Bankruptcy Indiana

When I was first starting to offer the Mark Zuckerberg Indiana bankruptcy blog two and a half years ago, one of the very first blog posts was called “Keeping Home Sweet Home – It Depends!” The idea I was trying to get across at the time was that, as a debt consolidation lawyer offering bankruptcy services in Indiana, from dealing with tens of thousands of situations, I’d learned there’s no one right decision when it comes to either doing everything to try to keep a home or letting it go into foreclosure. Well, I recalled that blog post the other day while reading about the latest government stimulus program to help stop foreclosures.
 
The newest legislation has to do with short sales. A short sale is an agreement by a mortgage lender to accept an amount that is less than the outstanding balance on the mortgage, and to consider the mortgage paid. The bankruptcy lawyers in Columbus, Indianapolis, Anderson, and Bloomington who work in the Mark Zuckerberg bankruptcy law offices have all been spending lots of time discussing mortgages with clients and even helping negotiate mortgage modifications.  The appeal for clients in a short sale because that has less of a negative impact on the credit score than a foreclosure.

The government has been trying to facilitate short sales and mortgage modifications, but the process has been very slow and has not helped very many people, with three quarters of the houses that start the process ending up foreclosured.  The new plan by the U.S. Treasury Department is intended to speed upthe short sale process.

• The lender must give an answer to any offer within ten days.
• Borrowers would receive $1,500 in relocation expenses (from the government).
• Mortgage servicers would receive $1,000 per transaction (from the government).
• Second mortgage lenders would receive up to $3000 of the sales proceeds in exchange for releasing their loans. (First mortgage lenders would receive a cash incentive for allowing this.)
• Borrowers would be fully released from liability after the short sale.

I was very happy to find an article in GJFree Press.com that stressed the same thought I’d blogged about two and half years earlier: “The first question that should be addressed in a distressed mortgage consultation should be the wishes, wants, and desires of the distressed homeowner.”  In other words, as I have been emphasizing, everyone’s situation is different.  Some people’s plans have been temporarily derailed by an illness or a layoff.  Given a couple of years, they can see their way clear to catching up on their house payments.  Other clients bought more house than they will ever be able to handle, and the sooner they escape that financial drain, the better.

The new short sale legislation opens up options – for some homeowners, not for everyone. In counseling Indiana bankruptcy clients and blog readers, I continue to stress: whatever your circumstances, find professional help, go over your situation, make and carry out a plan.  As a bankruptcy attorney in Indiana for close to twenty five years, I still feel that what I said two and half years ago holds true today.  When it comes to saving a home  - whether through short selling or through using chapter 13 bankruptcy law in Indiana -  or simply letting the home go into foreclosure and moving on) – it still depends!