September 2009

30 Sep Can I Keep My Non-Exempt Assets in Bankruptcy?

If you file a Chapter 7 Bankruptcy, the Chapter 7 trustee will determine if the items you own (your assets) are exempt.  To the extent that they are exempt, they are protected from the reach of the trustee and your creditors.  Exemptions are determined by the Federal Bankruptcy Law or the Exemption laws of your state. In New York State, for example, you can exempt $50,000 of equity in your home, $2,400 in your vehicle, $600 in tools, and $2,500 in household goods.  If, say, your vehicle is worth $6,000 with nothing owed against it, then the Chapter 7 trustee can take the vehicle, sell it, give you your $2,400 exempt value, and use the rest to pay towards your creditors. If you file Chapter 7 and want to keep an asset that is worth more than the applicable exemption, you usually can, if you offer to buy out the trustee’s interest. 
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30 Sep Re-Default Rates Continue to Plague Mortgage Industry

The mortgage industry and government continue to push loan modifications as a way of saving homes. The Treasury Department released a report showing how that program is working out. The short answer is that it is muddling through. The Office of Comptroller of the Currency reported that 8.5% of all mortgages are now delinquent and almost 3% are in foreclosure. In step with this increase in defaults, more loan modifications are being done, and more of them include reductions of principal and interest payments. And the rate of re-default after a loan modification is worked out still appears to be running between 1/3rd and 1/2 of all work-our deals. Of course that means a very large number of home loans, when reasonably modified, are in fact performing too.
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