TAMPA FORECLOSURE DEFENSE
At the Galewski Law Group, P.A. we have extensive experience in helping people stop foreclosure, file for
bankruptcy and otherwise workout and restructure their debt. If you are facing foreclosure, do not take a risk
with your investment, call and ask how we can stop the foreclosure or help you file bankruptcy. We are a debt
relief agency, our foreclosure attorneys and bankruptcy lawyers help people file for relief under the Bankruptcy
Code.
Question of the week:
I am surrendering a home to a mortgage lender to help consolidate my debt, may I still collect rent on
the home, and does this change after filing a chapter 7?
If you have rental income from property but are planning on surrendering the property to the mortgage lender,
either in bankruptcy or foreclosure, the rental income may belong to the mortgage lender. Please refer to your
mortgage and note for details, but often rental income is assigned as part of the mortgage. If you were to file a
chapter 7 or 13 bankruptcy, you may still not be able to keep the rental income. In a chapter 7 bankruptcy, the
bankruptcy estate would own the rental property and they would be the proper party to collect the rent. Even if
the rent is paid to you, you may be required to turn over the rent to the bankruptcy trustee. If you file a chapter
13 or reorganization, the rental income may be used in calculating your income for purpose of determining your
discretionary income and ultimately your chapter 13 plan payments.
I am up-side-down or have negative equity in my home, can bankruptcy help me?
If you owe more than your house is worth, you typically have three options: pay for the house the home value
increases, return the home to the bank or sell the home. If you sell the home, a Tampa bankruptcy attorney
may help you to negotiate a short sale with the bank, so you do not need to bring money to sell. If you decide
to give the house to the bank, this may be done, with or with out a bankruptcy. If you do not file a bankruptcy
the Court may grant the bank a deficiency judgment against you for the difference between the sale price and
the amount owed. The bank may attempt to collect the difference from your personally or may file a 1098/1099
with the IRS, and treat the deficiency amount as earned income. You would then be personally liable for the
difference as if it were earned income from that tax year. A bankruptcy or reorganization may save you from the
deficiency judgment and the 1099 taxable gain. Call your Tampa bankruptcy lawyer for more information.
Click here to learn more about personal bankruptcy as an option to loss of assets in garnishment or foreclosure
Tampa Attorney
GALEWSKI LAW GROUP, P.A.
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Tampa Bankruptcy Attorney’s Update to the Bankruptcy Mortgage Reduction or Bankruptcy Mortgage Modification
Amendments:
Senate Rejects Mortgage Cramdown Provision
The Senate defeated by 51 to 45 votes an amendment to the Helping Families Save Their Homes Act that would have granted bankruptcy judges broad
authority to modify the mortgage terms for at-risk homeowners.
Assistant Senate Majority Leader Dick Durbin, D-Ill., chief sponsor of the ‘cramdown’ provision, said he was disappointed with the vote but would continue to
bring the issue to the floor “until the Senate decides to put the interests of homeowners above the interests of bankers.” Durbin noted that the number of
homeowners at risk of losing their homes now stands at over eight million, compared to nearly two million only two years ago.
“We’ve given the bankers who got us into this crisis every opportunity to responsibly address this crisis and they have failed,” Durbin said.
The White House said that notwithstanding the Senate vote on the Durbin amendment it looks forward to working with Congress to craft “appropriately tailored
legislation to provide a mechanism for homeowners who are out of other options to file for bankruptcy and implement a responsible plan to pay the debts that
they are able to pay.”
Meanwhile, Senate Minority Leader Mitch McConnell, R-Ky., said the provision would have lead to higher interest rates and even greater uncertainty in the
housing and credit markets. “It’s clear that we cannot fix the housing problem by implementing bad policies,” he said.
The American Bankers Association agreed, noting that Congress and the administration have taken several strong steps to help troubled borrowers and get
the economy back on track. “Giving bankruptcy judges broad cramdown authority would work against those efforts and effectively undermine the goal of
stabilizing the housing market,” the association said.
Analysis: Your Tampa Bankruptcy Lawyer notes that this means that for the time a Bankruptcy cannot be used to
reduce the principal amount due on a first mortgage, but since the House has passed the Bankruptcy Reform Bill,
it is possible that a Bankruptcy Judge may have the authority to cramdown or modify a mortgage in the near
future.
LATEST REPORT ON BANKRUPTCY MORTGAGE MODIFICATION:
The Senate voted down the bill proposing to give Bankruptcy Courts the ability to modify
Representatives in the two houses of Congress are looking for new ways to allow your
bankruptcy lawyer to help you save your home:
"People in the servicing industry and in the broader financial industry must understand that if this
last effort to produce significant modifications fails, the argument for reviving the bankruptcy
option will be extremely strong," said Frank.
But Durbin told The Progress Report in an interview that, ultimately, "I think we're going to
beforced into alternatives." One alternative option is taking away the tax advantage enjoyed by
trusts that hold mortgage-backed securities "if the investors refuse to allow modifications."
There is also mandatory mediation, a very successful program requiring that lenders and
borrowers meet and try to work out an agreement before a foreclosure can proceed. Congress
could also "temporarily change the rules on foreclosure to give people facing foreclosure the
right to rent their homes" at the market price, giving banks an incentive to modify mortgages, in
order to avoid becoming landlords.