Filing for Bankruptcy

By
Mortgage and Lending with Essex Mortgage 1487494

Should you File Bankkruptcy?

 

So you have reached the end of the road, your debts are piling up, and the phone is ringing off the hook. Whether it is to save your home, your marriage, or your sanity, the decision to file bankruptcy is a personal choice that carries some consequences.  The biggest one is the effect a bankruptcy filing will have on your credit report. For starters, if you have reached the point of deciding to file bankruptcy, it is likely that your credit report has already taken a beating.  It is more than likely that you have slow pays or late pays and collection accounts lurking on your credit report.  Your credit cards are possibly maxed out and you may have judgements against you.  In this case, filing for bankruptcy may be your only way to a fresh start.

 

Chapter 7 Means Test

 

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, also known as BAPCPA, makes it more difficult for some debtors to file for bankruptcy protection, Chapter 7 that is.  The provisions of BAPCPA require that debtors pass a means test to qualify for a Chapter 7 bankruptcy protection.  The bankruptcy means test takes into consideration Internal Revenue Service Guidelines for housing, utilities, groceries, and transportation.  Additional expenses such as allowances for taxes, alimony, child support, unreimbursed medical expenses, child care, and involuntary retirement contributions are allowed.  If a debtor does not pass the means test after all allowable expenses have been subtracted from the debtor's gross household income than he or she does not pass the means test and is likely ineligible for a Chapter 7 bankruptcy.

 

Chapter 13 Bankruptcy

 

What does this mean? This means that a debtor will need to pay his or her debts through a Chapter 13 repayment plan.  In a Chapter 13 repayment plan, a debtor is required to pay all of his or her disposable income into the plan for a period of 60 months.  During this time a debtor cannot take on any new debt without the bankruptcy trustee's approval.  Additionally, the debtor will likely encounter issues when looking for a place to rent as it shows up as an open bankruptcy on the credit report and most landlords and property management companies will not rent to anyone with an open bankruptcy.

 

If you are able to successfully complete your Chapter 13 bankruptcy and make all 60 payments to the trustee you will be granted a super discharge.  This means that all of the unsecured portions of your debt will be discharged.  Your priority debts such as those secured by property and auto loans, and income taxes due less than three years before filing your bankruptcy petition, will be paid through the plan over the 60 months.

 

Bankruptcy Effects on Your Credit Report

 

A Chapter 13 bankruptcy filing will stay on your credit report for 7 years from the filing date and a Chapter 7 bankruptcy will stay on your credit report for 10 years from the filing date.  Some say that the presence of a Chapter 13 bankruptcy looks better on a credit report than a Chapter 7 but potentially any bankruptcy filing on a credit report does not look favorable when applying for credit.

 

About the author

 

Arlene Di Sessa will be partnering up with Gustan Cho Associates and will be a full service mortgage banker specializing in FHA Loans, VA Loans, USDA Loans, Conventional Loans, FHA 203k Loans, Reverse Mortgages, Jumbo Mortgages, Non-Conforming Loans, and Commercial Loans. Arlene Di Sessa’s specialty will be originating mortgage loans with no lender overlays. Arlene will be a direct full eagle mortgage banker. If you have any mortgage lending questions and like to go over case scenarios, feel free to contact Arlene Di Sessa at 530-813-0661.

Comments (12)

Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

I like to congratulate Arlene Di Sessa on her new position as the branch manager for the Rocklin, California branch office of MLD Mortgage, Inc., dba The Money Store. Arlene Di Sessa is a senior writer for Gustan Cho Associates and will be a major player in the growth of the Gustan Cho Team at The Money Store. Arlene Di Sessa is a full service Fannie Mae direct lender where her expertise will be originating and funding mortgage loans with little to no lender overlays. The automated findings via the AUS, AUTOMATED UNDERWRITING SYSTEM, is the final approval. Visit Arlene Di Sessa blogs on www.gustancho.com and www.lendingnetwork.org

Jun 13, 2016 10:07 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

Technology has changed the way consumers shop, especially shopping for mortgage loans. The creation of Amazon.com, the largest online superstore in this world, has lead the way on ways consumer shop for everything from consumer goods, to cars, to homes, to even mortgages. Here is an article on online shopping that was written by Arlene Di Sessa, a senior writer for Gustan Cho Associates and a licensed mortgage loan originator for the Sacramento, California branch of The Money Store, a national full eagle mortgage lender headquartered in Florham Park, New Jersey and published on Gustan Cho Associates Mortgage and Real Estate Informational Center, http://www.gustancho.com. Arlene Di Sessa holds a Master's of Business Administration degree and a Master's degree in accountancy and is the branch manager of the Sacramento, California branch of The Money Store. Here is the link to the blog: http://gustancho.com/online-shopping

Jun 13, 2016 11:57 PM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

Amy Rowland was one of my borrowers who came to me because she got the run around with multiple mortgage lenders when trying to qualify for a FHA Loan back in 2015. Amy Rowland has gotten mortgage loan pre-approvals by multiple banks and mortgage companies and even went to the extent in selling her home and purchasing another home and has gotten last minute denials. The home buying process is stressful enough even if you have all of your ducks in a row, however, to be told that you no longer are able to close on your home at the last minute after the mortgage lender gives you a solid pre-approval and their blessing to go purchase a home and sell your current home, can drive anyone to the brink of a nervous breakdown. Amy Rowland, an accountant and an attorney by trade, did not give up and surfed the internet and somehow found me online. Amy Rowland was a pleasure to speak to and after interviewing her for an hour, I knew that I can do her loan no problem with The Money Store. We did have some hiccups during the mortgage process but it was not because of The Money Store but due to the home itself where she needed to find a different home to purchase. The Money Store has closed on her home last Christmas Eve 2015 and she could not be happier with MLD MORTGAGE, INC. dba The Money Store. Amy Rowland personally thanked Michael Francis the Chief Operating Officer at The Money Store , Brian Borchard, the managing director of The Money Store, Larry Dear the President of The Money Store, Gary Dear the Executive Vice President of The Money Store, Patricia Taylor the underwriting director of The Money Store, Jacqueline Boston the FHA Underwriting Manger at The Money Store, Kay Tassapat Sripetcharakool the assigned mortgage loan officer and Patricia Celli Marino the senior mortgage loan processor at The Money Store and of course myself, the Area Manager at The Money Store. Amy Rowland liked the way The Money Store treated her and how smooth the mortgage process was that she decided to go for a career change and decided to become a loan officer with The Money Store and got her license and got offered a job as a licensed mortgage loan originator by Brian Borchard. Here is the link to the mortgage experience that Amy Rowland went through with MLD MORTGAGE, INC. dba The Money Store http://gustancho.com/my-experience-with-the-money-store-by-amy-rowland

Jun 14, 2016 01:58 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

The great part about FHA Loans is that you can qualify for a FHA Loan with open outstanding unpaid collection accounts and charge off accounts. FHA does not require you to pay off outstanding unpaid collection accounts in order to qualify for a FHA insured mortgage loan. Here is a mortgage blog article post about qualifying for a FHA Loan with open collections that was written by Amy Rowland, a senior writer for Gustan Cho Associates Mortgage and Real Estate Informational Center website, www.gustancho.com . Amy Rowland is a mortgage loan originator with MLD Mortgage, Inc. dba The Money Store and is also the branch manager of the Michigan branch office of The Money Store. Here is the link to Amy Rowland mortgage blog post:  http://gustancho.com/can-i-qualify-for-fha-loan-with-open-collections-amy-rowland

Jun 14, 2016 02:34 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

For those who are planning on purchasing a home in the near future, they should start preparing to qualify for mortgage as soon as possible. Credit reports do contain errors and it will be a mistake assuming that your credit will be fine when in fact you may have room to maximize your credit scores. Credit scores do play a major impact on your mortgage interest rates and so does your debt to income ratios. Maxed out credit card balances will definitely plummet your credit scores and increase your debt to income ratios. It will not cost you anything to get a pre-approval by a bank or mortgage company and a loan officer will be able to guide you in the right direction whether or not you are pre-approved or what you will need to do to get pre-approved. Fixing your credit or to try to optimize your credit scores to the maximum potential possible does take time and cannot be done overnight. Here is a mortgage blog article post that was written by Gustan Cho of Gustan Cho Associates and published on Gustan Cho Associates Mortgage and Real Estate Informational Center website, www.gustancho.com. Here is the link to the mortgage blog article post   http://gustancho.com/preparing-to-qualify-for-mortgage

Jun 14, 2016 06:40 AM
CA COASTAL ESTATES Lauren Selinsky Perez CRS
California Coastal Estates - Aliso Viejo, CA
"Your Real Estate Broker" #oclauren

Thanks for the follow Arlene~. 

Be sure and include your NMLS # on your info. 

Congrats again & good luck with your new position. 

Jun 14, 2016 08:10 AM
ARLENE DI SESSA, NMLS 1487494
Essex Mortgage - Roseville, CA
Loan Officer

Thank you Lauren! and thanks for following me. 

Jun 14, 2016 08:38 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Arlene,
Thanks for this post.  I think Bankruptycy is a much misunderstood issue.  

Jun 15, 2016 02:28 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

Rebecca Clevlen is a senior writer for Gustan Cho Associates Mortgage and Real Estate Informational Center, www.gustancho.com and a licensed mortgage loan originator with MLD Mortgage, Inc. dba The Money Store. Rebecca Clevlend will be partnering up with Kay Tassapat Sripetcharakool at MLD Mortgage, Inc. dba The Money Store and will be developing the Austin, Texas real estate and mortgage lending markets. Rebecca Clevlend and Tassapat Sripetcharakool both have extensive experience in the mortgage industry and are experts in FHA Loans, VA Loans, USDA Loans, and Conventional Loans. Tassapat Sripetcharakool has been with The Money Store, a national full eagle Fannie Mae direct mortgage lender based in Florham Park New Jersey since February 2015 under the direction and management of Brian Borchard, who is the top dog at MLD Mortgage, Inc. dba The Money Store. The Money Store is a national mortgage lender known for its no lender overlays on FHA Loans and reputation of doing tough hard to do deals. Here is an article about Making Austin Texas Home that was written by Rebecca Clevlen of Gustan Cho Associates and published on Gustan Cho Associates Mortgage and Real Estate Informational Center, www.gustancho.com. Kay Tassapat Sripetcharakool is licensed in a handful of states, including the state of Texas. Here is the link to the article that was written by Rebecca Clevlen about Austin Texas:  http://gustancho.com/tax-settlement

Jun 15, 2016 10:37 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

Like to write a little not about one of my special colleagues who I work with, Trisha Mangiaracina. Trish Mangiaracina is one of my loan coordinators at the Orland Park branch of MLD MORTGAGE, INC. dba THE MONEY STORE and I have had the pleasure to work with her since February 2015. Trisha has years of mortgage and banking industry experience and knows every aspect of the mortgage business from opening, to borrower income qualification, to origination, processing, underwriting, funding, and most importantly, knows and cares about her borrowers. Besides her extensive experience in the mortgage business, her husband Robert Mangiaracina, is a veteran mortgage loan originator and banker and team leader at Wells Fargo and she is Robert Mangiaracina's right hand person. The many borrowers of mine and my loan officers get to know our very one and only Trisha Mangiaracina and form a lifelong bond with her. Being a mother, wife, and best friends to countless of people has made Trisha Mangiaracina a special person where people just gravitate towards her. I am extremely blessed to have Trisha Mangiaracina be part of my business and personal life and a lifelong friend. A great team player and natural born leader at Gustan Cho Associates, www.gustancho.com. Here is a link to an article that I wrote about Trisha Mangiaracina on Gustan Cho Associates Mortgage and Real Estate Informational Center:  http://gustancho.com/role-of-mortgage-loan-coordinator-trish-mangiarancina

Jun 15, 2016 11:30 PM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

Teamwork at the Workplace is the success of a happier work environment and the best way for any company, whether is it a mom and pop shop or large corporation, grow and creates a positive work environment. The way I like to run my small group of licensed mortgage loan originators and support staff is like a family where everyone is somebody and the way you treat every single member of your family. Whenever a new loan officer joins my team, I welcomed them on board and introduce them to everyone, from my upper level managers to fellow loan officers to my support staff. Every member of my team knows each other and have each others contact information where they can reach out to them whether on a personal matter or business matter. I am very proud of our team and every individual brings asset to the table and our group. Here is an article that was written by one of our team members, Amy Rowland, who is our branch manager of the Michigan office at The Money Store about Teamwork At The Workplace. Here is the link http://gustancho.com/teamwork-workplace-amy-rowland

Amy Rowland is planning on expanding her Michigan branch at The Money Store and has many real estate agents who she is networking with. Amy Rowland lives in a small community in Michigan where she everyone knows everyone and her goal is to brand MLD MORTGAGE INC., dba THE MONEY STORE brand. The Money Store is based in Florham Park, New Jersey and is a national mortgage banking company with a name that is over 40 years old and is licensed in over 46 states in the United States. The Money Store is known by most in the mortgage industry for doing hard to do deals and closing loans as long as the borrower has an automated approval per DU FINDINGS due to their no lender overlay policies due to them being a Fannie Mae direct lender.

Jun 16, 2016 05:34 AM
Gustan Cho
LOAN CABIN #NMLS 1657322 - Oak Brook, IL
National Managing Director at Loan Cabin Inc.

annie Mae is the mortgage giant that sets up rules and mortgage lending regulations for Conventional loan financing. Fannie Mae requires conventional loan borrowers to have at least a 620 FICO CREDIT SCORE to qualify for a Conventional Loan. Conventional Loans are not guaranteed by any government entity like FHA Loans, VA Loans, and USDA Loans so they have tougher mortgage lending guidelines. Fannie Mae, like government mortgage loan programs, have minimum mandatory waiting periods after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale. To qualify for a Conventional Loan after a short sale, there is a minimum 4 year waiting period after the date of the short sale. Here is a mortgage blog article post on qualifying for a Fannie Mae mortgage after a short sale that was written by Bob Vogel of Gustan Cho Associates and published on Credit Fix Advisors, www.creditfixadvisors.com. Bob Vogel is a writer for Gustan Cho Associates Mortgage and Real Estate Informational Center website, www.gustancho.com, and is also the Editor in Chief for Loan Consultants, www.loanconsultants.org. Bob Vogel is a contributing editor for Credit Fix Advisors, www.creditfixadvisors.com and a licensed mortgage loan originator for MLD MORTGAGE, INC. dba THE MONEY STORE. Here is the link to the article on 2016 Fannie Mae Mortgage Guidelines After Short Sale written and published by Bob Vogel  http://www.creditfixadvisors.com/2016-fannie-mae-mortgage-after-short-sale-guidelines.html

Jun 17, 2016 01:33 AM

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