Cleveland Bankruptcy Lawyer Blog

There is no denying that Ohio is facing a serious housing crisis and foreclosure filings in Northeast Ohio are at record levels. Unfortunately, many homeowners facing foreclosure simply abandon their home or surrender it to the lender. If you are one of the many facing foreclosure, then you should consult an experienced attorney to review your case and discuss your options before you give up your home.

If you are not yet in foreclosure but are behind on your mortgage, then you should also consult an attorney while you still have the most options available. However, even after the foreclosure has been filed, an attorney may find a basis to challenge the foreclosure action or be able to negotiate a resolution on your behalf. If these options do not work, a bankruptcy can also stop the foreclosure and may allow you to keep your home.

One new defense for homeowners in foreclosure resulted from a ruling last October by Federal Judge Christopher Boyko in Cleveland. In October 2007, Judge Boyko ruled that a foreclosing lender had not filed the proper paperwork to support its right to foreclosure on fourteen Ohio homes (Judge Christopher A. Boyko, Opinion and Order, In re Foreclosure Cases, Case 1:07-cv-02282-CAB, U.S. District Court, Northern District of Ohio, Eastern Division, filed 10/31/2007 ). Previously, many courts let this slide and banks and lenders were often permitted to bypass the requirement to produce the original mortgage note by simply filing a "lost note affidavit" attesting that the original note could not be located and then proceed with foreclosure. Judge Boyko's ruling provides a basis for homeowners to challenge the lender's right to the security (your house) and potentially stay or stop the foreclosure proceedings if the lender cannot produce the original mortgage note.

Since Judge Boyko's ruling, several judges in other jurisdictions have followed suit and required lenders to produce the original mortgage note in order to proceed with their case. Due to the common practice of lumping mortgages together and selling them as mortgage-backed securities, many lenders are not the originator of the mortgage and are, therefore, unable to produce the original note, providing a basis to challenge the foreclosure. Notably, it has been reported that Ohio Attorney General Marc Dann is challenging the ownership of mortgage notes in as many as forty cases in Ohio.

If you are facing foreclosure you are certainly not alone. Foreclosures in Ohio rose eighty-eight percent in 2007. Recent developments in Ohio law as well as the increased willingness of lenders to resolve or "work-out" mortgage delinquencies make it more important than ever for homeowners to explore all of their options when facing the loss of their home.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Foreclosure

Bookmark:

There are important Ohio exemptions that may protect your retirement fund in bankruptcy. It is unfortunate that many people make the mistake of waiting too long to consult an attorney when they find themselves unable to pay their bills. Instead of seeking legal advice, some people make a valiant effort to fend off creditors and pay down balances by tapping into their 401(k) or similar retirement fund. However, this approach usually involves significant early withdrawal fees and penalties and, even worse, it is rarely successful. This is due to the steep late payment penalties and compounding high interest rates on credit card debt which quickly cause the balances to drastically increase if you cannot pay them off lump sum. Sadly, dipping into their retirement funds often leaves these individuals in a much worse financial situation than if they had consulted an attorney first, used available bankruptcy exemptions to protect their retirement funds from creditors and discharged or repaid their debts through a well-planned bankruptcy.

To decide if bankruptcy is right for you, consult with an experienced bankruptcy attorney early in your decision process and as soon as you realize that you will not realistically be able to pay your bills or mortgage as they come due. Contact the law firm of J.M. Smith Co., LPA to speak with an attorney about your specific situation.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Chapter 7 Bankruptcy

Bookmark:

Many people in Ohio struggling with the decision to file bankruptcy are understandably concerned that it will hurt their credit.

While it is true that filing bankruptcy will lower a high credit score, if you are one of the many people that have maxed-out credit cards, several late payments or your credit score is already poor, then filing for bankruptcy protection may actually help you improve your credit more quickly.

Better yet, it will do this with the added benefit of stopping harassment by creditors and giving you a fresh start. Part of the reason bankruptcy may improve your credit score (after you receive a discharge) is that you will eliminate your high balances and improve your debt-to-income ratio. Before filing, creditors may view you as an extreme credit risk due to a lot of consumer debt, little income and the possibility that you may file bankruptcy at any time after they extend you credit. Once you have filed and recieved a discharge, creditors will view you as having little debt, more disposable income and unable to file bankruptcy again for several years all of which make you less of a credit risk. For this last reason it is important that you use credit carefully and responsibly after you receive your fresh start through bankruptcy.

On the other hand, if you currently have excellent credit then you should consult with an attorney before you fall behind on payments to discuss your options and determine if a bankruptcy alternative, such as debt settlement, might work for you. Keep in mind that if you wait until you are already behind you may reduce the options available to you.

Posted by Justin M. Smith | Permalink | Email This Post | Comments (0)

Posted In: Consumer Credit & Credit Reporting

Bookmark: