COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

EDITOR’S COMMENT: There is no easy answer to this question. Each area of the country is different, and even the Judges in the same district are different. When lawyers call and ask me this question my usual answer is that Max Gardner is probably right — that generally speaking Bankruptcy Court is a better place to be — if the client actually qualifies. The reason is that the Judges and Trustees in Bankruptcy court are accustomed — day in and ay out — in analyzing the priority and validity of claims.

Whatever you choose to do, it is essential that you have enough data that can be introduced or proffered as admissible evidence to support your position when you challenge their status as creditors, their standing etc. Whether someone is underwater or in the middle of a foreclosure attempt, the starting point is to get the COMBO (see above) — a report that details the issues in the title chain and documents combined with a report that analyzes the impact of the securitization trail — and how that diverges from actual monetary transactions. Remember the money trail most often does not even bear a resemblance to the documentary trail in most instances.

That said, there are places where the Bankruptcy Judges have not caught up with the reality of the fraudulent foreclosures. In those cases, you MIGHT be better off in State Court and fight the removal with a motion for remand. For laymen reading this it all boils down to this — check with local counsel licensed in the jurisdiction in which your property is located. They know who the Judges are and what they are doing.

My suggestions to attorneys usual include an admonition against admitting things that you later want to challenge. So if you list the house as an asset with a defined value and then list a creditor as having a secured interest whose claim is more than the asset, then you are admitting many things that you later want to challenge.

First, you don’t know what the house is worth for sure, especially to the homeowner considering the competing claims of creditors. So presumptions about the absence of any equity in the property will arise if you list the property in a conventional way, which is what the computer programs for BKR automatically do. This will diminish your argument regarding their inevitable motion to lift stay.

So I usually suggest to lawyers that they take a more aggressive stance — showing the home, but leaving the value as unknown. Second that they show the creditors — all of them, and show them as unsecured because of your position that they have no rightful claim to the loan or property.

Also, when the client has received multiple letters from different entities, the usual ploy is that the  banks and servicers pick one of them and use that entity to petition the court to lift the automatic stay. You can avert that or at least put it in issue if you list all creditors who have ever stated a claim to the property and even filing a proof of claim for those creditors that did not file the proof of claim. Failing to object to a proof of claim can sometimes be fatal to your strategy, so remember to do that.

The article below I picked up from the internet. It is more of an advertisement than an article but it contains some basics that are worthwhile knowing.

Have A Bankruptcy Attorney Protect Your Home From Foreclosure


Since the economic meltdown back in 2008, many Americans have been losing their houses to foreclosure and having to file for bankruptcy. People bought houses at inflated prices with a loan that they couldn’t afford. Many of these folks were lured in by teaser rates so they can afford the mortgage payment, while being told that they could just sell the property if they couldn’t make the payment when it adjusted. Everyone knows how the story ended with millions of people losing their homes to foreclosure. Many aggressive lenders stuck a knife in these debtors backs by going after the beaten-down consumer with a lawsuit for the deficiency or a IRS form 1099C making the debtor responsible for taxes on the deficiency. Basically, filing bankruptcy is the only way out of this problem for these individuals. Filing for bankruptcy will eliminate all the liability from a short sale or a foreclosure.

Recently, it was reported on RealtyTrack that there is 4 million US homes in the pipeline for foreclosure in 2012. Last year, different real estate agencies were reporting that we will see a rebound in the real estate market in 2012. Last week, it came out that the numbers for home sales were improperly reported, where they actually counted an escrow and sale as two transactions, virtually doubling the amount of home sales for the year. This blows apart the theory that the economy is rebounding and housing prices are on their way back up. People that are hanging on trying to juggle their credit card bills along with their mortgages until the market comes back, might want to reconsider filing bankruptcy. Using a bankruptcy filing can help in stopping foreclosure. A bankruptcy attorney can help an individual make the proper decisions to get out of debt and protect the family home. Many individuals find out that after filing Chapter 7 bankruptcy and wiping out all their unsecured debt, they have enough money left over to be able to make the mortgage payment and keep their house out of foreclosure. Before it’s too late, everyone in this situation should consider seeking the advice from a bankruptcy attorney. Most attorneys offer free consultations, so you can’t use the excuse that you don’t have the money to spend. In today’s unstable economy, being proactive with your finances will help protect your family’s financial future.


36 Responses

  1. Hi Neil, can you use a bankruptcy litigation paralegal?

  2. Well it’s 2013 my home foreclosed in 2011.

    About tow weeks ago I get not one buy TWO 1099’s with Cancelation of Debt Statements .from a Servicer who I never had any relationship Jan Van Eck or Neil

    I filed Chapter 7 in 2008 and included my home in the bankruptcy. Fast forward to two weeks ago and I received TWO 1099-c Debt Cancelation statements

    They each name my old property address and references the same. Loan number which is not my loan number, both are dated the same day with the same account number showing 10/21/2012 as when this debt cancelation happened.

    I do know the property was sold in November 2012 for 540,000

    I paid 870,000 in 2005 and put down 87,000 and paid monthly payments for three years plus upgrades before I lost it. It went back to the servicer on the court house steps with no bidders in July 2011. I had someone there to watch.

    Here is the weird thing…
    Statement 1 1099-C shows $563,456 in section 2 Discharged Debt and then
    Statement 2 1099-C that came from same address, same day, all the same numbers Has the following WAIT FOR IT….. $1128884.74!!

    So this servicer has filed with the IRS That I have been received a debt discharge in the amount of $1,692,320.74!! For a home they sold for $540,000 and I purchased in 2005 for $870,000.

    Five years ago In 2008 I was discharged in Chapter 7 for this property and the lender who I made payments to requested Lift of Stay and it was granted. We all know they were most likely a servicer and not the owner of the loan but at that time we did not know to object or request proof it was just assumed they were. The BK attorney did not know to put 0 or neg o down as what was owed.

    That servicer did not foreclose but instead passed this discharged debt to two separate servicers the next three years. My bankruptcy attorney says that I am not responsible since the discharged was for that property address.

    I am worried Jan Van Eck or Neil what do you think?

    I do not trust we still know the full picture and I am saving everything and keeping a log since the IRS is no one to full around with!!

    I already got the new servicer under FDCPA in Federal Court for reporting on my credit report since they were never a creditor of mine and also reopened my BK7 in Adversary proceeding for trying to collect on a discharged debt last year and now I must deal with IRS hopefully they will look at the discharge paperwork and accept that and it will be done. This is like having a second job!

    Does anyone know if a discharge is for the property address no matter which scum bag debt collector comes out saying I owe them?
    The Bankruptcy attorney is one of the best but again this is still new territory for most of them.

    I know a 1099-C is a standard form a lender or servicer must send out but is their a benefit for them with a high amount such as above?

    I seem to remember Neil saying long ago to be careful if the wrong party is named on the discharge paperwork then You could still be liable. I pray this is not the case if anyone’s knows please let me know here and help some of us who have been dealing with this mess for years!

    I have recovered financially as I knew I would and survived BK 7 and foreclosure. Sadly shame and fear took over for quite sometime then I got mad!

    Now I will fight anytime I feel it is necessary



  3. What you’ve stated is exactly how corrupt our Judicial system has become. If the Judges sitting behind the bench know these are crimes, they should do something besides hammering their gavel in favor of this corruption. Who’s on the take here? Is it the Judges, the Politicians? the Insurance companies? The Wall Street banksters? or is it “All Of The Above”. It’s time for the DOJ (also on the take) to take control of the biggest crime against a society in history.

  4. Sorry, Huey Reed…DAH!

  5. @ Huey Long….

    You are asking the question I keep asking about the insurance. I have seen documents on potential and real defaults in a forensic analysis, from a broker/quasi-bank that shows the betting on failing loans and insurance on the actual defaults by “servicers”. I say it is illegal and fraud on the insurer. Servicer’s have no “insurable interests”, hence they cannot, under policy parameters collect proceeds. I underwrote and sold insunace for many years, this is a fact. How they have gotten around this is a huge question, as they have gotten reimbursed for any losses. Given, the servicers have no “insurable interest” they are NOT entitled to the proceeds as they do not have any losses. Now, the money should be used to pay the note, leaving many of us a note of satisfaction at the deed office, which has not been done. So, we have fraud on the insurer, fraud on the court, theft of insurance proceeds and filing false documents, when in fact there was money out there to pay for the default. It does not belong to the servicer. PERIOD!

  6. I think it was Thomas Jefferson who said we need a revolution every 20 years just to keep the politicians honest. We’re overdue!

  7. @ angry, thanks, but I found what I was looking for, and it’s not what Jan van Eck stated, at least not in the cases I’ve found. Attorneys are OK as MERS signers.


  9. What about identity theft to create the security? Theft of the note during securitization? Forgery to create the security? Forgery during the multiple-assignments? The insurance claim on the foreclosed property? Who keeps the money from the claim? How do I claim the insurance payout?

  10. That kind of sums up this entire mess doesn’t it. Even if you win, you lose! The banksters can come back after you’ve paid off your 30 year ‘note’ make up a new lie and take it back.

  11. cubed2k, on December 22, 2011 at 8:12 pm said: I am still laughing my ass off…

    Most people here are very aware of what has happened to our country and our economy. The last thing Bill Clinton did before leaving office was guarantee himself a pile of money in offshore accounts from the Banksters and Wall Street Criminals by putting them back together. This has been going for years, greed! We are the New Rome and we as the ancient will crumble.

  12. etolle
    searched for – non Attorney Officers of MERS

    missing tho is the discussion or application of the following
    Rule 1-100. Rules of Professional Conduct, in General. seq et

    Rule 3-200. Prohibited Objectives of Employment.

    A member shall not seek, accept, or continue employment if the member knows or should know that the objective of such employment is:

    (A) To bring an action, conduct a defense, assert a position in litigation, or take an appeal, without probable cause and for the purpose of harassing or maliciously injuring any person; or

    (B) To present a claim or defense in litigation that is not warranted under existing law, unless it can be supported by a good faith argument for an extension, modification, or reversal of such existing law.

  13. @ Jan van Eck, I came across something you wrote here last year and can’t find the backing for your assertion, and I could use it for my case. You said:

    “Attorneys are not Officers of MERS. That is against MERS regulations. Only bank entities that are members of MERS can receive appointments from MERS. And even that little charade is under constant attack in multiple courts.
    If your document is signed by the attorney that is doing the foreclosing, then be sure to deny the Document in the Pleadings and plead responsively a Special Defense that the document is void, fabricated in anticipation of litigation, and bears an invalid signature. you get great traction from those claims, if properly pled.”

    All of my assignments are done by the same attorney signing for three banks and MERS. You wouldn’t have anything on that handy would you? I searched MERS and couldn’t locate anything.

  14. Well, this is really interesting—here is a sentence from the “Notice of Trustee’s Sale” paperwork:

    “…Said sale will be made, but without covenant or warranty, expressed or implied, regarding title, possession, or encumbrances…”


  15. Neil is on the right track to suggest that you do not assign a specific number value to your house in the BK Schedules. By the same logic, I would forewarn against assigning anything other than a “de minimus” value to a creditor claim that you file in the Unsecured section. If you fie, say, a $10 value to the pretender lender mortgage claim, then it is up to the “creditor” to file a Proof of Claim of some much larger amount and substantiate it to the court. that sets the stage for your challenge by way of an “Objection to Proof of Claim,” and a Motion for evidentiary hearing and Sanctions.

    Hence, you certainly can file a Listing of Creditors (with de-minimus amounts) in the Schedules, which will be considered an Admission by you the debtor that you owe those amounts. Fine; when the dust settles, you pay the mortgage creditor ten bucks and the debt is discharged [or they can fight you first]. Having made a declaration of the debt to that entity, I do not see how you are required to file a Proof of Claim further. the filing of the Schedule with that debt listed is taken as your admission that you owe that amount. Up to them to file and demonstrate that you owe more.

    In reality, as is now quite apparent, NONE of these “creditors” actually have any claim, so a de-minimus claim is perfectly reasonable. When you are asked about it at the Section 341 Hearing, your answer is: “I am not convinced I have any debt at all, but for ten bucks, I am not going to fight it. Not worth the effort.” And that is a perfectly acceptable answer to the trustee.

  16. BSE

    pmbva at yahoo

  17. dont forget to schedule a forthcoming lawsuit as exempt or the estate will retain the ONLY rights to pursue the “cause of action” , otherwise later interaction of the debtor & trustee will be required. I know this 1st-hand

  18. Pat1

    Can you provide a contact number or email address.
    I would like to discuss…


  19. I am still laughing my ass off.

    What a joke……………

    Go BK or Lawsuit———-

    Unbelievable that NOBODY REALLY KNOWS what is going on.

    A system of laws,,,,,,my ass————

    It’s a system of whatever you can get away with from both sides………….

    what is this complication over money———–it’s cops and robbers and that legal level.

    thank you very much CONGRESS and THE FEDERAL RESERVE SYSTEM of BANKS…………there are no reserves, it’s all make believe………….

    Don’t ever borrow from these corrupt institutions, they are all in confusion and you only give away your future to them…………get out one way or the other.


    What about fraud upon the Court of Records? How do we “get them” on that?

    That aspect is HUGE.

  21. anonymous- thank you for input as i want feedback to see how solid the ground is i stand on. i will be presenting this to my trustee in this case and it may go to a federal judge before long. i hope is that i can find a honest court, and if not i will kept going until i get the results i seek.

  22. Pat1,

    Sorry about your situation. The problem is that there are few and far between attorneys that are willing to challenge the identity of the creditor in court. This has been going on for years. Courts blindly rubber-stamp in courts without challenge as to the real party in interest. Of course, if the real party/creditor is not identified, even if you PAY in full, you are still delinquent. This is why is critical for BK attorneys to force the issue that the actual creditor be identified. Such valid challenge is taking time to sink in with BK attorneys — they are too accustomed to rote BK filings.

    I agree with Neil here. And, you have to remember, any fraud upon the courts — has no statute of limitations. Thus, BK, or any action, can be reopened — for fraud upon the court.

    And, everyone, we have a lot of fraud upon the court.

  23. i have researched and discovered, 3001(c)(2)(c) 2001 committee note new section 3b section 7 writings suppoerting a claim or evidencing perfection of a security interest must be atached to the proof of claim. the individual that who completes the form must sign it. by doing so, he or she declares under penalty of perjury that the information provided “is true and correct to the best of knowledge, information and reasonable belief. that person must provide identifiabling information—-name; title, company, and if not already provided, mailing address, telephone number, and email address——indicating by checking the appropriate box the basis on which he or she is filing the proof of claim. when a (for creditor servicing agent authorizied signs) rule 3004 will indicate that basis for filing here, the checkbox on the first page of the form for stating the filer’s status as a trustee or debtor is deleted. proof of claim of creditor, the individual completing the form must sign it and must provide his or her own name, as well as the name of the company that is the servicing agent. so proof of claim—- chain of interest— etc. please disect this item as i wish to use this in a chapter 13 adversary hearing. let me know if valid for defense………..bob pro se petitioner.

  24. I did bankruptcy Chapter 7 three years ago I tried to pay since they would not modify until they took part of my payment and put in a suspense fund and declared me in default one year after discharge.

    Low and behold my discharged loan get a new servicer and anew loan number two years later and they start collection on a discharged debt so I hauled them in to Adversary Proceeding I kept very detailed notes and I won sanctions!

    Next took the same servicer to court for FDCPA for ruining my credit agian on a discharged debt we settled out of court and they paid a nice penny!

    Next they foreclosed but not before I got on record a Lis Pendis and finally got to court non-judicial and the judged ruled against up in a Motion for Summary Judgement he says why should they care who is foreclosing they no longer repsonsible for the home and ruled withthe defendant.

    So now the Unlawful Detainer will come next and I will fight them on this and also submit an appeal to the highest court. I am going to fight them all the way!

    If I were to file bankruptcy today I would call them out right when they request Releif from Stay we werenot so lucky back in 2008 we have learned so much since then.

    Kepp Fighting them..

  25. Enraged,

    This is not a rush insolvent filings is always the best way to go period. The only thing that stop people are pride. No one wants a bankruptcy on there credit report, but any large business knows when creditors come a knocking bankruptcy comes a dropping.

    Erasing ones debt goes all the way back to the days of the bible. Every 7 yrs all your debt is suppose to be forgiven. People need to wake up and understand the insolvent laws. The only problem is that people do not understand the laws and lose out on things.

    Bankruptcy was not made to take things away from you but save you from getting locked up in debtor prisons until your family members could pay off your debt. The debt was gone, and you could not erase your debts again for another 7 yrs.

    Truthfully nothing should be in your personal name, you should have a Delaware Series LLC. You should make one corp your holding company and you work for that company. While you have another company that holds all your assets and have a trustee take care of those assets for you. With this setup you are arms length from any fall out that could come your way.

    I know some people might not like it but this is the truth.

  26. @ Nora,

    Compelling thoughts. Filed for Chapter 13 too, what an invasion of privacy…the credit counseling, oh my! It is geared toward an 8th grader and it is not relevant to anything that has happened to me! Punishing and insulting to say the very least.

    These days I use cash, keep minimal balances in 1 checking account, just in case I need to cash a check. In the job market and being slammed by my credit report…after acquiring an advanced degree in my 40’s…can barely get insurance, but people convicted of varied, serious crimes can.

    For me, I have 3 lawsuits filed, as we speak. The bankruptcy, with a competent attorney….if you can find one, might be for some. Me…I’ll go the litigation route and take my chances. If nothing else, (judge honesty?) will make them produce documents providing “party of interest” and “authority to foreclose”. We’ll see! Lying down and letting them steam roll over me, is not an option.

  27. @Nora C.

    We don’t need credit counseling, we need jobs. We want more than anything to return to an economy where we may work for and keep what we have. The banks destroyed our financial future, not us.

    It was more than just the banks … selling out our industrial production and bleeding the middle class dry has been going on for 40 years.. The banks delivered the death blow but we were already on out knees.

  28. Applying Recent Case Law in a Motion to Dismiss

    Posted on December 22nd, 2011 by Mark Stopa

    I’ve read, discussed (here http://www.stayinmyhome.com/blog/2011/12/not-just-standing-standing-at-inception/ and here http://www.stayinmyhome.com/blog/2011/11/happy-thanksgiving-from-floridas-fourth-district/), and enjoyed the recent decisions out of Florida’s Fourth District Court of Appeal emphasizing the need for a plaintiff in a foreclosure case to have standing to foreclose when the lawsuit was initially filed. Today, I encountered one of my own cases where this argument was particularly appropriate.

    BAC filed suit in December, 2009 and I moved to dismiss for lack of standing. In October, 2011 the court granted my motion and gave BAC leave to file an Amended Complaint. In November, 2011, an Amended Complaint was filed, but BAC wasn’t the only Plaintiff – a company called Asset Resolution Corporation was as well. In support of its alleged standing, ARC attached an Assignment of Mortgage reflecting BAC transferred its interest in the note/mortgage in February, 2011.

    Two things jumped out at me here.

    First, if BAC transferred its interest in February, 2011, why was the BAC attorney telling the Court in October 2011, in opposition to my Motion to Dismiss, that BAC was the proper plaintiff and had standing to foreclose? This is the slimy, shady, underhanded stuff that drives me nuts.

    Second, the Amended Complaint should be dismissed because ARC did not have standing at the inception of the case. In fact, its Amended Complaint showed it did not obtain an interest in the Note/Mortgage until 13 months after the lawsuit was first filed (which is why ARC was not named in the original Complaint).

    Anyway, I see this fact-pattern as a really good one, so I filed a fairly comprehensive Motion to Dismiss, http://www.stayinmyhome.com/blog/wp-content/uploads/2011/12/MTD-or-for-SJ.pdf citing all of the Florida cases which address the need for a plaintiff to have standing at the inception of the lawsuit and asking the court to dismiss the Amended Complaint without leave to amend.

    It’s not going to happen in every case, but the flurry of recent cases from Florida’s appellate courts are going to make it really difficult for Florida’s trial court judges to deny motions to dismiss in many foreclosure cases.
    Mark Stopa Esq,


  29. While chapter 13 (debt reorganization) comes with the perk of making an adversarial motion to defeat the banks motion for relief of automatic stay, (and therefore forcing the burden of proof of standing to foreclose onto the bank) chapter 7 may be more beneficial if you have credit card debt, or other unsecured debt.
    Secured debts would be those where collateral (a car or property) secure the loan, subject to forfeiture under default.

    You are allowed to keep certain assets, usually. A fat savings account might be in jeopardy, though not many of us have those anymore.

    Bankrupcy is not without pain, either way. One thing I find particularly insulting is that you are forced to pay for credit counseling and get a certificate that you’ve completed it before your case can be discharged– further proof that those in power want to punish those who become financially unable to meet their committments, regardless of the fact that they caused the financial ruin of the people of this country, and largely the whole planet.
    We don’t need credit counseling, we need jobs. We want more than anything to return to an economy where we may work for and keep what we have. The banks destroyed our financial future, not us.

    I tire of the propaganda and hearing smug, self-righteous people blather about how they signed a promise, made a committment. They’ve been lucky so far, that’s all. Just wait till they try to sell their property. They will be wailing like the rest of us, then.

    No two attorneys will tell you the same thing, however, and it is still a big personal choice. Credit impairment is not the stumbling block it used to be, perhaps due to the fact that millions of people have been forced into bankrupcy by the banks, and it’s less of a sin in the eyes of a multitude, in the same sinking boat.

    I take little stock in credit reports, scores and the vapor surrounding them. Debt-based life is a fallacy I refuse to buy into. I’m not paying people I didn’t authorize to collect and sell my personal information, to sell it back to me, or anyone else for that matter. I use cash, save for things I need, fix what’s broken instead of replacing it with new, and sleep very, very, well.
    Bankrupcy was a bitter lesson for me, pasted in my hat as a reminder to think critically about owing anyone. The invasion into and court-ordered discussion of my personal finances was chapping. To quote a poster here, “Never Again!”

    Rather than consult just attorneys on whether or not you should file, consult a few people who’ve already completed the process…it shouldn’t be hard to find them. Most of us are glad it’s behind us.

  30. WOW!- The David Stern Deposition- A Very Interesting Read
    December 22nd, 2011 | Author: Matthew D. Weidner, Esq.
    David J. Stern remains one of the key figures in the fraudclosure tragedy that continues to play out all across this country.

    Not nearly enough has been written about this figure and his unique role in this country’s coming collapse, but the 277 page deposition that was just filed in the civil federal case that is pending is a fascinating read.

    I gotta tell you, I find the guy pretty darn compelling in this deposition. I find most interesting the meteoric rise of this guy who admittedly never spent much time at all in the courtroom but soon found himself handling hundreds of thousands of foreclosures all across the state. Another interesting element is the rise and spectacular fall of the Chardan Holding Company, a Chinese investment group that bought into the entire operation.

    Throughout this entire crisis, we all need to be asking just how our government was so incompetent and corrupt. This morning I heard whispers that the FBI might be investigating Fannie and Freddie…this will certainly be a start and it is becoming apparent that a major tide is shifting….and I’m certain this is going to produce some profound unintended consequences…..

    It truly is a fascinating read, an essential element for all who want to understand where this collapse is heading.



  31. Again, that’s a strategy that doesn’t work for everyone and isn’t feasable everywhere and it assumed that you already “beat the party stating a claim”.

    The plus side is that, indeed, you may get two bites at the apple. The downside is that you may not… Takes a very skillful atty who understands a heck of a lot more than just BK.

  32. After foreclosure, how can we find out when the insurance policy for the Trust has paid out? We want to sue for the full amount of the policy, pain and suffering etc., since they stole our identity to create a profit.

  33. Tony’s on the right track though, and points out the flaw in the article’s title. Bankruptcy and filing a lawsuit aren’t mutually exclusive.

  34. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  35. @tony,

    Don’t rush into conclusion. The best solution is the solution one can best live with and gives the best result for what you want to achieve.

    Case in point: suppose you have a mountain of debts, including a mortgage. You could act different ways, depending on how strong you are and how willing you are to fight.

    Some people decide not to worry about the debts and to wait until a JDB sues them. That allows them to answer and file a counterclaim for violation of FDCPA, UCC and others. The pay off: if they prevail, they not only win the case and erase the debt but they can also collect statutory damages. Takes a long time but well worth it for some individuals.

    Same thing with the house: some people file for bankruptcy in the hope that the BK will allow them to argue “unsecured” debt and keep the house. Those results are still quite few and far between and there is a risk: what if the BK judge doesn’t agree? Other people choose a different course of action. Knowing full well that they can’t pay, they investigate their loans for any potential federal statute violations. They attack first and see if the bank/servicers counterclaim in foreclosure. It’s a question of style, personal endurance and mental strength: fighting can be exhilarating for some and overwhelming for others.

    All those methods have value. BK is not the panacea for every situation, every state nor everyone. Also and that needs to be stressed and emphasized: BK attorneys are not all capable or willing to question the bank’s standing and the legitimacy of the alleged mortgage debt. Many of them accept the case and want to put into it the least amount of time and effort. I met one BK attorney before going on the attack, to see what I would get out of filing chapter 7. The guy was very straightforward and told me that he didn’t do mortgage foreclosure defense at all. His thing was BK (13 and 7) and nothing more. I respect that but BK without a solid fight wasn’t part of my plan.

    Hence the need to carefully figure out what you want to accomplish (fight or walk away), choose your attorney and spell out what you want from him/her and strategize together your course of action.

    One of the biggest lies this country is selling to people is that there is such a thing as “One size fits all”. There ain’t. Nowhere. Not even in clothing. Unless you don’t mind not looking your best. Question of priorities and personality.

  36. Of course bankruptcy is the best course of action. It is the only place where you can do a double shot. Beat the party stating a claim, defeat that claim disclose you will sue later in your schedules and when you finish bankruptcy then beat them down in a law suit. You must do the bankruptcy first before the lawsuit, because they will use the lawsuit to stop any claim of defense you have in bankruptcy.

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