Riverside County Bankruptcy Lawyer Blog

Foreclosures have slowed down this month across the nation not because people are staying current on their mortgages but because the banks are facing scrutiny over their foreclosure proceedings. This is really a big issue for states that use judicial foreclosure which California does not, but Californian’s are getting the benefit from the slow down as some banks have voluntarily stopped foreclosures for this month. I was going to file a chapter 7 case in which we surrendered the house last week a day before the date of sale at a trustee sale but a day before that the title company halted the foreclosure. It is now scheduled one month out which buys my client another month to live in his house for free and once he files he’ll get another 2-4 months before they can foreclose again. In his case he can’t afford his house and its 50% underwater so he had not intention of trying to keep it but it will allow him to save some money and be in a better position to move and get a fresh start once his bankruptcy case is filed and he gets a discharge. For people trying to save money to get caught up in their arrearages and still be able to file a chapter 7 this moratorium is a blessing, for others it just stalls the inevitable but gives them a place to stay for longer.

If you have recently been sued or have a judgment against you its only a matter of time before a sheriff will be contacting your employer and levying your wages through a garnishment. In California a creditor can take 25% of your net wages. If you make under the median income I can wipe away your debt through a chapter 7 bankruptcy and if you are a high wage earner or have too many assets to file a chapter 7 and be able to keep everything then we can lower your payment to your disposable monthly income which is almost always considerably lower than 25% of your wages. I would say 5-10 % is much more common when you are doing a chapter 13 bankruptcy and I have got plans confirmed with 1-2 % of income going into the plan. Call me to get a free case evaluation.

I am predicting that the tide of bankruptcies will not be falling anytime soon based on the new numbers that came out in June 2010. Overall California’s unemployment rate decreased to 12.3% according to data that was released by the California unemployment development department. That’s a .1% decrease and a year ago the unemployment rate was 11.6%. Riverside county’s unemployment rate grew to 14.5% which is .5% up from a month before. I also recently read that 10% of homes in Riverside county are 90 days or more deliquent on their mortgage payments. The data spells trouble for people who have lost their jobs or who are currently working with lenders on modifications. Remember that bankruptcy is a right and is something that should be considered a tool to help move out of the current situation that we are in. Our economy is based on consumer spending and when consumers can’t open their wallets due to old obligations that are unlikely to be paid its better to take the pain quickly then to walk around on a broken leg for years. My personal feeling is that the banks are dragging people along and giving them false hope of a modification which are often meaningless so that they don’t have to dump all these excess properties on the market which will depress prices even more and affect the banks. Bankruptcy needs to be looked at as a business decision and people have to let the negative emotions and connotations that are associated with it fall by the wasteside. Getting your family back on track from a new starting point in my opinion is better for the economy than allowing modifications, late payments and collection companies to prosper in an environment that ultimately hurts everyone.

According to a yahoo finance article
economic distress eased although unemployment ticked up and foreclosures likely only slowed down from banks delaying proceedings. Many banks foreclosure methods are being questioned as many banks through MERS are having standing issues in trying to foreclose as well as the affidavits that were being signed were not by people who necessarily had knowledge of the foreclosure file which is required. It will be interesting to see how the slow down in foreclosures that is likely to come will affect the economy and house prices in general. Some economists think the banks have exacerbated the problem by foreclosing too quickly and putting distressed properties back into the market at a rate they can’t be absorbed while others believe that its best to get out of this thing quickly so we can see a real road to recovery instead of a double dip. No matter what your take on it, there are still many home owners struggling to pay their mortgage and bankruptcy is a great way to buy some time and get your financial house back in order. Call a riverside county bankruptcy attorney if you are having problems modifying your loan or need any other help in trying to stay in your home while these economic times remain fragile