A recent story on MSNBC detailed how foreclosures in Colorado and throughout the country are churned out using less-than-upstanding tactics by some of the country's largest banks.
Colorado foreclosure attorneys read with interest this exclusive piece. It allowed an inside look at so-called "foreclosure factories" which provides a greater understanding of the process and underscores why it's so important to have a skilled Colorado foreclosure attorney on your side in these matters.
A recent settlement by five of the largest banks and attorneys general from 49 states - including Colorado - granted $25 billion to alleviate the hardships caused by the real estate implosion resulting from unsavory tactics by financial institutions. A portion of that money is slated to go to individuals who were improperly foreclosed upon due to robosigning techniques and the banks not having the proper paperwork to ensure they even owned the property in question.
Part of that agreement was that they would alter their methods.
But this piece shows little has changed. At Wells-Fargo, which services nearly 18 percent of the nation's residential mortgages, entry-level staffers are given the title of "vice president" and told they need to keep a quota of how many foreclosures they need to process in a given day. The average number they are expected to produce in an 8-hour shift is 10.
This is concerning because if you are currently in the midst of fighting a Colorado foreclosure, you know that the process involves an inordinate amount of paperwork. These "vice presidents" are made to sign off on statements swearing to have personal knowledge of certain facts of the case - facts that they are unlikely to know given the volume they churn out each day.
What's more, employees of the bank, speaking on the condition of anonymity, have said borrowers who were seeking help in the form of loan modifications had sent reams of personal financial documents to the bank. Problem was, they were sent to fax machines that went weeks without being checked.
In some cases, the foreclosure process was kick-started when borrowers fell behind on miniscule payment amounts - sometimes as little as $2 on the interest.
Having an experienced Colorado foreclosure attorney walk you through the process is critical, given the type of practices that are continuing at these large banks.
Recent media reports indicating that Colorado foreclosures are on the decline don't tell the whole story.
Colorado foreclosure attorneys know there is much more to it, and many families continue to suffer as the result of greedy banks and careless politicians.
According to a story by Reporter Heather Draper of the , the urban counties in Colorado have seen a dip in the numbers of foreclosure sales and filings this past January, as compared to a year ago.
Draper cites the new figures released by the state's division of housing, which reports that foreclosure filings have dropped nearly 30 percent since last year, from 2,699 in January 2011 to 1,939 this January. She also cites foreclosure auction sales, which dipped from 1,499 last January to 1,150 this January.
While all this might be true - and encouraging if it continues on this same slope - we must remember that this report is only comparing two, 30-day time frames. A 23 to 30 percent decrease sounds like a lot, but we're not talking about this in terms of an entire year.
In truth, the housing crisis in which this country finds itself embroiled is far from over. And what many homeowners might not realize is that filing for bankruptcy can actually help by allowing the opportunity to shed their second and third mortgages on homes that are underwater anyway. Filing for bankruptcy will also halt the foreclosure process, and potentially give you and your family the opportunity to stay in your home, at least temporarily, until you can work with an attorney to determine the next step.
One misconception people have is that they have to be current on their mortgage payments in order to keep their home. This is not always true. A Colorado foreclosure attorney can help you sort through the legal mess.
According to the Journal, all counties except Broomfield showed a decrease in foreclosure auction sales. It's important to note, however, that some of those counties saw only minimal slides, like Mesa County which reported a 2.5 percent decline. A percentage like that is within the margin of error, and therefore not definitive enough to say whether things are actually improving or not.
Foreclosure can be a complicated process, but with the help of an experienced attorney, it can be far less stressful.
As our Colorado debt-relief attorneys discussed in an earlier post to the Swift Law blog, whether a Colorado family has health insurance coverage or not, the ever-increasing cost of medical care continues to bankrupt families across the state and nationwide. In 2007 alone, crushing medical bill debt was tied to more than 60 percent of all personal bankruptcy filings in the United States.
With that said, the Colorado legislature is hoping to change this grim statistic. The Denver Business Journal reports that Senate Bill 134, also known as the "hospital charity-care bill", recently passed the Colorado Senate with an overwhelming majority vote of 28-6.
Bill sponsor, Sen. Irene Aguilar (D-Denver) -- who is also a practicing medical doctor -- told
Key points of include:
~ requiring hospitals to provide patients with clear and accessible information about their charity, financial aid, payment plan, and cash discount programs,
~ directing that hospitals turn to collection agencies only after all other options of medical bill debt collection have been exhausted, and
~ prohibiting hospitals from billing patients more than the lowest cost they bill insurance companies for the same procedure.
According to Colorado Public News, Colorado hospitals currently charge uninsured accounts nearly 400 percent of costs on average while a private insurer -- thanks to group bargaining -- is being billed at closer to 100-150 percent of costs for the same services.
Southern Colorado debt-relief lawyers with the Law Office of Stephen H. Swift understand that even hard-working Colorado families can find themselves overwhelmed by unmanageable (and often unexpected) medical bill debts.
Contact us today for more information and to schedule a free consultation
A Colorado bankruptcy can provide you relief from a long list of creditors.
Our Chapter 7 bankruptcy attorneys know that this includes credit card bills outstanding medical balances and business debts.
However, there are certain debts that are almost never dischargeable. Generally, those are going to include student loans and taxes, though there are special circumstances in which you can apply for an exception.
Child support payments, however, you will almost certainly continue to pay.
That was the issue in the case of Florida v. Davis, recently heard by the U.S. Appeals Court for the Eleventh Circuit. Although this was a Florida case, the same general principles with regard to child support and bankruptcy apply here in Colorado.
Here are the facts, as outlined in court documents:
Mr. Davis and his wife were married in 1997. They divorced in 2003 in Illinois. Mr. Davis moved to Florida, and it was that state's department of revenue that oversaw the child support payments for which he was obligated.
Then in 2008, an involuntary Chapter 11 bankruptcy was filed against Mr. Davis. This is a rare situation in which creditors seek relief from the bankruptcy court.
In the list of creditors spelled out in the filing, there was $180,000 that Mr. Davis owed Ms. Davis for child support. The bankruptcy court required proof of claim from each of the creditors. However, neither the state's department of revenue nor Ms. Davis filed any paperwork.
The debts were formally discharged by the court in May 2009.
The following month, the state department of revenue filed a proof of claim for the $180,000 owed to Ms. Davis.
The bankruptcy court, however, determined that neither Ms. Davis nor the department of revenue could seek relief due to res judicata, or in other words, the case had already been decided and closed.
The case was then taken to the appellate court.
The appellate court determined that while Mr. Davis did have to pay the child support - it was not a debt that could be discharged in the bankruptcy process - the department could not seek interest or liability because it had not properly met the court's deadlines.
Although child support can't be discharged in a bankruptcy, filing frees up your income from other obligations so that you will be able to pay.
Contact us today for more information.
If you are facing foreclosure, it won't be long before your friends and family start offering advice. You may hear about some proven strategies to keep the mortgage company at bay, and other actions that may help you avoid foreclosure. But first it is important to understand foreclosure.
What is foreclosure?
A bank foreclosure is a legal process through which a mortgage lender can take possession of your home when you are not making the monthly mortgage payments. While it is different in every state, it usually follows that when you miss a few payments on the mortgage, the lender will send a default letter. This letter usually urges the borrower to make payments to catch up or to make some alternative arrangement with the bank. However, if the situation is not fixed within a few months of this letter, the bank will begin the foreclosure process.
What is the foreclosure process like?
After a loan has been in default for a month or two, the bank will send Sheriff's Sale Notice. Usually, this sale is scheduled to take place within four weeks of the date of the letter. Sheriff's sales are auctions where people can bid on the house; however the lender is usually the winner of the auction. In certain situations, the lender can attempt to collect any balance of the loan above the price paid at the sheriff's sale. This debt is called a "deficiency" but it usually a dischargeable debt in bankruptcy.
On the day of the sale, the lender assumes ownership of the property and the "redemption period" starts. This period of time is designed to protect the borrower's from abuse by the lender and it usually lasts for six months. During this time, the borrower can remain in the home, but doesn't have to pay the mortgage or property taxes. The borrower may also buy back the home at the price paid at the auction, but this might be impossible since lenders won't give loans to people right after a foreclosure. At the end of the redemption period, the borrowers can be evicted from the home.
How can bankruptcy help?
Filing for bankruptcy during a foreclosure can help in a couple of ways, but it must have been filed before the sheriff's sale. For one, a Chapter 13 bankruptcy can help you catch up on payments if you fell behind on your mortgage. Secondly, Chapter 7 allows you to stay in the home longer while stopping the lender from collecting a deficiency after taking the home.
Chapter 13 and foreclosure
If you fall behind on your house payments but you still have a large enough income to pay the mortgage, then Chapter 13 might be the ideal solution. This is particularly true when you have some equity in the home and want to hold on to it. A Chapter 13 bankruptcy allows you to pay back the amount your fell behind over the period of three to five years, while continuing to make regular mortgage payments. Once the arrears are paid, the mortgage will no longer be in default.
Chapter 7 and foreclosure
If you fell "underwater" on your mortgage because the balance is higher than the value of your home, or you can no longer afford to make monthly mortgage payments, then Chapter 7 may be just the fix. Chapter 7 bankruptcy legally protects you from any actions taken to collect a debt, including the sheriff's sale on a foreclosed home. While the lender can still ask the court to hold a sheriff's sale, the protections of Chapter 7 can last up to three months. In the case of a Chapter 7 bankruptcy, you can gain an additional 1 to 3 months in the home without paying a mortgage.
Perhaps more importantly, a Chapter 7 bankruptcy discharges any deficiency debt that may result from the house selling at auction for less than the balance of the mortgage. In cases where the deficiency judgment is quite large; which can occur when the house is remortgaged or underwater, a Chapter 7 filing can be quite helpful.
In this financially turbulent time, many Americans have found themselves facing foreclosure. It’s not an altogether strange story… Being able to make a mortgage payment is getting harder and harder as more people lose their jobs.
It only takes getting behind on one payment, and then before you know it, you can be paying huge amounts of interest. Creditors want to you owe them as much money as possible, which is why they entice you into vehicles, property, or other goods that would normally be beyond your means.
It may have seemed like a miracle that a credit company was willing to loan you the money to buy a great new house, but there was nothing miraculous about it. For them, it’s a win-win proposition. If you pay the money back, then it’s no problem for them. But if you fail to pay on time, they’ll just keep taking and taking until you have nothing left.
That’s why filing for bankruptcy is such an important part of your rights as an American. If you’ve bought a house beyond your means, or if you’ve suffered a bad turn of luck, you may be facing foreclosure. If your house is foreclosed, you may have nowhere else to go, but the credit companies don’t care. That’s not their problem.
If you file for bankruptcy any time before the foreclosure sale date, your property can be protected under bankruptcy law, and in most cases, you can even just keep the house!
If you owe money, and most Americans do, you’re probably being harassed by calls from creditors. They call at odd hours of the day, hoping to trick you into answering the phone, and make it so that whenever your phone rings, you have a moment of dread when you see a number you don’t recognize.
That’s really only the start of the problems, too. Creditors can repossess your property, garnish your wages, and more.
There’s more to consider than just physical harassment, though. The stress of constantly living in fear of creditors can have emotional damages, too: anxiety, depression, and plenty of others. It can get in the way of you working to your full potential, and even take the joy out of life.
That’s where bankruptcy comes in.
When bankruptcy is filed, an automatic stay is issued to creditors, which means that they can no longer attempt to collect from you. Practically overnight, the harassing phone calls will stop, and there’s a good chance that when the bankruptcy is over, they won’t start again.
Filing for bankruptcy offers you protection from creditors through the duration of the process. That means no calls, no repossessions, no garnishments, or anything.
Any good bankruptcy attorney will make sure that even when the process ends and the stay expires, the creditors will leave you alone. That’s because it’s their job to create a plan that works for you, so that you can pay back any debts that survive the bankruptcy process.
If you file properly and don’t overspend again in the future, bankruptcy means never getting another collections call.
It should come as no surprise to learn that singles are less affluent compared to other family structures. According to recent research by the MetLife Mature Market Institute, singles reported the lowest income levels (averaging $32,000), the lowest asset levels ($110,000) and the lowest rates of homeownership (43 percent). A surprisingly low 17 percent said they were on track to reach their retirement savings goals and 20 percent hadn't even started saving. The biggest worries for singles were affording their living expenses and maintaining their standard of living in retirement.
Most of the financial stress originates from relying on one income instead of two. This makes singles more vulnerable than couples who enjoy double earnings. Additionally, singles tend to earn less money and have lower education levels than their married peers, whether they have children or not. The study also reported that singles between the ages of 45 and 80 were less likely to have taken steps to pay off debt than married couples of the same age.
Changing demographics raise economic concerns
The MetLife study comes at a time when the country's demographics have already shifted in favor of single-person households. In fact, the U.S Census Bureau reported that single-earner households had grown to 31 million as of 2010, a 15 percent increase over the previous ten years. Meanwhile, traditional husband-wife households are on the decline, making up less than half of all households in America. If singles continue to be financially insecure, this trend could prove to be troubling for the economy.
Of course there are always individuals that buck the trends and find a way to make single life sound better. Eleanore Wells, a singles expert and author of "The Spinsterlicious Life," said it is far easier for her to save for retirement, because her money is her own and she can spend it how she wants to. Wells isn't the only one who feels this way. Many divorcees say they are better off single than they were as a couple, especially if their partner was less financially responsible.
Are singles more likely to declare bankruptcy?
Single people face more financial stresses than couples, but bankruptcy is usually caused by major economic stresses, such as a lost home, lower wages or unemployment. Any significant financial strain is likely to result in bankruptcy, but it's even harder to dig out of debt when you're facing it alone.
Singles are also less likely to seek the advice of a financial counselor, and less likely to save for retirement. The MetLife study found that couples were far more likely than their single counterparts to pay off debt or have met with a professional to help them map out their finances.
All of this stress on singles ultimately results in a higher rate of Colorado bankruptcy filings for single-headed households. But there is a bright side of bankruptcy; it can give you a fresh start and a clean financial slate. A successful bankruptcy is unrivaled in terms of the freedom it offers. One of the benefits of being single during the bankruptcy process is that you won't have to worry about jointly-held debts, as is often the concern with couples or recently-separated individuals.
A consultation with a Colorado Springs bankruptcy attorney will help you determine if bankruptcy is the right solution for your debt problems. Many people try debt counseling first, or a debt consolidation loan. An attorney specializing in bankruptcy can advise you on the best course of action.