Carl R Gustafson's blog

You learned in school not to write all your papers by just looking on the internet. It was a sign of lazy work and arose suspicion of cheating. And the information that you found on Wikipedia wasn’t to be trusted. Who knows who wrote that?

Times have changed since I was in school. Now the internet is a vital source of information and authorship can be verified on reliable websites. And it takes a long time for editors to publish books, and a long time to get to the library to check them out.

A lot of clients come in worrying about their house being in danger of immediate foreclosure. By filing for bankruptcy at any time during the foreclosure process, you automatically pause this procedure and protect your home for a limited time. Here is a basic breakdown of the timeline of a typical foreclosure:

For many borrowers, the choice of whether to file bankruptcy depends on a determination of whether a home-owner will be liable for debt on his home following foreclosure.

California has enacted a very strong law protecting home-owners from deficiency judgments following a foreclosure.  This is called the anti-deficiency statute or non-recourse statute.  It says, in sum, that borrowers who take:

   1. purchase money loans
   2. on an owner-occupied residence

In my office I increasingly see clients come in for consultations after having completed a mortgage modification. I wish that I saw it much more frequently. With its singular ability to entirely remove a second mortgage, bankruptcy is an excellent follow-up to mortgage modification. Here are 7 reasons why everyone who completes a mortgage modification should consider also filing for Chapter 13 Bankruptcy.

One of the most exciting areas of bankruptcy law is the ability to discharge or remove a second mortgage.  For years the ability to remove a second mortgage was largely irrelevant as property values rose year after year.  Now the power of the bankruptcy court has become one of the most powerful consumer protection laws on the books.  It is important for every home-owner to know his right to adjust his home mortgage through the bankruptcy law.

How can bankruptcy help discharge my debts?

Frequently the best way to get out of an upside-down mortgage without bankruptcy is to short sale a house. The basics of a short sale are that the lender allows the borrower to sell his real estate for less than is owed. In exchange for saving the lender the cost of foreclosure, the borrower typically expects to be forgiven of the remaining balance. The borrower must always look at the terms of the short sale contract.