Can lien holder on a property after the foreclusre in AZ garnish my personal checking or saving accounts? (HOA, mortgage)

[RockThunder6]

Originally Posted by Greatday

One must also remember that where there is no deficiency judgment, the lender will send a form 1099 (misc income) to the borrower for the total amount of the loan that was "forgiven" and, that amount is subject to being added to the former borrowers income on their tax return.

While there is a temporary moratorium on "forgiveness of debt" reporting (signed by President Bush on Dec 27, 2007), it is temporary AND is applicable to primary residences only.

The temporary Moratorium is for years 2007-2009. I believe its for Owner occupied and 2nd home. Because you can Itamize Mortgage Interest for your Primary Residency and a second home you have somewhere else.

But if you owned your home that is Primary Residence or a Secondary Residences more then 2 years and sold it any income would be exempt up to 250,000 for a single person and 500,000 for married people. So the Moratorium is meaningless if you had your home for over tow years and the C.O.D. (Cancellation Of Debt) was less then 250k for single and 500k for married. Because you can already exampt up to 250K Single or 500K Married.

[Greatday]

Originally Posted by RockThunder6

Because you can already exampt up to 250K Single or 500K Married.

This is for capital gains purpose.

Not for forgiveness of debt (IRS purpose)

And, it is for primary residence only

[RockThunder6]

Originally Posted by Greatday

HELOC's are not unsecured. They can be a first position lien (in the case of free and clear property) or junior liens.

If you have a Free and clear title. And Let say you aquired a Heloc and you defualted. And I hope you had a homestead. It can be as a lien but not record deed of trust (CA) or Mortgage for other states. Because these instruments gives the lender to foreclose on the home not the promisary note. Just like the car your pink slip gives the power for dealership to impound your car if you don't pay not the promisory note you signed at dealership.

In that case if you defualt on the HELOC. Then the lender can force the borrower to BK only if the lender have an outstanding balance of $13,475 and the borrower has less then 12 creditors. Then lender himself force you to BK.

Once in the BK if you had (HomeStead) you have equity of more then 20,200 of equity is exampt. You will be forced to sell if you had more then 20,200 of equity to replenish your creditor/lender debt. and if that is not enough to repay the HOLEC. Then if you have a non exampt monthly income.

Your sufficient monthy income then you will be foreced to Ch.13 BK. And your income will go through the MEAN test and see where you fit and how much can be taking out for up to 5years Max.

[Greatday]

First - Homestead exemptions vary from state to state. In Arizona, the exemption is $150.000 of equity on your primary personal residence - and you automatically get the exemption upon acquiring title to the property.

In Nevada (my other state of residence), the exemption is $600,000 but, it is not automatic. You must file for it.

Additionally, Homestead exemptions do NOT protect against voluntary liens - such as a mortgage. They will protect only against involuntary liens.

As for the Bankruptcy laws: The revisions of several years ago establishing means testing have not proved to be all that restrictive - if people incur debt, then they should, if at all possible, repay it. Many of my clients have done 13's and happily repaid their debts as they wanted to.

On the other hand - we are now doing more and more no asset Chap 7's - and getting most debt (including IRS) eliminated.

Home Equity lines of Credit are usually recorded as liens in the State of Arizona.

[RockThunder6]

Originally Posted by Greatday

First - Homestead exemptions vary from state to state. In Arizona, the exemption is $150.000 of equity on your primary personal residence - and you automatically get the exemption upon acquiring title to the property.

In Nevada (my other state of residence), the exemption is $600,000 but, it is not automatic. You must file for it.

Additionally, Homestead exemptions do NOT protect against voluntary liens - such as a mortgage. They will protect only against involuntary liens.

As for the Bankruptcy laws: The revisions of several years ago establishing means testing have not proved to be all that restrictive - if people incur debt, then they should, if at all possible, repay it. Many of my clients have done 13's and happily repaid their debts as they wanted to.

On the other hand - we are now doing more and more no asset Chap 7's - and getting most debt (including IRS) eliminated.

Home Equity lines of Credit are usually recorded as liens in the State of Arizona.

Let say if your involentarly go to BK another ward forced by your creditor. Exemption most likely to appear for Homestead( up to 20,200 of residence property), Car (up to $3,225), and etc...SSI, UI, Alimony.

I don't know how effective its but thats what it is.

It was revised so people with high incomes to be responisable for some of the too much unnecessary debt incurred.

Such as rappers, basketball, football players, Boxers Such as (Tyson) buying too much "bling bling" jewlery. Then filling for BK not knowing how they could not live with 100 million dollar contract.

[Greatday]

Originally Posted by RockThunder6

Let say if your involentarly go to BK another ward forced by your creditor. Exemption most likely to appear for Homestead( up to 20,200 of residence property), Car (up to $3,225), and etc...SSI, UI, Alimony.

I don't know how effective its but thats what it is.

It was revised so people with high incomes to be responisable for some of the too much unnecessary debt incurred.

Such as rappers, basketball, football players, Boxers Such as (Tyson) buying too much "bling bling" jewlery. Then filling for BK not knowing how they could not live with 100 million dollar contract.

Again - exemptions are by states. Some are very conservative - some very generous.

BTW - it would be most unusual for a creditor to force you into a BK (involuntary). In fact, for a creditor to compel a debtor into BK, a majority of creditors (75%+) must agree to do do.

BK's are "voluntary" and are a way to work out and or discharge, debt.

[Ponderosa]

Originally Posted by Greatday

Again - exemptions are by states. Some are very conservative - some very generous.

BTW - it would be most unusual for a creditor to force you into a BK (involuntary). In fact, for a creditor to compel a debtor into BK, a majority of creditors (75%+) must agree to do do.

BK's are "voluntary" and are a way to work out and or discharge, debt.

In AZ you get to keep one pair of shoes and a loin cloth.

[Greatday]

Originally Posted by Ponderosa

In AZ you get to keep one pair of shoes and a loin cloth.

Funny.

Actually, Arizona is one of the better states as far as exemptions - It is one of the reasons (certainly not the only one) why AZ has so many Chap 7 and 13 filings

[RockThunder6]

Originally Posted by Greatday

Again - exemptions are by states. Some are very conservative - some very generous.

BTW - it would be most unusual for a creditor to force you into a BK (involuntary). In fact, for a creditor to compel a debtor into BK, a majority of creditors (75%+) must agree to do do.

BK's are "voluntary" and are a way to work out and or discharge, debt.

Well I don't know how often its been done. But the BK law allows creditor to petition a debtor involuntary into BK proceedings under CH.7 or CH.11. IF
1) debtor has fewer than 12 creditors any one or more creditors owes at least $13,475
2) Debtor has more then 12 creditors then at least 3 creditors owed $13,475 aggregately.

[Greatday]

Originally Posted by RockThunder6

Well I don't know how often its been done. But the BK law allows creditor to petition a debtor involuntary into BK proceedings under CH.7 or CH.11. IF
1) debtor has fewer than 12 creditors any one or more creditors owes at least $13,475
2) Debtor has more then 12 creditors then at least 3 creditors owed $13,475 aggregately.

It is very uncommon - especially in personal bankruptcy - it is very risky for the creditors