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Bankruptcy

When you go through this mess, you start to look forward to the end, no matter how bad it is…you just want it to be over….
–Lauren McKenzie, Portland, Oregon


"I don't know what to do except file bankruptcy," says Lauren McKenzie of Portland, Oregon.

Caught with one of those bad mortgages, Lauren’s monthly house payment has shot up 31% (from $3,000 to $3,930) and she’s missed two payments.

“This is outrageous…I am sick to my stomach, and I have no idea what to do!” states McKenzie.

 

McKenzie cannot afford this exploding house payment. Lauren's consumer credit counselor warns against filing, suggesting that bankruptcy should be used as a last resort.

Bankruptcy Provides New Beginning!

Lauren sees no alternative, and she is aware of the new bankruptcy laws (in effect October 2005).

“This seems to be the last resort for me,” Lauren admits. “The clock is ticking…they (mortgage lender) have accelerated the loan (Acceleration Clause in mortgage).”

Before filing for bankruptcy protection, she knows she must attend mandatory credit-counseling sessions held by designated groups throughout the country.

New Bankruptcy Laws Erase Last Hope For Many….

Under this new law getting your debts cancelled is more difficult! For some people, getting debts canceled will be impossible. And you can thank the credit card issuers for the more stringent laws.

For Lauren, her counselor will recommend a Chapter 13, which immediately halts a foreclosure sale and freezes all collection actions for debts that predated the bankruptcy filing.

The court then approves a repayment plan that determines which creditors get paid back and when.
Under that arrangement, she will have up to five years to pay missed mortgage payments, essentially forcing the lender into a repayment plan and forcing a time frame that most lenders would not otherwise accept.

But while trying to make good on past debt, Lauren must keep up with her regular mortgage payments and other living expenses. Can Lauren afford these increased mortgage payments?

From bad to worse, Lauren’s home probably is not worth what she paid for it…she probably owes more than it is worth. Should she continue making payments on a house she cannot afford?

These are the kind of painful decisions Lauren will need to make.

 
Objective: To present new bankruptcy laws; to share real people’s experience with bankruptcy; to discuss implications of bankruptcy on credit.
   

   
 

Legal Notice: The associated recordings and resources are intended for educational purposes only. Reasonable care has been taken to ensure that the information reflects Florida law as of the date of publication. However, laws change frequently, and the author and publisher recommend that the reader proceed with caution in the implementation of any of the techniques and/or strategies described herein. The reader must consult appropriate legal, tax or other professional advice before implementing any of the techniques and/or strategies described herein.

The reader is not offered any expressed or implied warranties about the merchantability or fitness for any particular use of this manual and/or legal forms and/or audio/video recordings included.

©2007 by Mike Payne, P.A.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopy, recording or any other – without the prior permission of the author.

Names, characters and places are either the product of the author’s imagination or are used fictitiously. Any resemblance to actual names, characters, places or persons, living or dead, is entirely coincidental and beyond the intent of the author or publisher.

 

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