Janice: Good afternoon Atlanta! Welcome to Legal Talk. This is Janice Mathis. We’re here today and we’re going to give you some information that we know you can use. We’re going to talk about the Home Affordability Mortgage program, also known as HAM. This is about what you can do if you’re facing foreclosure difficulty. We’ve got our good friend Roger Ghai in the studio. Good afternoon Roger, how are you?
Roger: Fine, thank you.
Janice: Now tell us how people can contact you if they have questions about what we’re about to discuss.
Roger: Call my office at (770) 792-1000 or (678) 302-6555 or visit my website.
Janice: www.Chapter7Attorneys.com. Do they spell out ‘seven’ or use the number?
Roger: The number ‘7’.
Janice: www.Chapter7Attorneys.com. All right now, why should somebody file Chapter 7?
Roger: If someone has a lot of unsecured debt that they just can’t get rid of Chapter 7 bankruptcy might be a good option. For example, a lot of times clients have humongous medical bills that were not covered by insurance or they didn’t have insurance. Maybe they’ve just come out of a divorce and have been hit with nine zillion dollars in unsecured obligations that may be dischargeable. Or perhaps they have a lot of credit card debt. One of the topics that you mentioned at the beginning was the ‘Home Owner’s Affordability Assistance Program.’ This program has been a total fiasco. The government spent seventy-five billion dollars in that program only to delay the pain. People cannot afford the houses and the assistance is a temporary band-aid. Now Congress is going to have to decide what they’re going to do with that. But, you know, you might be in a situation — I see it more and more now and I didn’t see it 20 years ago — where after your home has been foreclosed or surrendered, the mortgage companies will sue you for any unsecured deficiency. The deficiency is the difference between what you contractually agreed to pay for the home and the amount that the mortgage company gets for it at the foreclosure. So, for example, if you agreed to pay a hundred grand and they only get sixty at the foreclosure, you’re on the hook for the other forty. They will sue you.
Janice: Which is something that never used to happen.
Janice: Of course, 20 yrs ago we didn’t see much property ‘under water’ either. Typically real estate at least kept up with what was owed on it.
For a free legal consultation, call (770) 792-1000
Roger: Well Janice, I brought an article that I thought was really good from, let’s see, it’s from the January 20th, 2010 New York Times. It’s called “U.S. Loan Effort is Seen as Adding to Housing Woes.” Now, what that article deals with in particular is that there are 15 million Americans right now whose homes are ‘under water.’ ‘Under water’ means the home is worth substantially less than the amount the client owes on the home. What you’re seeing is a lot of people, according to the article, instead of trying to stay with the house, they’re walking away from the house. Now, what’s happening is this, the banks still have all those assets on their books. So there’s not been a true clean-out of the banking system yet.
Roger: Either the government has to step in one more time to help those banks out. And if they don’t do it — and the Obama Administration doesn’t want to do it because of the deficit — there’s a very good likelihood that we are headed to another recession. But this time there’s not going to be bail-out money to put into it.
Janice: Well that sounds bleak and gloomy. What does Chapter7attorneys.com offer? What can you offer by way of assistance?
Roger: Well, hopefully a fresh start. I started Chapter7attorneys.com for a reason. I practiced with a major firm here in Atlanta and I’m familiar with a lot of the other bankruptcy lawyers here in Cobb. Often, and this is just my opinion, — you’ve got a lot of great bankruptcy lawyers out there — a client isn’t properly advised. Look, if you go into a Chapter 13, which is a repayment plan, it’s not based on what you can afford to pay. That’s a myth in that Chapter 13. You still are obligated to pay those secured creditors for X number of dollars and the attorney doesn’t walk on water. He or she can’t make your Chapter 13 payment what you WANT it to be. And so, the whole issue comes down to, the bottom line is, whether you can really ultimately afford it. Now, in a Chapter 13, unfortunately, 75% of those cases fail. Why do I mention that? Because a client has to think about whether he or she wants to spend $3,000 to $5,000 for an attorney to file a Chapter 13, and then end up having to file — 75% of the time — Chapter 7. And the case lasts for 3 to 5 years. That’s a lot of mental strain to deal with for 3 to 5 years. You do have an option, it depends on the particular circumstances, but you might be able to get a fresh financial start. It’s not always recommended. It’s not always appropriate. But your case may be. Pay the attorney fees. A competitive attorney fee for a Chapter 7 is going to run a thousand bucks. The court filing fee is $299. You’re in and you’re out of that case within 6 months. And the other thing that I think that’s important whenever we’re talking about bankruptcy is that we’re really just talking about money. You don’t go to a bankruptcy lawyer because you want to continue to be in debt. You don’t even WANT to go to a bankruptcy lawyer. But I think that the reason a client comes to a bankruptcy lawyer is to get out of debt and get themselves on a solid, or somewhat stable of a financial footing. So think about it in terms of what you want and what you need. You want these goodies today and you’re going to struggle to pay for them or, you say to yourself, I really can’t afford them right now. Instead, what I want to be relieved of my obligations. I want to save that two or three hundred dollars, or whatever amount, and INVEST it for myself, and BUILD something for myself like a nest egg. Those are what your options are.
Janice: Ok, you mentioned the term when you first started talking about ‘unsecured debt.’ Tell us what the difference is between secured and unsecured.
Roger: Ok, secured debt is property that you have purchased from a creditor. Let’s say for example, furniture, or your home, or a vehicle. And you have not paid for that property fully in cash.
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Janice: Ok, we’ll stop you right there and we’re going to take a brief commercial break. And when we come back to ‘Legal Talk’ we’ll have more with Roger Ghai telling us what YOU can do to get out from under that debt you have piled up that you don’t want to pay for. You’re listening to News & Talk 1380 WAOK.
Janice: Good afternoon Atlanta! Welcome back to ‘Legal Talk’. This is Janice Mathis here with our good friend Roger Ghai, and he’s walking us through what YOU need to know if you find yourself head over heels in debt. Don’t listen to all those commercials that come on the radio talking about ‘you can be out of debt, I can resolve your debt’. There’s always a catch to that, listen to what Roger Ghai has to say. Call him. Give us your phone number Roger.
Roger: 678- 302-6555.
Janice: Now, Chapter 7, as I understand it, works best with certain kinds of debt and you were talking about unsecured versus secured. Finish telling us about the difference between unsecured and secured debt, and then tell us what kind of debt works best with a Chapter 7.
Roger: Ok. Secured debt, again, is where you have not fully paid the creditor for the property, such as a vehicle, a home, furniture, or something of that nature. Examples of unsecured debt would be credit card debt or medical bills. Student loans, technically, are an unsecured debt, but they’re no longer dischargeable in a bankruptcy case.
Janice: Ok, you mentioned a very important term, ‘dischargeable’. What is a discharge and how do you get it?
Roger: Well, ‘discharge’ means that you are released from the legal obligation to repay that creditor. So for example, if you sign a contract on a vehicle — I have a client right now who wants to get a fresh start. He just said, “You know what? I’m sick and tired of paying this 19% interest rate. The payment is five or six hundred dollars a month, and I don’t want it anymore.” And so, he wants to be released from that obligation to pay. The creditor will not voluntarily let him out of that contract. So his option is to file a bankruptcy. He has other debt will justify filing bankruptcy. The creditor does not allow you to get out of that debt voluntarily and you try to voluntarily take the car to the lot, which a lot of clients do, and say they’re done with it. The creditor will take the car and sell it at an auction. And then they will sue you for the difference between what you agreed to pay on the contract and what they actually get for it at the auction. So, you know, you might have signed for a car that’s worth 20k or paid 20k, they auction it off for 10k or less, and then they want to go ahead and sue and garnish you for the balance — the other 10k. The only way you can get out of that obligation is to file a Chapter 7 bankruptcy, or, in some instances, to do the Chapter 13 bankruptcy and then you’re released from that obligation, that is the ‘discharge’.
Janice: That means legally you’re no longer responsible for it.
Janice: And that’s the whole point of filing for Chapter7 or Chapter 13 for that matter, isn’t it?
Roger: That’s true. That’s right.
Janice: And so, there’s certain kinds of debt, credit card debts, medical bills, deficiency judgments, things that don’t have collateral attached to them. Those are the kinds of debts that can be wiped out, so to speak, in a Chapter 7.
Roger: That’s right. The debts are wiped out. People have a fear especially in a Chapter 7, and I’m not a big, big believer at all of fear, but clients have a fear of not being able to rebuild themselves from a credit perspective. And the fact of the matter is, and this is the honest to God’s truth, I have a client who’s in, presently in a Chapter 7 case. He is currently being solicited for credit card debts. The terms are not very favorable because they, they’re going to have you by the gonads, pardon my French, but you can only discharge debt every 8 years. The credit card companies are shrewd. These are, you know, very shrewd business people sitting up there on Wall Street. And so what do they do, they play into, you know, this concept of you got to have this or that. So they’ll go ahead and they’ll start to solicit clients immediately for credit again, and guess what happens? Sometimes, not MY clients, because I try to educate them, but clients sometimes get into that darn debt trap again. The bad thing is, that the only option is, if they can’t pay those bills then, and you file a Chapter 7, or perhaps sometimes even a Chapter 13, the creditor can go ahead and sue you and garnish you. So you’re in the same darn position that you were in before you went through the Chapter 7 or Chapter 13 bankruptcy case.
Janice: And you don’t have the option of re-filing because you can only file once every how many years?
Roger: Eight years. If you filed a Chapter 7 in the last 8 years, you can file a Chapter 13. Ok? But you will probably be stuck with a full repayment bankruptcy. Meaning, you won’t get a discharge of debt. The only thing that’s going to happen is that you’re going to be probably stuck in a Chapter 13 repayment plan for 3-5 years. And you’re going to have to pay that 3 or 4 or 5 thousand dollars in attorney fees in a Chapter 13.
Janice: We’ve got a caller on the line. Feel like taking a call Roger? Let’s see … Good afternoon Bob, how are you? What’s on your mind?
Bob/Caller #1: Hey, how are you doing? I’m enjoying your show.
Janice: Well thank you very much!
Bob/Caller #1: Yea, I was talking to a friend of mine last night, that has some legal problems and I said, ‘well, I’m going to call the attorney who has a show that comes on at 1 pm on Saturdays.”
Janice: All right.
Bob/Caller #1: And true enough this is the topic that you’re talking about is the one that I have a question about.
Janice: Well go right ahead.
Bob/Caller #1: The question is, what if the person can’t afford to file bankruptcy, is there any advice that the attorney could give that person?
Bob/Caller #1: Now, this is what I’m saying. This particular friend of mine from Africa, he had a bad loan from Countrywide.
Bob/Caller #1: And, you know, he’s in the first stages now of the bank trying to get his property back. And I told him, you know, I’ll do what I can to try to find some info. But he says he’s looking at bankruptcy, but he can’t AFFORD the bankruptcy. And I just heard you saying that if they can’t afford the Chapter 7 or the (14), they could wind up in more trouble if they file and can’t afford that, than they were in before they file.
Roger: Well, a couple of things: Number 1: a Chapter 13 is a repayment plan and based on what you’re telling me, a lot of times clients in his situation, what they try to do is, they try to put in any missed mortgage payments into a Chapter 13 repayment plan and then to pay that debt over time. If he decides he wants to do a Chapter 13 he has to have the income to be able to make those monthly Chapter 13 payments.
Bob/Caller #1: So are there any other options for a guy who pretty much hit bottom? But he’s still trying to save his house? Plus, Countrywide, from my understanding, there was a big lawsuit against them and we couldn’t find any information about that.
Roger: Countrywide has been sued for a variety of things over the years, so I don’t know which litigation you’re referring to.
Bob/Caller #1: He had a bad loan, really, with Countrywide and now they’re trying to take his house back.
Roger: All right. Is his house up for foreclosure on Tuesday, this coming Tuesday?
Bob/Caller #1: Well it’s going to be. The letter that he said he got was for March. The first two was in March.
Roger: Ok. Well let me tell you generally what the fees are. The attorney fees for a Chapter 13 to start the case are usually nothing down. Usually attorneys don’t charge anything and they put all the attorney fees under the repayment plan. The court costs he has to pay up front, but remember, in a Chapter 13 he is going to have to have the income to be able to make the Chapter 13 payments. If that’s not an option, then he has an option of filing a Chapter 7 case. The court costs is $299 and most attorneys are going to get at least $300 down on the attorney fees. If he can’t do that, then I would recommend that he, if he’s just trying to, you know, stop the foreclosure, stay in his house for awhile — heck, he can go down to Office Depot, fill out a bankruptcy petition and take it down to the federal courthouse. He may be able to do a pauper’s affidavit. It’s an affidavit that says that he doesn’t even have enough money to pay all the filing fees. Take it down there. Get the court clerk to stamp it, file it, and notify Countrywide. At least it will buy him some temporary relief. That’s all that I can recommend to him at this time.
Bob/Caller #1: Can I ask you one more question?
Janice: Sure you can!
Bob/Caller #1: And that question is, well, if he was interested in getting some legal advice from you, is there any way he can get in contact with you?
Roger: Yes, I always give free consultations.
Bob/Caller #1: Well he’s, like I said, he’s an International African, but he’s a friend of mine and I told him I’d see what I can do from the legal show!
Bob/Caller #1: So what is your phone number?
Bob/Caller #1: 678-302-6555
Roger: Yes sir.
Bob/Caller #1: And that’s attorney who?
Roger: Roger Ghai
Bob/Caller #1: G..?
Roger: ‘G’ as in good. ‘H’ as in hot. ‘A’ as in apple. ‘I’ as in ice.
Bob/Caller #1: Ok, G-I-E?
Bob/Caller #1: G-H-A-I. Ok, thank you sir and thank you for the information!
Janice: Bob, before we let you go, let me ask you about your friend’s situation. Roger was just saying that there are 14 million Americans who …
Roger: 15 million
Janice: 15 million Americans whose homes are now worth less than what they owe on it. Does your friend still have any income coming in every month?
Bob/Caller #1: Well, I think he does because he has his own business, a small chauffeuring business.
Janice: And is his wife working or is there anybody else in the household with income?
Bob/Caller #1: He’s single.
Janice: I see.
Bob/Caller #1: But the problem is, the property is in a very valuable beltline location. He’s been trying to negotiate because, from my understanding, Bank of America now owns Countrywide.
Janice: That’s right
Bob/Caller #1: But they screwed a lot of people. They messed up a lot of people with these balloon payment type loans and like I said, they’re very valuable…
Janice: And is that what he has, a balloon payment?
Bob/Caller #1: Yes, from my understanding, that’s what he got with them.
Roger: Well, let me say this. He might want to temporarily, you know, stop the foreclosure and everything but if he’s in that type of a situation. If I were him, it sounds to me like I might walk away. Get a new piece of property.
Bob/Caller #1: I’m sorry?
Roger: It sounds to me like I might, in his situation, if he’s not yet decided to vacate, go ahead and file a bankruptcy to stop it. But if he’s in a balloon situation and he’s underwater, there’s no sense in keeping something that’s not worth something to him economically.
Bob/Caller #1: Right.
Janice: You know, that’s an interesting point Roger, because often I talk to people that get emotionally attached to the property. They may not have any equity in it. They may not be able to afford to make payments on it. But, in their mind, they OWN it and it’s difficult. You see the same thing with people getting divorced. The marriage may be gone to seed, but people don’t want to say “I have failed, it just didn’t work out.”
Roger: Well, it’s not a failure. It’s not necessarily a failure, it’s a learning experience. That’s how I’d put it. And number 2, is I would say that yes, you’re going to have people, of course they have the memories of events that occurred in THAT home, in THAT residence, and so forth. But, you know, you have to step back and realize what is it? What is a home really? A home is where you live. It’s walls, roof, cement, slab, and so forth. So, you know, you don’t want to put yourself in a position for the sentimental reasons of, you know, hanging on to that, and letting that particular thing drag you down. After all, it is only a material possession. Just like a vehicle, just like anything else. So, the good news is that we’re able to go ahead and there are options such as filing bankruptcy. I mean, it’s not the BEST option, nobody wants — like I said at the beginning of the show — nobody wants to walk into the bankruptcy lawyer’s office and be in that position. But if you ARE in that position, you know, thank God there is that option and then you just move on and figure out what your next game plan is.
Janice: Maybe one of the ways to analyze it is you look and say, ok, in Atlanta it’s going to be hard to find a decent place to live for less than a thousand dollars a month or so. And if he can negotiate with Countrywide or Bank of America, or whoever it is, to get his payment where he can afford it over a long term, great! If he cannot, then that’s an indication that maybe he needs to look at a lower cost alternative.
Bob/Caller #1: Well I wish I could’ve recorded this. I think that’d be good advice for him. And like I said, I’m going to mention to him that you said that possibly Chapter 7 would be his best bet, or if not, if he can’t afford that, maybe he just needs to let the property go.
Bob/Caller #1: All right.
Janice: Thank you Bob!
Bob/Caller #1: Thank you!
Janice: Well folks, that means that we’ve got to go to a commercial break, the music means that we got to go. But we’ll be back with more Roger Ghai and great financial legal advice, talking about Chapter 7, when it’s appropriate, and how it can affect any mortgage debt that you might be under. This is News & Talk 1380 WAOK.
Janice: Good afternoon Atlanta! Welcome back to News & Talk 1380 WAOK. I’m here with Roger Ghai, who is an EXPERT in Chapter 7 and Chapter 13 bankruptcy law. He says that most of the time if you are underwater, swimming in a sea of debt, particularly unsecured debt, you may be better off to just let it go. We want you to call us at 404- 892-2703. Every first Tuesday of the month there’s a foreclosure auction at each of Georgia’s 159 counties. The first Tuesday, if I’m not mistaken, is this Tuesday coming up.
Roger: That’s right.
Janice: If you are facing foreclosure this coming Tuesday, or if you’re already in bankruptcy, or contemplating bankruptcy, we want you to call us at 404-892-2703. Your experience may be just what somebody else needs to avoid the pitfall that you found yourself in. Or, we’ve got an awfully smart bankruptcy lawyer here in the studio. He may be able to offer you some tips on how to make your situation less painful. That number again is 404-892-2703. If you have questions about the bankruptcy process, if you have questions about what kinds of debts are dischargeable, please call us at 404-892-2703. Roger, let me ask you this, there’s something in Chapter 7 called ‘reaffirmation’, do you recommend it or not? When is it appropriate or not?
Roger: It depends on the amount of the debt. Now, what a reaffirmation is this: It means that a client has to sign with a secured creditor, a secured creditor being of course like a vehicle or furniture or on the mortgage. A new contract that says that even though my other debts are discharged in the bankruptcy, I still want to keep this property and I understand that if I sign this new contract with this creditor that this debt will not be discharged in the bankruptcy. As far as whether I recommend it, sometimes I do, sometimes I don’t. A situation where I would, would be a situation maybe where a client has very limited or a very low amount left on their vehicle and it’s in good working order and condition and everything. They want to keep the vehicle; they need it to go back to and from work, that type of deal. Where I wouldn’t recommend it is if they’ve got a $30,000 vehicle, they’re making $25,000 a year, they’ve got a $600 a month vehicle payment, they’ve got insurance on top of it and they’re living in an apartment. I would not allow that client, normally, to sign a reaffirmation agreement.
Janice: Because they’re just digging themselves in deeper.
Roger: They’re digging themselves deeper.
Janice: We’ll talk about cars, maybe, before we leave. (laughter) But, do you think people get emotionally attached to their HOUSES?
Roger: Cars are worse frankly. I mean, they really are. It’s supposed to be a status symbol. But, you know, some people are making payments of four, six, or seven hundred dollars a month. And some of these are large gas guzzling vehicles, which is a different pet peeve of mine. But, you know, you’ve got a lot of different expenses associated with the insurance, the tags on it. If you’ve got a new vehicle, you’ve got a gas-guzzler, and God knows what’s going to go on with gas prices. So, those things have to be considered when making that decision.
Janice: And sometimes you end up working for the car instead of the car working for you.
Roger: That’s right. And I’m hoping that through this program that Janice and I can educate people about, who do you want to work for? Do you want to be a slave to your debts? Or do you want to be OUT of that involuntary servitude and start building something for yourself. We hope it’s the latter.
Janice: Let’s take a couple of calls. We’ve got Renee. Good afternoon. How are you Renee?
Renee/Caller #2: I’m fabulous, how are you?
Janice: I’m doing fine. Thank you for calling. What’s your question or comment for Roger Ghai?
Renee/Caller #2: Ok. I recently filed Chapter 13 in November, and I told my attorney I wanted to surrender my home. So they notified all of my creditors — I had to list all my creditors. My question is: do I need to let my bank or my mortgage company know, that I’m going to surrender the home? Or do I just, you know, because they probably are not aware that I did not put them in bankruptcy. But they know that I have FILED bankruptcy.
Roger: All right, ma’am you made a really egregious error and your lawyer needs to know. Unless I’ve misunderstood something, you need to make SURE that your lawyer knows that you have a house on a lot and a mortgage with a mortgage company in the Chapter 13.
Renee/Caller #2: Yes, they do, they do. I had to list ALL my creditors.
Renee/Caller #2: I chose to surrender the home.
Renee/Caller #2: It’s not in foreclosure. They have not filed foreclosure at all.
Renee/Caller #2: Yes, I let my attorney know that I chose not to — that I’m going to choose to surrender my home. But I’m asking, do I need to let the mortgage company know I’m going to surrender if they choose to do foreclosure? It has not even gotten into foreclosure at all yet. But I’m already behind and I know that eventually it probably will.
Roger: You don’t have to let the mortgage company know. That will happen as part of the bankruptcy petition. Your lawyer has probably already indicated that you’ll be surrendering the home. And so there’s nothing further that you’re required to do.
Renee/Caller #2: Oh! Ok. So they will let the mortgage company know that I’m going to surrender the home.
Roger: Yes ma’am. That’ll be part and partial of your Chapter 13 repayment plan.
Renee/Caller #2: Oh! Ok got it. Ok. All right, thank you so much.
Janice: That was a great question. Thank you for calling in and thanks for the listening.
Renee/Caller #2: Thank you! Bye bye.
Janice: Let’s see … we’ve got a couple of other callers on the line Roger. If we could see the list we could tell who’s on the line. (pause) Thank you. Let’s see, we’ve got John. Good afternoon John, how are you?
John/Caller #3: I’m doing well and yourself?
Janice: Doing just fine, thanks for calling.
John/Caller #3: You’re welcome. My question is in reference to investment property foreclosures. And it’s … I guess, you know, got a property or properties and then right now there’s nobody in them. So you’re just making the mortgage yourself. I mean, is it the best thing to do to go ahead and let them foreclose? Or… or… I mean… there’s nobody there. I mean you’re carrying this loan… you’ve been carrying I guess…
Roger: Well it depends on what your personal financial status is. Because if the homes go into foreclosure then, like I said at the beginning, the mortgage company is more than likely going to try to sue you for any deficiency. And you don’t want that if you have personal assets that could be at risk. So, if you’ve got assets at risk, you want to go ahead, but you’re not getting any revenue out of them, try a deed in lieu of foreclosure. Try to go ahead and sell the property, which is probably difficult in this market. You know, something along those lines. If you don’t have any or a lot of personal assets then, yes, you may just be done with the headache and done with having the property as a money drain every month — making those mortgage payments.
John/Caller #3: Right.
Janice: Are the properties, sir, underwater? Are they worth less than you owe on them?
John/Caller #3: Yes they are.
Janice: Yes, NOW they are.
John/Caller #3: Right, yes.
Janice: Yea and its just tough isn’t it?
Roger: It sure is
John/Caller #3: Extremely tough. So you’re saying that deed in lieu, what is that actually?
Roger: It just means that instead of having the mortgage company go through the formal legal process of foreclosing and advertising the property for foreclosure, you’re in a sense giving the deed back to them. You’re signing your right title of interest in the property back to the mortgage company.
Janice: Roger, have you ever seen the bank or the mortgage company be willing to say in exchange for saving us the trouble of a foreclosure, the expense of a foreclosure, we will NOT go after you for any deficiency or we will NOT report it as aggressively on your credit? Have you ever seen the bank willing to negotiate for a lien in a deed in lieu of foreclosure?
Roger: I haven’t seen that but I certainly think that is reasonable. I haven’t had a lot of experience doing those with clients. I know clients that have done it. But I would think that they would be open to it because it does save them the money.
John/Caller #3: Right.
Roger: Saves them a lot of expense.
Janice: Yea, you may be able to get a little bit of leverage on them in terms of negotiating, look I’ll just give this back to you. But I don’t want to. You ought to get something out of that because it saves them a little time and money.
John/Caller #3: Exactly. So now Roger is that something else that you could help me with? Could I bother you to go that route?
Roger: Sure. If you want to just give me a call on Monday at 678-302-6555. That would be just fine.
John/Caller #3: Ok. Thanks a lot.
Janice: Thank you so much for calling and thanks for listening. The lines are lit up with callers. We’re going to take a break and come back and take all of your calls and try to answer all of your questions at News & Talk 1380 WAOK. We’re here with Roger Ghai and the show is called ‘Legal Talk.’
Janice: Good afternoon Atlanta. This is one of my favorite hours of the week. We’re here today with Roger Ghai. He is a bona fide expert in bankruptcy. He can answer ALL of your questions about bankruptcy filings and we’re going to get to those in just a minute. But we’ve got some people that have been patiently waiting. Samuel in Atlanta do you have a question about bankruptcy or foreclosure?
Samuel/Caller #4: Yes I do.
Janice: Go ahead sir.
Samuel/Caller #4: Ok. Well… I was laid off of my job about a year ago and when I was first laid off, you know, I had a little bit of cash reserved. I was able to make my mortgage payments and I called my mortgage company and thought I’d work something out with them. I asked them if I could possibly put three or 4 payments on the back end of my mortgage so I could, you know, increase my cash reserves
Samuel/Caller #4: So that when, you know, if things got really hard I would be able to, you know, pay my mortgage.
Janice: And when you called them you were not in arrears. You were current?
Samuel/Caller #4: I was current, yes I was.
Janice: My experience has been that as long as you are current they are very reluctant to work with you. They want you to be 2-3 payments behind.
Samuel/Caller #4: (interrupts) Exactly! That’s exactly what they told me.
Samuel/Caller #4: That is exactly what they told me. So, you know, by receiving that information, you know, I stopped making payments, you know. I got like 2-3 months behind and then, when I started to contact them again I would get hung up on. You know, they, literally, wouldn’t talk to me.
Janice: Who’s your lender?
Samuel/Caller #4: Chase Manhattan. It was Chase Manhattan.
Samuel/Caller #4: I’m a first time homebuyer and I had never been late on a payment or anything. I owned my home for about 5 years and, you know, when things really got bad, I got behind trying to get a system and couldn’t. It really got bad. Now I’m about, 7-8 months behind right now.
Janice: Are you scheduled for foreclosure?
Samuel/Caller #4: No, I haven’t received any notice of foreclosure or anything. As a matter of fact, they’re not even sending me mortgage statements anymore.
Janice: Well that could be a bad thing. That could mean that they have accelerated the debt and are refusing to take any more payments. But I want you to call Roger Ghai and give him the number. You can visit him at Chapter7attorneys.com. You can call the Rainbow PUSH office at 404-525-5663, that’s 404-525-5663. You may be a candidate for some kind of modification. We’ve been able to negotiate with the banks to get some fairly decent modifications going. We’re going to have, as a matter of fact, on February the 18th, we’re going to have a public town hall meeting with some of the legislators to see if we can’t change some of the Georgia foreclosure laws because they’re terrible. They’re the worst foreclosure laws in the country. We’ll see if we can’t get Chase to give you, you know, give the laws mitigation people a chance to get you a decent offer. Are you on your way back to work? What’s your work situation?
Samuel/Caller #4: Well … I’m thinking that. I was involved in a family business.
Samuel/Caller #4: And, you know, we just Chaptered … went under, you know, with the financial stresses that took place.
Janice: So you’re going to have to change careers.
Samuel/Caller #4: No, no, the family business is still operational. It’s just that we had to get rid of a lot of executives and what not. We had to downsize quite a bit.
Janice: I see.
Samuel/Caller #4: So we could keep the business going and pay the employees.
Samuel/Caller #4: So, you know, right now I’m receiving unemployment and, as a matter of fact, my unemployment ran out about 2 weekends ago.
Janice: Look, I don’t want to interrupt you. I’m going to hold you on the air and get some more information from you off the air. But we’ve got a bunch of people on the phone line and we’ve got 8 minutes to wind it up.
Samuel/Caller #4: Ok
Janice: But just hang on for a second and we’re going to come back to you off the air and see if we can’t point you in the right direction. Let’s go to Joyce. Good afternoon, how are you?
Joyce/Caller #5: Good afternoon and thank you for taking my call.
Joyce/Caller #5: This is regarding bankruptcy and what would be best. My brother is 64, he works, but he has credit card debt. And the debt it was incurred by him using his credit card to pay his rent in situations when he couldn’t afford to pay it. But, in the interim, he was blessed to live in a family foreclosed property for about a year, not having to pay anything because the prospective buyers didn’t want the house empty. And for about a year, but he still has not been able to save enough to get out of debt because he has since moved out into another apartment and he still complains about having credit card debt. Is Chapter 7 for someone in a situation like this? Unsecured debt — I think that falls under based on what you were talking about earlier?
Roger: Yes ma’am it does. Depending on how much. Do you know how much he has approximately?
Joyce/Caller #5: Well you know what? When I finish talking with you, I am so happy to get on this program because I was just telling him again this morning, “you’ve got to DO something because here we are, every year, still talking about credit card debt!” And I thought by him not having to pay rent for a year he would have been able to, because he pays about 13 or 14 hundred dollars a month. At least he HAD been paying that, I’m sorry. At least he would have been able to SAVE, so now I don’t know, but I can find out. You know? And what would that information do to help him?
Joyce/Caller #5: Once I know…
Roger: Sure and if you have access to the email, you can contact me at email@example.com or my number is 678-302-6555.
Joyce/Caller #5: Ok, thank you so much.
Roger: You’re welcome.
Roger: All right
Janice: Thank you ma’am. Thank you so much for listening.
Joyce/Caller #5: Yea, you guys have a good afternoon now!
Janice: You have a good afternoon too Joyce. We’re into our last 5 minutes and I want to hurry up and get some — how much does it cost to file a Chapter 7?
Roger: Including the core cost typically it would be, a reasonable fee would be $1,299. $299 is for the core cost and $1,000 would be for the attorney’s fees. Most attorneys I know will work out a payment plan for you because most clients can’t come up with that piece of change in one lump sum.
Janice: Should, or can a husband and wife file together?
Roger: You don’t necessarily have to file together. And that causes a lot of confusion. Sometimes clients call me and they get nervous and they say, “Well does my husband have to file?” Or “does my wife have to file with me?” And the answer is absolutely not.
Janice: And a big question people had is how long does it take to rebuild my credit worthiness after a Chapter 13 or a Chapter7 discharge?
Roger: Well, that’s a great question actually. Credit card companies are going to start soliciting you within the bankruptcy or after you get your discharge. But more importantly, first and foremost on most people’s minds is WHEN can I go ahead and qualify to get a home? Under the current FHA guidelines a person who is filing a Chapter 7 discharge that has maintained good credit for 2 years can go ahead and qualify under the FHA underwriting rules for a mortgage.
Janice: So, 2 years after the discharge in a Chapter 7, I MAY be eligible for a FHA mortgage again.
Roger: That’s right.
Janice: All right. Let’s go to our last couple of callers. Lynn in Marietta, how are you? Quickly dear, tell us what’s on your mind.
Lynn/Caller #6: Hi, my question is — I know I qualify for a Chapter 7, but my question is can you get them to modify your mortgage within the bankruptcy?
Roger: It’s cleaner if it’s done prior to the actual filing. The reason I say that is because you’re behind more likely than not on the mortgage payments. And in a Chapter 7 case, a secured creditor does not have to let you keep the property if you’re behind. So, you’re probably behind on the mortgage payments if we try to do it in a Chapter 7 case there’d be a chance that you’d lose the house. So I’ve been telling my clients that before we file the case let’s get the modification done and then file the case and get rid of your other debts.
Lynn/Caller #6: So, do you do modifications?
Roger: I haven’t done one, but if you want to call me I’ll talk to you about it perhaps on Monday if that’s ok with you.
Lynn/Caller #6: Can I ask one more, quick question? My loan was modified but the bank did not let me know it wasn’t approved. They sent paperwork saying that it was modified and I was paying that payment. But I kept incurring late charges. And then after 5 months or so I called the bank and they said it was never approved and I had never received anything saying that it wasn’t approved.
Janice: Unfortunately I’m hearing more and more stories like this. Who is your lender?
Lynn/Caller #6: Bank of America
Janice: Well, I will say in the bank’s defense, they did not go into the business to become modification agencies. And so they don’t have the staff and they’re not set up to do that. But if you want to contact Roger — give your email again Roger.
Lynn/Caller #6: Thank you and I will call first thing Monday.
Janice: Email, Email.
Lynn/Caller #6: Oh, you meant email. Ok thank you.
Janice: All right, final question. Lamar?
Lamar/Caller #7: Thank you for taking my call. I’m trying to prevent Chapter 7, 13, and anything else. I have a rental property and you know, it’s a renters and buyers market. And I was just curious if, is it possible, is it good, to try to refinance to get a lower interest rate loan on the house now because of the fact that everything is so vulnerable.
Roger: If you’re not under water.
Lamar/Caller #7: (interrupts) Oh I’m not under water or nothing like that.
Roger: Ok, second thing is, if you can find a bank out there to loan the money. Some of them just aren’t doing it now.
Lamar/Caller #7: Oh, they’re not doing it — even if you’ve been with them a long time?
Roger: I’m not saying that they won’t, I’m saying, sir, that you have to be able to find one. If you’ve got a good relationship with your bank that’s the first option I would say.
Lamar/Caller #7: Ok, all right, well thank you. That’s exactly what I wanted to know sir. Thank you
Roger: All right thank you.
Lamar/Caller #7: All right, bye bye.
Janice: Well Roger, thank YOU for all the great advice. Once again, people can reach you at firstname.lastname@example.org or they can visit your website at www.Chapter7Attorneys.com and if all that fails the phone number is 678-302-6555. We hope you’ll come back and visit with us at least once a month and share this good information with us.
Roger: I look forward to it each and every month, second Saturday of every month.
Janice: You’re listening to ‘Legal Talk’. This is Janice Mathis. Be blessed. News & Talk 1380 WAOK.