Janice: Good afternoon Atlanta and welcome to Legal Talk. This is Janice Mathis. This is my favorite hour of the weekend. I learn something new every weekend talking to these brilliant lawyers we have on every week. Now if you were listening to the intro you heard something, maybe, about a criminal attorney…well, I tell you what, it IS criminal what’s going on with some of these creditors and debtors. That’s what we’re going to talk about today with Roger Ghai is how you can protect yourself when, you know, the law recognizes that sometimes you get so deep into debt that the only way out of debt is to file for bankruptcy. Hello Roger, how are you?
Roger: I’m doing just fine today
Janice: That’s good and we’re glad to have you here. Now you’ve got a new phone number and I want to give that out so people know if you need help, if you think you might want to file bankruptcy, if you’re up to your neck or up to your nose in debt, it’s 770-792-1000. I’m going to repeat it several more times so get your pen and paper ready, 770-792-1000. That’s Roger Ghai at www.Chapter7attorneys.com is the website address. But you say a lot of people that file Chapter 13 bankruptcy really ought to be in a Chapter 7 bankruptcy.
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Roger: I do and I’m a big advocate of that because in the statistics bear me out – 75% of those Chapter 13 bankruptcy cases fail and they primarily fail because the client will lose their job and they just can’t make the payments. I have a lot of that going on right now. So, we end up either having to do a, because sometimes the client will insist on doing a Chapter 13 bankruptcy and then it must be converted over to a Chapter 7 bankruptcy. They’re then a little irritated they’ve been through 2 or 3 years of a struggle. What I’ve started to do now is just talk to clients and have them understand up front is that Chapter 13 bankruptcy, it doesn’t work like, that’s what you, in the sense of, you know, hey I have X number of dollars and that’s going to be my Chapter 13 payment. It really is tied down to what their obligations are. Up front I try to be honest with people and tell them, look, you can either afford these obligations or you can’t and it just depends on your own personal circumstances.
Janice: What is the big difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy?
Roger: It’s a difference of night and day. Either it’s a fresh start or you can be under a tortuous process under a Chapter 13 bankruptcy that will be pending for the next 3 to 5 years of your life. A Chapter 13 bankruptcy means that you’re repaying your creditors and you’re going to repay them over time. Now, you have to have sufficient income to be able to repay your creditors in the Chapter 13 plan of reorganization.
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In a Chapter 7 bankruptcy once we file the case, as with a Chapter 13 bankruptcy, none of the creditors can call you, threaten you, sue you, garnish you or harass you. All of that stuff stops. But the beauty of a Chapter 7 bankruptcy is this: You file a Chapter 7 bankruptcy you get rid of your debts. We have to determine if you’re eligible and most folks are eligible. You get rid of your debts and we have a hearing about 30 days after we file the case. Bankruptcy cases are filed electronically, which is great. Usually at the hearing the person who conducts the hearing is a Chapter 7 bankruptcy trustee. That trustee, their role is, really, is to make sure that the Chapter 7 bankruptcy laws have been complied with, all the rules and regulations. For the most part they’re going to ask you did you give the information to your lawyers and is it true and accurate and those types of generalized questions. The hearing should take less than 5 minutes. After that one and only hearing, about 4 months later, in the Atlanta division here, the client will receive a piece of paper now giving the discharge.Now that has to be contrasted with the Chapter 13 bankruptcy. You’re going to have at least 2 hearings in a Chapter 13 bankruptcy. You will have the first hearing and then you’re going to have a hearing about whether your plan can be approved by the court. Usually what happens is this: Once the plan is proposed, because nothing is perfect, what will happen is there’s going to be a creditor objection that you’re not giving them or the plan does not provide that they’re paid enough money. Sometimes the creditors will actually even go ahead and just file a motion for relief from stay which means that they don’t want to be included in the bankruptcy they just want their property back. So, it’s an ongoing struggle in a Chapter 13 for most wage earners.
Janice: And that plan is supervised by the court, by the trustee from the time it begins to the time it ends, right?
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Roger: That is true and you have an additional cost when you deal with a Chapter 13 bankruptcy. Let’s talk about cost for a second. You know, you can typically do a Chapter 7 bankruptcy, usually ranging from $1000 and up, depending on the particulars of your circumstances. A Chapter 13 bankruptcy is going to cost you probably $3500 to $4500 to do it. You have to look at the fact that it’s probably 75-80% not going to be successful, but that’s not the only cost. Let’s say that your Chapter 13 bankruptcy plan calls for a payment of $500 per month, and over time, let’s say that the case lasts for 5 years. So, you’ve got to pay in to the plan $25,000. Each month when you pay into the plan, the Chapter 13 bankruptcy trustee, for monitoring the case and overseeing the case, they receive a percent of what you’re paying in. Usually it’s about 5%, I’d calculate it at 5-6% just to be safe. The trustee fees alone in a Chapter 13 case can exceed just what a Chapter 7 attorney fees would be.
Janice: So that’s something to take into consideration.
Janice: As far as, we talk a lot about foreclosure because I’m working on a lot of foreclosures right now. Chapter 13 doesn’t really offer you any relief. It will stop the bankruptcy foreclosure on the courthouse steps that Tuesday morning. But in the long term does it really offer a whole lot of relief for somebody in foreclosure?
Roger: It doesn’t and I’m glad you brought that up. I have a client right now, we started a Chapter 13 case last fall, and at that time my opinion was they should have given up one of the vehicles. They did not give up the vehicle. I did not think they would be able to make the payments. The husband was earning some decent money. The husband was bringing home $90k for the family. But they decided to keep the one vehicle and now we have a motion for relief from the state on their house because they haven’t been able to pay it. And so, that’s what I mean, a Chapter 13 bankruptcy, to get back to your point, unless you’re able to pay and make those mortgage payments on time, you’re just going to get a temporary band-aid relief, that’s what you’re going to get. But over the long term, you have to look at the long-term horizon as to what you’re really trying to accomplish there.
Janice: Some people elect to not file bankruptcy and try to work out a compromise with their creditors. Some people go to debt consolidators and do plans for working out debt with their creditors. What’s your experience with those types of plans? Don’t answer now, that music means we’ve got to go to a break. We see the calls on the line and we’re going to come to you. 404-892-2703 this is News & Talk 1380 WAOK.
Janice: Good afternoon Atlanta. This is News & Talk 1380 WAOK. This is Janice Mathis and I’m here with my good friend Roger Ghai. He is a genuine expert on every aspect of Chapter 13, Chapter 7. He specializes in Chapter 7. You can reach him at his brand new phone number 770-792-1000 or visit his website at www.Chapter7attorneys.com. Before we went to the break I asked Roger — what do you think of debt consolidation plans? You see a lot of advertising for them. What do you think of those? But before we get to your answer, Roger, I want to hear from people. The number here is 404-892-2703. If you’re in a Chapter 13 bankruptcy, if you’ve been in a Chapter 13 bankruptcy, if you’ve been in a Chapter 13 bankruptcy plan and your plan got dismissed, if you’re trying to figure out whether you should file a Chapter 13 or a Chapter 7 bankruptcy, we want you to call us at 404-892-2703 because we’ve got answers for you. Ok now — what about these debt consolidation plans, you see them everywhere?
Roger: Well, you know, I’m going to do a little bit of research for one of the next shows coming up. But what I suspect is, just as a Chapter 13 bankruptcy fails 75% of the time or more, I expect that the statistics are going to bear out that the voluntary non-bankruptcy repayment consolidation programs fail at that rate or a little bit higher. In fact, I have quite a few clients that they’ve, unfortunately, they’ve been paying for a few months and thought they would be able to pay and then just could not financially manage it. The other problem is, you really have to, if you’re going to go with one of those companies, you have to know if it’s a reputable company because there’s a lot of scoundrels out there.
Janice: Yea, you know, unfortunately, with all of this economic and financial misery we’re seeing right now… I’m also seeing a lot of scams.
Roger: Lots of hoodwinkers out there. I mean, just a lot of people out there, like you said, a lot of scammers, and you really have to be careful. A lot of companies do those supposed modifications and it doesn’t accomplish anything. In fact, I have a friend of mine who is in the mortgage business in California, and his real estate or mortgage company started doing the modifications and charging people out there $3500-$4000. They didn’t get them through and he told me, he said “Roger, I’m not going to get involved in this because I think it’s a scam.” Sure enough all of the regulatory authorities now are investigating that company and they’re missing millions of bucks and that type of thing from taking people’s money and not being able to do anything. Modifications, just so everybody knows, for the most part, you can do it yourself or with the assistance of, I think, Janice runs a….
Janice: A nonprofit. We don’t charge anything for it.
Janice: And if anybody tells you that you need to pay $1500 or $2000 there’s something not quite right. Not to say that they can’t do it, but there are a lot of places where you can get assistance, if you need it, for a lot less money. And you don’t get any more for your money than if you get some $25… Well now, some nonprofits charge, like, $50 because they want to get a credit check or something like that. But if somebody is telling you to bring them $2000 I would really ask a lot of questions and think twice and investigate other alternatives. What they will lead you to believe is that because you’re paying for it they have special access or special expertise or something extra that they can give you. I just have not seen that bear out. So, now, when somebody comes out of a Chapter 7 bankruptcy, what are they looking at in terms of getting started again?
Roger: Actually you don’t even have to be out of a Chapter 7 bankruptcy to get started again as far as creditors. I have a client right now who is in a Chapter 7 bankruptcy, he has not yet received his discharge from the court, and the credit card companies are soliciting him right now with credit card offers. So that’s a real dangerous thing, because when you file a Chapter 7 bankruptcy you can only discharge your debt every 8 years. One of the things that we look at is whether you should even file a Chapter 7 bankruptcy or not is how much debt do you have? Generally my threshold would be about $15k for an individual. I know that some lawyers are filing for $10k, if the client has $10k in debt or so. But I don’t think that’s a very wise exercise of your right to discharge because you don’t know what could happen in the next 8 years.
Janice: In other words, your debt could increase, but you’ve already used up your once every 7 or 8 years shot at getting a bankruptcy discharge and so you could have a catastrophic injury with mounting medical bills and not be eligible for discharge because you did it on $10k worth of credit card debt.
Roger: If your income is sufficient my recommendation a lot of times would be to negotiate if you can yourself or just not file in that type of situation.
Janice: Do you ever see people who have had their car repossessed and then the lender has sold the car for less than what is owed on the contract? Then they come back, sometimes years later, for a deficiency judgment.
Roger: I do see that a lot and I am also starting to see instances where the mortgage company has foreclosed. Let’s say, for example, you agreed to pay $150k for your house and they get $100k at the foreclosure then they will try to sue you for the remaining $50k. I see that and then the car context, or vehicle context, I see situations a lot of times where the client might have signed up for a vehicle for $25k and they get $10k at an auction. Then they sue you and garnish you for the difference of the $15k.
Janice: Does a Chapter 7 bankruptcy help in those situations?
Roger: It does and this is not CPA advice but in order to, one of the things that the mortgage companies will do in addition to trying to sue you, if they don’t think they can do that, they’ll try to 1099 you for the difference. So, in other words, they… (Interrupted)
Janice: Wait a minute, wait a minute now. You lost me there. Say that again?
Roger: Let’s say for example, the mortgage company sells your house for $100k and you agree to pay $150k. Well, they’re going to go ahead and try to issue you a 1099 income statement at the end of the year for $50k. That’s happened quite a bit. I have a client right now that has happened to.
Janice: So they’re doing that under the promissory note that you signed? Because a mortgage is a two-parter isn’t it?
Roger: Yes it is. So they’re doing it under a promissory note. If you’re insolvent under the tax code it’s not construed as income to you. You have to be insolvent. There are some instances where the person really is not insolvent and so you could end up with a large tax bill if you’re not careful.
Janice: Now insolvent, Roger, is a real important term in bankruptcy. Just to make sure we’re all on the same page can you give us a kind of a working definition of what insolvency is for bankruptcy purposes?
Roger: Sure. Insolvency just means that you just have no assets really to be able to repay your creditors. That’s how I would define it in a common sense level.
Janice: Yea, more debt than assets.
Roger: Yes ma’am.
Janice: Yea, that’s one of the tests for actually filing a Chapter 7 bankruptcy.
Roger: Yes. In Georgia you can protect, if you’re an individual, $10k equity in your home, $500 in jewelry, $3500 in a vehicle. You’re able to protect money that you have in a 401k or IRA, usually in fairly significant amounts. You’re able to protect, in Georgia, certain amounts of household goods, furnishings, and animals, stuff like that.
Janice: And if you’re married you get twice that.
Roger: You get to double it if you’re married.
Janice: Now let me ask you a question. In order to claim the spouse’s exemptions, does the spouse have to be in bankruptcy also?
Roger: Yes. Well, what I would do, that’s a very good question. Let’s say, for example, one spouse files and the other spouse doesn’t file. I’ve always taken the position that the equity of the home is only ½ of the filing spouse’s. So then I would subtract that amount of equity the exemption for protection.
Janice: Oh, so you go about it that way.
Roger: That’s how I’ve done it in the past.
Janice: That’s a smart way. Now you were telling me off the air that you’ve seen something in the last few weeks that you haven’t seen before in regard to foreclosures. What is that?
Roger: I’ve seen instances now when I’m filing Chapter 7’s for bankruptcy clients and the client is behind quite a few mortgage payments at the time of filing the Chapter 7 bankruptcy. In the old days, the mortgage company would not allow the client to keep the house because of the arrearage and there was really nothing that a judge, the judge doesn’t have the power to order the mortgage company to allow the client to keep the property. Interestingly, what’s going on now, I don’t think that these mortgage companies want these homes. They have too many bad assets on their books as it is. So, even though the client is behind on their mortgage, now they want to do a modification with the client. There’s no guarantee that they would do a modification if you filed a Chapter 7, but almost in every case I’ve filed they have.
Janice: Now that’s a big change over the last year because, a year ago, if you were seeking a modification of your mortgage but you were also in bankruptcy they would make you dismiss your bankruptcy before they would even talk to you about a modification.
Roger: Yea, that’s absolutely right. They just seem more agreeable nowadays to working with clients and they seem to be bending over backwards a little bit, which is good.
Janice: Well, ya’ll know that I want Congress to order the lenders to be subjected to modification in bankruptcy court. I’ll tell you the story when I come back. It’s a very interesting story of what a big newspaper chain just did this week in bankruptcy and I want to compare that, Roger, to what an individual can do. You’re listening to News and Talk 1380 WAOK. We’re going to come back with James’ call and more on WAOK 1380.
Janice: Good afternoon Atlanta and welcome back to Legal Talk. We want to go right away and take James’ question. You’ve got a question about Chapter 13?
James/Caller #1: Yea ma’am and if you don’t mind I have a comment and a question if you have time.
James/Caller #1: The comment is that I, me and my wife had filed Chapter 13 and I heard the bankruptcy lawyer was saying… I think that Chapter 13 is for some and not for all. I’m kind of glad that we filed ours because we filed our car. Not knowing in the future, that if we had let our car go in a Chapter 7 bankruptcy, we had a terrible accident and lost one of our vehicles, so I’m kind of glad we kept it. My question for you is, how do you go about restoring your credit when you in a Chapter 13, well let me say this. Can you restore your credit while you’re in a Chapter 13 bankruptcy and then once you’re out of a Chapter 13 bankruptcy how do you go about restoring your credit?
Roger: All right. When you’re in a Chapter 13 bankruptcy it’s very difficult to restore your credit. Really, your credit is sort shot. Once you’re out, it’s a different story because it will show as a positive mark on the credit report if you’ve successfully completed your Chapter 13. But you might have to wait 3-5 years from that point forward. You have to remember that if that’s what you’ve done, if you’ve successfully completed the Chapter 13 bankruptcy, then from, once that shows 3-5 years later on the credit report it’s still going to show up there for up to 10 years. After that point, you restore your credit just like you would after a Chapter 7 bankruptcy, get a secured credit card, and pay your bills on time, that type of a thing. I’m hoping that by late next week, Wednesday or Thursday, because I have a whole bunch of content on my website dedicated to rebuilding your credit after you file a bankruptcy. Just check the website www.Chapter7attorneys.com. I’d say by at least Friday and then you should be able to figure out a bunch of stuff to do on it.
Janice: Now when you say, Roger, it takes 3-5 years to build your credit back from a Chapter 13, is that because you’re actually still in the plan for 3-5 years?
Roger: Exactly. You’re in the case for 3-5 years normally. So there’s nothing else that you can do to really rebuild. If you’re going to try to buy something you have to have court permission to buy it depending on what the item is — that type of a thing. You really have to have the Chapter 13 bankruptcy completed before you’re able to, after that point, to start rebuilding.
Janice: Now James said that Chapter 13 worked well for him. For some people, obviously, it does work well or it wouldn’t continue to exist I suppose.
Roger: Yea, I think that for a certain percentage of the public that Chapter 13’s will work and they’re, in fact, actually legally necessary to do a Chapter 13. You might not be eligible to do a Chapter 7 bankruptcy so there are some circumstances where a Chapter 13 would be the appropriate vehicle. I’m not an advocate, at all, saying that Chapter 13 shouldn’t be used at all. I am a proponent of saying that I don’t think that most of the bankruptcy lawyers out there, for one reason or another, are having a heart to heart conversation with their client and explaining what the pragmatic reality is of what actually happens when you go into a Chapter 13. There’s a lot of frustration a lot of times between lawyers and the clients when they’re in a 13. I think a lot of that could be avoided if everything were just talked about up front.
Janice: I think that sometimes once the lawyers go through the planned confirmation, in their minds at least, they’re done.
Roger: They’re done and the problem is that sometimes you might go into a Chapter 13 bankruptcy lawyer’s office and the lawyer is projecting that your payment is going to be, for example, $500. Then, to be able to get the case actually approved and confirmed by the bankruptcy court the payment has to be increased, to maybe, $700. That’s something that happens quite frequently and that can happen for a variety of reasons… anything from the client not disclosing all of their creditors, or the exact amounts of the creditors, those types of things are pretty typical. There’s a frustration associated with the Chapter 13’s and a lot of times I get the client asking me, “Well, you know, how am I supposed to live? How am I supposed to do this?” That’s a difficult thing because, as lawyers, we don’t walk on water. We can only do and operate within the guidelines of what the Chapter 13 bankruptcy laws are. So, if you’ve overextended yourself and then you file a Chapter 13 thinking that’s just going to be the absolute remedy, that’s not necessarily the case. People get really angry at the fact that their bankruptcy payment has to be X number of dollars and they usually direct that anger at the attorney.
Janice: Well, and that’s not a pleasant situation. Now let’s go to Greg. Hello Greg, you had a question about credit cards down in Clayton County.
Greg/Caller #2: Yea, my mortgage company found out I had judgments on my credit card and my question is do I have to deal with my mortgage company in terms with that or deal with an outside agency in regards of trying to straighten that matter up?
Roger: Well, let me ask you a question, were you sued?
Greg/Caller #2: Huh?
Roger: Were you sued, sir, by the credit card company?
Greg/Caller #2: Yes
Roger: And so they now have a judgment? Is that right?
Greg/Caller #2: Right
Roger: Ok so that is somehow interfering with your mortgage, did you say?
Greg/Caller #2: Well, they found out about it and it seems like they trying to get me to work with them and pay it off through them. What I want to do is kind of, like, get it all into one consolidated situation.
Roger: That’s the worst thing you might possibly do. A lot of people got into a lot of trouble because they went ahead and they consolidated their credit card debt and they took out a second mortgage on the house. That put them at severe risk of foreclosure, which is actually what happened to a lot of people. I would not deal or have them be in your business as far as about trying to consolidate that if I were you. You don’t have to do anything with the mortgage company.
Greg/Caller #2: I don’t have to deal with them on that?
Roger: No, that’s your private business you owe the credit card company and whatever you do with that credit card company is up to you.
Greg/Caller #2: Ok that’s what I wanted to know.
Janice: Alright Greg, well we thank you for calling in. These are the kind of questions we want to hear from you, 404-892-2703. This can be a fairly tricky and complicated area of the law and this is your opportunity. If you’ve got questions, don’t be bashful. Call us at 404-892-2703 and let Roger Ghai who is our resident expert here about every 4th Saturday. How does a filing of a Chapter 7 bankruptcy case affect a person’s credit rating? You want to know the answer to that question? Well stay tuned. This is News and Talk 1380 WAOK.
Janice: You’re listening to Legal Talk and we’re here every Saturday. Today my guest is Roger Ghai and Roger is just excellent on bankruptcy. You can’t find anybody more knowledgeable about the ins and outs of bankruptcy. This is not something that you want to tackle on your own. I know they have those kits online and you’re supposed to be able to fill in the blanks but you can mess yourself up real bad. What you don’t know can really hurt you. You want to call Roger Ghai at 770-792-1000 and get some great advice. Let’s go to Lee. Good afternoon sir and how are you?
Lee/Caller #3: Fine, thank you
Janice: You’re calling us from where?
Lee/Caller #3: Clayton County
Janice: Ok, what’s on your mind today?
Lee/Caller #3: I just recently got into a Chapter 13 bankruptcy and I’m wondering if I made the right move. I was able to take care of all the unsecured debt but what about a second mortgage, shouldn’t that have been taken care of? Also, second question is, the bankruptcy stays on your record for 10 years, is that 10 years from when you start your bankruptcy, your program or is it after you’ve finished your program in 5 years and then your 10 years starts?
Roger: It starts 10 years from the date that the bankruptcy case was filed. As far as including your mortgages in the bankruptcy, they’re not exactly included. The Chapter 13 bankruptcy laws require that you make direct mortgage payments to the mortgage company as those payments become due after you file the case. So those have to continue to be paid throughout the case.
Lee/Caller #3: And they continue to pile, it seems like they continue to pile the interest on. Are they supposed to do that?
Roger: Yes, a secured creditor in a Chapter 13 bankruptcy case is allowed to go ahead and charge interest and, in addition to that, one advantage of a Chapter 13 is that if you have a lot of unsecured debt it will stop the interest in a Chapter 13.
Lee/Caller #3: Ok, all right well thank you.
Roger: You’re welcome
Janice: Thank you for calling. We’ve got a few more minutes left so let’s see if we can get in as many calls as we can. Charles, you’re in Atlanta, you’re calling about a Chapter 7 bankruptcy.
Charles/Caller #4: Yes, well I was calling to find out, I guess my situation was very unusual because when I filed the Chapter 7 I was left with 4 credit cards and was able to use all 4 of them while I was in the Chapter 7 bankruptcy.
Roger: You were permitted to use the credit cards when you were in the Chapter 7 bankruptcy.
Charles/Caller #4: Oh I must have a bad connection because I can hardly hear you.
Janice: Yes, you may want to hang up because there’s a lot of wind noise behind you, like you’re in the car. Did you use your credit cards while you were in bankruptcy?
Charles/Caller #4: Yes.
Janice: Did you reaffirm your credit card debt?
Charles/Caller #4: No, they left me with a Sear’s card. They cancelled out all of my debt and gave me a new line of credit. And my two regular charge cards, my Macy’s card, they were still valid. I was just asking was that unusual for that to happen in a Chapter 7?
Roger: Well, I learn something new every day!
Janice: Me too. Thank you for …(interrupted)
Charles/Caller #4: I was just asking is that unusual for that to happen in a bankruptcy 7?
Roger: Yes, that’s extremely unusual.
Janice: Yes, that’s unusual unless you do a reaffirmation where you sign an agreement that you continue to pay the creditor and you continue to make payments, but I don’t know…
Charles/Caller #4: No, those particular 3 cards were not included in the Chapter 7 bankruptcy. Each one had about $4k line of credit…
Janice: Well, when you say they weren’t included did you tell your bankruptcy lawyer about them?
Charles/Caller #4: Yea I listed all of the outstanding debts that I had. Sears was the only ones that came to court, yea because with Sears I had 4 credit cards with Sears. They came and made an agreement that said ok they’d write off everything and then turn around and give me a $900 line of credit on a regular Sears’s card for me to use.
Janice: Yes, that sounds like a reaffirmation — yes, that happens sometimes.
Charles/Caller #4: That’s what I was just concerned, now I have a beacon score of about 720 now.
Roger: See? It goes up after you file bankruptcy. A lot of times it goes up after you file a bankruptcy.
Charles/Caller #4: Ok I guess I’m going to hang up because I can hardly hear, but thank you very much.
Janice: Thank you for calling and thanks for listening. That was Charles, I believe. Let’s see if we can get Ms. Carolyn, how are you in Douglas County?
Carolyn/Caller #5: I’m doing fine and you?
Janice: Doing all right and you have a question about loan modification.
Carolyn/Caller #5: Yes, I am 56 years old and have been unemployed for a little over a year. I have assets of a 401k and a pension plan, am I eligible for a loan modification on my mortgage?
Roger: It’s going to depend, I guess, on your mortgage company. One of the things they’re going to look at is they’re going to look at your income. You mentioned a pension so you may well be eligible for a modification with your mortgage company. Who’s your mortgage company?
Carolyn/Caller #5: Chase. I tried a loan modification and they denied me.
Janice: As a rule of thumb, you have to have 3x as much income as the payment will be. So if your payment is $1000 a month, they’re going to generally, now this is just a general rule of thumb, they’re going to look for $3000 a month in income.
Carolyn/Caller #5: Ok I’m currently getting unemployment.
Janice: Yea, that’s what, about $1500 a month?
Carolyn/Caller #5: Yes, about $1500 a month.
Janice: So unless they can figure out how to make your payment about $500 per month. It’s going to be tough. But there are ways to get around it. Why don’t you give me a call at 404-525-5663? Every situation is different, but it may be that you can convert some of your assets into income. Every situation is different but I had one lady, and she had her adult daughter come and live with her and start paying rent and that gave her more income and got her to where she could get a good modification. Thank you
Carolyn/Caller #5: Thank you. Bye.
Janice: Ok let’s go to Paul. Hey Paul
Paul/Caller #6: Hey, how you doing?
Janice: Doing fine, how are you?
Paul/Caller #6: Ah fine. I got a question, I filed a Chapter 7 bankruptcy and not too long after I got a letter from my mortgage company for a state of execution. I am just trying to see, I was supposed to go to court, well I didn’t know I was supposed to go to court, but yesterday they did it. And now, now I got a letter stating that they granted them a state of execution. Now I put the home into foreclosure, I’m not trying to keep it. The court — if they foreclose the home am I going to be left to pay that balance?
Roger: No sir. That debt will be wiped out.
Paul/Caller #6: Ok that’s all I wanted to know. Thank you.
Roger: You’re welcome
Janice: Thank you for the call. Great call. Good subject. This is a smart audience, Roger. You’ll find out, this is the smartest audience you’ll talk to in radio. This is not your cross-town audience where they crazy. This is a smart audience. Hey Jeff
Jeff/Caller #7: How you doing’ Miss Mathis?
Janice: I’m doing fine, how are you?
Jeff/Caller #7: All right. My question is if you’ve got pending judgments against you can you file a Chapter 7?
Roger: Yes, that’s the best time to do it. A lot of times you go ahead and file a Chapter 7 bankruptcy and the client already has a judgment, sometimes they even have a garnishment, we go ahead and we wipe all that stuff out.
Jeff/Caller #7: One of them said they were going to send me a promissory note.
Roger: Don’t sign any promissory note if you’re thinking about filing a bankruptcy.
Jeff/Caller #7: Ok, and next question, what’s your address and phone number?
Roger: Well, I’ve got several locations, where are you located at?
Jeff/Caller #7: Stone Mountain
Roger: Probably the best one is going to be in Kennesaw, that’s going to be a bit of a trek for you. Or, Marietta, actually at 85 and 285. I don’t have that address memorized, that’s a satellite office, but my phone number is 770-792-1000.
Jeff/Caller #7: Ok, next question. I was listening to you earlier and you stated the fees amount, and I was wondering if a client such as myself, a good listener to WAOK, if you would take half at the beginning and half later.
Roger: I will! For good listeners like you
Jeff/Caller #7: You the man! You the MAN!
Roger: And I hope that you go ahead and spread the word.
Jeff/Caller #7: No problem! Thank you Miss Mathis!
Janice: Ok thank you and that number again is 770-792-1000. 770-792-1000 if you need bankruptcy debt relief you should call the firm of Roger Ghai. His website is www.Chapter7attorneys.com. We’ve got one final caller, Eric from Gwinnett, you’ve got a question about bankruptcy and your tax return.
Eric/Caller #8: Yes ma’am. I was dealing with one of my lawyers, I was dealing with a bankruptcy lawyer and I’m getting kind of confused here. He said that, well you can pay off a certain amount and be paid off on your bankruptcy and the remains, like, if you’re dealing with a trustee, you can pay, you know, a certain amount can be paid to the trustee and the remainder of your tax return goes to you. It depends on your case. But now I’m getting paralegals telling me that that’s not the case because what’s going to happen is they’re just going to take your whole refund.
Roger: That’s right. The paralegal in this instance may know a little bit more than the actual lawyer. Usually Chapter 13 plans have a provision which is required by the trustees in order to get the case approved that says that all of the person’s, the debtor’s tax returns for the next X number of years will be remitted to the office of the Chapter 13 bankruptcy trustee. So I’ve never seen, again, maybe I’m going to learn something new today for the second time, but I’ve never seen an instance where the trustees’ office has allowed a debtor to retain a portion of their income tax return. But, there could always, of course, be a limited circumstance. So I would go back to your lawyer, the actual attorney, and maybe he or she knows something that the paralegal does not know and maybe the paralegal is wrong.
Eric/Caller #8: Ok, well how can, I guess, ok let’s just say that I’m paying my $500 a month for the next 5 years. Now, let’s just say that my next couple of tax returns is like, $2000 or $3000 and that goes towards paying down all the… I mean, is there a set amount that I should be paying towards this bankruptcy? Because I’m thinking, ok, they’re taking my whole refund, and that should knock some of the bankruptcy down.
Roger: Yea, you’re going to get into, this is a very technical discussion for on the air… But I would tell you that you want to talk to your Chapter 13 bankruptcy on this, but the bottom line is you have what’s known as a base amount that has to be paid in the Chapter 13. I don’t know, off the top of my head, what your base amount is, but if you contact your bankruptcy lawyer, if the case has already been confirmed by the court, that is, if it’s already been approved by the court. Then you will have what’s known as the base amount and you and your lawyer can discuss what that is and how it’s going to be applied.
Eric/Caller #8: Ok
Janice: All right. Does that answer your question?
Eric/Caller #8: Yea, it does.
Janice: The bottom line is to contact your bankruptcy lawyer and write down these questions and ask him one by one until you get the answers you need. Roger, we want to thank you for coming in and we’ll see you again next month.
Roger: Yes, you will and I appreciate it.
Janice: And give out that phone number one more time, it is 770-792-1000. Thanks a lot. This is News and Talk 1380 WAOK.
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