Thursday, July 20, 2017
Having very little, or even no debt can be liberating. Think about how much your stress level would decrease if you were able to pay all of your bills without struggling, or how nice it would be to put aside part of your paycheck each month for an emergency. This is what it is like to be debt free and you can get there! But, it does take a little work and some discipline when it comes to spending and budgeting.
Five steps to being debt free include:
• Living on less than what you make. When your budget requires you to spend every cent you earn on necessities, you can quickly find yourself facing a foreclosure or repossession if your job or family circumstances change.
• Avoiding impulse purchases.
• Paying off credit card balances each month rather than carrying them over month to month and paying interest on top of interest on those balances.
• Having an emergency fund for house or car repairs, rather than using a credit card to cover these expenses.
• Sticking to a budget.
It might look easy, but we know the truth is that staying on track with your money is not a piece of cake. If you are trying to get your finances in shape so you can live debt free, but are having a hard time getting started, let us help. We can talk to you about options to reduce your overall debt load, such as mortgage loan modifications or bankruptcy, so you can use the extra savings to pay things off or put aside for unexpected emergencies. We know what it takes to get in good financial shape, but more importantly we know how to help you make a choice that will allow you to stay financially healthy. Our goal is to find a solution that will get you out of your immediate financial crisis while allowing you to plan for the future on solid financial footing. If you are not able to pay all that you owe and are wondering what you can do to change this, call us to learn more about your choices.
If you have more questions about how to get out of debt, contact us today at www.law-ri.com. We will help you get prepared for what comes after we file your case, and have multiple locations where we schedule appointments.
Wednesday, July 19, 2017
We all know that if you ignore your debts, they will only catch up with you and cause more trouble. For instance, if you are behind on payments and are letting calls go to voice mail, you are not really solving the problem. All you are doing is causing the lender to continue auto dialing your phone, all the while fees and interest expenses are being added to your balance. It is also pretty common knowledge that if you don’t pay your bills, the items you purchased with the loan may be taken from you (either by repossession or foreclosure). None of these things will help improve your situation, so it is always good to have a plan when you have more debts than you have money.
There are also some unseen costs to ignoring overwhelming debt, or things that most of us do not automatically associate with having too much debt. Three of these types of unseen costs are:
• Added stress to yourself and your family. It has been said that money and financial troubles are the number one cause of most struggles in a marriage or relationship, and that is because when one person bears most of the burden resentment can quickly build. Or, it might be that when money is tight people are more on edge and prone to either pick a fight or participate in a heated conversation. Either way, money problems are a huge source of stress, and most times the effects are not visibly noticeable.
• Damage to your credit score. When you don’t pay your bills on time, your lenders report you as delinquent to the credit reporting bureaus. A few late payments may not seem like a big deal, because at first there are no negative effects. But over time the constant notation that you pay late will hurt your credit. So while you cannot immediately see or feel the pinch to your credit of a late payment, it will eventually cost you.
• Higher rates for rentals. Believe it or not the amount you pay to rent a car, an apartment, or even your insurance premium can depend in part on your finances. When your credit shows too much debt or late payments, some companies raise their rates with you because they feel you are a lending risk.
One way to combat some of these unseen costs is to get a grip on your money. If you are struggling to make ends meet, one way to do this is to file for bankruptcy. While bankruptcy will have an impact on your credit, it will also stop lawsuits and collection calls. This alone can take off some added stress, and the impact on your credit is not as harsh as you might think. In fact, most people are able to start repairing their credit within months of completing a bankruptcy case.
For more information about how to manage debt, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.
Tuesday, July 18, 2017
When you don’t have enough money to pay all of your bills each month it seems strange to think that you might make too much money to obtain some sort of debt relief. But that question comes up more than you might think when people start looking at filing bankruptcy to alleviate their financial stress. There are two types of bankruptcy cases available to consumers, and one of them does take into consideration your income level.
A Chapter 7 case is a liquidation of debts, and a Chapter 13 case is a reorganization of debts. Most people who file bankruptcy prefer to file a Chapter 7 because it allows them to get rid of all of their unsecured debt, and lasts a shorter amount of time. But in order to be able to file a Chapter 7 bankruptcy, you have to meet certain requirements. Most notably, your secured debt to income ratio has to be a certain amount, as determined by the means test. The means test is:
• Part of the Bankruptcy laws and everyone who files a case has to put their finances through this computation.
• The test compares how much secured debt you pay each month, compared to how much income you bring in each month.
• If the test shows you have at least some disposable income left after paying secured obligations, to put towards your unsecured debts, you will be required to file a Chapter 13 case instead of a Chapter 7.
So while you can never really make too much money to file a bankruptcy case, your income level can dictate which type of case you are allowed to file. In either case, you get relief from overwhelming debt, and are able to get a fresh financial start. And, in either case, you get the benefit of the automatic stay, which prevents your creditors from harassing you as soon as you file a case. Along with the prohibition against contacting you for payment, creditors are also no longer able to file lawsuits against you for collection of debt or garnish your wages. These benefits alone are significant enough to make filing bankruptcy an attractive option when you are in over your head.
If you have more questions about bankruptcy, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.
Monday, July 17, 2017
Bankruptcy for consumers comes in one of two forms; a Chapter 7 case, or a Chapter 13 case. A Chapter 7 is a liquidation of debts, whereby your unsecured debts are completely eliminated. A Chapter 7 case is usually over in a few short months, with the discharge order being entered around 4 months after your case is filed. It can go a little faster, but can also take a bit longer depending on your personal circumstances. A Chapter 13 case is a case where you reorganize your debt, into a repayment plan. The plan will include proposed repayment to all of your creditors, including unsecured creditors. This does not mean you will have to pay back all of your credit cards and other unsecured debt, as most Chapter 13 plans provide for repayment of only a small percentage of your unsecured balance (sometimes as low as 0.00 or 1.00%). With all of these differences, you might be wondering what the requirements are to file each type of case.
One of the biggest questions about what is required to file a Chapter 13 is if there is a minimum amount of debt to qualify. The answer is no, but there are other requirements that have to do with your financial picture, such as:
• How much of your debt is secured vs. unsecured?
• What is your income level, for the past 6 months?
• What amount of your income is being devoted to repayment of secured debts?
So while you do not have to have a certain amount of debt to file a Chapter 13 bankruptcy, you do have to know the details of your income and expenses. The rules on bankruptcy were changed in 2005, requiring those that file to first undergo a financial calculation. The test is called the means test, and it measures how much of your income is left after you pay your secured debts each month. Depending on the answer, you will be able to file either a Chapter 7 or a Chapter 13 case. The calculation is complicated, but we know what goes into it and can get it done for you properly. If you file a case with an improper means test result, your case may not make it through the Court. Let us help you file a case correctly, so you don’t have to worry about doing it over or answering complex legal questions about your paperwork.
If you have more questions about bankruptcy, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.
Friday, July 14, 2017
Most things that have to do with money require a lot of paperwork. Think about the amount of documents you have to gather each year to do your taxes, or to send your kids to school. Almost everything has an application that has to be filled out, from renting a car or apartment to asking a bank to loan you money. It would seem reasonable that once you have obtained a mortgage, your mortgage company would have record of all of your information, eliminating the need to provide it again if you ask for your loan to be modified. However, when you apply for a mortgage modification, you are required to submit documents again, so it is a good idea to know what will be required if this is something you are thinking about doing in the near future.
Other than the application form provided by your lender, here are five of the essential documents needed to modify your mortgage:
• Proof of income, which can be a paystub or copy of your tax return.
• Bank statements for at least the past six months, for both checking and savings accounts.
• A financial worksheet, which may be part of the application packet, detailing your income and expenses. If you rely on a written budget each month, this information is usually the same as what is included on your budget.
• Proof of homeowner’s insurance, listing your lender as the loss payee.
• A printout of the property taxes you typically pay on your home.
Once you have all of your data gathered, allow a trained legal professional to help you get them in order and turned in to your lender. Applying for a mortgage modification might seem like a task you can do without the assistance of a professional, but there can be hiccups and other issues that arise along the way that require legal analysis. The time and effort you put into having a debt management attorney help you will pay off in the end, because you will be able to put your trust in someone who has obtained results in the past, and can shoulder the burden of the process for you. And if your modification is not approved, a skilled debt management attorney can offer you alternatives for getting out of debt. Whatever your financial need, let us help.
For help getting out of financial distress, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.
Thursday, July 13, 2017
A mortgage loan modification can lower your house payments, and for that reason a lot of homeowners decide to ask their lender if this option is available for their loan. If so, there is a procedure to follow in order to get the modification, but there are also a lot of questions. Before you make a final decision, do your research and make sure that you have satisfactory answers to all of your questions.
Ten questions to ask your lender about mortgage loan modifications, when you are considering filling out an application, are:
• How long will it take to get the modification, and what amount are you supposed to pay each month until there is a final decision on your request?
• What documents are required to be turned in with the application, and what happens if your documents are misplaced?
• Is there a minimum amount of income you need in order to qualify, or a minimum amount of time that you have to be at your job in order to apply for a modification?
• What other options do you have to get your mortgage payment to a more manageable level if the modification is not approved?
• Will your modified loan be serviced by the same lender, or will you have to make payments to a new company?
• Do you have to get your house appraised in order to apply for a modification?
• Can your taxes and insurance expenses be included in the modified loan?
• Will there be a trial period or will your modification start right away?
• If you have had your mortgage modified before are you still eligible to have it modified again?
• How low of a rate will you be able to get with a modification?
Many lenders have an entire department dedicated to helping their borrowers seek modifications, but those employees are not working for you. If you want to get the best result possible, or even learn about alternatives to lower your total debt load, call a knowledgeable debt management attorney today. We have experience assisting consumers with mortgage modifications, filing for bankruptcy, or finding another solution to their money issues.
For more information about how to handle overwhelming debt, call us today or reach us online at www.law-ri.com.
Wednesday, July 12, 2017
Years ago variable rate mortgage loans were popular, because the initial rate was much lower than what a borrower could obtain with a fixed rate loan. The way a variable rate mortgage works is that the rate starts off at one level, and varies as changes in the market dictate the need for a change. These types of loans can be beneficial if the rates are expected to drop, but when rates go up instead of down, your house payment also goes up. If the amount of increase in rate leads to an increase in the mortgage payment that is out of reach, homeowners can quickly fall behind on their mortgage obligation. When that happens, the risk of foreclosure is high.
If you have a fixed rate mortgage, you are guaranteed to have the same rate over the entire life or your loan. The benefit to this type of loan is that you never have to wonder if your payment will change, thus giving you the ability to create a budget with known expenses. This sounds good if you need to know what your payments will be, but it can be frustrating to pay your house payment at a higher rate than what the market shows. This scenario comes up more frequently than you might think, and if could have you wondering if you should refinance a fixed rate mortgage to a variable rate. If you do, here is what you can expect:
• Lower payments, at least at the outset and when the variable rate is lower than the fixed rate you have been paying.
• Changes to your payment amount, depending on where the government sets rates.
• An increase in the amount you have to pay each month if the rates go up drastically.
There are benefits to both types of mortgages, and if you opt to refinance for a variable rate because it is lower than your current fixed rate, be prepared for the changes. However, we realize that even when you are prepared for changes, sometimes those changes can be more than you anticipated. If that happens, you will have to make some important decisions about how to manage your money. If you become overwhelmed, one option available to you is to file for bankruptcy. Other options might be to do another refinance, or seek a modification of your mortgage loan. Whatever your need, we know how to help.
If you have more questions about money management, bankruptcy and debt, contact our office. We can be reached by phone, or online at www.law-ri.com.
Tuesday, July 11, 2017
When you apply for a loan your credit score is checked, as is your debt to income ratio. If you have more debt than you have income, it will be hard to get a loan. But if you are able to keep your debt low, compared to how much you make, you stand a greater chance of getting a loan. A low debt to income ratio will also help you get loans at lower interest rates, which helps keep your payments manageable. So what happens when your debt spirals out of control and in order to get a handle on it, you file for bankruptcy? We all know that even though bankruptcy has an impact on your credit score, it can rebound quicker than you think after having filed a case. But does this positive impact carry over to your debt to income ratio also?
There is a good argument to make that filing bankruptcy will help improve your debt to income ratio. Here’s how:
• Some of your debts will be eliminated in your bankruptcy. Once eliminated, the debts are no longer considered due and should not be included in your total debt figure.
• When some of your debt is eliminated, causing the amount of total debt you owe to go down, you suddenly look more capable of making loan payments when lenders check your credit.
• If your income remains the same after bankruptcy, yet your debt has been reduced, your overall debt to income ratio will improve.
Having fewer debts will make it easier to pay remaining debts, and it will also make it easier to get a loan. This is an often overlooked benefit to filing for bankruptcy, but is an important one. Not only will you be able to show more income than debts, but if you do take out a loan after having filed bankruptcy, and make the payments on time your credit score will also start to improve. The combination of these things makes the transition back to your normal life after filing for bankruptcy smoother. To learn more about the benefits of bankruptcy, call our office.
If you have questions about bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.
Monday, July 10, 2017
When most people face difficult financial times, they do all they can to get out of trouble. This might include taking a loan from a friend or family member, refinancing their house to get out some equity and maybe even a lower payment, asking for a modification of their mortgage, or filing for bankruptcy. These are all good things to consider, but not all of us have family or friends that can help and if you have already exhausted your other choices or are unable to get a loan from your bank, you will start to look to other sources. Credit cards are often used when there are no other funds available, and some people even take loans from their life insurance or retirement plans. But is it a good idea to take a loan from your retirement account? Because if you do will you still be able to participate in the plan, or will there be enough money there when it comes time for your to retire?
Having the answers to these questions will help you decide where to look for funds when you need them, and if it is your house you are trying to save you should know these things about taking a loan from your 401(k):
• A 401(k) loan has to be repaid, and the payments come out of your paycheck. This means your take home pay will be lower, so you need to make sure you can still manage your obligations with less money each month.
• There is interest on 401(k) loans, and even though it is a lower rate than most other loans, you will still end up paying back more than you borrowed. This should be considered when you are trying to decide if the repayment schedule fits within your budget.
• If you leave your job before the loan is repaid the amount loaned will be considered as income. This means you will be taxed on the amount of the loan and may even have to pay penalties for taking money out of your retirement account before you actually retire.
• Depending on the rules and restrictions of your plan, you may not be able to put any money in the account until the loan is fully repaid. And if your employer is doing a match of what you put in, your employer may not be contributing until the loan is repaid either.
Another alternative is to file for bankruptcy. This will allow you to keep on contributing to your 401(k) and will also save you from having to repay a loan. Your financial security as you age is critical, and if you deplete your retirement savings before actually retiring, you may end up working longer than you had planned. Let us look over your budget and options, and help you decide what to do to get out of debt.
For more information about how to fix your finances, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.
Friday, July 7, 2017
Sometimes the best plans don’t work out like you thought, and you have to find an alternative resolution to a nagging problem. If you are in over your head with debt and have tried to get your mortgage holder to modify your loan to a lower payment, but the lender has refused, you need to start thinking about your options. One choice to save your finances is to file for bankruptcy. A bankruptcy will reduce or eliminate certain debts, and this makes it easier for you to pay the debts that remain. But how do you know if bankruptcy is the right choice for you?
If your attempt to modify your mortgage was denied by your lender, bankruptcy can really help. But before you decide to file a bankruptcy case you need to ask yourself a few questions. Here are some things to consider:
• What are your financial goals? If you want to save money for emergencies, eliminate high interest rate debt, and save some of your collateral, bankruptcy is a good option. These are all things you can accomplish through a bankruptcy because when you eliminate or decrease your debt load you area able to save more. You are also able to make the payments on other debts, like your house and car, so you can hang on to the pieces of collateral that you need.
• Are you facing a foreclosure? If so, a bankruptcy can save your home. In both chapters of consumer bankruptcy, a Chapter 7 and a Chapter 13, you get the chance to make payment arrangements on your mortgage.
• Do you have any pending collection lawsuits or garnishments against you? If so, all of those must stop the instant you file a bankruptcy. This alleviates stress and also lets you keep more of your paycheck.
• Have you filed a bankruptcy before? If so, there are certain guidelines that have to be followed about what type of case you can file now. If you file the wrong type of case, the Court will likely not allow you to proceed.
• What type of case will suit you best? Would you prefer to file a Chapter 7 or a Chapter 13, and which one do you qualify for to file? This requires an examination o of your secured debts and income. The test is complex and will dictate which type of case you can file.
The decision to file for bankruptcy is a big one, but with the help of an experienced bankruptcy ad debt management attorney the decision becomes an easy one to make. For help with your money, call us to learn more.
For more information about bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.
Thursday, July 6, 2017
When a mortgage gets modified the homeowner and the lender both benefit. The homeowner gets a lower payment, making it more likely that they are able to stay on track with their mortgage payments and the lender gets paid back on their loan rather than having to foreclose. If you are thinking about a modification you need to know how they work, and what to expect once you set the wheels in motion. One thing that may not be on your mind is the possibility that the beginning of your modification includes a trial period. During the trial period you are able to make the lower payments that you will also make once the modification is complete, but the modification will not be final until the modification period ends and the payments are made on time and in full for the duration of the trial modification period.
When a mortgage loan gets modified there may be an initial time period the lender refers to as the trial period. During this time you will:
• Make the payments that you expect to make one the modification is complete. Most trial modifications last about 3 months.
• The lender might report that you are making less than a full payment, be sure to ask this question so you know how your payments are being reported on your credit.
• The purpose of the trial period is so the lender can be assured you have the capability to make the new payment amount. Believe it or not there are instances where even though the payment is lower, it is still out of reach. Lenders do not want to commit to a modification if payment problems will still exist.
For many the trial modification is not an issue, and the payments are made without incident. Once the payments are successfully made for the trial time period, the lender will do a final modification of your mortgage. At that point your lower payments will be official, and you will continue to make the modified payment for the life of your loan. Let us help you find out if a mortgage modification is right for you.
For more information about mortgage loan modifications, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.
Wednesday, July 5, 2017
One of the most popular questions people who have more debt than they can handle is what will happen if they file bankruptcy, or lose their house to foreclosure. These are valid concerns, because it is always important to have a good credit score, so you have access to funds when the need arises. And because we all know that things like bankruptcy and foreclosure have an impact on our credit, it is natural to wonder just how much of an impact these things have on our future finances.
You might even be wondering if you will ever be able to buy another house if you have lost one to foreclosure already. Generally speaking, the answer is yes, but here are some words of caution you need to know:
• The interest rate you get may be higher than what you are used to, which will make your payments higher. This makes it critical to buy only as much house as you can afford, and not overextend yourself with a new house purchase.
• You will probably not be able to buy a house right away, and will first need to rebuild some credit in order to get a loan.
• The down payment you make might be more than what you have paid in the past, because the lender may want more up front as an assurance that the loan will be repaid. Take your time to save enough for a healthy down payment, and to find the house that is just right for your budget.
While a foreclosure, or even a bankruptcy, affects your credit all is not lost. In most instances people who have gone through a bankruptcy or been foreclosed on begin to receive credit offers a few short months after the fact. Depending on the state of your finances, it can be a good idea to accept these offers as a way of starting to raise your credit score again. Just be sure you can make the payments and that you do not take out more loans or take on any new credit that you are not able to repay.
For more information about foreclosures, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you soon.
Tuesday, July 4, 2017
A person’s home is usually their biggest investment, and also their largest asset. So when it is put in danger it is worth taking steps to protect that asset. You might need to protect your home from natural disasters or theft and this is done with insurance, or you might need to protect your home from falling into foreclosure. If you are facing the loss of your home because you are not able to make your payments, you should consider asking for a mortgage modification so your payments go down and you are more able to pay on time. But you do need to take into consideration the value of your home versus the potential value in the long run if you are able to save your house.
Here are some tips to help you figure out if your home is worth saving with a loan modification:
• What rate you will be given in the modification. If it is only slightly lower, the payments will not go down enough to be affordable, and you may want to see what other options you have to get out of debt.
• How long the modification will last, if you significantly extend the amount of time you are paying for your home you may not see any financial benefit for a while. It is worth weighing the amount of money you will pay out over time versus how quickly you will see a return on your investment.
• The value of your home, and the likelihood it will either hold its value or increase in value. If you anticipate a decent increase over the next few years and are planning on staying in your home for a while, you will likely build equity that you can benefit from when you eventually sell the house.
Everyone has different needs and circumstances, let us go over yours with you so you can make a decision that works for you. If a modification is not for you, we can explain other options to you and work with you towards your goals. Don’t let the situation get out of control, call today for help.
For more information about a mortgage modification, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.