I recently explained why a mortgage modification might be an inferior choice to a chapter 13 bankruptcy. As it turns out, mortgage modifications can stymie a chapter 7 New York bankruptcy as well. Why? Two reasons: the means test and exemptions. I’ve discussed the chapter 7 means test in detail before, but debtors whose household …
Mortgage Modifications Can Stymie Chapter 7 Bankruptcies Too Read More »
The Federal Reserve Bank of New York published a fascinating blog post about the 14 percent of U.S. households whose debts exceed their assets. Because a substantial proportion of New York bankruptcy cases involve net debtors, the post illuminates the segment of the country that most likely faces serious financial hardship. One of the chief …
Study: Net Debtors’ Financial Situations Differ Substantially Read More »
Negotiating a mortgage modification is an alternative to New York bankruptcy that frequently pops up, even though the Home Affordable Mortgage Program was not so successful. Nevertheless, modifications are perfectly reasonable. Debtor-homeowners can reduce their interest rates and monthly payments to align their mortgage costs with their incomes, particularly when they’ve lost substantial equity in …
A Mortgage Modification Can Stymie a Chapter 13 Bankruptcy Read More »
“Loss Mitigation” sounds like an intimidating term, but it’s really just a mechanism within New York bankruptcy to help parties resolve foreclosure issues to debtors’ and creditors’ benefits. That is, its objective is to keep debtors’ principal residences out of foreclosure or reduce needless costs to creditors. It involves negotiations between the parties, possibly including …
In a typical chapter 13 New York bankruptcy repayment plan, the debtor pays any prepetition mortgage arrearages in the regular plan payments to the trustee in full and any post-petition mortgage payments directly to the lender as though the bankruptcy had not occurred. Two separate payments might be cumbersome to debtors, so the question is …
What Is a Conduit Mortgage Provision and Is It Worthwhile? Read More »
One of the questions raised since Congress passed the Affordable Care Act (ACA) six years ago is whether decreasing uninsured rates would also reduce medical bankruptcy. One mechanism the ACA enacted was a requirement that states expand Medicaid, but the U.S. Supreme struck that down, leaving state governments with the choice of expanding the program …
Federal Reserve: Health Insurance Can Keep You Out of Bankruptcy Read More »
I recently wrote about what happens to condo or homeowners fees in New York bankruptcy, but I left out the prominent alternative, non-renting urban residence: co-ops. That wasn’t an accident; the reason is co-op maintenance fees are paid before mortgage payments, so a debtor would default on a mortgage before co-op fees. The result is …
Last year I wrote about reverse mortgages and New York bankruptcy, but a recent article in the American Bankruptcy Law Journal adds more depth to the “intersection” between reverse mortgages and bankruptcy. It has a handful of lessons that New York homeowners (and their heirs) might want to know. First, though, is a reminder as …
In addition to mortgage modifications, deed-in-lieu of foreclosure offers, New York bankruptcy, and other options, the federal government has finally created the effective solution that until now has been off the table for underwater homeowners: mortgage principal reductions. On April 14, the Federal Housing Finance Agency (FHFA) announced the Principal Reduction Modification program, which would …
At Last, a Principal Reduction Opportunity for Underwater Homeowners Read More »
Many New Yorkers live in condos or homeowner communities as opposed to independent, single-unit owner-occupied or rental housing. Keeping a home in New York bankruptcy is a common topic, as is protecting the interests of renters—including those in rent-stabilized units—but not so much is said about condos or homeowner communities. In New York City such …
What Happens to Condo or Homeowners Fees in Bankruptcy? Read More »
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