Manchel
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New Jersey Bankruptcy Blog

What Is An FHA Informal and Formal Forbearance Plan? Explained By a NJ Bankruptcy Lawyer

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An FHA Informal and Formal Forbearance Plan are types of resolutions of a defaulted loan, in New Jersey. Such types of resolutions are the first type that are evaluated by the mortgage servicer. These are the only resolutions that may be available for homeowners that are behind with their mortgages and cannot confirm a decrease in income or increase in expenses.
Typically, an Informal Forbearance Plan is a verbal agreement that permits the homeowner to cure their mortgage arrears within three months. Informal means that there is no written agreement required. Some type of documentation should confirm the verbal agreement.
Typically, a Formal Forbearance Plan is a written agreement that permits the homeowner to cure the arrears between three and six months. The mortgage servicer must determine that the homeowner is able to cure the arrears in such time, based on using only a certain percentage of their income.
The criteria of the above plans and other resolutions options in New Jersey are continuously changing. This means that the criteria of the above listed plans may change in the future.
Robert Manchel is an attorney in New Jersey that handles loan modification matters. Mr. Manchel may be contacted at 866 503 6566.

New Jersey Bankruptcy Attorney Explains The FHA Loan Modification Options

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There are various types of loan modifications, or loan modification type resolutions that may be available to resolve an FHA loan that is in default. Typically, there is an order of priority as to the loan modification options, that are applicable for each applicant. The general loan modification types in order of priority are as follows: 1. Informal and Formal Forbearance repayment plan; Special Forbearance Repayment Plan; 2. General Loan Modification; and 3. FHA HAMP Loan Modification.
The mortgage companies review the loan modification options above in the order reflected above. This means that if the homeowner meets the criteria of an Informal or Formal Forbearance criteria, the company may offer same, prior to any other resolutions. If the homeowner does not meet the criteria for an Informal and Formal Forbearance agreement, they will then apply the homeowner’s criteria to the next option, in the order stated above.
It appears that the priority order of the loan modification options lists the least advantageous first, to the most advantageous, last. The application process for all options is typically lengthy and laborious. Also, needless to say, the modification options, clearly, do not include all people that are in default with their mortgage payments.
Robert Manchel, New Jersey mortgage resolution attorney, is available to discuss your loan modification options for an FHA mortgage at 866 503-5655.

What Is A Deed In Lieu Of Foreclosure

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An option to surrender a house after a foreclosure action may be a deed in lieu of foreclosure, which is a way to surrender your house, in New Jersey. This is the conveyance of the property to the mortgage company, without the need to complete the foreclosure action and sheriff’s sale. Although this option will likely save the mortgage company money, typically, in my experience, the banks create great difficulty in consummating the deal.
It may be possible for the mortgage company to provide a payment to the New Jersey homeowner, as an incentive to sign over the deed and vacate the property. Another benefit may be to remove your name from the title of the house on an expedited basis. On occasion, the foreclosure process make take years, after the owner has moved on with their life.
A burden of a deed in lieu of foreclosure, may be the time and frustration of completing the deal, which may never be accomplished. Another burden is that a homeowner must vacate the premises after signing over the deed, instead of residing in the property, mortgage free, for the entire foreclosure process.
You may contact Robert Manchel, the foreclosure resolution attorney in New Jersey, at 866-503-5655.

How Long Can I Live In The Property After The Foreclosure action

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A foreclosure action in New Jersey, at present, takes approximately 8 months from the time the foreclosure action is filed with the court, until the sheriff’s sale. The 8 months time frame assumes that the foreclosure action was recently filed or will be filed in the future, as the previously filed actions may take years.
A homeowner is permitted to reside in the property, without making payments, until the sheriff demands that the residents vacate the property. After the sheriff’s sale, the residents must leave the property soon thereafter.
It is possible that the mortgage company will postpone the sheriff’s sale in the event that the homeowner is in the process of any of the following: loan modification; short sale; deed in lieu of foreclosure; or other similar application process. However, the New Jersey homeowner must not rely on the mortgage company requesting a postponement.
The homeowner may also postpone the sheriff’s sale by filing a bankruptcy case, which automatically stays all sheriff’s sales. A New Jersey chapter 7 will not save a property from the foreclosure action. However, the chapter 7 filing will postpone the sheriff’s sale. A New Jersey chapter 13 will postpone the sale and allow the homeowner to permanently save a house. Furthermore, each homeowner has the right to two separate two week adjournments of the sheriff’s sale.
The NJ. Lawyer, Robert Manchel, is available to discuss foreclosure issues at 866-503-5655.

NJ Bankruptcy Attorney Details What Happens to Marital Debt in Bankruptcy

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The 2005 bankruptcy code amendments resulted in stricter protections for individuals entitled to receive payments for support, alimony, equitable distribution, maintenance, etc. In other words, it is more difficult to eliminate such debt.
A chapter 7 debtor may not eliminate or discharge any debt that is due to a spouse, ex-spouse, or child, for support, alimony or maintenance. Maintenance includes any funds or property that is used for the support or sustenance of an individual.
In addition, a chapter 7 debtor may not eliminate or discharge equitable distribution, under certain situations. Equitable Distribution is typically the acquired assets, such as money and property, or a liability, such as marital debt, incurred during the marriage. Typically, bank accounts, real estate, and autos that were acquired during the marriage, which is distributed at divorce is deemed equitable distribution. Also, joint or personal debt acquired during the marriage, that is ordered to be paid by a spouse, as part of a divorce, is deemed equitable distribution.
A debtor’s Equitable distribution debt may not be discharged or eliminated in a chapter 7, if the debt is due to a spouse, former spouse, or child of the debtor and incurred by the debtor in the course of a divorce or separation, or in connection with a separation agreement, divorce decree, or other order of a court.
Typically, the issue in a chapter 7, is whether the debt is actually support, maintenance, or equitable distribution.
A chapter 13 debtor must pay, and may not eliminate, a spouses obligation to pay any support, alimony, or maintenance. Any support, alimony or maintenance arrears,due at the time of the filing, must be paid through the chapter 13 plan payment, in additional to payment of all future monthly payments for such debt. If the debtor is not current with all such payments, he will not obtain a chapter 13 discharge. At the end of the plan, the debtor must file a document that indicates all post filing payments were paid in full.
If the debtor is unable to pay all arrears through the bankruptcy plan, in addition to all post filing monthly payments, at any time during the case, the debtor will not be able to proceed with the chapter 13 case. This means that if the debtor has insufficient funds to pay all support arrears, through a 60 month bankruptcy plan, in addition to making the monthly support payments, the debtor will not be permitted to proceed with the case, no matter the reason for the filing.
The main difference between a chapter 7 and 13, regarding marital debt, is that a chapter 13 debtor is permitted to eliminate and discharge equitable distribution, no matter when and how the debt was incurred, with very limited exceptions. This means that any debt that is deemed equitable distribution may be eliminated, if the debtor does not have the ability to pay such debt, in a chapter 13.
Robert Manchel is a bankruptcy attorney in NJ., who is available to answer your questions at 866 503-5655

What Happens To Real Estate Taxes In A New Jersey Chapter 7 Bankruptcy?

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A chapter 7 will not allow a debtor to save their house, if they are behind with real estate taxes or mortgage payments. In a New Jersey chapter 7 bankruptcy case, real estate taxes must be paid if the debtor wishes to keep the house.
If real estate taxes are due to a township and/or a tax certificate owner, a chapter 7 will not save their house from a tax foreclosure action. Also, if a debtor is behind with mortgage payments, that includes escrow for real estate taxes, a chapter 7 bankruptcy filing, will not save their house from a mortgage foreclosure action.
However, in a New Jersey chapter 7, typically the debtor will not be personally liable for any real estate taxes, that are due prior to and/or after the filing. However, this does not mean that the debtor does not need to pay and keep the real estate taxes current, if they wish to keep the house. This means that the taxing authority, tax sale certificate holder, or mortgage company will not pursue the debtor for the money that is due, but can take the house through foreclosure, if the taxes are in default.
The bankruptcy laws do not permit the taking of the debtor’s real estate. If the debtor is behind with real estate taxes, the debtor is able to continue to reside in the house, until the mortgage company or tax sale certificate holder takes the house by foreclosure. The explanation of a tax sale and a tax sale certificate holder is set forth in a separate blog.
Robert Manchel, who is a bankruptcy lawyer in NJ., will answer questions regarding real estate taxes and how bankruptcy can help someone who is behind with real estate taxes at (866) 503-5655.

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    Manchel
    New Jersey
    Bankruptcy Law

    This web site is designed to provide general information regarding the bankruptcy laws. The bankruptcy laws are complex and may be applied differently, in each case, depending on the particular facts. There may be numerous exceptions and variations for each law and rule. Do not rely on the information provided in this web site. If you are considering filing for bankruptcy protection, you should consult with an experienced NJ bankruptcy lawyer. We are a debt relief agency. We Help people file for bankruptcy relief under the bankruptcy code.

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