Author: tancincowp

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Should I Leave My Home Before It Is Foreclosed?

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A few days ago, a client came to me wanting to file for bankruptcy protection. One of the information I got from them was that they own a home, the mortgage for which they can no longer afford to continue paying. The spouses had the belief that the moment they stopped paying their mortgage, the bank would initiate foreclosure proceedings right away and they would then be evicted from their home in a matter of days. Not wanting to take the chance of being evicted and homeless, the couple abandoned their home and rented an apartment. They decided to take this course of action immediately after they were unable to pay for their mortgage.

The mortgage on their home was approximately $4,000 per month. The rent for their new apartment is now costing them $2,000 per month. Their lowered monthly payment is giving them some financial relief.  Should they have abandoned their home immediately and rented an apartment?  Did they have a better option?
    
I have previously written about foreclosure proceedings in this column. It would normally take a few months before a bank can actually foreclose on your home. Before a bank even initiates foreclosure proceedings on a debtor’s property, it takes a few months before they send the debtor a notice of default. Normally, they don’t send debtors a notice of default until the third month of delinquency. This notice give you a warning to cure the default or they will foreclose on the property.    

Once the bank has sends you this default notice, it may take them another few months to actually foreclose on the property. In California, for example, the period of time it takes a bank to actually do an extra judicial foreclosure on a home is approximately 4 months.

Even after debtor’s home has already been foreclosed, debtor still does not have to leave the home immediately. Depending on the jurisdiction where you live again, it may take another few months for the bank to go to court and actually evict you from the foreclosed home. In California, for example, this may take about 3 months for the actual eviction to take place.
   
Thus for the couple above who came to me wanting to file for bankruptcy, if they had not immediately abandoned their home, they would have been able to stay in their home for at least a few months rent-free. The moment they stopped paying their mortgage, it would take at least 3 months before a default notice would be sent to them. Another 4 months for an extra judicial foreclosure of their property (longer than that if it were to be a judicial foreclosure). Then approximately another 3 months for an eviction case to take place in court.                                 

If you add up the 3 months for the default notice to the 4 months for the foreclosure proceedings, and, the 3 months for the eviction action, the total would be 10 months. At $2,000 per month of apartment rental, the couple could have saved $20,000 had they just stayed in their home instead of abandoning it and going out to rent an apartment. This is the minimum that they would have been able to save as I have run into some homeowners who have been delinquent in their mortgage payments for more than a year and yet no foreclosure proceedings have even been initiated by the bank. In fact, many homeowners who refuse to leave their homes are paid by the lenders to move out of their home voluntarily.  

To some people, it may be immoral to be a squatter and stay in a home you no longer own or are paying for. However, for some financially troubled homeowners they may have no other choice. Other homeowners may also just feel that they are being screwed by the system where the banks get all the financial bailouts from the taxpayer’s money; and, bankers get billions in bonuses while homeowners find it impossible to get any form of financial relief from the banks. For these homeowners, this may just be a way for them to save some money and build up their cash reserves before they actually loose their home. 

(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old.  Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com
 

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Updates

Final Rule Regarding H-2A Program Is Published in Federal Register

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Today, the Department of Labor published a final rule in the Federal
Register regarding the labor certification process under the H-2A
Temporary Agricultural Worker program. The goal of this final rule is
to strengthen protections for both U.S. and foreign workers and to
ensure the integrity of the H-2A visa program. This new rule takes
effect March 15, 2010.

“This new rule will make it possible for all workers who are working
hard on American soil to receive fair pay while at the same time expand
opportunities for U.S. workers,” said Hilda L. Solis, U.S. Secretary of
Labor. “The actions that we have taken through this rulemaking also
will enable us to detect and remedy different forms of worker
violations.”

This final rule will ensure that U.S. workers engaged in the same
occupation and for the same employer as a foreign H-2A worker should
not receive a lesser wage than the foreign worker, regardless of the
date of hire, according to the Department of Labor. Additionally, it
will create a national electronic job registry where job orders will be
posted through half of the relevant H-2A contract period. Finally, the
final rule creates new safety measures to ensure that employers do not
shift recruitment fees, visa fees, border crossing fees and other fees
required by the U.S. government to the H-2A worker.

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Updates

DHS Reports a Decrease in the Number of Illegal Immigrants Living in the United States

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According to new data provided by the U.S. Department of Homeland
Security (DHS), there are now less illegal immigrants living in the
U.S. than there were two years ago. In the estimates provided by DHS,
roughly 10.8 million illegal immigrants lived in the U.S. in January of
this year; in 2007, that number was just about 12 million.

While there are doubts about the accuracy of the data provided by DHS,
most experts agree that the number of illegal immigrants has indeed
dropped. Some believe this is due to less undocumented persons entering
the U.S.; others contest that the reason for this drop is because more
illegal immigrants are leaving the U.S. Two causes for this decrease in
numbers were cited: first, the current economic has led to less
economic opportunity in this country for illegal immigrants, and
second, an increase in enforcement has limited the amount of
undocumented persons entering and remaining in the U.S.

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SideBar

Do Debt Connsolidation Companies Really Help?

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Juan, a client, came to me this morning asking for help in regards his debt problems. He signed up with a debt consolidation company in order to get relief from his debts. Instead, he is now in a worse financial position than he initially was before he signed up with the debt consolidation company.

Juan initially saw the advertisements of this debt consolidation company in print ads. This company’s ads claimed that it would help solve Juan’s debt problems. The promise was that creditors would waive 60% of Juan’s debts. Already being in financial hardship, Juan, immediately signed up with this debt consolidation company thinking that this was exactly the relief that he needed.

The welcome letter that Juan received from this company after he had signed up, reads:

    “First off, I would like to welcome you to our program. Let me take the time to explain to you how the process works. There are 3 main components to the negotiation process, accounts being delinquent, money to settle, and creditor willing to settle. The main way we gain our leverage in being able to settle your accounts for a low amount, is by the account being delinquent. The longer it is delinquent, the easier it is to negotiate…”

Juan signed the necessary documents to enroll with the debt consolidation company. The arrangement was that $490 a month would be deducted from Juan’s savings account and paid to the debt consolidator. For the next 7 months, the debt consolidation company continued to deduct $490 monthly from Juan’s account. In the meantime, the debt consolidation company did nothing but collect the $490 monthly. The Creditors then sent Juan’s account to a collection agency. Still the debt consolidation company did nothing. Now, Juan’s account is already with an attorney for filing of a collection lawsuit and his debts have also increased with interest and penalties accruing.

When Juan signed up with the debt consolidator he was blinded by the promise waiver of  60% of his debts. This would indeed be a very attractive offer to most debtors.  Unfortunately, Juan did not understand the way debt consolidation/negotiation companies work. As stated in the debt consolidation company’s “welcome” letter to Juan above, to reduce your debts, there are 3 things to the negotiation process: (1) accounts being delinquent, (2) money to settle, and, (3) creditor willing to settle.  
    
Did Juan really need the help of a debt consolidation company to reduce his debts? Even if we just look at the letter of the debt consolidator it would be very easy to see that Juan never really needed the help of a debt consolidator.  The debt consolidator’s letter states that to be successful in negotiating a reduced debt, the first requirement is that the account be delinquent. Juan does not need the help of anyone to make his account delinquent. All he needs to do is just not pay his debts and his account will be delinquent.

The second requirement in the debt consolidator’s letter is that there is “money to settle”. Where is this money coming from? Juan failed to understand that the “money” that is to be paid to the creditors in fact is to come from him. The way it is supposed to work is that the debt consolidator would accumulate his $490 per month for the next so many months and put it in an “account”; and, when there is enough money in the “account”, then they would negotiate with the creditor for a reduced debt. Problem with this is that a certain percent of the $490 will be paid to the debt consolidator as their fees and only the remaining balance will be credited to Juan. Why could Juan not have just saved the whole $490 himself instead of paying the debt consolidator to accumulate his money? Likewise, it is also a common horror story for the debt consolidation company (or its owners) to abscond with your money in the “account” and leave debtors with nothing when it is needed. Thus, it never made sense for Juan to give the $490 monthly to the debt consolidation company for accumulation when Juan could just as easily have saved the whole amount himself and have it within his control all the time. 

The third requirement is that the creditor must be willing to settle for a lower amount. Once again, did Juan need a debt consolidator to have a creditor willing to settle?  Why pay someone else to settle your debts when you can as easily just call your creditor and negotiate debts yourself. If a creditor is willing to negotiate with a debt consolidator, then there is no reason why it would not also be willing to negotiate with you. In fact, some creditors flat out refuse to negotiate with debt consolidators.

Only you can decide whether or not a debt consolidator will be able to help you. However, in my practice, I have yet to meet a debtor who has been satisfied with the results of a debt consolidation company. 

In the end, Juan ended up with more debts now than when he started out 7 months ago. He is now preparing to file for Chapter 7 bankruptcy. He is looking forward to having a fresh start after wiping out 100% of his debts instead of just being satisfied with 60%, which was an unfulfilled promise, by the debt consolidation company. .

(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old.  Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com
 

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Updates

USCIS Issues Additional Guidance Regarding EAWA to Employers Filing H-1B Petitions

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Earlier this week USCIS published additional guidance regarding the
Employ American Workers Act (EAWA) for employers wishing to file H-1B
petitions on behalf of skilled workers. EAWA was passed to make sure
that companies that received federal funds under the Troubled Asset
Relief Program (TARP) (or section 13 under the Federal Reserve Act) did
not engage in hiring that would displace U.S. workers. Under EAWA,
companies that received federal funding and wish to hire a new H-1B
worker are categorized as “H-1B dependent employers,” and must make
additional statements to the U.S. Department of Labor regarding their
attempts to recruit U.S. workers in their Labor Certification
Applications.

After the enactment of EAWA, USCIS revised Form I-129, the Petition for
Nonimmigrant Worker, to include a question specifically asking
employers if they received funding from TARP or section 13 of the
Federal Reserve Act.

It should be noted that EAWA only applies to new H-1B hires and not to
H-1B petitions for the changing of status of an employee currently
working for an employer under another visa category. Additionally, EAWA
does not apply to H-1B petitions seeking extensions of H-1B status for
an employee to continue working for the same employer.

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Immigration Round Table

Relief for Victims of Human Trafficking

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Dear Atty. Lou,

I arrived in the US in December 2009 using a working visa which I obtained through an agency in the Philippines. I signed a contract to work as a housekeeper for a hotel and I was asked to pay $4,000 by this agency. This does not include airfare and other miscellaneous costs. We were told that our salary would be $1,900 a month. I borrowed the $4,000 to pay this ‘agency’.

Upon arrival in the US, a representative of the agency brought us to the house of her friend. We were informed during our meeting that we are going to work as “caregivers”. There are 20 employees with working visas and we were each assigned to work as caregivers in different care homes. My salary is $1,100 with $200 to be deducted by the agency. I did not receive my salary for the first month because we were told that the first month is for our training as caregivers. My employer also deducted $500 for my fingerprinting. According to my employer, my salary shall be directly deposited to a bank account that will be opened in my name. I have no control over my bank account and I cannot even withdraw from this account to buy a phone card. I am also prevented from leaving the care home without permission from the agency.

My visa will expire in May 2010 and I want to find a new employer. If there will be a new employer who will file a petition on my behalf, will I be able to stay here legally? Did my employer breach the contract when we were asked to work as caregivers instead of housekeepers? Is there are a recourse to get the promised salary of $1,900 from the agency? Is the employer correct in controlling our finances and keeping our salaries? Will the employer file a lawsuit against us if we leave our current employment? What is our liability in case we are petitioned by another employer?

There are more than 20 employees who are victimized by this agency. May we report this agency to the Philippine Overseas Employment Agency (POEA) or to the US Department of Labor. Your immediate reply to our concerns will be greatly appreciated.

Worried Caregiver

Dear Worried Caregiver,

Based on the information you have provided, you appear to be holding an H2b visa or a temporary working visa for seasonal workers. Hotel workers or housekeepers fall under this category. The visa issued for these workers are for less than one year and are renewable for another year as long as your employer can prove the temporary nature of the job.

To respond to your question, if your visa is expiring in May 2010, you may want to find another employer who will be your petitioner for the extension of your visa. This will not be a breach of your contract on your part.

In regards to your question regarding your employer’s failure to comply with the terms of your contract of employment, you have the right to demand that you be paid according to your agreed compensation. It is obvious that your employer breached your contract in regards to the job offer, terms and conditions of employment. You may have a cause of action against your employer for breach of contract.

Your employer may potentially be committing acts constituting human trafficking.  This is the 21st century slavery in which traffickers lure individuals with false promises of employment and a better life. You have to understand that you may not be forced to work against your will.  Human trafficking cases involve the use of force, threats of force, or other forms of coercion to compel labor or services, including commercial sex acts, from victims. If you feel that you are being coerced to work, you may avail of immigration relief by filing for a T or U nonimmigrant visa. Your application must be supported by clear and convincing evidence that you are indeed a victim of human trafficking.

Last month, President Obama proclaimed January as National Slavery and Human Trafficking Prevention Month. The message being sent is for the public to educate themselves about all forms of modern slavery and the signs and consequences of human trafficking.

The US Department of Justice established a hotline to access assistance for those who are victims of human trafficking. You may want to call the National Human Trafficking Resource Center Hotline at 1-888-373-7888.

I hope this information is helpful.

Atty. Lou

(Lourdes Santos Tancinco Esq .is a partner at the Tancinco Law Offices, a Professional Law Corp. Her office is located at One Hallidie Plaza, Suite 818, San Francisco CA 94102 and may be reached at 415 397 0808, email at law@tancinco.com. The content provided in this column is solely for informational purposes only and do not create a lawyer-client relationship. It should not be relied as legal advice. This column does not disclose any confidential or classified information acquired in her capacity as legal counsel. Consult with an attorney before deciding on a course of action. You may submit questions to law@tancinco.com

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Updates

Secretary of State Clinton Indicates Potential Changes in U.S. Immigration Policy toward Haitian Nationals

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Earlier this week, Secretary of State Hillary Clinton indicated that
the U.S. may allow an increase in Haitian immigration to the United
States, in the wake of the devastation caused by the recent earthquake
in that country. While the Secretary of State did not announce an
official change in immigration policy, she did imply that the U.S.
would be open to accepting greater amounts of immigrants from Haiti.
“We are certainly looking at that and will have more to say later,”
Clinton recently said at a news conference on the effects of the
earthquake in Haiti.

One potential proposal, according to Lavinia Limon, the president of
the U.S. Committee for Refugees and Immigrants, would be to speed up
the cases of people currently approved to enter the U.S., enabling them
to legally and safely enter the U.S. and escape their circumstances in
their native country.

Presently, very recent changes in immigration legislation, including
the extension of temporary legal status to Haitians currently in the
U.S. has led to the suspension of deportation of certain Haitians. More
changes may be imminent in the near future.

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Global Pinoy

No Preferential Treatment for the Criminal Alien

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An innocent Jason Aguilar, a hardworking overseas employee in Qatar, was  incarcerated for seven days and deported back to the Philippine. He was mistaken for Jason Aguilar Ivler, the suspect of the November 18, 2009 killing of a certain Renato Ebarle Jr. The traumatized OFW experienced humiliation and hardship because the real Jason Aguilar Ivler escaped and deliberately refused to surrender to authorities in regards to the offense he committed. This is the first injustice in the case of Ivler.

There are several indications in this case that may connote that he will attempt to obtain preferential treatment during his trial. His mother already sought the assistance of the US Embassy. Will Ivler be able to obtain preferential treatment because he is an American citizen and a former member of the US Marine corps? Is this media frenzy about his arrest paving the way for him to escape his charges?

Criminal Aliens

Ivler is facing criminal charges both in the US and in the Philippines.
    
Recently, Ivler was reported to be a fugitive of justice in the United States for failing to appear in court on charges of illegal drug use and possession with intent to sell.

After his arrest two weeks ago, Ivler is also facing charges under Philippine law for murder, illegal possession of firearms, resisting arrest and frustrated murder.

With criminal charges in both the US and the Philippines, there is apprehension that Ivler may find a way to escape and depart for the US. The mother even reportedly sought the assistance and representation of the American Embassy.

If Ivler were a Filipino immigrant in the US facing charges, the Philippine consulate may provide assistance during his trial. But as observed, the consulate’s assistance is more on ensuring that the Filipino nationals’ rights and interests are protected. There are no special treatments that are accorded to immigrants facing charges. It is anticipated with reservations that Ivler will not receive any preferential treatment and be treated as an ordinary criminal alien.

Factors Raised

The media had an extensive coverage of Ivler during his arrest in his home at Blue Ridge, Quezon City. The victim in the road rage shooting of whom Ivler is being charged for murder is not an ordinary citizen. Renato Victor Ebarle Jr. is the son of the Undersecretary of the Presidential Chief of Staff. On the other hand, Ivler claims, as reported, is also not an ordinary American citizen. He is known to be the nephew of a former celebrity singer Freddie Aguilar. Most interestingly Ivler was also a former member of the US Marine Corps who was formerly deployed in Iraq before he was discharged.

But unlike Lance Corporal Daniel Smith, Ivler is no longer in active military service. Neither is he assigned in the Philippines under the Visiting Forces Agreement. Unfortunately for Ivler, he does not have the protection of the provisions of the VFA. He is not expected to be under the custody of the American Embassy pending his legal proceedings on the offenses that are charged against him.

The fact that he is related to a celebrity is not a favorable factor to his case. In fact, he is best described in the song, popularized by his uncle, “Anak” where his stubbornness had caused his mother to bear the embarrassment and humiliation of his arrest before millions of viewers. Had he surrendered voluntarily and not escaped from authorities he would have prevented unnecessary spending on government resources to arrest an innocent victim from Qatar and prevented injuries to special agents to the National Bureau of Investigation (NBI).

Since Ivler had failed attempts to escape from authorities, there are speculations that he may also try to evade his prosecution or detention.  The circumstances of his case may not be favorable but just like any suspect in any criminal case, Ivler is entitled to his rights. He will be afforded the right to his hearing.

Compared to Spain, the United States does not have a treaty with the Philippines that allows transfer of criminal aliens’ incarceration to their home state.  Ivler’s case is not similar to the case of Larranaga, a Spanish national convicted of rape. Larranaga was allowed to depart the Philippines to continue his detention in a Spanish prison.

A number of Filipino immigrants are also incarcerated in US prisons and serving sentence for crimes that they have committed. I have yet to see the cuddling by the Philippine government of a convicted Filipino immigrant languishing in jail for violation of criminal or immigration law.
   
The strict policy against criminal aliens is apparent in the US. The immigration law contains harsh provisions against criminal aliens especially those convicted of violent offenses. Despite serving sentence based on the criminal conviction and no matter how far back the offense was committed, the Immigration and Customs Enforcement is mandated to incarcerate and deport the alien after completion of his criminal sentence. This is also the same policy that is being expressed by the Philippine government where they publicly mentioned that Ivler is going to be tried first in Philippine Courts before he is sent back to the United States to face his criminal charges before the criminal courts in Reno, Nevada.

All citizens and aliens alike are all expected to respect the law. The government is mandated to defend Philippine law and sovereignty against aliens who are convicted of committing crimes against Filipino nationals. The celebrity status, the fact that Ivler is an American and a former member of the US Marine Corps are of no consequence and immaterial to his defense. Justice must be served and the rule of the law must be upheld.  But in these times of uncertainty, it remains to be seen how the wheels of justice will turn for the families of the murdered victim.

(Tancinco may be reached at law@tancinco.com or at 887 7177 or 721 1963).

Categories
SideBar

Should I Prevent Foreclosure by Filing Bankruptcy?

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Almost one out of five people going through the required credit counseling prior to filing bankruptcy are now doing so in order to avoid foreclosure.  Considering that the home is usually our primary asset, homeowners should in almost all cases seek legal advice prior to foreclosure. Every homeowner facing foreclosure should at least have a basic understanding of the foreclosure process, the timetables involved, their rights as well as their obligations and potential liabilities before and after the foreclosure. An understanding of the foreclosure process will give the homeowner a realistic view of how much time they have to come up with a solution that will stop foreclosure; or, in the alternative make them understand the futility of saving a home they can no longer afford.
 
If a homeowner gets behind in mortgage payments, a lender will necessarily take steps to foreclose on the mortgage. This does not happen overnight so it gives the homeowner a few months to work out a solution with the lender.  Homeowners may have several possible solutions presented to them including: loan modifications, loan forbearance, short sale or deed in lieu. These are choices that are available to a homeowner but it is also important to understand that the success of these solutions is not solely within the control of the homeowner alone. These solutions will require the consent of the lender who may or may not agree to do so.

In a scenario where the lender refuses to cooperate with the homeowner in finding an acceptable solution to the homeowner problem, what is the homeowner’s alternative? This would be a good time to consider bankruptcy as a possibility for avoiding or stalling foreclosure.  

A homeowner can file either a Chapter 7 or Chapter 13 bankruptcy.

Some homeowners will do whatever they can to save their home. If this describes you and you are already behind in your mortgage payments with no way to catch up on your arrears, then you may want to consider a Chapter 13 filing. A Chapter 13 bankruptcy allows you to save your home by giving you time to pay off your mortgage arrears with a repayment plan over a 3 to 5 year period. Furthermore, a Chapter 13 filing may also help eliminate the payments of your second mortgage or home equity lines of credit. That’s because with the depreciation in home values, many second mortgages on homes are no longer secured. This allows the Chapter 13 court to “strip off” the second mortgage and classify it as an “unsecured debts” which gives these debts last priority to be paid back. The result is that these second mortgages will have the same last priority as your unsecured credit card debts. The Chapter 13 repayment plan normally require you to only pay off a portion of these unsecured debts over the three to five year repayment plan period. At the end of your repayment plan, these unsecured debts will be discharged and you will only be left with the primary mortgage as your obligation.          

On the other hand, it may be your case where you will have no choice but to give up your home no matter what. If so, then a Chapter 7 bankruptcy filing will at least delay the sale and give you a few more months to stay in your home and save up some money during the process. As you do not need to pay the mortgage while bankruptcy is pending, you can set the mortgage money aside as savings. During the pendency of the Chapter 7 filing, you can live in your home rent-free and mortgage-free at least for a period of time while the bankruptcy is pending, and maybe even several more months after your case is closed. You can use whatever money you save during this period to later on secure new shelter.   Furthermore, a Chapter 7 filing will wipe off any second mortgages or home equity lines of credits, as well as any other unsecured debts you may have such as credit card bills or medical bills. The Chapter 7 filing then gives the homeowner a chance to start all over again with no credit obligations instead of continuing with the credit obligations they can no longer afford to pay.

The bottom line is that homeowners just need to know what benefits and protections the law gives to them as debtors.  This knowledge gives homeowners choices, which they can use for their financial benefit.   Bankruptcy is undoubtedly one of these options. However, which option is better depends on the homeowner’s individual situation. There is no single solution to every debtor’s problems. The best thing to do is not to ignore one’s financial problems until it is too late. One just needs to know what one’s rights, obligations, and options are as a debtor; and, to act sooner rather than later.

(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old.  Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com