On October 17, 2005 President Bush's
sweeping bankruptcy reform law goes into effect forever
changing the rules of debt collection in this nation.
Consumer advocates and the public appear to be completely
unaware of the total and complete victory of the creditors
under the new legislation. This article opens the door
to the Trojan Horse, so that consumers can prepare themselves
for the worse.
The most important aspect of the bankruptcy
code was the “automatic stay” provision. This allowed
consumers to file for bankruptcy at anytime during the
creditor's collection process putting an immediate stop
to all contact and collection activities from the creditor.
The new law requires that a debtor receive credit counseling
from an approved non-profit credit- counseling agency
for 180 days prior to filing Chapter 7 or Chapter 13
bankruptcy.
While this may sound benevolent, a much
closer look at the practical effect of this provision
reveals the crafty peeling of the debtor's rights. The
180 day requirement is to provide the credit counseling
agency the opportunity to work out payment plans with
creditors. However, during this same period of time the
creditor is not restrained from collection efforts. For
example, Margaret is a homeowner in Jacksonville , Florida
and is six months behind on her mortgage. As a rule,
credit counseling agencies only work with credit card
companies and have little or no training with dealing
with mortgage companies.
After receiving foreclosure papers, Margaret
goes to see her attorney to file for bankruptcy and is
told that she must first seek credit counseling before
filing for bankruptcy protection. Meanwhile, the foreclosure
proceeds on schedule and a sale date is set 120 days
later. However, Margaret still has not completed her
180 day requirement. What will happen to Margaret's home?
That's right! The home will be sold and she cannot stop
the sale by filing bankruptcy.
This is the most sweeping shift in debt
collection in the past 50 years. Margaret's only hope
will be to work out a repayment plan or a loan restructure
with her mortgage company. This is a process called loss
mitigation and is explained in great detail to consumers
in our new book, How to Save Your Home, ISBN#09753754-0-7,
$19.95, SYH University, LLC, 2005 which is sold at Amazon.com.
Loss Mitigation works because lenders
lose an average of $28,000 to $50,000 per foreclosure
nationwide. It is a myth that the lender wants your home
and makes a profit off of foreclosure. A lender has to
pay attorney fees, court and collection costs, maintain
fire insurance, hire a real estate professional, repair
structural and other damage to the home, and pay property
taxes. The homeowner can work out an agreement with the
lender in over 90% of cases. Our company has provided
housing counseling service to thousands of homeowners
and loss mitigation absolutely works.
In conclusion, it is up to the consumer
to educate and prepare themselves for worse case scenarios.
How to Save Your Home is an excellent training tool and
will teach homeowners how to protect themselves under
the new bankruptcy law. Most Americans do not have health
or disability insurance and are vulnerable to job layoffs
because of a stagnant economy. Who amongst us is immune
to heart attacks, business failure, strokes, law suits,
tax liens or other challenges that life sometimes presents.
One pay check is literally what separates many families
from home security and despair and the new bankruptcy
law will severely punish those who slip behind on their
mortgage payments.
Herbert Addison, JD, CHC is a Certified
Housing Counselor and a member of the Virginia Association
of Housing Counselors. Mr. Addison is co-author of the
new book, How to Save Your Home, and has helped thousands
of families to save their homes from foreclosure sales.
Article Source: EzineArticles.com
On October 17, 2005 President Bush's
sweeping bankruptcy reform law goes into effect forever
changing the rules of debt collection in this nation.
Consumer advocates and the public appear to be comp |
