Can Filing a Chapter 7 Bankruptcy Stop Foreclosure?

The worst has happened. You’ve fallen behind on your house payments, and the bank has started foreclosure proceedings. First you got the Notice of Default. Now you’ve been served with the Notice of Sale, telling you that the bank has set a date for the sale of your home. What can you do? Should you file a Chapter 7 bankruptcy to stop the foreclosure?

Maybe, but then again, maybe not. Foreclosure laws differ from state to state and they are very complicated. Whether a Chapter 7 filing is right for you depends on your particular circumstances. However, if you are facing foreclosure, it’s important that you understand at least some of the basics, including the difference between a judicial foreclosure and a nonjudicial foreclosure, and:

  • how much time you have to respond to the notices,
  • what your rights are and what laws protect you in foreclosure, and
  • what happens afterwards (for example, whether you’ll be liable for a deficiency judgment).

Filing a Chapter 7 bankruptcy can temporarily stop the sale of your home (because of the “automatic stay”) but that does not mean it will ultimately save your home from foreclosure. Whether a Chapter 7 is the right option for you is something that you should discuss with a bankruptcy attorney. Here at OlsenDaines, our bankruptcy attorneys know the options and care about the outcome. That’s why we offer free consultations, so we can sit down with you and help you decide what is the best approach for you and your family.

While a Chapter 7 will give you the benefit of the automatic stay, bringing the foreclosure to a halt until discharge or the stay is lifted, unlike a Chapter 13 bankruptcy, it will not allow you to catch up on missed mortgage payments. That’s because a Chapter 7 is a liquidation bankruptcy designed to discharge (wipe out) unsecured personal debts (e.g., credit card debt and medical bills).

Chapter 7 Will Erase Personal Liability on the Note, But it Won’t Eliminate the Lien.

When you took your loan from the bank, you signed a Promissory Note (“Note”) agreeing to repay the money. And you secured that promise with a Deed Of Trust (“Deed”), creating a lien on your property. Chapter 7 will wipe out the amount you still owe on the Note, but it won’t wipe out the mortgage lien. That means that if you are behind in your payments on your mortgage, your lender can foreclose on your property. It also means that the lender can continue a foreclosure that was delayed by your bankruptcy once you are discharged or a relief from the automatic stay (“relief from stay”) is granted. The same thing applies to other liens on the property; like homeowner association liens, or condominium liens.

No Deficiency.

On the other hand, the lender cannot get a deficiency judgment against you after a nonjudicial foreclosure. (A deficiency is the difference between the amount you owe on the loan and what the house sells for at the nonjudicial foreclosure sale.) In many states, absent a bankruptcy, the lender can come after the homeowner for this amount. Oregon laws prevent a lender from getting a deficiency judgment after a nonjudicial foreclosure, a judicial foreclosure of a residential trust deed, or a short sale (if certain conditions are met). But Oregon does not have laws about deficiency judgments where a deed is given in lieu of foreclosure (“deed in lieu”). That means you need to be careful if you accept a deed in lieu of foreclosure, because the specific language of the deed in lieu negotiated between the borrower and the bank will govern whether or not the lender can seek a deficiency.

Talk to a Lawyer!

Losing your home to foreclosure is stressful and can be devastating. The foreclosure laws are complex and confusing. If you are facing foreclosure or struggling with debt, take advantage of our free consultation and talk to one of our experienced Oregon or Washington bankruptcy attorneys. We can help you decide what course is best for you and your family. Call us at 1-800-682-9568 today!

What Are the Most Common Slip and Fall Accidents?

Slip and fall accidents result in thousands of traumatic injuries every year. Here are some of the most common types of slip and falls, and somethings you can watch out for.

  1. Wet and Uneven Surface

This type of accident accounts for 55% of slip and falls every year. When you’re walking anywhere watch out for the following (particularly if you’re in unfamiliar surroundings):

  • Loose floorboards
  • Defective sidewalks
  • Parking lot potholes
  • Cluttered floors
  • Torn carpeting
  • Recently mopped or waxed areas
  • Loose mats
  • Any place where water or other liquid has accumulated
  • Rundown or poorly constructed stairways
  1. Adverse Weather Conditions

Bad weather causes a significant number of slip and fall accidents every year. While winter weather isn’t the only culprit, it does present the most common hazards. Watch for patches of ice, sidewalks and staircases that haven’t been shoveled or salted, and black ice on the pavement.

  1. Improper training in the workplace

Slip and falls are common in the workplace, particularly the construction industry; and they frequently result in litigation. When employees in high risk industries are not given proper safety training or procedures, the risk of slip and falls and other injuries goes up exponentially. Employees should make sure that they receive proper training on all equipment and tools they are expected to use.

  1. Nursing Home Neglect

Sadly, slip and fall accidents are common in nursing homes. The elderly often have an impaired sense of balance which leaves them especially vulnerable to slipping and falling. This risk is compounded by the fact that the chances of a slip and fall injury being life-threatening are also increased in the case of elderly adults. If you have a loved one in a nursing home, make sure the administrators and aides are properly assisting and monitoring their residents.

  1. Footwear

The National Floor Safety Institute has found that 24% of all slip and falls are caused by the wearing of improper footwear. The major risk factor here is when shoes or boots do not offer the right kind of traction for the conditions at hand.

Can Bankruptcy Keep You From Getting a Personal Loan?

After filing for bankruptcy, many people despair that they’ll never be able to get a personal loan. The good news is that this is by no means the case. In fact, while the bankruptcy can stay on your credit report for up to ten years, you can still begin the process of rebuilding your credit immediately after you file. There’s no reason why you can’t get back into a position to qualify for a personal loan after your bankruptcy. Here are some important steps you can take to make this process as fast and efficient as possible.

  1. Keep track of your credit reports

There is no question that a bankruptcy will hurt your credit. However, your credit can begin to rebound right after you file. In fact, the debt discharge might make you more credit worthy from the get-go by improving your credit-to-debt ratio. To ensure that this process is underway, check that the three major credit reporting agencies are correctly showing your bankruptcy. Make sure that all accounts involved in the bankruptcy process show a zero balance and are labeled as “discharged.”

  1. Rebuild a positive payment history

It’s crucial that, following the bankruptcy, you pay all your bills on time every time a payment is due. A good strategy is to keep one account open, but maintain it with a zero balance. Once a month, make a few purchases; then promptly pay off the balance.

  1. Try a secured credit card

If you’re having trouble opening a credit account following your bankruptcy, you might consider a secured credit card. These are cards designed for people with poor credit to begin the credit rebuilding process. They require you to deposit cash as collateral which then becomes the credit line. When applying for any new credit post-bankruptcy, be careful that you don’t overdo it. It’s crucial to avoid the past behaviors or patterns that may have contributed to the bankruptcy.



5 Things to Know About a Slip and Fall Accident

A slip and fall accident occurs when a person slips, trips, or falls on someone else’s property as a result of a dangerous or hazardous condition. It includes falls caused by water, ice, snow, uneven flooring, poor lighting, or a hidden hazard like a hole in the ground. These types of accidents can be extremely serious, resulting in back, head, and neck injuries that can produce lifelong pain and health issues. Here are five things to keep in mind if you or a love one is involved in a slip and fall accident.

  1. Immediately get help. Not only do you want to get necessary medical assistance on the scene as fast as possible, you need to let an employee or property owner know want happened so you can establish a record of the incident.
  2. Do not provide the insurance company with any kind of recorded statement. Claims adjusters often try to get the injured person to agree to a recorded question and answer session over the telephone. Do not let yourself be talked into this, as you have nothing to gain and a lot to lose by it. You probably don’t know the details or extent of your injuries yet, or even the basic facts of what happened and why. Don’t get locked into a premature statement on the record.
  3. Follow through in necessary medical treatments and follow-up visits. While some people avoid going to the doctor or physical therapist at all costs, this is emphatically not the course you want to take after a slip and fall accident. Not only do you need to make sure your injuries are properly treated for the sake of your health, not following the advice of your doctors can make the insurance company suspicious that your injuries are not as serious as you’re claiming.
  4. Make notes throughout the process. First, write down everything you can remember and learn about the injury itself. Then keep track of your physician visits and all medical treatments, and the daily status of your injuries. Also keep track of any loss of wages due to an inability to work.
  5. Stay off of social media. Thoughtless updates on Facebook or Instagram can be disastrous for personal injury litigation. Don’t do the opposing side’s job for them.


Slip and Fall Cases and Homeowners Insurance

If you slip and fall on residential property and are considering filing a personal injury claim, you will probably be dealing with the property owner’s homeowners insurance. It’s important to keep in mind that being injured on someone else’s residential property doesn’t automatically entitle you to have the claim covered by the homeowners insurance.

The homeowner will only be liable for your injury if they were negligent, and that negligence was what led to the accident. Negligence related to the accident will have to be shown; again, just because you have an accident in someone’s home does not necessarily mean they were negligent.

These types of accidents often involve slip and falls on stairs. Sometimes this can be the result of negligence, but it could also have been accidental. The distinction is crucial in terms of whether or not the homeowner is liable. While a simple accident is not the homeowner’s fault, the following factors could potentially be the result of negligence: foreign substance on stairs; lack of handrails; poorly built step; and poorly placed carpets or rugs.

Slipping on snow or ice at a residential property is another common cause of accidents. However, liability can be difficult to show here. While in most states homeowners have a duty to make reasonable efforts to remove ice and snow and make sidewalks and walking paths reasonably safe, juries are often reluctant to find liability in these kinds of circumstances. This being the case, claims adjusters are more likely to be stubborn about these claims. If you do have an accident on residential property, make sure you immediately take pictures of the accident scene, your clothes, and any bruises or other signs of injury. Then seek the guidance of an experienced personal injury attorney to help you determine the best path forward.


The Intersection of IRA Withdrawals and Bankruptcy Exemptions

One of the less well-known advantages to IRAs, but an important one nonetheless, is that they provide a significant amount of protection from creditors during bankruptcy. This protection comes under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that went into effect in 2005. The BAPCPA provides protection for up to $1 million in assets held in traditional or Roth IRAs, and is subject to regular inflation adjustment. For purposes of the BAPCPA, a rollover IRA is a traditional or Roth IRA account that was originally funded through a transfer from a qualified retirement plan.

A July article in Forbes discussed a recent case that demonstrated in practice the intersection between bankruptcy law and the exempt status of IRAs. In this case, debtors had filed for Chapter 7 bankruptcy and claimed an exemption for money in an IRA. Usually a fairly routine matter in bankruptcy cases, the issue here was how the lack of a rollover affected the status of the IRA exemption. The debtors had withdrawn money from the IRA and used it to pay expenses, and these funds were not rolled over into another IRA.

The bankruptcy court held that these funds had lost their exempt status because they were not rolled over to another IRA within 60 days. The debtors appealed the decision to the district court and then to the Fifth Circuit Court of Appeals; both courts affirmed the ruling. A relevant quote from the Fifth Circuit decision, quoted in the Forbes article:

“When the [debtors] failed to deposit the funds into another retirement account within sixty days of withdrawal, the conditional exemption expired, and the [debtors] lost their right to withhold the funds from the estate.”

As the article concludes, while IRAs enjoy substantial creditor protection, it’s important to note that this protection is sensitive to the facts of the individual case and the governing law.

5 Advantages to Filing for Bankruptcy

Declaring bankruptcy is a means and a right to get a fresh financial start. It allows individuals or businesses to resolve financial issues, rebuild credit, put a stop to aggressive debt collecting actions, and discharge certain kinds of debt that have become unmanageable. Here are 5 advantages to declaring bankruptcy.

  1. Address missed payments, defaults, repossessions, and lawsuits that are keeping your credit score down. While bankruptcy will also hurt your credit score, it is often an easier and quicker way to rebuild your credit score than to try and deal with each creditor individually over a number of years.
  2. Put a stop to creditors’ aggressive debt collecting practices like harassing phone calls, dunning letters, repossessions, and declined transactions. Even in the case of student loans, which are not dischargeable, at least you can prevent future aggressive collecting actions.
  3. You’re wiping the slate clean. The opportunity to get a fresh financial start should not be underestimated. While bankruptcy can have its own stresses, there is a great deal of peace of mind and relief to be gained from declaring bankruptcy. And keep in mind that you will probably end up keeping all of your personal possessions, either because of exemptions or lack of interest from creditors.
  4. While being in a disastrous financial situation often becomes all too public, bankruptcy is something you can keep fairly private. Friends, co-workers, and even your family do not have to know that you have filed for bankruptcy (unless you owe them money as well). The only time your bankruptcy will show up is on a credit history report, and as stated above, that can sometimes make a better statement to a lender than being stuck in a financial quagmire. And even if your employer was to find out, it is illegal under bankruptcy laws for an employer to discriminate based on bankruptcy.
  5. Debt discharge. This is an obvious one, but it’s huge. All of the (unsecured) debt that has been making your life miserable will disappear.


Say Goodbye to FDCPA

Supreme Court Justice Neil Gorsuch issued his first opinion this week.  We learned a lot from this opinion.  Unfortunately, the most important thing we learned was that he can come to any conclusion he wants – that makes him a perfect fit for the Supreme Court.  This opinion is being heralded as well written and Gorsuch is praised for his “Melodic Phrasing”  (ABC) and his “Writing Flair” (FOX).  What was lost in all the praise was the simple fact that with one opinion, Justice Gorsuch eliminated the whole of the FDCPA (Fair Debt Collection Practices Act – 15 USC 1692).

The primary requirement when a judge is interpreting a law is to give the law some meaning.   What the Court ruled was that to avoid the FDCPA completely, all a debt collector has to do is buy the debt instead of collect the debt for another.  Nothing in the opinion states that a collector can not have a sell back provision and sell a debt back to the original lender if the collector is unable to collect.

Bottom line:  A lender and a debt collector can now write their agreement in such a way as to completely avoid the FDCPA.  Justice Gorsuch has now given the FDCPA no meaning.  For the 50% of adults in America who have debts:  You just lost your right to not be harassed.