Category Archives: Real Estate

The Mortgage Meltdown: What Really Happened?

As a bankruptcy attorney routinely filing Chapter 7 and Chapter 13 bankruptcies in an economically hard-pressed state, Michigan, I am daily confronted with the real-world consequences of what the news media talking-heads have come to refer to as “The Mortgage Meltdown” or “The Housing Bubble Burst.”

Everyone is familiar with the long and short of this economic crisis—namely, that property values were quite high for some period of time, during which many folks purchased homes at high prices thinking that they were investing in their future, and then, suddenly, those homes were not worth nearly as much, leaving homeowners with negative equity, massively high monthly mortgage payments relative to the value of their homes, and no real way to sell or move away from the home in the case of job-loss in their geographic areas.

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Do I Need to Keep Paying Homeowners’ Insurance after I Surrender my Home in Bankruptcy?

After the surrender of a home or other real estate in a Chapter 7 or Chapter 13 bankruptcy in Michigan, you should still keep the property properly insured until you are no longer the titled owner of the property.

Click here to read more about homeowners insurance after a surrender in bankruptcy on the new Michigan Bankruptcy Blog of Michigan Bankruptcy Attorneys The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact us at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

What Is My Redemption Period in Michigan if I Have More Than 3 Acres of Land?

The length of the redemption period in Michigan is no longer simply 6 months if you have less than 3 acres of land and 12 months if you have more. In December, 2011, the Michigan legislature made a change to the statute governing the redemption period in Michigan.

Read more about the new rules concerning the redemption period in Michigan here on the new Michigan Bankruptcy Blog of The Hilla Law Firm, PLLC, Michigan bankruptcy attorneys.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

How Can I Save My Home with a Chapter 13 Bankruptcy?

While Bankruptcy is one of the most cost-effective and efficient legal means of walking away from an underwater or foreclosed home available, it is also, under the right circumstances, a better means of saving a home in danger of foreclosure than other non-bankruptcy strategies, such as mortgage modification.

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A Hidden Advantage of Not Reaffirming: the Freedom to Move

Guest Post by Atlanta Bankruptcy Attorney Peter Bricks.

A reaffirmed mortgage is a mortgage that you remain stuck with just as much after a Chapter 7 bankruptcy as you were before the Chapter 7 bankruptcy. A non-reaffirmed mortgage after a Chapter 7 bankruptcy, on the other hand, is a mortgage you can walk away from if you need to.

To read more, click here to read our full article about the advantages of not reaffirming a mortgage in Chapter 7 bankruptcy in Michigan on the new Michigan Bankruptcy Blog of Michigan bankruptcy attorneys The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

How Much Can my Chapter 7 Banrkuptcy Trustee Can Take from Me?

Most Chapter 7 cases that I handle as a Michigan bankruptcy attorney are “no-asset” bankruptcy cases, meaning that, after I  have exempted the filing individual’s personal assets from the bankruptcy estate created by the filing of the bankruptcy petition, there is nothing left available for the Trustee to liquidate (seize and sell off for cash) and distribute to creditors. In fact, the great majority of Chapter 7 bankruptcy cases filed anywhere are “no-asset” cases of this sort.

However, some cases are “asset” cases that do involve a transfer of assets from the filing individual’s ownership to the creditors whose debts he or she is discharging by way of the Chapter 7 Trustee assigned to the case, whose job is to do just that.

Sometimes, however, a filing individual does have more property or more cash assets in their possession than the exemptions in the Bankruptcy Code allow me to protect. (The exemptions are bits of the Bankruptcy Code statute that allow me to remove up to certain dollar-amounts of certain types of property from that legal “bankruptcy estate” containing otherwise everything the individual owns or is owed at the timing of the filing of the case.) These cases are called “asset” cases.

Usually, the available bankruptcy exemptions are sufficient to protect, if not ALL of somebody’s property, nearly all of it and what the Trustee manages to liquidate and distribute to creditors is less than what the individual owes to their creditors. This is sometimes only a few thousand dollars or less, which may be a small price for the individual to pay to discharge and walk away from tens of thousands or hundreds of thousands of dollars’ worth of debt.

Occasionally, however, the asset liquidated by the Trustee may be quite valuable. On extremely rare occasions, its value may outstrip the total dollar amount owed to the individual’s creditors.

Of course, this is rare because the calculation by the filing individual of the worthwhileness of the bankruptcy’s filing in the first place may be premised upon the fact that they will lose less to the Bankrutpcy Trustee than they owe; if they could simply sell off a valuable asset in order to pay creditors off and avoid bankruptcy in the first place, this is generally preferable. When this occurs, it may be because a filing individual has underestimated the value of an asset, did not realize that they owned it in the first place (e.g., a piece of real estate titled to them by an elderly relative without their knowledge, etc.), or for other reasons.

What happens then?

The Trustee takes a small percentage of the amount distributed to creditors, naturally. After that, however, Section 726 of the Bankruptcy Code governs how creditors are paid and in what order. Creditors are paid by the Trustee according to the timing of the claims that they file with the Bankruptcy Court when the Trustee alerts them that there is an asset to be distributed and according to their classification as “secured” creditors (holding debts with collateral attached to them) or “unsecured” creditors (holding debts with no collateral attached to them). Interest owed is paid as well, under certain circumstances.

However, after all creditors have been paid in accordance with Section 726, the Debtor him- or herself (i.e., the individual who filed the bankruptcy) is then paid.

In other words, you can only pay 100% of what you owe–and no more. If an asset liquidated by the Trustee brings more money to the Trustee for distribution to creditors than those creditors are actually owed, the filing individual will get money back from the Trustee. Eventually. (This distribution process can take months or years to complete.)

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Bankruptcy

Guest Post by Atlanta Bankruptcy Attorney Peter Bricks.

A home mortgage loan modification can be differently challenging before, during, and after a Chapter or Chapter 13 bankruptcy.

To read more about home mortgage loan modification and how bankruptcy may affect the process—or be affected by it—click here to read our full article on this subject on the new Michigan Bankruptcy Blog of The Hilla Law Firm, PLLC, Michigan bankruptcy attorneys.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.