Los Angeles Bankruptcy Lawyers Blog

Clients in Los Angeles usually start their free Bankruptcy consultation with me with a story of their exhaustive attempts to modify a home loan only to find out just prior to approval that the "investors" do not approve of the modification after all. Many homeowners are offered a three month trial to attempt a new loan modification, and after two and a half months, are told their modification has not been approved. This is usually followed by a failed short sale, and then a foreclosure.

Bankruptcy is the only real solution if you want to keep your home and the lender is not "playing ball". Provided you have some income and your arrearages are not too great, a Chapter 13 Bankruptcy is the only real weapon a person has if they want to keep their home and want to stop enduring the pain of a failed short sale or a failed loan modification.

A Bankruptcy also gives a person more bargaining power with the lender. As long as a person is dutifully making a Plan Payment in Chapter 13 and making the mortgage payment from that point forward, a lender cannot take that person's home. There is another advantage of filing a Chapter 13 Bankruptcy. If a person sticks to the Plan, they can remove any personal liability on the home if the lender later takes the house through foreclosure due to lack of payment. If you have a second loan or a refinanced loan, a homeowner is typically personally liable for any deficiency balance between what the home is sold for at a foreclosure auction and what the person owes on the loan. A Bankruptcy removes that personal liability so a lender has less leverage over that homeowner and may be more inclined to actually modify a new home loan.

By removing personal liability through Bankruptcy, a homeowner puts themself in a better bargaining position with a lender, since a home that is "under water" is not a good foreclosure candidate when there is no personal liability to help cover the lender's loss. If you are looking for a Los Angeles Bankruptcy Attorney who may also be able to strip away your Second Home Loan in addition to the securing the aforementioned advantages, give us a call.

Your ability to effectively negotiate with the Banks is only a phone call away.

Kirk Laron
Pasadena Bankruptcy Attorney

A Chapter 13 Bankruptcy can allow Los Angeles residents as well as other Americans to pay a fixed payment over time so they can save their home from foreclosure in many circumstances. At times, however, when the delinquent amount owed on a home, known as Arrearages are too great, the plan become unaffordable when only the future income of the person is considered.

Fortunately, payments to the plan can come from several sources. In other words, not all payments to creditors must be made from the debtor's future income. The debtor may choose to fund payments from exempt property, from property of the estate, or from a Contribution from another person.

Many assets that a person has would be exempt from creditors if they declared a Chapter 7 liquidation Bankruptcy. Any of those assets could in theory be used to pay for the plan payments. Also, another person can sign a Declaration pledging them to pay a portion of the debtor's payment. This can often make the difference of a successful Chapter 13 Plan and one that a debtor cannot afford. This becomes an analysis that an experienced Bankruptcy Attorney in Los Angeles can provide as these alternatives can pave the way to getting out of debt and keeping your home, even if it days away from foreclosure.

Through a free consultation, the possibility of saving your home and getting relief is just a phone call away

Kirk Laron
Pasadena Bankruptcy Attorney

On January 1, 2010 homestead exemptions rose to $75,000 and $100,000 of home equity for single and married debtors declaring Bankruptcy. In places like Los Angeles and Pasadena, this can be critical because protecting whatever equity may be left in your home could be important in determining whether Bankrtupcy Protection is worthwhile. Protecting as much equity as possible becomes a key variable for any person considering Bankruptcy in Southern California, and as of the beginning of the year, Angelinos just gained a little more protection.

However, recording a judgment lien against real property "freezes" the amount of the homestead exemption the person can claim under California's nonbrankruptcy exemptions. Moreover, any subsequent statutory increase in the exemption amount does not apply to the judgment lien creditor. This means that despite this generous increase, if you already have a judgment against your home, the added protection does not apply that particular debtor.

This is just one example of why a Pasadena Bankruptcy Attorney is important to have when considering filing Bankruptcy when you own a home. I will help you protect what assets you have and to maximize your protections under the law.

Kirk Laron
Pasadena Bankruptcy Lawyer

Minimal research of Chapter 13 Bankruptcies in Pasadena will reveal that the main advantage of this option is to save your home from pending foreclosure. However, with an appraisal of your home, you may be able to strip away your second lien ("lienstripping) as long as the following is true:

Your home value must be below the value of your first lien. In other words, if the home is sold, only the first lien holder would get paid because there is nothing left for the second lien holder.

In this case, one can totally strip away the second and convert it into unsecured status, which gets treated like a credit card. If you can successfully maintain your payment plan in a chapter 13 throughout the payment period (3 to 5 years), then any remaining unsecured debt is wiped away. You can emerge with a fresh start, and a home that no longer has a second mortgage on it.

If you have a job, want to keep your home, but are having trouble making ends meet, give us a call or e-mail and we will guide you through this process and see if a Chapter 13 Bankruptcy can be the right solution for you.

Kirk Laron
Pasadena Bankruptcy Attorney