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.

---

Better Links Directory

Why You Should Get Out of Debt Today?

The main reason for getting out of debt today, is... Read More

Life After Bankruptcy

Bankruptcy and Credit - What Happens After Your Debts Are... Read More

Credit And Debt Relief--A One Stop Solution

Amy Wright, 34, was extatic when her realtor showed her... Read More

Out of Credit Card Debt - Without Filing Bankruptcy

To be out of credit card debt is your dream... Read More

Think for a Change

I'm not sure where it originated, but I've heard it... Read More

Drowning in Debt? Tips and Tricks for Getting Out of Hot Water with Creditors

Do you, like millions of other Americans, feel like you're... Read More

Tips For Saving Money

Still living from pay to pay? Or envying those great... Read More

The ONE Law You Should Be Breaking

There is a law all smart people break.Parkinson's law.Parkinson's law... Read More

Debt Management Systems

What is a debt management system, and when do you... Read More

Budget the Luxuries First!

Strictly speaking, his advice was preceded by another Heinlein maxim... Read More

How to Reduce Your Debt in 5 Easy Steps

If you have incurred substantial personal debt, consider these options:... Read More

Help to Get Out of Debt

Debt Help is the stepping stone to debt elimination and... Read More

How to Get Triple A Credit in 25 Days

Good credit is everyone's dream. A wise use of credit... Read More

What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

We have all experienced getting so far in debt we... Read More

Dont Let The Good Times Bury You

It is vital to get rid of debt while things... Read More

How to Become Debt Free

In today's consumer society it is all too easy to... Read More

Debt Getting You Down? - Make a List!

Debt is not much fun and when faced with it,... Read More

Personal Debt Reduction Practices

Personal debt reduction practices, the steps people take to relieve... Read More

Bankruptcy - Your Fresh Start

Most American consumers are living too close to the edge.... Read More

Debt Consolidation and Personal Finances: Learn the Truth!

An inability to manage credit, growing debt and bankruptcy are... Read More

5 Options Toward Debt Relief

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

Individual Voluntary Arrangements- A New Alternative to Bankruptcy

This May, the Department of Trade and Industry in the... Read More

Debt Elimination Is The Key to Financial Freedom

If you want financial freedom, the first thing that you... Read More

Worried About Debts?

Having trouble paying your bills? Getting dunning notices from creditors?... Read More

What the Mail on Sunday Said

Anyone considering Bankruptcy may have experienced fear after reading an... Read More