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FHA Trims Waiting Period for Borrowers Who Experienced Bankruptcy

2013 August 20 by

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond their control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.



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You Saved My Home!

2013 June 4 by

I just got an email today from one of my chapter 13 clients who is finishing her chapter 13 plan.

“Hi Jesse!

Wow can you believe it’s been 5 years? … I have one last payment to make this month.    Can you feel the excitement??

I’m so relieved it is soon to be behind me.

You saved my home for me you know. I will never forget it Jesse, thank you.

– Leslie”


THANK YOU Leslie for trusting me and my team with your important legal issues.

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Stop Harassing Collection Calls – Know Your Rights.

2013 May 22 by

As a Colorado bankruptcy lawyer Many of my clients suffer from numerous and seemingly unending calls from creditors about their unpaid bills. There are limits to when, where, and who the collectors can call you about your debt. However, you must assert your rights. The collectors are not going to do that for you. Collectors only want one thing – your money. They will bully you until they get what they want!

Depending on the client’s unique situation it can take a few days to several months to file a bankruptcy case. Until the bankruptcy case is filed the client is typically harassed by his creditors for money. That’s unfortunate. Those stressful irritating calls can be stopped.

Both Colorado and the US Federal Government have laws that protect consumers from unfair debt collection practices. The law is called the Fair Debt Collection Practices Act.

Both the Colorado law (CRS 12-14-105) and the Federal law (15 USC § 1692c) give you the following rights:

  • Collectors can’t contact you at any unusual time, place, or manner known or which should be known to be inconvenient to the consumer.
  • Collectors can call you between 8:00 a.m. and 9:00 p.m. local time unless you tell them it’s inconvenient
  • Collectors can call you at work, unless you tell them your employer prohibits you from taking such calls at work.
  • Collectors cannot call your family, your neighbors or your spouse or anyone else but you about your debt without your express consent or a court order.
  • Collectors cannot call you if they know you are represented by an attorney.

If you get a collection call or letter I strongly suggest you send a letter to the creditor asserting your legal rights under both the Colorado and Federal Fair Debt Collection Practices Acts.

Please contact me, Jesse Aschenberg, if you creditors are harassing you or you have bankruptcy questions.

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Defalcation? (Yes that’s a real word)

2013 May 16 by

A debt may not be discharged in bankruptcy if it was the result of “defalcation.” What in the world is that? Is that even a word?

Well … the terms is not defined in the bankruptcy code. (Way to go congress!) And there has been enough confusion over the term for our United States Supreme Court to issue a ruling on its definition.

In 13 years of bankruptcy practice this word has come up once. It was in a recent case against a client of ours who had allegedly mishandled funds while handling his parent’s estate after they died. The Colorado Bankruptcy Court, in that case, found that our client’s behavior fell within the term “defalcation.” We appealed, in part, because we knew the Supremes had take up the same issue and would have a ruling on it this year.

Robin Miller with Consumer Bankruptcy Abstracts & Research has published a summary/excepts of the Supreme Court’s decision issued earlier this week. (By the way, you may need a dictionary to read this too. It’s good lawyerly writing).

Supreme Court holds that “defalcation” in Code § 523(a)(4) requires culpable state of mind:

Observing that “[t]he lower courts have long disagreed about whether ‘defalcation’ includes a scienter requirement and, if so, what kind of scienter it requires,” the Supreme Court, in a unanimous decision by Justice Breyer, held that “defalcation,” for the purpose of the discharge exception found at Code § 523(a)(4), includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior. Noting that, in Neal v. Clark, 95 U.S. 704, 24 L.Ed. 586 (1878), the Court had construed “fraud” as meaning “positive fraud, or fraud in fact, involving moral turpitude or intentional wrong, … and not implied fraud, or fraud in law, which may exist without the imputation of bad faith or immorality,” the Court concluded that the statutory term “defalcation” should be treated similarly.

This interpretation does not make the word identical to its statutory neighbors, the Court said. As commonly used, “embezzlement” requires conversion, and “larceny” requires taking and carrying away another’s property. “Fraud” typically requires a false statement or omission. “Defalcation,” as commonly used (hence as Congress might have understood it), can encompass a breach of fiduciary obligation that involves neither conversion, nor taking and carrying away another’s property, nor falsity. Nor are embezzlement, larceny, and fiduciary fraud simply special cases of defalcation as so defined. Code § 523(a)(4) makes clear that embezzlement and larceny apply outside of the fiduciary context, while “defalcation,” unlike “fraud,” may be used to refer to nonfraudulent breaches of fiduciary duty.

Bullock v. BankChampaign, N.A., 2013 WL 1942393 (May 13, 2013)

Any Questions? Clear as Mud?

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Financial Stress Is Horrible!!!

2013 May 14 by

Can’t think straight.

Can’t enjoy life.

Loose sleep.






…. maybe bankruptcy is the answer for you. Let’s talk.

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A good tip for keeping track of your chapter 13 plan payments

2013 May 9 by

When someone files chapter 13 bankruptcy they typically have to make 60 monthly payments to their chapter 13 bankruptcy trustee.   The chapter 13 trustee’s in Colorado don’t send out a monthly statement telling your what your payment is, when it’s due or how many more months you have left to pay.   The total burden of making timely monthly payments is on the debtor.

So ….. how can you tell how many payments you’ve made and how far along you are in your bankruptcy then?

Here’s an awesome and simple trick I learned at a recent tax class I attended that one practitioner uses to help her tax clients keep track of their tax payments:

If your chapter 13 payment is $200 per month, then put an extra penny in each check that corresponds to that monthly payment.   For example

  • Trustee Payment #1: $200.01
  • Trustee Payment #2: $200.02
  • Trustee Payment #3: $200.03
  • and so on and so on ….
  • Trustee Payment #60: $200.60.

This will help you keep track of how many payment you’ve made and also whether the trustee has cashed that check.

I think that’s a pretty cool and simple trick.

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Where to Send Mortgage Payments to Bank of America During a Chapter 13 Bankruptcy

2013 May 9 by

When a chapter 13 bankruptcy is filed, some lenders require mortgage payments to be sent to a special address.    Here is the payment address for Bank of America for people who are in Chapter 13:

Bank of America Retail Payment Service
PO Box 650070
Dallas TX 75265-0070

Or you can in mortgage payments by calling Bank of America’s bankruptcy department:    1-800-669-5224

Make sure to keep good records of all your mortgage payments during your bankruptcy and put your account number on all your payments.

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Surviving Debt: A Must-Read

2013 May 3 by

Bankruptcy is just one of many possible solutions to your debt problems.   Our firm is not a bankruptcy mill.   We want to do what’s best for you.

Are unsure whether hiring a bankruptcy attorney is best for you, your family or your business?  Don’t spin your wheels spending hours on line trying to research your options.  I wholeheartedly suggest you pick up a copy of the book  “Surviving Debt”  published by the National Consumer Law Center.

Surviving Debt is a GREAT book!     I can’t recommend it enough.   I have bought and handed out copies of this valuable resource to my clients over the last 13 years of being a Denver bankruptcy lawyer.

Surviving Debt

The 2013 version of the book includes the following topics:

  • Dealing with Debt Collectors
  • Which Debts to Pay First
  • Saving Your Home from Foreclosure
  • Credit Card Debt
  • Student Loans
  • Your Credit Report
  • When and When Not to Refinance
  • Strategies to Prevent Repossessions
  • How to Defend Collection Lawsuits
  • How to Find Effective Credit Counseling Agencies
  • Your Bankruptcy Rights, and much more.

Follow this link to review and purchase the book from the National Consumer Law Center: or see if it is available in your local library.


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10th Anniversary

2013 May 1 by

May 1st is the 10th anniversary of this law firm.

10 years of rescuing good hard working people from the life
destroying burden of overwhelming debt and foreclosure.

10 years of restoring hope and the ability to dream.

Lord willing I’ll have many more years to come.

I am truly blessed to represent my diverse and wonderful clients.

Thank you!

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Chapter 7 bankruptcy meeting of creditors photo

2013 April 29 by

This is what the chapter 7 meeting of creditors room in Denver looks like. No judge. No jury. No torture devices. Good and boring. Just the way it should be. (Some days it can make the DMV look almost interesting).

Meeting of creditors take about 5 minutes each and they hold 45-60 a day. They ask the same 20 questions over and over.

Tip: Do it right the first time you go so you don’t have to endure sitting through other interviews a second time.

If you have a good attorney your meeting should be like a knife through warm butter.


This is the building the meetings are held in: 1999 Broadway. Denver


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