Everyday Law

April 23, 2009

My mortgage and auto lender are calling me monthly and I’m not overdue!

Filed under: Banking,Debt,Debt Collection,Debt Collection Harassment,Housing — Amy Kleinpeter @ 9:41 pm

If your bank has targetted you as a high risk loan — it may be because you have had some late payments, because of your debt:income ratio, or because of some totally random characteristic having NOTHING to do with your character or payment history, you may be getting monthly reminder calls.  “Remember to pay your mortgage!”

These calls may be from an autodialer or even real people (!) and if there are multiple calls, especially multiple in a day, they can really become annoying.  However, in most circumstances, these calls fall into the “crappy customer service” category and not debt collection harassment.   I am not sure what can be done to stop the calls (change your number?) but you could try sending a letter requesting you only be contacted by mail.


January 2, 2009

How filing bankruptcy can lower your mortgage — now!

Filed under: Bankruptcy,Housing — Amy Kleinpeter @ 3:27 pm

I hope my subject is not too misleading.  Right now, the law is that when you file a Chapter 13 bankruptcy, you can knock your car loan down to the value of your car (provided it is over 910 days old).  You can also knock down the value of a loan on your boat, if you have a boat, or the loan on pretty much ANYTHING except your house.

HOWEVER — there is one way filing bankruptcy can reduce the amount you owe on your house and that is by stripping your 2nd mortgage.  The following must be true.

(1)  Your house is underwater.  In other words, you owe more than it is worth.

(2)  Your house is SO underwater, that the 2nd mortgage is essentially unsecured.  For example, your house is worth $300,000, your first mortgage is $345,000 and your second is $45,000.  That second mortgage has nothing behind it, no security!

In this case, if you file a Chapter 13 bankruptcy, your attorney may file a motion and have your second mortgage determined to be an unsecured loan.  Then your second is treated the same as any credit card debt, personal loans, etc.

This is something that should be more helpful the lower the real estate market sinks.  It is too bad — ideally NO one would be in this circumstance, but if you find yourself owing so much more than your house is worth that your home value is less than your first mortgage, filing bankruptcy could help you.

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