Foreclosure Fairness Act

I'm sure, by now, you all see news about foreclosure increase and home prices dropping on a daily basis. Washington State legislators responded to the foreclosure crisis by changing the way banks foreclose.

Washington State passed the Foreclosure Fairness Act, which went into effecton July 22, 2011. The new law will allow borrowers more time and a better chance at seeking a work-out solution with lenders to avoid foreclosure. Particularly, the new law requires banks to physically sit down and talk to borrowers before foreclosing. Without this new law, lenders often refuse to slow down the foreclosure process even if there was a possible way to avoid it. Keep in mind that foreclosure in Washington can occur within 6-7 months from a default (missed payment). Now, lenders will be required to slow down the process by a month or two and review alternative options.

More information on the Foreclosure Fairness Act: http://www.webwire.com/ViewPressRel.asp?aId=143539

What debts are dischargeable in bankruptcy?

I probably meet at least a handful of new clients on days our office in Seattle conduct consultations, and one of the most common questions that come up with is, "Can this be discharged?" Through experience, I can easily identify dischargeable debts from non-dischargeable debts on the spot. But I can imagine that to average consumers, this area of law can be a bit foggy.

First, here is what the Bankruptcy Code says a discharge is:

11 U.S.C § 524(a)(2) states that "A discharge . . . operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived. . ."

And of course, we have exceptions to a discharge, which is found in 11 U.S.C. § 523. This section has a long list of the types of debts that are not dischargeable. Among those are student loans, certain types of taxes, government fines, child support arrears, personal injury claim as a result of a DUI, debts incurred by fraud, etc.

Next, I'll explain what this all means. A discharge order acts as a Federal court order against creditors from collecting debts that were deemed discharged. All debts are considered dischargeable unless it fits in one of the types listed in the "exceptions to discharge." Usually, this means that all medical bills, credit cards, personal loans from friends and family, mortgages, and car loans are all dischargeable in bankruptcy. Speak to an attorney if you have car loans or a mortgage because there is more to discuss than I can go into in this post.

If you are in Washington State (or in Seattle-area) and would like to schedule a free bankruptcy consultation, please call our office. We recently added a new paralegal to our team. More to come about our staff soon!

Arrow Law Group | 1904 3rd Ave Ste 930 | Seattle, WA 98101