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Update as of October 20, 2011 - in the many foreclosure cases we
handle, we tend to see trends as they develop. Prior to the Bush bank
bailout in 2008, a debtor could cut deals with banks. Once the banks
became flush from the bailout money, they quit dealing. The banks
started to loosen up again but when the Obama bank bailout hit, they
quit dealing again. The banks have ever so slowly started to begin
dealing, but it's different now. To get a deal now, you have to work
the bank through litigation. To speed the process up and to increase
one's likelihood of getting a deal, you need to take away the carrot on
the end of the stick - your good credit, remaining assets and wages -
because the bank sees that and thinks it's going to be theirs one day,
after you lose a lawsuit. The only sure-fire way to take that carrot
off the stick is to file a bankruptcy - and the best kind to file is a
liquidation bankruptcy under chapter 7 of the bankruptcy code. If you
speak to a lawyer and he or she tells you that you are too rich to file a
bankruptcy because you earn more money than the median income for a
person with a family size such as yours, ask them to run the "long
form". Though you may not qualify under the means test, you may qualify
under the long form. Once you discharge the debt, in Florida, even
though you technically surrender the home, you get to stay and fight the
bank in Circuit court. Without that carrot, banks loosen up and become
much more reasonable.
Note: Last week (10/27/11) we got a 53.27% principal reduction for a client.
For what it's worth. George Gingo and James Orth