Very often, I find myself speaking to debtors and wondering what I would do if I were in their shoes. This week, I spoke with a debtor who has had a chapter 13 case pending for about a year and was representing himself. The debtor was facing a Motion for Relief from Stay for failing to make post-petition mortgage payments, although the plan payments were current. I asked the debtor why he was representing himself in his case and he told me that all the lawyers he spoke to had told him he should just “walk away” from his house and file a chapter 7. After our conversation, I understood why.
I asked the debtor why he had made no mortgage payments – and was told that the mortgage company had refused to accept them. The mortgage had not been paid for almost 10 months and the post petition debt totaled more than $18,000. Knowing that mortgage companies do tend to mess up after filings and not accept payments, I asked another question: do you still have the funds on hand to pay the mortgage company? The response was “no.”
Arguably, at least a healthy fraction of those funds should have been on hand but were not. Not a penny. When I asked the reasons why the funds were not on hand, the response was “I had bills to pay.” The debtor also told me there was no equity in the property and it was 100% financed.
I thought to myself: ‘what the heck are we doing in a chapter 13?’ There’s no house to “save” – the value is probably less than it was at the closing, so there’s no equity building up. In fact, it’s probably getting more underwater as the months go by. The mortgage payments are $3000 per month and they are not being made, nor is the monthly house payment being set aside. Other choices are being made.
It was then that I asked why the debtor did not have an attorney and was told that all of the attorneys he spoke to told him he could not afford his house and he should just “walk away.” This pretty much what I ended up telling him.
My point is this: debtors who meet with competent attorneys should expect to hear the truth about real life issues they are facing. Competent consumer bankruptcy attorneys are not there to sell a home theatre system and tell you what you want to hear. At times, you’re going to hear what you do not want to hear. Think of this way, you do not go to the dentist with a toothache only just he can tell you everything is hunky-dory (and if you’re lucky, get a lollipop).
Or we could think of it another way: years ago I had abdominal surgery. I recovered fairly quickly, but one stupid stitch ended up getting infected. It hurt like a s.o.b. (since this is a professsional website, my use of the term s.o.b. is designed to illustrate the level of pain that I was experiencing). When I realized that my efforts at treating the infection were not working, I opted to head over to the emergency room. When I met with the doctor, he looked me square in the eye and said “I’m going to pull it out. And I’m not going to pull any punches with you: This is going to hurt like hell, but the pain will pass quickly.” I appreciated his honesty.
And do you what? He was right. I felt better almost immediately and it was sort of cool walking out to waiting room and asking my friend if he could hear me scream all the way out there. Today, the scar is barely noticeable.
I know that we often do not like to hear (and feel) what is painful or difficult but there was nothing I could do for this debtor. He did not want to hear that he should walk away from his house. He did not want to hear that he could not afford his house. And he did not want to hear that there was nothing that he or I could do about it.
If it were you in this debtor’s shoes, what would you do? What would you do if more than one bankruptcy lawyer told you that there was no way you can save your home? Would you going to keep looking for a lawyer who would tell you want you wanted to hear? Or would you just sit back, bear down and hope that the pain passes quickly?
Related posts:
- So You Think It’s a Good Time to Buy a House?
- The Easy Life of a Consumer Bankruptcy Attorney
- To Reaffirm or not Reaffirm: That Really Is The Tough Question
- Storm Preparation: Payment Advices
- Bankruptcy Court Observations: Bad Lawyering
Tags: Bankruptcy