sale, or a loan modification, and whether you need a Chapter 7 discharge or a Chapter 13 plan to help you repay mortgage arrears. By filing a Chapter 7 or Chapter 13 Bankruptcy, you can clear other types of debt as well. Call the Law Office of David M. Offen  today to schedule your free, no-obligation consultation. Let us help you get a fresh financial start. The post Deed in Lieu of Foreclosure After Chapter 7 Discharge appeared first on David M. Offen, Attorney at Law.

 https://www.cityandstateny.com/politics/2021/12/will-15-minute-delivery-do-bodegas-what-ride-hailing-apps-did-taxi-industry/360006/

How a Deficiency Judgment Works in Pennsylvania Are you subject to a deficiency judgment in PA? Learn from a top Philadelphia bankruptcy lawyer what a deficiency judgment is, how a deficiency judgment is created, the limits on deficiency judgments in Pennsylvania, how Pennsylvania law limits collecting on deficiency judgments, and how you can get rid of deficiency judgments. If you are having financial difficulties and find you must also pay a deficiency judgment, call us to discuss your situation – free of charge! We can help. Deficiency Judgments Explained A deficiency judgment is a creation of law. First, because Pennsylvania is a judicial foreclosure state, a mortgage lender must file a foreclosure lawsuit in order to repossess the property. Once the mortgage lender files a foreclosure action and forecloses on a home, they sell that property at auction, often for less than what the debtor owed on it.  The deficiency balance is the amount of that difference plus any fees and charges permitted under the mortgage contract. A deficiency judgment is based on the deficiency balance. Limits on Deficiency Judgments in Pennsylvania In PA, if the mortgage lender forecloses on your home and sells it at auction for less than what you owed on it, they must take separate legal action to create and collect on the deficiency balance and they have limited time to do so under 42 Pa. Con. St. Ann. § 5522(b)(2). In a deficiency lawsuit, the lender will present evidence of the property’s value and the sale price, as well as the applicable fees and other charges due under the contract. The court will then determine the amount of the deficiency balance and enter a deficiency judgment against the debtor in that amount. A similar process is also available to junior lien holders such as second mortgage or HELOC lenders, who may sue a debtor on the promissory note and get a money judgment against the debtor if they receive no proceeds or insufficient proceeds from the sale of the property following foreclosure. Under PA law, junior lien holders have four years to file suit. A Deficiency Judgment Can Be Unsecured or Secured Debt in PA Most often a deficiency judgment is a personal judgment against the debtor and therefore is unsecured debt. In PA, a creditor cannot garnish wages for this type of debt. For this reason, a creditor can only collect on a deficiency judgment via levy on bank accounts and liens on other property. In PA, a deficiency judgment can become a lien on the debtor’s other real property. The lienholder has the right to be paid if the debtor sells or refinances that property, and may have the right to foreclose on that property. This is how a deficiency judgment becomes secured debt. Limits on Collecting Deficiency Judgments in PA A mortgage lender must take separate legal action to create a deficiency judgmentA mortgage lender has only six months from the date the deed transferred to file this action against the debtorIn calculating the amount of the deficiency judgment, the court will takes into consideration the property’s fair market value, which the lender will then argue is low to increase the amount owed and the debtor should argue is higherDeficiency judgments are subject to 6% interest from the date they are enteredA deficiency judgment is unsecured debt unless the debtor owns additional property in PA and the creditor takes additional action to create a lien on that propertyA creditor cannot garnish wages to satisfy a deficiency judgment When a Mortgage Lender is Likely to Seek Deficiency Judgments A mortgage lender knows the homeowner’s financial situation. If the homeowner has no assets other than the property that the lender is foreclosing, it is probable that the lender will not waste time and money seeking a deficiency judgement. However, if the homeowner does have other assets such as other real property or bank accounts, the mortgage lender will have more incentive to seek a deficiency judgment. How a Deficiency Judgment Becomes Secured Debt in PA If a debtor owns other real property in the county where the deficiency judgment gets entered, the deficiency judgment becomes a lien on that property. A creditor can transfer a deficiency judgment to any county in PA. Therefore, if the debtor owns other real property anywhere in PA the deficiency judgment may become a lien on that property. What Happens After a Deficiency Judgment? After the court enters a deficiency judgment against the debtor, the creditor will likely attempt to collect on the judgment with levies on the debtor’s bank accounts. If the debtor owns other real property in PA, the creditor will likely take action to create and enforce its lien on that property. Is Pennsylvania an Anti-Deficiency State? Pennsylvania is not an anti-deficiency state. Pennsylvania law permits mortgage lenders to file a separate action to create a deficiency judgment within six months of the deed transfer following foreclosure and sale of the property. Pennsylvania also has no right of redemption, meaning that a mortgage foreclosure sale is final and the debtor has no recourse. Work With a PA Bankruptcy Lawyer to Get Rid of Deficiency Judgments If your home was foreclosed and sold for less than what you owed on it, call us. Our PA foreclosure lawyers can help you avoid a deficiency judgment by negotiating a waiver of the deficiency balance or executing a deed in lieu of foreclosure. If you are served with deficiency action papers, we can help you by challenging the lender’s valuation of the property and by negotiating with the lender to avoid a judgment against you. A deficiency judgment is usually unsecured debt that you can get discharged in bankruptcy. If a lender has a deficiency lawsuit or judgment against you, call us for help immediately. We can protect your assets by preventing or stopping levies on your bank accounts and liens on your real property.  If a deficiency judgment created a lien on your PA real property, we can help. Schedule your free consultation with our PA bankruptcy lawyers today. The post Deficiency Judgment in Pennsylvania appeared first on David M. Offen, Attorney at Law.

When someone’s vehicle is repossessed, they are usually facing other financial difficulties. Losing your primary mode of transportation could make it impossible to deal with your other economic problems. Below we look at Pennsylvania repossession law and how it could impact your life. At Young, Marr, Mallis & Deane, we understand that debt can quickly […] The post Car Repossession Laws in Pennsylvania appeared first on .

When someone falls behind on their car or truck payments, the thought of repossession usually enters their mind. Repossession occurs when a lender exercises its legal rights to take the property back that was used as collateral to secure a loan. Once you default on the loan, even if you are only one day late, […] The post What Are Repo Companies Allowed to Repossess in Pennsylvania? appeared first on .

The Pennsylvania Statute of Limitations on Debt Collection Did you know that in PA, your creditors have only a certain amount of time to try to collect a past-due debt from you? Your creditors are not legally permitted to pursue you forever for debt. Find out from an experienced Philadelphia bankruptcy lawyer how long your creditors have to try to collect debts from you, when the statute of limitations begins and how it gets restarted, what debts fall under PA’s statute of limitations, what to do when the statute of limitations runs out and creditors try to collect from you, and how to solve your debt problems during and after the statute of limitations. What the Statute of Limitations on Debt in PA Is For most types of debt, creditors have four years in Pennsylvania to sue you for unpaid debt.  What does the PA statute of limitations on debt (42 Pa. C.S. 5525(a)) do for you? It prevents creditors from filing a collection lawsuit once the statute of limitations runs out. When the Statute of Limitations Begins The PA statute of limitations on debt begins to run on the day the debt comes due. That day is usually established by your contract with the creditor.  For example, if your car loan retail installment contract includes a provision that failure to make two monthly payments in a row constitutes default, then the day after the last day you could have made the second payment on time will be the day the statute begins to run. Resetting the Statute of Limitations You can reset the statute of limitations by making a payment, making a partial payment, or negotiating for a new payment plan with the creditor. Do You Need to Pay After the Statute of Limitations Runs Out? For most debt, no. However, for some debt such as federal student loans, federal income tax, and PA state tax, there is no limit to the time the government has to sue you to collect that debt. Which Debts the Statute of Limitations Applies To The types of debt the PA statute of limitations governs are: Mortgage debtCar debtCredit card debtMedical debtPrivate student loan debtPromissory notesOral contractsDeficiency balances on mortgage or car loan accounts, when the collateral has been surrendered, repossessed, or foreclosedUnpaid second mortgages following foreclosure and sheriff’s sale The Statute of Limitations for unpaid second mortgages following foreclosure runs from on that debt runs from the date of the last payment made on the second mortgage, not from the date of the sale.  Be forewarned – if a promissory note was signed under seal, the lender may argue that the 20-year statute of limitations on documents under seal in PA applies. What to Do if a Debt Collector Tries Collecting After the Statute of Limitations Runs Out While a creditor cannot sue you if the statute of limitations has run, they can still call you and send you letters to try to collect on that debt. If a creditor calls you about unpaid debt, ask to have verification of that debt in writing. You are entitled to written verification of the type and amount of debt, the identity of the original creditor if the debt was sold, the date you allegedly became indebted, and the date you allegedly defaulted under the federal Fair Debt Collection Practices Act (FDCPA).  Under the FDCPA, you can also ask the creditor to stop contacting you about the debt whether or not the statute of limitations has run, and that creditor must comply. If the creditor fails to comply and continues collection efforts, you can sue that creditor in federal court and the court will impose mandatory monetary sanctions on the creditor. Debt Relief Programs If the PA statute of limitations has not run out on an unpaid debt and you are concerned about being sued, you might try negotiating a different payment plan or a reduced total with the creditor. Be advised that making a payment or entering a new agreement with a creditor restarts the statute of limitations. You might also consider consolidating your debt if you have more than one debt. A debt consolidation company negotiates with your creditors for you. You make one payment to the debt consolidation company, and the company in turn pays your creditors.    The downside of debt consolidation is that your creditors are not bound to enter any consolidation plan. They can still sue you even if you have consolidated all of your other debts. Filing for Bankruptcy in PA The only way to force creditors to the table is to file bankruptcy. Whether you need to get medical or credit card debt discharged, you need to catch up with past-due car or mortgage payments, or you need to renegotiate your mortgage or car loan, bankruptcy is the tool to get that done. Talk With an Experienced Bankruptcy Lawyer to Help Your Case Your initial case consultation is free of charge. Take this opportunity to explore your options in dealing with debt you cannot pay, whether the statute of limitations has run or not. Call us today – we’ve helped thousands of Pennsylvanians greatly improve their financial situation, including many individuals and families who did not realize how much bankruptcy could help to quickly turn their life around. Find out how we can put a smile on your face and help you get a fresh start too. The post The Pennsylvania Statute of Limitations on Debt Collection appeared first on David M. Offen, Attorney at Law.

 Keith Fogg wrote a post on Tenancy by the Entirety and Bankruptcy Exemptions, which can be found at https://procedurallytaxing.com/tenancy-by-the-entirety-and-bankruptcy-exemptions/ The post and the cited case demonstrate that debtors who live in New York State and own appreciated property together (Tenancy by Entirety property) may be better off not filing for bankruptcy and instead using NYS exemptions instead. Jim Shenwick

 https://ceoworld.biz/2021/12/14/4-tips-to-avoid-bankruptcy-while-running-a-startup/

Converting from Chapter 13 Bankruptcy to Chapter 7 There are instances where someone who files Chapter 13 bankruptcy should or must convert to a Chapter 7, and the bankruptcy process allows for this. This article explains why converting a Chapter 13 to a Chapter 7 happens and how. If you are contemplating either Chapter 13 or Chapter 7 bankruptcy, give our experienced Philadelphia bankruptcy lawyers a call. We assess your particular financial situation and advise you as to your options – free of charge! Chapter 13 Bankruptcy The primary feature of Chapter 13 bankruptcy is your three- or five-year repayment plan, through which you can catch up with past-due debt such as: Mortgage paymentsCar loan paymentsCar lease paymentsChild support arrearsSpousal support arrearsStudent loansIncome taxesOther taxesGovernment fines or fees You can also file Chapter 13 to strip off second mortgages as unsecured debt and get that debt discharged, and cram down car loans to current retail value at prime plus 1-3% interest and own the car at the end of your plan. If you are at the end of a car lease, want to keep the car, but cannot afford to pay the end-of-lease balloon payment, you can pay the balloon payment off through your Chapter 13 plan and own the car when your plan is fully paid. Qualifying for Chapter 13 To qualify to file Chapter 13, you must have steady income and enough disposable income to fund your plan. “Disposable income” is income that is in excess of the money you need to pay your monthly expenses.  Chapter 7 Bankruptcy Chapter 7 bankruptcy is a four to six month process during which you disclose your income, assets, expenses, and debts, and you are discharged of unsecured debt you cannot afford to pay. “Discharged debts” are debts that you are no longer personally responsible for paying. People who file Chapter 7 often have loans, credit card debt or medical bills they cannot pay. People also use Chapter 7 to legally surrender unaffordable collateral such as real property or a car. The underlying debt gets discharged. Qualifying for Chapter 7 In order to file Chapter 7 bankruptcy, you must pass the “means test,” which compares your income minus qualifying expenses to the state median income for a family of your size. If your income is less than the state median income, you qualify to file Chapter 7 bankruptcy. Congress put the means test in place to prevent abuse of the Chapter 7 process by those who earn enough income to pay back at least a portion of the debt they owe. When You Can Convert from Chapter 13 to Chapter 7 You can convert from Chapter 13 to Chapter 7 at any time if you no longer have the income to fund your Chapter 13 plan. This can happen if your expenses unexpectedly increase or if your income unexpectedly decreases.  Note that conversion to Chapter 7 is available only to Chapter 13 debtors who have not received a bankruptcy discharge within the previous eight years. Also, you should be able to  pass the means test in order to convert from Chapter 13 bankruptcy to Chapter 7 bankruptcy. How to Convert Bankruptcy Types Some bankruptcy courts require you to file a motion to convert, while others have forms for this purpose, such as a “Notice of Conversion.” You will also pay a conversion fee. In most instances you need to file amended Schedules showing the reason you need to convert to Chapter 7, whether it be an increase in expenses or a decrease in income. You must also file a Statement of Intention setting forth your intent as to your secured debt such as your home or car. What Happens When You Convert from Chapter 13 to Chapter 7 The court typically grants your motion to convert automatically, without a hearing, as long as the above conditions are met and there are no objections from creditors or from the Trustee. You will stop making plan payments, and your case then proceeds as a Chapter 7. You will attend the  341(a) Meeting of Creditors, complete the Financial Management Course and do anything else that  the trustee asks.  Once the date for creditors to object to discharge has passed and no creditor filed an objection, the court enters a discharge order in your case and your case closes.  Bear in mind that at this point, the automatic stay is lifted and creditors who were not discharged can take action to collect. This means that if you did not reaffirm your secured debts and are not paying them, your lenders can repossess your car or take steps to foreclose on your home and evict you. When the Court May Force Your to Convert to Chapter 7 If a Chapter 13 debtor is habitually late or in default in making plan payments, the Trustee may move to convert the case to Chapter 7. However, if the debtor has enough income to make plan payments but is simply not making them, the Court may not allow a Chapter 7 conversion. If the Court finds that the debtor is acting in bad faith in refusing to make plan payments when they can afford to do so, the Court dismisses their case entirely. How a Bankruptcy Lawyer Helps You Convert Bankruptcy Types Choosing which type of bankruptcy to file and whether conversion is necessary requires knowledge of the legal and financial ramifications of each option. Let a top bankruptcy lawyer help you assess your situation and your goals and guide you in whichever process best helps you reach those goals.  The Philadelphia bankruptcy attorneys at The Law Offices of David M. Offen have helped thousands of clients get a fresh financial start. We can help you too. Call us today for your free consultation. The post Converting from Chapter 13 Bankruptcy to Chapter 7 appeared first on David M. Offen, Attorney at Law.

Imagine you’re walking down the street, following all laws and unspoken societal norms. Perhaps you just got out of work and you’re on...