Category Archives: Foreclosure – Tax Refunds And Bankruptcy

Millions of Americans count on their tax refunds each year to pay down debts, get caught up on bills, or simply to make ends meet. With an estimated 1.5 million personal bankruptcies to be filed in 2011, bankruptcy lawyers around the country are being asked the same question: “What will happen to my tax refund if I declare bankruptcy?”

Income tax refunds are basically interest-free loans to the government, and are therefore considered assets of debtors who declare bankruptcy. The trustee assigned to your case may be able to seize your income tax refund, depending upon two main factors: first, what type of bankruptcy you file, and second, whether your refund is fully  exempted.


•  According to the IRS, the average tax refund for 2009 was $3003 per person.
•  Early filers usually get larger refunds.
•  There were $1.2 trillion in personal taxes in the 2009 tax year.

The two main types of personal bankruptcy cases are Chapter 7 and Chapter 13. In a Chapter 7 case, debtors are essentially allowed to walk away from their debts.

In a Chapter 13 case, debtors must repay their unsecured debts over 3 to 5 years.

Most Chapter 7 cases are considered “no asset” cases, and for those assets that the debtor does possess, there are federal and state exemption laws, which prevent the bankruptcy trustee from seizing and selling the debtor’s property.

Just like the debtor’s household goods, clothing and automobile, in most Chapter 7 cases the debtor’s tax refund can be fully exempted, which means the bankruptcy trustee cannot even consider seizing the refund. However it is very important to use the full and correct exemptions to protect the refund.


•  Tweak your withholdings to produce more immediate income throughout the year, which will reduce your refund return at the end of the year


•  You must disclose all of your assets and all of your debts, and your tax refund is an asset. Bankruptcy fraud is a serious crime.
•  Maximize the bankruptcy exemptions on your refund and in most cases, you will be able to keep it.


•  If your refund is exempt, the money is yours to keep.
•  If your return must be surrendered, the trustee in your case will directly notify the IRS, and you will likely never even see the money.

Via EPR Network
Law press releases

Lawyers To Lawmakers: Reject Anti-Consumer Foreclosure Bill

A group of attorneys who represent foreclosure defendants around the state is calling on lawmakers to reject a proposed new law deceptively titled “Homeowner Relief and Housing Recovery Act” designed to change Florida’s foreclosure process from that is supervised by the courts, to a non-judicial process that would be entirely in the hands of the banks and mortgage companies from start to finish. Lawyers for Homeowners Rights or LHR-FL, a statewide coalition of consumer attorneys, will travel to Tallahassee on April 21 with homeowners to speak out against this anti-consumer legislation. According to Chip Parker, a Jacksonville attorney, “every Florida homeowner should be worried about passage of this bill”.

The two bills, HB 1523 by Rep. Tom Grady, R-Naples, and SB 2270, by Sen. Michael Bennett, R-Bradenton, will be considered this week by legislative committees. These two lawmakers want to allow mortgage companies to obtain foreclosure quickly so the home owned by a borrower who falls behind on their payments can be sold only after two letters sent by mail. If the homeowner does not respond or cannot pay what has been demanded by the bank, the house can be s sold -even if the homeowner is still living in it. There would be no independent review of any amounts claimed to be owed, or whether there has been a default under the mortgage, or even if the mortgage company has the right to foreclose even if there has been a mistake.

“It offends me that bankers can convince our lawmakers to use such blatantly misleading titles to legislation in a concerted effort to fool consumers,” said St Petersburg attorney Matt Weidner, who represents hundreds of homeowners across the state in foreclosure proceedings. “I see first-hand, every single day the profound effect the foreclosure crisis is having on consumers, institutions and our communities. This bill will do nothing to help homeowners.”

LHR-FL opposes the legislation saying that these institutions cannot be trusted with the foreclosure process pointing to a federal probe, recently reported in the Wall Street Journal, that is now underway and looking into alleged fraud by a Jacksonville, Florida company known as Lender Processing Services and its subsidiary Docx, LLC. These companies regularly prepare thousands of documents for banks and mortgage companies to be used in foreclosures all over the U.S., including at least one document that was prepared and filed in a Florida county showing that “bogus assignee” owned the mortgage. “Our lawmakers should not vote to trust the same people involved in that kind of activity. That is not good judgment in our view”, says Weidner.

Dominick Salfi, a former Circuit Court Judge in Seminole County, says “passage of this law would only worsen the abuse by mortgage companies”. He continues, “mortgage companies, banks and their lawyers are taking advantage of our overworked judges and their support staff who do not have sufficient hours in a day to thoroughly review each file.” LHR-FL argues that lawmakers who vote to put the foreclosure process in the hands of an industry that has shown little regard for the law, our courts and homeowner rights themselves risk being someday at the mercy of these institutions if mortgage payments are missed. “It’s a sobering thought. Even if you have faithfully paid for years into your mortgage, if something unexpected happens to you and cannot pay, or if the mortgage company mistakes you for someone else, it’s two notices and you’re out. That could happen to anyone, and it’s just not safe at all.” says Parker.

Via EPR Network
Law press releases

The Parsa Law Group Has Helped Thousands Of Homeowners

In the midst of the current foreclosure crisis in reaches epic proportions, the nation’s leading provider of legal loan modifications services, the Parsa Law Group and its marketing arm, the National Loan Modification Center, have helped hundreds of homeowners stay in their homes and are preparing to help even more.

The Parsa Law Group provides professional legal representation for those wishing to renegotiate an existing mortgage with their lender. The ultimate goal of the service is to avoid foreclosure and keep people in their home. The on-site team of attorneys and staff has helped thousands of homeowners who are facing financial hardship, have a mortgage that is upside down, or are stuck with an ARM/Interest-only mortgage they can no longer afford by stopping foreclosure, reducing their monthly mortgage payments, adjusting the principal on their mortgage, working out a modified loan with a lower fixed interest rate, and getting any missed mortgage payments tacked on to the end of their loan.

“For me this is a mission to help as many homeowners as possible stay in their homes. It’s such a shame when we see so many people that were taken advantage of with loans that were not explained to them fully or when you have someone that is about to lose their house and entire life’s savings because someone lied to them outright, or because they lost their job, or are simply going through rough financial times like so many other Americans. With the banks out to save themselves with billions in bonuses, and refusing to free up credit markets with the bailout money, a line has clearly been drawn, and we have chosen to be on the side of struggling homeowners.” said James Parsa, Lead Attorney at the Parsa Law Group / National Loan Modification Center.

“It’s been a quite challenge to keep up with the explosive growth of this area of our business,” says Mike Ponzillo, Director of Operations at the Parsa Law Group / National Loan Modification Center “we are literally hiring people every week because the calls keep coming in and every single case we negotiate with a lender requires a huge commitment of staff hours and resources on our end.”

Kelly Sneed, Marketing Manager at the National Loan Modification Center, said “Since we started this service it has been an ongoing effort from a marketing standpoint to get the word out about Loan Modifications as an alternative to foreclosure. A few months ago people didn’t know what a Loan Modification or a Loan Workout was, or how it could help them save their home.”

The Parsa Law Group is also in the process of assisting homeowners who do not qualify for the foreclosure help President Obama has recently issued. The Parsa Law Group is the staunch legal ally that struggling homeowners need in these incredibly difficult times.

Via EPR Network
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