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Timothy Casey Theisen
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Timothy Theisen’s Answers

60 total


  • Can I refinance a mortgage that was not reaffirmed in a chapter 7 bankruptcy?

    My chapter 7 bankruptcy was finalized 4 years ago and my home loan was discharged in the bankruptcy. I have continued to live in the home and make on time payments. My financial health has improved greatly since I don't have much debt and now that...

    Timothy’s Answer

    Yes you can, and don't let anybody tell you anything to the contrary. More than two years has elapsed from the bankruptcy, (although for some programs, there might be a three year waiting period), and as long as you otherwise qualify (i.e. typically loan to value of less than 80%, and sufficient income, this should not be an issue, particularly with your husband's income assisting.

    You might need to go through a different lender though. If you try to go through your current mortgage company, they may take the position that refinancing their own mortgage could be construed as an attempt to collect the debt, so sometimes they won't refinance out of an abundance of caution, so you will probably need to go with a different lender. And the other issue that may arise, is the fact that the payments that you have been making for the last form years they not appear on your credit report to assist you in rebuilding your credit, in which case you might need to show proof of those payments to manually rebuild your credit.

    There is a blog post on my website about this topic. It seems that some misinformed lenders tell people that the failure to reaffirm precludes refinancing. If somebody tells you that, go find another mortgage broker.

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  • How do courts determine debt in divorce. Are things split 50/50, or can each party take responsibility for their own debts?

    My daughter wants to file for bankruptcy for $15,000 - her medical bills, and their credit card with her name on it. She would then want to file for divorce after filing bankruptcy. Her husband has $25,000 in medical debts from when they li...

    Timothy’s Answer

    Whether she is actually liable on his medical debts would be a question under North Carolina law. The safe thing would be for her to list his medical bills on her schedules. That should take care of it.

    As long as he agrees to assume the medical debt, the divorce court would be highly likely to approve. While debts are basically negative assets and divorce agreements need to "equitable," that just means it needs to be fair, not necessarily exactly 50-50, and the judge would not even likely ask why it's fair for him to assume debt and her not to, but the logical explanation would be that she now needs to have a bankruptcy on her record & he doesn't, and presumably he an afford to pay his debt & she's waiving maintenance, and there may be other property issues at play.

    As far as the timing of one or other going first, I really think she should talk to an attorney who specializes in both family law and bankruptcy, even if it's just for a consultation. You did a good job explaining the situation, but there are many other factors that could affect the right (and possibly wrong) ways to go about what they want to accomplish

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  • Are student loan payments considered preferential payments during chapter 7.

    I have federal student loans that I make payments on every monthly. Unfortunately, I was recently sued and got a very high judgment against me that I cannot workout or pay. I'm thinking of filing chapter 7. My student loan payment is $175.00 per m...

    Timothy’s Answer

    The trustee can only avoid payments if it's more than $600 in the prior 90 days, so $175/month shouldn't be a problem.

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  • Chapter 7 and an apartment lease- Will the landlord find out?

    I will be renting an apartment due to a likely foreclosure. There is a possibility I may need to file Chapter 7 after the foreclosure if I am pursued for a deficiency on a second mortgage on the property. My question is this - I know that I can r...

    Timothy’s Answer

    Lease must be listed on schedule G of the bankruptcy petition, but I do not believe that landlords are creditors entitled to notice, so you should be able to omit them from the mailing matrix, in which case the only way they would find out about the bankruptcy would be by searching the bankruptcy court or doing a credit check, which isn't free.

    If you are concerned about them jacking up the rent at renewal time, which I don't think will happen if you pay the rent on time & don't complain about things (or get complaints from others) then just negotiate a longer lease, or perhaps an option to renew upon expiration for a nominal rent increase.

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  • Will HUD come after me for deficiency if I default on a FHA backed loan?

    I've had an incredibly rough year. Abbreviated story, I purchased my first home last fall with an FHA backed loan. I haven't even been in the place a year, and it's already falling to pieces. HVAC system, electrical issues, and HIDDEN mold/water d...

    Timothy’s Answer

    I am impressed as you seem to have a pretty good grasp of the concept of deficiency judgment and strategic foreclosure. You have glossed over an important step. You need to look at your mortgage documents. If you signed a third-party guarantee with a governmental agency, there would have been a separate document or writer that specifically would have said so. If you have questions about that, you should contact the person who assisted you with the mortgage.

    I am not aware of HUD or FHA always doing this, in fact it is quite the opposite. The only governmental agencies that I have seen do this, are the Veterans Administration, and some rural first time home buyer programs, which do get turned over to HUD.

    The other thing to look into, is whether you may have a cause of action against the seller. Even if they are insolvent, there may be insurance coverage, either their own, or perhaps something through your purchase of the property. If you had an inspection, you can go after the inspector. Or maybe your realtor committed malpractice by not advising you to get an inspection.

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  • If I filed bankruptcy, would I be able to purchase a home?

    I owe a lot of debt, but want to buy a house. Will I be able to purchase a home if I filed for bankruptcy? How long does bankruptcy stay on your record?

    Timothy’s Answer

    The bankruptcy itself stays on your record for ten years. Mortgage standards, after having been tightened following the housing crisis, are starting to loosen to the point that you can qualify for a mortgage two years after the bankruptcy. See attached link. Of course, that presumes you are otherwise eligible.

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  • Can I sell my car to my child before bankruptcy for fair market value?

    I was planning on contacting a lawyer in the next couple months but as it turns out I will be needing a different car very soon. I am currently driving my daughters car and she is driving mine because it is more dependable. I would like to sel...

    Timothy’s Answer

    Intra family transactions can be perfectly innocent and honest, but they have the potential to ensnare your relatives into your bankruptcy. There was somebody else in Chatfield asking complicated questions this morning on Avvo, aren't there any lawyers down there? Sometimes you cause problems that didn't even already exist, especially if you could protect the car anyone. The fact that your question is premised on the fact that you "think" you are only allowed two cars, which I don't even understand where that comes from, underscores the need to hire counsel. Even if you think you can do this by yourself, you might just want to consider doing a consultation with a lawyer.

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  • Can I count my 19 year old college student on the chapter 7 means test as a member of our household?

    We are trying to fill out the chapter 7 means test but are having trouble with the household size. Depending who we talk to or what we read it sounds like there is a debate as to whether college students count as a member of the parents household...

    Timothy’s Answer

    Minnesota courts typically utilize a "heads on beds" approach as set forth in the census, i.e. if you file on the weekend when your daughter is there, you should be OK.

    But the means test is probably the most difficult part of getting a chapter 7 case to go through, and should be done with the guidance of an attorney. There are two many other things to be misinterpreted that you might think you understand, but the caselaw interprets a completely different way. You make more than 50% of the people in MN with your household size, and probably 90% of debtors in bankruptcy, and should figure out a way to hire an attorney.

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  • How do I address the second mortgage lender, I don't want to pay because the second mortgage was tied to the home and it's gone

    The bank foreclosed on my home in Minnesota and there was a second mortgage which the lender is asking. But the home was foreclosed and sold.

    Timothy’s Answer

    It is quite typical that a chapter 7 bankruptcy will follow a foreclosure when there is a second mortgage. The first mortgage takes the house & leaves you alone, and there is a 90-95% chance the second will eventually sue you. Every once in a while you might get lucky and they will forgive it. But if they come after you (or even if it's just sitting there on your credit report) and you can't negotiate a settlement, a chapter 7 bankruptcy (presuming you otherwise qualify income-wise, time-wise and asset-wise) is usually the best way to resolve it. The fact is, with a foreclosure on your credit and the second mortgage sitting there, a bankruptcy won't make your credit any worse, and will put you in the best position to move forward. Almost everybody that I talk to in this situation does qualify, and they usually have other debts that they can discharge as well.

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  • Email me pricing?

    Chapter 7 - No Asset Filing - Looking for an inexpensive attorney in the Twin Cities. Would be a pretty basic filing, and figured I would see what prices are like.

    Timothy’s Answer

    I would recommend you check around with at least three attorneys. While price is many people's first consideration, also consider experience, professional disciplinary history, whether they have staff to answer your calls and accept papers to drop of when they aren't around, whether they sound like they are truly interested in helping you, and whether they have an office near you.

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