Foreclosure Defense — Strategic Bankruptcy Options

foreclosure pileStrategic Comment: There are two ways for you stop foreclosure, sale and eviction dead in its tracks. One is to file bankruptcy under Chapter 13 which is an opportunity for debtors to reorganize their payments to creditors.

* An automatic stay goes into effect immediately upon filing with the Bankruptcy Court. Creditors who say or do anything in furtherance of collecting a debt are committing a federal crime from the moment it is filed, whether they know about it or not.
* However, the payments include fees to the Court and Trustee which exceeds 10% of what you pay into the Court for the benefit of your creditors, so since you are strapped for cash it further impedes your ability to work out a realistic plan. Additionally you will have to commence making the former payment without any adjustment of the interest or any account that the house is worth about 25% less than what is owing.
* Also for secured debts like mortgages, the lender can come into Bankruptcy court and ask the court to lift the automatic stay which in the past has been routinely granted and for the most part still is, UNLESS YOU DO SOMETHING ELSE.
* WHEN YOU FILE YOUR PETITION STATE THE MORTGAGE AND NOTE TO BE CONTINGENT LIABILITIES BASED UPON TILA VIOLATIONS. You will need a TILA audit before or immediately after filing to support your position.
* YOU SHOULD ALSO NAME, AS THE CREDITOR, THE ORIGINAL LENDER, and state the amount of the loan as a contingent liability to them. The fact is, in most cases, you have not been presented with proof of transfer of anything, nor seen any assignment, or what rights or obligations were picked up in transactions after your closing by third parties who own the servicing rights, or the mortgage or the note. The Trustee or other party coming into court or posting notices of sale on your property probably is getting his/her marching orders from someone who either doesn’t have or can’t prove they know the amounts you paid, to whom or what is currently due. PLACE THE BURDEN WHERE IT BELONGS — ON THEM.
* Then you should state the present mortgage servicing entity to whom you are now sending your payments (this applies only where the loan has been sold which is true in 95% of the cases) as a contingent liability in an unknown or unliquidated amount.
* Then you should add a creditor “john Doe” as also an unknown unliquidated debt as the possible owner of a security under which he has ownership of the mortgage and note.
* Then you should file an adversary proceeding or action under TILA, RESPA, fraud etc. making all appropriate claims for rescission, refund of interest, points, loss of value in the property etc.

If your case is handled in this way there is a higher probability that you will survive the motion for lifting of the stay as the movant will have to prove the chain of title and authority on the mortgage and note, thus giving rise the the issue of legal standing for them to standing in the courtroom at all.
The second option, if you are faced with foreclosure, sale or eviction is just file the TILA action in Federal court and then go the State Court and ask the State Court to issue a stay because there is pending litigation in Federal Court. Usually State Court judges are more than happy to get the matter off their desks and thus grant your motion for stay, but they might not be under no obligation to do so.
Remember that whether you go straight into Federal Civil Court or Federal bankruptcy Court, which is a different division, and you are NOT represented by counsel, the Judge must do the legal research himself to determine the merit of your claims. If you are represented by counsel you need to make sure he knows what he is doing. Most bankruptcy lawyers don’t know an adversary proceeding or TILA action from egg on the wall. They have no experience with it. Very few lawyers or judges know this area since it only became important in the last couple of years.
Southern California (909)890-9192 in Northern California(925)957-9797foreclosure1


14 Responses to Foreclosure Defense — Strategic Bankruptcy Options

  1. On Pins and Needles says:

    This is the most valuable information I have found, thus far, in my quest to avoid eviction and save our home…A,B,C steps! Thanks.

    My atty filed CH 13,converted it to CH 7 (not yet dismissed), so I wonder if the Ch 7 can be converted back to a 13, using the above methods.

  2. Gardener J. Doane says:

    I need help in Sacramento CA.
    How would I use holder in due course against a trusee who has been assigned to foreclouse, for First Franklin Financial Corporation, even though my mortgage is a ABS? NOD issured Feb. 4, 2009.

  3. Tony says:

    Please read this article and tell me what you think.

  4. Darrell Sturgill says:

    i have been on unemployment for a year now, which is my only income. so i don’t know if i could qualify for bankruptcy. i want to keep my home but i have not made a payment in 17 months. my 90 day waiting period for the foreclosure ended on dec 11th. now i guess i will receive the 20 day notice of sale at some point.

    can i file chp 13 with just unemployment for income ? if not, can i stop the foreclosure because of illegal practices , which i think i see plenty of in my loan papers.

    how do i get a hold of your firm ? do you charge for a preliminary assesment of my situation ?

    Thank You, Darrell R. Sturgill

  5. MICHAEL says:

    Very good information! I will try to use it in New York.

  6. Lisa says:

    This is very informative!!!!

    One question though, if you file chapter 13, and your house is only worth $120,000, yet you owe $400,000 including the $100,000 in arrearages. Can the judge calculate you payments based on the current value of your home? Or more important, is it possible for some if not all of the arrearages to be forgiven this case?




  7. Pingback: HELLLLLLLLP!! Got Notice to Vacate Property today; had rescinded mortgage under TILA before foreclosure trial - Page 3 - Loans, Debt & Credit

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  9. MARIO KENNY says:

    I have found that most BK attorneys know little about how to properly do a BK the right way I have done some very nice research on BK.

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