San Jose Short Sales

Since I posted “stopping foreclosure sale with Chapter 13 filing” and got positive feedbacks, I would like to follow up with this post of how to file Chapter 13 without an Attorney.  You can do it yourself and save $3500 in fee.  I know troubled home owners can use some extra money for other important expenses.

Bankruptcy Packages:  the following BK forms are needed, you can go to this link to get these forms http://www.uscourts.gov/bkforms/bankruptcy_forms.html#200 .

1.  B1 Voluntary Petition (3 pages)
2.  B1 Exhibit “D” – Individual Debtors Statemetn of Compliance with credit Couseling Requirement (2 pages)
3.  B6 Summary of Schedule – Including Statistical Summary of Liabilities
4.  B6A Schedule A – Real Property
5.  Credit Matrix Cover Sheet (.doc) – You need to type in another page of your Creditor Name and Address)
6.  B 3A  Application and Order to Pay Filing Fee (2 pages)
7.  B 21 Statement of Social Security

After filling out all those forms, you need to take it to your local United States Bankruptcy Court.   The address for San Jose Bankruptcy Court is the US Federal Building and Courthouse Rm 3035,  280 South First Street, San Jose, CA 95113 (408) 535-5118.  Please submit your forms 2 to 3 days prior to foreclosure or auction sale because you want to maximize your delayed days.

Submission of BK packages:  Court fee for BK filing is $274.  The Clerk will stamp on your Chapter 13 package on the first page and assigned Case Number on top right hand.  Once you have the case number, you call your lender number on your mortgage statement, and ask for Brankruptcy Department Phone and Fax numbers. 

Call up Bankruptcy Department, tell them that you file for Chapter 13, give them the Case number, and ask for Foreclosure Department number.  Next day, you call Foreclosrure Department to verify if they postpone the trustee sale to next 30 days.

To validate this process, call trustee sale number, enter trustee number on their automated system, they will give you updates on the auction date.  I can easily verify this with my system.

Remember, this BK filing is just to stop the foreclosure sale, it is not neccessary that you are filing for Bankruptcy.  If you don’t show up after 30 days, the house is still up for auction sale. You can repeat this process again if you like.

Please consult your attorney for more information.

As home owners, you can file the Chapter 13 at any time before the sale and can stop it.  However, you have to prepare for it by obtaining a “Certificate of Counseling” (credit counseling).  This is a preliminary requirement.  Without the certificate, the court will dismiss your petition.  Please go to www.bkcert.com to obtain a certificate.  It will cost you about $50.

You can sell your house within Chapter 13, but if it’s a short sale, you will have to obtain approval from the bank.  The sale has to be ordered by the court.  If it’s not a short sale, it will be easier.

When you are in Chapter 13, you are required to make payments under the current terms of your loan.  The amount of arrears will be spread out into three to five years.  However, many judges will allow you to make payments according to the HAMP guidelines (HAMP is the federal loan modification program), provided that you are qualified. You may also have to repay (a small) part of your unsecured debts (credit card debts) in most instances.  These payments are made pursuant to what is known as a Chapter 13 Plan (the “Plan”).  You may also remove the secondary liens on your home under certain circumstances.

The foreclosure will be stopped as long as you make payment under the Plan.  If you fail to make payments under the Plan and fail to obtain the court’s approval in modifying the plan, your petition may be dismissed, allowing the creditor to resume the foreclosure process.

The point here is you can stop foreclosure sale, without go further in bankruptcy process!

The Bankruptcy court has a fee schedule that you should know.  Most attorneys charge their clients $3,500 – $3,600 for a Chapter 13 petition (not including the filing fees of $274).  

Please consult your attorney for detail information.  This is only for educational purposes.

Many home owners, when facing a foreclosure sale date, would like to postpone a sale in order to have a chance to get the loan reinstated or paid off, and work out a solution that benefits both parties. There are 3 ways to stop a foreclosusre sale.

1. Ask the lender. Lenders, though, will put a sale on hold, in many instances, in order to give the clients another chance to save their home or get out of foreclosure.  Doing a short sale will stop the foreclosre sale!

2. Ask the court.  Foreclosure sale postponed is when the homeowners petition their county court for additional time. This option is especially appropriate in cases where the lender is not willing to give the homeowners any more time to save the property from foreclosure. The county court can automatically postpone the sale regardless of the lender’s intentions.

3. Chapter 13 Bankruptcy. This is the least-desired option on the part of the homeowners. Foreclosure victims would rather find a different solution to foreclosure other than filing bankruptcy.

Please consult legal advice for further understanding of how to stop a foreclosure sale.