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Foreclosure Tricks in Bankruptcy - How Does It Affect You?

April 10, 2012 | Comments: 0 | Views: 177

There always seems to be an increase in crime when the economy is not doing well. Whether it is increase of violent crimes like muggings and burglaries or white-collar crimes like embezzlement and ponzi schemes it all hurts us - it makes life more difficult for more people. This is evidenced in the recent economic downturn. An old scam is resurfacing that may delay the foreclosures on homeowners' properties. There has been an increase in distressed homeowners transferring a small interest in their home to a person that has recently filed for bankruptcy. Another variation of the crime is when the homeowner downloads a deed from the recorder's office and photo shops fraudulent information on the deed. The county recorder's stamp is left on the deed. Most of the time the lender or foreclosure trustee does not verify the information and only sees the deed with the fraudulent information.

The person filing for bankruptcy usually does not know about the transfer of interest in the home. They probably do not even know the distressed homeowner. The distressed homeowner probably found the information of the bankruptcy through looking at recent bankruptcy filings. The homeowners would then send the notice of bankruptcy to the creditors about to foreclose on their home. Once the lender or foreclosure trustee receives notice that there is a bankruptcy filed from a person that has an interest in the home the foreclosure process is momentarily stopped. This was the intention of the distressed homeowner all along - stopping the foreclosure and not having to file for bankruptcy.

The worst part is that most of the time the distressed homeowners probably had no idea that they were doing something fraudulent. They hire companies that guarantee that you will be able to stay in your home for a certain amount of time and the distressed homeowners pay them thousands of dollars upfront to delay the inevitable. Before these fraudulent companies can get shut down or prosecuted they change name and move elsewhere to provide the same services to other desperate homeowners. It is a vicious cycle where there are no winners except these fraudulent companies.

How does this affect you, the person that filed for bankruptcy and had no knowledge that someone had transferred a property interest to you? It may look like you have committed fraud by not disclosing the home in the first place and it costs you time and money to fix something you had no idea would occur. If a Motion for Relief from Stay is filed in your case by the lender or foreclosure trustee, courts have recommended that bankruptcy attorneys should file a response to the motion with evidence that you had no interest or knowledge in the property and the bankruptcy filer was not involved in a scheme to hinder, delay or defraud the lender. The bankruptcy trustee and the U.S. Trustee should be notified so they can investigate the issue and prosecute the offenders.

If this occurs in your bankruptcy case and you are not represented by a bankruptcy attorney you should contact the bankruptcy trustee and U.S. Trustee regarding these matters.

The Law Offices of Lin & Wood is a Bay Area and California consumer bankruptcy law firm filing Chapter 7 and Chapter 13 cases for individuals in need. Visit us online to find out if bankruptcy is right for you or call our experienced bankruptcy attorneys committed to providing personal service for a reasonable fee.

Source: EzineArticles
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