Bankruptcy Law Blog

Monday, October 17, 2016

Family of deceased veteran suing Wells Fargo over sudden foreclosure

How can you save your house during a bankruptcy?

Perhaps one of the common questions that comes up when we talk to people about filing for bankruptcy is: Will I get to keep my house? Being able to hit the refresh button on your finances while still being able to live in your home is often critical to people’s decision to file. 

While it’s often the case that people can keep their homes during bankruptcy, if there’s a foreclosure in the process, banks tend to make it harder to do.

Unsavory Bank Tactics Trigger Foreclosure

Wells Fargo has recently come under scrutiny again when it suddenly foreclosed on a deceased veteran’s home. Prior to his death, Jimmy Collins was faced with the prospect of losing his home. He filed a loan modification application to avoid foreclosure.  Wells Fargo, employing an illegal process called “dual-tracking” pushed a foreclosure through simultaneously with his loan modification application.

Upon Collins’ death, Wells Fargo foreclosed on his home, following requests from his estate to continue deducting payments. Faced with losing the home for good, the estate is suing for wrongful foreclosure.

Alabama Homestead Exemption

Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, you may still be able to keep your home. While this hasn’t always been the case, last year Governor Robert Bentley signed a law to increase the homestead exemption for the first time since the 1980s, making it easier to keep your home.

The current homestead exemption allows you to keep $15,000 per person (or $30,000 per couple) of equity in your home. This means that if you and your spouse have a home worth $160,000 and you owe $130,000 or more, the bankruptcy trustee would not be able to sell your house to satisfy your debts.  The homestead exemption applies to homes, condos and mobile homes, but must live in the home at the time your bankruptcy case is filed.

Keeping Your Home

If you are feeling overwhelmed by your financing situation and are worried about losing your home, there are ways to get help.  Personal bankruptcy can be a difficult choice, but talking with an experience Alabama bankruptcy lawyer can help you better understand your options. Request a consultation with the attorneys at Padgett & Robertson today or call 251-342-0264.

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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

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