Law Firm of Gregory A Ross, PC

April 28, 2011

Chapter 7 and Chapter 13 Bankruptcy Myths and Fallacies

Bankruptcy Solutions

No, THE 2005 REFORM ACT just made it more difficult and added SPEED BUMPS to overcome. This is why you need to consult a consumer bankruptcy attorney before you do anything if you are in financial distress.

No, do not wait until it is an emergency with bank restraints and income executions. Figure out where you will be financially 6 months from now. Will it be better or worse?

No, the starting point is the MEDIAN INCOME set in the Means Test under the new law which is currently $38,294 for single person with no dependents in Texas.
– $55,178 for family of 2.
– $65,477 for family of 4.
– Each state is different.
This is just a starting point. Certain expenses will help qualify you, so one’s gross income can be substantially higher in some cases. See your local Salinas and Monterey bankruptcy attorney to see if you qualify.

NO: Each state has different protection for homes. If your home is underwater (meaning no equity in it), it is not considered an asset in the bankruptcy and you may elect to keep it or surrender it. Texas has an unlimited dollar value homestead exemptions to protect equity in your principal residence.

Let’s face it: most clients already have bad credit. Question is: What are you going to do about your debt? Most credit scores will go up after filing bankruptcy, particularly in a Chapter 13.

You have a better chance of landing that job if you take action to fix your finances. Employers do not want harassment at work or income executions. Landlords want tenants who can use their salary to pay rent, not the Marshal or credit cards.

WRONG! Stop using the cards and stop paying them and see a consumer bankruptcy professional. Maxing out those cards will create more problems in your bankruptcy filing and may be bad faith. Bankruptcy is meant for the UNFORTUNATE but HONEST debtor.

WRONG! Your retirement funds are protected! And, you will be taxed and penalized on retirement withdrawals by the IRS! Don’t listen to those Cable Television Talkingheads who tell you to cash in your retirement!

NOT TRUE: Filing bankruptcy is NOT a crime and will NOT affect your Green Card or CITIZENSHIP!!

Bankruptcy filings are published in some newspapers since it is a matter of public record. Your real friends will understand, and who cares about anyone else. They aren’t in your shoes and don’t know what led to having to file Bankruptcy.

NO! If you pay the DMP and do not pay your creditors, you will be sued by the creditor. Most DMPs are being investigated by the Attorney General.

No. Bankruptcy allows a Fresh Start. You must list all of your debts. It is likely that the card will be closed anyway.

Most bankruptcy attorneys have payment plans. In Chapter 13, most of the fees can be paid through the plan payments. You are generally instructed to stop all credit card payments freeing up money for fees.

Studies show that bankruptcies are generally caused BY HEALTH PROBLEMS, EMPLOYMENT PROBLEMS, and MATRIMONIAL PROBLEMS.

In A Chapter 7 bankruptcy debts are wiped out with the exception of certain taxes, child support/alimony and student loans. In Chapter 13 you pay back debts that must be paid, such as certain taxes, mortgage arrears if you are keeping the house, or payments for vehicles on which you still owe money.

Contact us with any of your Bankruptcy questions. The initial consultation is free.

Law Office of Gregory A. Ross, PC
4245 Kemp Blvd., Ste 308
Wichita Falls, TX 76308
Telephone: (940) 692-7800
Facsimile: (940) 692-7813

March 25, 2011

Facing Foreclosure

Purchasing a home can be one of the most significant investments a person or family makes. After the sale is complete, there is often no one available to consult with when you experience financial troubles and face foreclosure. This article is designed to provide a basic introduction and description of the foreclosure process, the laws governing foreclosure, and possible options for those facing foreclosure.

What Are the Different Types of Foreclosures?

In Texas, the type of foreclosure process that is used by a lender depends on the type of debt that is owed. There are two general classes of foreclosure: a non-judicial foreclosure and a judicial foreclosure. A non-judicial foreclosure — performed without involving a court or judge — is used when the loan was used to purchase the home or to refinance the original purchase loan. A judicial foreclosure generally occurs when a government entity is seeking to collect taxes owed on the property. The government will file a lawsuit with the court seeking to have your property sold to pay for property taxes that are owed.

There is also a third type of foreclosure that combines parts of the non-judicial and judicial foreclosures and is used only for specific types of loans. If a homeowner has received a home equity loan or a loan that was used to pay property taxes, the lender must obtain a court order approving the foreclosure before performing a non-judicial foreclosure. After the lender provides the first notice and the homeowner does not pay the debt owed, the lender must file an application with the court requesting an order of foreclosure. The homeowner has 38 days to file a response to the foreclosure application. If a response is filed, the court will hold a hearing to determine whether the lender is entitled to foreclosure. If a foreclosure order is signed by the court, the lender will then be allowed to continue with a non-judicial foreclosure by providing the second notice, which is the Notice of Sale.

What Steps Are Involved in a Non-judicial Foreclosure?

Once a homeowner has missed a mortgage payment and is in default under the promissory note, the lender may attempt several unofficial steps to resolve the problem, such as collection calls, letters, acceptance of partial payments, or negotiating a temporary payment plan. Assuming that these efforts have not resolved the problem and the lender is ready to proceed with a nonjudicial
foreclosure, the following actions must be performed by the lender:

1) Notice of Default and Intent to Accelerate (the first notice);
2) Notice of Sale and Acceleration of Debt (the second notice);
3) Foreclosure Sale;
4) Distribution of Proceeds;
5) Eviction;
6) Deficiency Action; and
7) No Right of Redemption for Non-judicial Foreclosure.

What Options Are Available to Avoid a Non-judicial Foreclosure?

A foreclosure can be canceled, delayed, or avoided at any time prior to the sale at the courthouse. The best time to reach a resolution is during the 20-day period after receipt of the first notice. During this time, you are required to pay only the past due amounts and not the entire loan amount. If you believe that you will be able to gather the necessary funds to bring the loan current, it would be wise to contact the lender and keep them informed on your progress as they may be willing to extend the 20-day period if they believe that the matter can be resolved without further action. If you cannot pay the entire amount that is due, your lender may be willing to agree to a payment plan, loan modification, or other arrangement to bring the loan current and ensure that you will be able to make future payments. In certain situations, it is possible that your lender must consider modification if your home loan qualifies under new laws passed to provide relief from rising foreclosures, such as the Making Home Affordable plan and the Home Affordable Modification Program.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure involves a scenario where the homeowner voluntarily transfers ownership of the property to the lender. Deeds in lieu of foreclosure are quicker to complete, cost less money for the lender, and are more confidential than a public sale. However, this is usually only an option when ownership of the property is free and clear of mortgages, liens, and encumbrances. Homeowners will be left with the same final result as with a foreclosure — the loss of their residence.


The filing of a bankruptcy petition will immediately stop a foreclosure sale from occurring as of the filing of the petition. However, you will be required to continue making some type of regular payments and make some payments toward the delinquency as part of your bankruptcy plan. Filing for bankruptcy is a major event and should not be taken lightly or performed without careful consideration.

For assistance when facing foreclosure, please call the Law Office of Gregory A. Ross at 940-692-7800, or email us at

This article was excerpted from Facing Foreclosure, a brochure prepared as a public service by the Texas Young Lawyers Association and distributed by the State Bar. To obtain a complete copy of the pamphlet, write to the State Bar Public Information Department at P.O. Box 12487, Austin, 78711-2487; call (800) 204-2222, ext. 1800; or visit

February 14, 2011

What is a Deed of Trust?

A deed of trust is an arrangement among three parties: the borrower, the lender, and an impartial trustee. In exchange for a loan of money from the lender, the borrower places legal title to real property in the hands of the trustee who holds it for the benefit of the lender, named in the deed as the beneficiary. The borrower retains equitable title to, and possession of, the property.

The terms of the deed provide that the transfer of legal title to the trustee will be void on the timely payment of the debt. If the borrower defaults in the payment of the debt, the trustee is empowered by the deed to sell the property and pay the lender the proceeds to satisfy the debt. Any surplus will be returned to the borrower.

Deed of trust is a document which pledges real property to secure a loan, used instead of a mortgage in the following states; Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri, Montana, North Carolina, Texas, Virginia, and West Virginia.

If you have any questions about deeds of trust, or real estate law, call the Law Office of Gregory A. Ross, PC at 940-692-7800, or email us at

October 22, 2010

Did you know the Servicemember’s Civil Relief Act (SCRA) protects active duty military from repossessions and foreclosures?

Filed under: Foreclosure,SCRA — Tags: , , , — gregoryrosspc @ 9:15 am

SCRA Installment Contract Protection

A servicemember who, prior to entry into active duty, entered an installment contract for the purchase of real or personal property (including motor vehicle), is protected under the SCRA if the servicemember’s ability to make the payments is “materially affected” by the military service.

  • The servicemember must have paid, prior to entry onto active duty, a deposit or installment under the contract.
  • The seller is then prohibited from exercising any right or option under the contract to rescind or terminate the contract, to resume possession of the property for nonpayment of any installment due, or to breach the terms of the contract, unless authorized by the court.
  • The SSCRA protects servicemembers against foreclosures of mortgages, as long as the following facts are established:
    1. The relief is sought on an obligation secured by a mortgage, trust deed; or other security in the nature of a mortgage on either real or personal property;
    2. The obligation originated prior to entry on active duty;
    3. The property was owned by the servicemember or family member prior to entry on active duty;
    4. The property is still owned by the servicemember or family member at the time relief is sought;
    5. The ability to meet the financial obligation is materially affected by the servicemember’s active duty obligation.

October 4, 2010

Housing and Economic Recovery Act of 2008 FAQ

Filed under: Foreclosure — gregoryrosspc @ 11:05 am

Q: How will the law help struggling homeowners keep their homes?
A: Through the Federal Housing Administration (FHA), an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages. The program offers government insurance to lenders who voluntarily reduce mortgages for at-risk homeowners to at least 90% of the property’s current value.

Q: When will the program begin?
A: The program will begin on October 1, 2008 and sunset on September 30, 2011. Homeowners in danger of losing their homes before October 1, however, should not wait to contact their loan servicers and should begin applying for federally insured mortgages now.

Q: Who is eligible?
A: To be eligible to participate in this program, a borrower must:

  • Have a loan on an owner-occupied principal residence. Investors, speculators, or borrowers who own second homes cannot participate in this program.
  • Have a monthly mortgage payment greater than at least 31 percent of the borrower’s total monthly income, as of March 1, 2008.
  • Certify that he or she has not intentionally defaulted on an existing mortgage, and did not obtain the existing loan fraudulently.
  • Not have been convicted of fraud.

Q: How can a homeowner access this new program?
A: Homeowners or a servicer of an existing eligible loan need to contact an FHA-approved lender. The FHA-approved lender will determine the size of a loan that a borrower can reasonably repay and that meets the requirements of the program. If the current lender or mortgage holder agrees to write-down the amount of the existing mortgage and make the new loan affordable, the FHA lender will pay off the discounted existing mortgage. Loans provided under this program must be 30-year fixed rate loans.

Q: Are lenders required to participate in this program?
A: No. The program is completely voluntary for lenders, investors, loan servicers, and borrowers.

Q: How does this law help neighborhoods that have been hit by the foreclosure crisis?
A: The impact of the current crisis has not been isolated to individual borrowers or investors, but has been felt broadly by neighbors, communities, and governments across the nation. The law strengthens neighborhoods hit hardest by the foreclosure crisis by providing $3.9 billion in Community Development Block Grants to states and localities to buy foreclosed homes standing empty, rehabilitate foreclosed properties, and stabilize the housing market.

Q: Will this law be a bailout for speculators, homeowners, investors, and lenders?
A: No. It is narrowly tailored to keep families in their homes. For example:

  • Only primary residences are eligible: NO speculators, investment properties, second or third homes will be refinanced.
  • Investors and lenders must take big losses first in order even to participate. The owner of the old mortgage can get a maximum of 90% of the current value of the home (which presumably will be considerably less than the value of the original loan). In many cases the loss will be significantly greater, but 10% is the minimum.
  • In addition, lenders must waive any penalties or fees, and help pay for the origination and closing costs of the new loans.
  • Most homeowners will have seen the equity in their homes disappear before being able to refinance under this program. In addition, the FHA will get a portion of any future profits on the house, to make sure the government recoups its investment over the long run.

Q: Will this law reward families who bought homes they could not afford?
A: Many homeowners facing foreclosure were misled, were deceived, or were in other ways the victims of unfair lending practices.  To prevent future abuses by lenders, this law will establish a nationwide loan originator licensing and registration system to set minimum standards for all residential mortgage brokers and lenders. It also strengthens mortgage disclosure requirements to help ensure that borrowers understand their mortgage loan terms.

Q: How will this law make it more affordable to own a home?
A: There are a number of provisions that will make homeownership more affordable:

  • Creates a refundable tax credit for first-time homebuyers that works like an interest-free loan of up to $7,500 (to be paid back over 15 years).
  • Grants states $11 billion of additional tax-exempt bond authority in 2008 that they can use to refinance subprime loans, make loans to first-time homebuyers and to finance the building of affordable rental housing.
  • Raises conforming loan limits for the FHA, Fannie Mae and Freddie Mac to $625,500. Because of the high cost of housing in California, a majority of the state’s residents were previously shut out from these programs. Raising these loan limits will lead to lower interest rates on some loans, greater refinancing opportunities, and enable more borrowers in high cost areas to avoid the type of nontraditional and frequently abusive loans that led to the current crisis.
  • Provides couples using the standard deduction with up to an additional $1,000 deduction for property taxes ($500 for individuals).

Q: Does the law provide help to those who still cannot afford to own a home?
A: Yes. The bill includes a number of provisions to increase the supply of affordable housing, which has been a major problem in California pre-dating the current foreclosure crisis. For example:

  • The bill creates a new permanent affordable housing trust fund – financed by Fannie Mae and Freddie Mac and not by taxpayers – to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas.
  • In addition, the legislation provides a temporary increase in the Low-Income Housing Tax Credit and simplification of the credit to help put builders to work to create new options for families seeking affordable housing alternatives.
  • Source:

September 23, 2010

Federal Mortgage Assistance Programs

Filed under: Foreclosure — Tags: , , , — gregoryrosspc @ 12:03 am


The Housing and Economic Recovery Act, Public Law 110-289, was passed on July 30, 2008. It created the HOPE for Homeowners program. It is effective from October 1, 2008 to September 30, 2011. 

In February 2009, President Obama introduced the Making Home Affordable program, which authorized the Home Affordable Refinance program and the Home Affordable Modification program. The Home Affordable Refinance program expires on June 10, 2011 and the Home Affordable Modification program expires on December 31, 2012.

HOPE for Homeowners Program

This program’s goal is to reduce principal and interest payments for eligible borrowers by allowing them to refinance into fixed rate 30-year FHA-insured loans based on current property values. Lender participation is voluntary. Eligible mortgages must have been originated by January 1, 2008. Borrowers must certify that they:

1. have a mortgage debt-to-income of at least 31%,

2. are unable to afford their current loan,

3. have not intentionally missed mortgage payments,

4. do not own second homes, and

5. have not been convicted of mortgage fraud.

Additionally, they must certify that the mortgaged property is their primary residence, and is a single-family home (one to four units).

Original lenders must agree to:

1. pay a 3% one-time insurance fee to FHA;

2. write down the mortgage to achieve a 90% loan-to-value ratio, if necessary;

3. waive prepayment penalties on the existing mortgage; and

4. release all existing claims, such as second mortgages.

The new loan may not exceed 90% of the property’s current appraised value. The maximum loan amount is 132% of the Freddie Mac limit. The program is effective from October 1, 2008 through September 30, 2011.

The Making Home Affordable Program

This federal program offers two options for mortgage applicants and seeks to make mortgages more affordable and prevent foreclosures. Lender participation is voluntary. The two options for homeowners are the Home Affordable Refinance program and the Home Affordable Modification program. Investors and lenders are provided incentives for participating in the Making Home Affordable program. The Making Home Affordable website refers homeowners to contact (888) 995-HOPE.

The Home Affordable Refinance Program.

This program is for applicants whose existing mortgage is owned by Freddie Mac or Fannie Mae and who have not missed any mortgage payments. Normally, they would be ineligible to refinance because their homes have decreased in value. The program allows them to refinance into a more stable and affordable fixed-rate loan. The program is in effect until June 2011.

The Home Affordable Modification Program.

This program assists homeowners who are at-risk and may have already missed a mortgage payment. However, payment delinquency is not a criterion for eligibility. Modifications may start immediately and continue until December 31, 2012, and loans may be modified only once. The Treasury will partner with the financial institution and investors to reduce a homeowner’s monthly mortgage payments. Criteria for eligibility in this program include the following:

1. the loan must have been originated on or before January 1, 2009;

2. the owner must occupy the property;

3. the first-lien loan has an unpaid balance of up to $ 729,750;

4. the mortgage payment is more than 31% of the homeowner’s gross monthly income; and

5. the applicant must sign an affidavit of financial hardship.

 Only the homeowner’s first mortgage is eligible for modification under this program.

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