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Bankruptcy Law/SBA loans and foreclosure

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Question
My company took out an SBA guarantee for $ 105,000. The court put the Co. in Chapter 7 liquidation The bank sent me a notice of default and election to sell my home under DEED OF TRUST  for the due  business loan. They have refused to re negotiate the terms.The bank said when I took out the loan SBA requires that you guarantee the the loan Personally and use the home as further guarantee. What recluse do I have to prevent it. chap 7 chap 13,
Also, I have filed a Declaration  of Homestead ust in case the bank forecloses which would give a  $ 175,000 exemption . My gut feeling is that one cannot PRE-WAIVE their right to a homestead declaration on unsecured debt.

Answer
Hello Mr. Rivera:    I have had cases dealing with this situation before.   Whether the SBA can execute a judgment on your house depends on some facts you don't mention here.    For example, it is possible that their lien is not perfected, or that, even thought they say you gave a personal guarantee, that you didn't.    Also, even if they did have a personal guarantee for the business loan, that you would be protected by your homestead.    Just filing the homestead declaration may not be enough to protect the house, or for that matter, to maximize the protection of your assets.   Whether you can use that exemption effectually or not depends on what state you live in, what the house is worth, what other liens are on the house, how much those liens are for, etc.

What can you do to prevent execution on the maximum amount of your property and can you do it with a 7 or a 13?   Even that depends on other facts relating to your income over the past six months.   Sometimes debtors are simply not eligible for a chapter 7.      On the other hand, it may be possible that you could file a chapter 13 and resolve this whole situation.    

There is no way that myself or anyone else could intelligently answer your question without knowing more about your situation.     If you wish, you can call me if you would like to discuss this further.   It is easier for me to talk on the phone than to wear my fingers out typing.    You can call me anytime, including this weekend, at this number.   I will not charge you just to talk on the phone.    


Jack Hall,   J.D.
Bankruptcy Services
915   261-3893

Bankruptcy Law

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Can answer questions about bankruptcy, lawsuits or judgments that have been filed against you. Also can answer questions about tax issues, property that is facing foreclosure, repossession of vehicles, and wage garnishments. 915 261-3893

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Over 30 years experience assisting consumers with lawsuits and bankruptcy matters since graduating from law school.

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Numerous published appellate court opinions; Law review publications; Article on consumer bankruptcy in Black Enterprise magazine; was requested to author a book on consumer bankruptcy by Doubleday Publishers

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Over twenty years of education including law degree (J.D.); masters and bachelors degrees in political science; author of magazine articles related to consumer bankruptcy; hundreds of hours of continuing education legal education and seminars

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Have had well over a thousand bankruptcy clients during the past 30 years and have had many clients in civil lawsuits during the same time period

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