New Bankruptcy Law Makes it Harder to Stop Foreclosure

On October 17, 2005 President Bush's sweeping bankruptcy reform law goes into effect forever changing the rules of debt collection in this natiion. 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 Trogan 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 severly 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.

---

Eliminating Credit Card Debt

The overwhelming task of eliminating your debts can often seem... Read More

How to Negotiate Debt Settlement

People over extend themselves financially as a result of a... Read More

Repair Bad Credit Yourself

In March 2005, the U.S. financial services industry succeeded in... Read More

New Bankruptcy Legislation May Make it Harder to Find an Attorney

The recently passed Bankruptcy Abuse prevention and Consumer Protection Act... Read More

The Road to Debt Relief

Living with debt is not something someone hopes for, but... Read More

Bankruptcy Interest Increases as Deadline Approaches

Congress recently passed sweeping legislation that will significantly reform American... Read More

Creating A Realistic Budget

Budgeting -- ooh, what a scary word! If you want... Read More

Senate Passes New Bankruptcy Law

The United States Senate passed a law on March 10,... Read More

Debt and Financial Optimism in the UK Continue

With £1.3 trillion pounds worth of debt in the UK,... Read More

Life After Debt ? Strategies for Dealing with Problem Debt

Honorably and ethically rid yourself of burdensome debts using the... Read More

Free Quick and Easy Money Saving Tips ? Part 1

With the high cost of gasoline and the amount of... Read More

Tips To Take Control Of Debt Collection

Yes, debt collection tips can help. You may think you... Read More

Debt Recovery Can be Easy

OK, so you are up to your head in debt.... Read More

Can You Escape the Trap of Ever Growing Debt?

It's difficult not to be concerned when facing numbers like... Read More

Is My Credit Card Debt A Problem?

For most Americans, credit card debt is a dangerous and... Read More

New Bankruptcy Law Will Not Protect You from Identity Theft

Recently passed by Congress with overwhelming support, the oddly-named Bankruptcy... Read More

The Effects of Consumer Debt

Consumer Borrowing Consumer borrowing in the UK has now crashed... Read More

Debt Settlement

What is debt settlement?Debt Settlement is a process to settle... Read More

Assess Your Financial Attitude and Eliminate Your Debt Forever

Want to know if your attitude towards your finances is... Read More

What Is A FICO Score?

Your FICO score or credit score as it's commonly called... Read More

The Debt Free Lifestyle

Many people have been taught that you cannot get ahead... Read More

The New Bankruptcy Law -- How Will It Affect Debt Negotiation?

In April 2005, Congress made sweeping changes in U.S. bankruptcy... Read More

Bankruptcy - The Easy Option?

Incredibly, since the changes in the bankruptcy law in April... Read More

5 Options Toward Debt Relief

If you are in debt, well over your head in... Read More

Debt Free Living - 5 Tips To Get Out Of Debt

A few times I wonder what sort of credit system... Read More