Announced FHA Policy Changes:
Foreclosure in Wisconsin is a fairly long process. Many people fear that the first time they are late on a mortgage payment they are a short time away from "getting kicked out." It typically isn't that simple, or that fast. Wisconsin law protects homeowners with redemption periods. The redemption period is a period of time that the lender must wait and see if the homeowner can make arrangements to get caught up. If the property is your home, Wisconsin law requires either a six or twelve month redemption period prior to selling it at a foreclosure sale. So how does bankruptcy fit into this? At any time during the foreclosure process a person can file a Chapter 13 bankruptcy. The automatic stay will stop the foreclosure process at whatever stage it is currently in. The Chapter 13 repayment plan will provide up to five years for a person to pay back any arrears they owe the mortgage company. So if you temporarily lost your footing due to a job layoff, extra holiday expenses or an unexpected illness, for example, Chapter 13 bankruptcy helps you get back on your feet and save your home.
Clients often use the terms "discharged" and "dismissed" interchangeably; however, their significance is extremely important because they have an opposite effect on whether or not you have to pay certain debts back.
Your credit report contains information about where you live, how you pay your bills, and whether you've been sued or arrested, or have filed for bankruptcy. Consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. The federal Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in the files of the nation's consumer reporting companies.
The NY Times recently published this article on January 7, 2010 about "Walk Away From Your Mortgage". Click on the link to read the entire article. http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html
Yes, filing bankruptcy will stop a wage garnishment. Oftentimes, clients come to us because their wages are being garnished as a result of a judgment regarding credit card debt. (Please note filing bankruptcy cannot stop a wage garnishment for domestic support.) When a bankruptcy is filed an Automatic Stay is put into place. This means that creditors may no longer contact or collect from the recently filed debtor, therefore stopping the wage garnishment. The debt the garnishment is paying will now be resolved through the bankruptcy. After the bankruptcy petition has been filed, a case number will be assigned. The debtor or his/ her bankruptcy attorney should notify the Human Resources or Payroll Department at the debtor's place of employment that a bankruptcy petition has been filed. This can be done by sending them the first page of the petition which serves as the proof of filing. It is also beneficial to send the creditor's attorney a copy of the proof of filing too. Once both parties have received notice, it may take up to a week to stop the wage garnishment. In some cases, it may be possible to recover a portion of the wages that were garnished before you filed bankruptcy. -written by Stacey Martinez, Legal Assistant
When a debt becomes past due, most creditors send the account to a debt collector. Bill collection agencies often specialize in digging up information about you and in some cases use this information to harass you. Fortunately, the Fair Debt Collection Practices Act is a law that protects people from the harassment of debt collectors.