Bankruptcy Indiana

Foreclosure and bankruptcy are two separate issues, but, in the lives of many, the two are very closely related. As a bankruptcy lawyer in Indianapolis,  I provide foreclosure prevention help, but I know that, from a legal standpoint, any decisions I discuss with my clients having to do with problem mortgages need to be made separately from decisions about filing bankruptcy.

In the real world, the three main causes of bankruptcy – divorce, job layoffs, and medical costs – are exactly the same three factors that cause people to need payday loan debt help, student loan debt help, as well as needing help keeping up with their home mortgage payments.

“I Didn’t Think It Could Happen To Me” is the title of an article in the latest issue of the AARP Bulletin.  The article features a New York couple named Pizer, whose used car business dried up in the recession and who were threatened with foreclosure.  Michael Fratantoni of the Mortgage Bankers Association explained that the Pizers are just one example of “your more conservative homeowners who’ve lost their ability to pay their loans because they’ve lost their jobs."

While AARP writer Carole Fleck explains that the Pizers’ lender agreed to a mortgage modification, allowing them to remain in their home, a second story has had a less happy ending: Veronica McGill’s Maryland townhouse is in foreclosure after she lost her job and exhausted her savings.

Ron and Sharon Pizer and Veronica McGill each had very conservative, 30-year fixed-rate mortgages.  A landmark ruling by a Massachusetts Appeals Court dealt with a much riskier type of mortgage.  Subprime mortgages offered by Option One Mortgage Corporation and H&R Block Mortgage Corporation, the court ruled, were “presumptively unfair”. Therefore, the court prohibited those two lenders from foreclosing on any of its mortgages without express approval from the Massachusetts Attorney General’s office.
 
The loans, the court said, posed an unreasonable risk of default and foreclosure, because they were adjustable rate mortgages with an introductory period of three years or less.  When the “teaser rate” expired and the mortgage jumped up to the higher rate, the monthly mortgage payments would be a very high percentage of the borrower’s income, so the loans were “doomed to fail”.

“I didn’t think it could happen to me” is a sentence I hear every working day in my four Indiana bankruptcy law offices. My colleagues who are Columbus bankruptcy lawyers, and the ones who are bankruptcy lawyers in Anderson or Bloomington – we are all used to hearing stories of people who have been handled their finances responsibly all their lives, but who have been simply overwhelmed by a combination of adverse circumstances.

When honest debtors reach the point where they cannot take financial care of themselves and their families without help, the much-needed safety net of the bankruptcy process is there to help. I’ve devoted my entire career to making that concept work here in Indiana!