Claims That Bankruptcy Will Not Stop Foreclosure Are Not Only False, But Absurd
By Jay Fleischman, New York Bankruptcy Lawyer on Feb 20, 2007 in Chapter 13 Bankruptcy
I came across a press release earlier today from a company called The Home Buying Center, LLC. the release was entitled “Bankruptcy Won’t Stop Foreclosure For Troubled Borrowers,” and it reads like something out of Chicken Little. In fact, the President of this Sacramento (CA) company, someone who is apparently a law school graduate, says:
many people who contact my company think that they can simply file bankruptcy and prevent their lender from foreclosing on their homes. They don’t understand that filing bankruptcy is more difficult these days due to recent federal legislation and that credit counseling and debt repayment programs may be required . . . at best, bankruptcy can forestall a borrower’s loss of their home, and at worst it can provide a false sense of security.
Is this guy joking? The whole point of Chapter 13 bankruptcy is to stop creditors – including foreclosing mortgage companies – and provide the consumer with enough time to catch up on arrears. In other words, Chapter 13 accomplishes exactly what this article says it does not do – it gives you the opportunity to reorganize your finances.
Every time I see someone like this deliberately misinform consumers in an attempt to get more business I’m reminded that profit is all too often the reason why truth is tossed to the side.
Jay S. Fleischman is a New York bankruptcy lawyer who sues bill collectors for violations of the discharge injunction and automatic stay violations. If you live in New York and are would like a free, no-obligation case review please contact Jay Fleischman.
Stephen Otto, Attorney at Law | Feb 21, 2007 | Reply
What is most troubling about the comments of Home Buying Center is that they are making the claim that “recent federal legislation” somehow affected a Debtor’s right to cure mortgage arrears in Chapter 13.
Huh?!
BAPCPA did absolutely nothing to affect the right of a Debtor to cure mortgage arrears in a Chapter 13 bankruptcy. If anything BAPCPA ENCHANCED the Debtor’s right in this area by adding now 11 U.S.C. Section 524(i). I will be dedicating a blog post to new Section 524(i) in the very near future.