Four Good Alternatives When Loan Modification Doesn’t Work

Asking your lender to modify your mortgage is a good way to get a lower house payment, and in most instances lenders are agreeable to the modification. But there are times when lenders don’t agree to your request, or the end result is not financially beneficial to you. When that happens you have to look for another way to lighten your loan, and with the right partnership it can happen. An experienced bankruptcy and debt management attorney can help you find what works for you.

Four good alternatives when a loan modification doesn’t work, and that could be helpful to you, are:

•         Bankruptcy: bankruptcy will eliminate or reduce most of your debts, and allow you to pay for what you want to keep without having to pay the rest of your burdensome debt.

•         Refinancing your mortgage: a refinance has nearly the same impact as a modification, it is just not done by your current lender. That means you may have to do extra things, like get an appraisal, but if you are able to successfully refinance to a lower payment, the cost of the appraisal will quickly be absorbed.

•         Give your lender back title to the home: This can stop a foreclosure, but will mean you are not able to keep your house. Stopping a foreclosure is always a good thing, and if your house is more than you can handle then turning it back over and finding affordable living arrangements can help straighten out your budget.

•         Asking to put the past due payments on your home loan at the end of your note. This is the equivalent of asking your lender to consider you current on your loan when you are not, and is similar to a modification but not quite the same. You can also ask your lender to let you make payments and ½ or some other creative payment structure until you are caught up and can get back on track.

One of these alternatives usually works for most people, and we can help you figure out which one will work for you. The key is to try not to panic, and know that help is just a phone call away.  

For more information about managing your mortgage payment or asking for a modification, call us today or reach us online at www.law-ri.com. We will help by looking at the facts of your case and giving you options to reach your financial goals.

Two Reasons Your Lender Would Prefer To Modify Your Mortgage Instead Of Foreclose

With the high number of foreclosures taking place across the country it would seem to most that the banks prefer to foreclose on your home than to work with you to find another solution. But the truth is lenders would much prefer a workable solution exist, and that you get to stay in your home than have it go back to the bank. There are a lot of reasons foreclosure is not as desirable for the banks as it looks, and perhaps the biggest of those reasons is that it costs the bank to foreclose. That said, there are other reasons lenders prefer to look for alternatives, and an attractive alternative for both parties is a mortgage modification.

Two reasons your lender would prefer to modify your mortgage are:

•         Foreclosures can take time, and during the process your home may lose some of its value. That means if the bank ends up getting the house back and has to remarket it, they can only do so for what it is worth. This could mean a financial loss to the bank.

•         When you modify your mortgage you still make payments to the bank. And even at a lower interest rate, your bank is still turning a profit on your mortgage loan. Banks are not in the real estate sales business, they are in the money business. It is much better for a bank to process payments and service loans than it is for them to try and resell houses.

In these two ways, along with saving the money it costs to foreclose a mortgage, banks also benefit when you modify your mortgage. This is an important piece of information to keep in mind when negotiating a modification of your mortgage loan. You can use this knowledge to your advantage and get terms that are more in line with what your budget can handle. All too often people have to threaten bankruptcy in order to get a good result from their lenders, and that is because creditors would rather have some money than none and if bankruptcy is the answer the lenders may loosen their standards to help out their customers. This is usually something seen with credit cards, and does not typically arise in a modification situation, but knowing the bank has incentives to work with you in these instances gives you a leg up.

For more information about mortgage loan modifications, call us today or reach us online at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations for more convenient one on one office visits.

Four Things You Should Know Before You Modify Your Mortgage

If you have heard about mortgage modifications and are wondering if this is the answer to your money troubles, you should take a moment to read on further. Mortgage modifications help thousands of people reduce their house payment and free up part of their income to pay other bills. But the process can be complex, and you should be prepared to be patient if you need to lower your house payment. In the end though, if you fill out the application and provide what is asked of you, along with the help of a debt management professional, the rewards are great.

Four things you should know before you modify your mortgage include:

•         Will a new appraisal be needed? When you initially bought your house you had to have an appraisal done in order for the lender to agree to make the loan. This is because lenders must follow certain guidelines when making loans, and one of those guides is that a loan cannot be given for more than what a piece of property is worth. But with a modification there is no requirement to appraise the property. This is because the lender is modifying their own loan and as such does not need to verify whether the loan to value ratio exists; that part was done at purchase.

•         You will be asked to provide proof of income, and the ability to make the modified payment. It might seem strange to prove you can make a lower payment than your current payment, especially if you are making the higher payment routinely. But this can be part of the process and you should be prepared to gather your documents and have them copied for your lender.

•         You should also expect to wait a while before your new loan is approved. This can be frustrating, especially if you have an immediate need for financial relief. But with the help of a trained professional, you can rest easy knowing your lender’s questions are being answered, and are being answered timely.

•         There will be a loan closing once the modification is approved. That means there are closing costs that will have to be paid, just like when you bought the home. But most times these costs can be made a part of the modified loan, so you are not out of pocket any funds.

Let us help you today if you are having a hard time making your house payment. We can go over the modification process with you, and help you to understand how it works and how you will benefit.

For more information about mortgage modifications, 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.

Three Key Elements To Mortgage Loan Modifications

If your house payments are out of control, you need to find a way to rein them in to a more affordable figure. One good way to do this is to have your lender modify your mortgage terms. A mortgage modification is a program offered by most lenders whereby you can reduce your interest rate, and by doing so also reduce your monthly mortgage payments. You might also consider reducing the amount of time you are paying on your loan, and this can save you thousands of dollars in interest over the years but will probably not give you a lower monthly payment. If you are struggling, reducing your payments is the best option, and we can help.

Before you decide to seek a modification of your mortgage you need to know a little bit about the process. Here are three key elements to getting your mortgage loan modified:

•         There is an application form that you will have to complete. Like most things, an application is how things get started, and a mortgage modification is no different. In order to have your lender consider your loan for a modification, you will need to fill out the proper application and provide requested documents.

•         You will need to provide pay stubs and other proof of income as part of your application. You might also be asked to provide copies of your tax returns for review. Whatever you are asked to submit, keep copies and a record of when and how you’re sent the requested documents to your lender. It is not unheard of for a lender to misplace documents, and ask for them to be resubmitted. This can slow down the process, but if you have delivery receipts and copies of what you sent you may be able to avoid sending duplicate copies.

•         There may be a trial period. Some modifications first start with a trial period, where the homeowner makes the reduced payments for a period of a few months, and if those payments are successfully made then the lender will finalize the modification. It is important to know whether your case includes a trial period, because it is possible that during that time you may have reports being made that you are paying less than what is due on your loan. If so, you may be putting your credit at risk and will want to negotiate further.

Modifying your mortgage is a good tool when you are in too much debt, or your house is worth significantly less than you owe. For help throughout this process, call us today.

For more information about how to handle overwhelming 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.

Three Things To Learn From A Celebrity's Finances

Mega movie stars, pop singers, athletes, and favorite television actors seem to have it all. Most of them are considered more physically attractive than non-famous people, and for certain a celebrity has more money than the average person. But these “perks” do not always make for a perfect life, and a star can fall on hard times just as easily as anyone else. When they do, they might seem more relatable, and perhaps that is why it can be good to take a look at what to do and what not to do with your money, from a celebrity’s standpoint.

Some important things to learn from a celebrity’s finances can best be found by looking at stories of stars who have had it all, and who have also lost it all. Three of these things to learn include:

•         Save, save, save! No one is assured of continued employment, whether that is at a retail store, a restaurant, in an office, or being in the movies. When you have extra money, save what you can! The only way to avoid a financial crisis is to plan for the times where funds might be out of reach or hard to come by.

•         Avoid overspending and splurging. When superstars hit it big they tend to make extravagant purchases. But when the money stops rolling in and it is time to pay the bills for private islands and lavish vacations, even a celebrity can find themselves without the financial means to pay all of the bills. Your splurge might be gourmet coffee every morning, or eating lunch out with co-workers a few times a week. If so, consider brewing at home and brown bagging it once in a while.

•         Come up with and stick to a budget. When you know where your money goes each month you are more likely to watch how it is spent. A budget is the perfect tool for keeping track of expenses and identifying areas where you can cut back on what you spend.

If you still need help with your money, that’s OK. We can give you options for getting back on track and help implement those options. Our goal is to help you resolve your money troubles, and avoid a repeat occurrence of financial hardship in the future.

For more information about how to handle overwhelming debt, contact us today at www.law-ri.com. We will help you come up with solutions that work for your family, and have multiple locations where we schedule appointments so you can make a choice that is convenient for you.

Why Do Debt Collectors Tell Me They Are Trying To Collect A Debt?

Debt collection calls and letters can cause stress and anxiety, and sometimes you can feel like you are being treated like a simpleton when a debt collector calls you. The minute you take the call you are talked down to, and even get told that the call is from a debt collector. This seems like a silly thing to say, because if you are behind on your debts it may not be a surprise to receive a call from a collector. To have that information repeated to you puts you on edge, and immediately on the defensive. So why do collectors take the time to let you know they are a debt collector and that the call to you is in an attempt to collect a debt?

The truth is that debt collectors are required to tell you these things, and if they do not inform you they are a debt collector and that they are attempting to collect a debt, they can get in trouble. The law requires:

•         Every collection call placed to be prefaced with the information that the call is being placed by a debt collector.

•         The collector has to let you know the call is being made in an effort to collect a debt

•         The collector also has to tell you that any information you provide during the call will be used by the collector in their collection efforts. So if you are asked to provide banking information, or where you work, you can bet that your wages or bank account is about to be hit with a garnishment.

Rather than play into the collector’s hands, take a minute to clear your head and once the collector tells you who they are and why they are calling, politely decline to continue the call. Or, if you have already given the collector some information, ask for a transcript of the call, so you can verify that all of the appropriate debt collection warnings were provided to you. These warnings are required by a federal law called the Fair Debt Collection Practices Act. If you catch a collector violating this law, you can bring a lawsuit against the collector and/or the collection agency for that violation. Often times holding the collector’s feet to the fire is the only way to bring about a change in collection activity, and put an end to the harassment. We can help.

If you have more questions about debt collection, contact us today at www.law-ri.com. We will help you come up with solutions that work for your family, and have multiple locations where we schedule appointments so you can make a choice that is convenient for you.

Two Tips For Dealing With Debt Collectors

Debt collectors are just about as much fun to deal with as tax collectors. No one likes to get calls or letters asking for payments, especially if there is not enough money to make the payments. And, debt collectors have a reputation of being hard to talk to, being rude, and relentless with the number of calls they place. None of this behavior makes it easy to gather your thoughts and come up with a plan to repay debts, but you can get a break from collection activity if you take a few simple steps.

One sure way to get a debt collector to stop harassing you is to file for bankruptcy. But if you want to try other things first, here are two tips for dealing with debt collectors:

•         Send a written request for verification of the amount due, and identification of the original creditor. Debt collectors are just that, collectors. That means they are not the original lender you owed, and sometimes it can be hard to tell which creditor the collector is calling or writing about and which debt is being collected. You have a right to know this information, and can ask that collection actions cease until it is provided to you.

•         Send a written request that all communications cease and desist. You have the right to be free from harassment, and when you put that request in writing you can enforce it if not honored.

You should also consult with an attorney and allow them to field the calls on your behalf. This happens most times when you are preparing to file bankruptcy, and part of that process is to let your bankruptcy attorney know who you owe so they can include everything in your bankruptcy case. It is perfectly acceptable to have that attorney also take any calls from your creditors while your bankruptcy is being prepared. Our team of bankruptcy and debt management professionals has experience dealing with creditors, and is happy to take on that task for you while you get a breather. We understand how critical it is to have your wits about you when you are trying to pay off debt or file a bankruptcy case, and work with you to make the process as painless as possible.

If you have more questions about debt collection, 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.

Will I Lose My Life Insurance If I File Bankruptcy?

Bankruptcy is a way to reduce or wipe out your debts, but if there are certain things you want to keep you do have to keep making payments. Most people opt to keep their cars and house, and so continue to keep up with those monthly payments even if they file for bankruptcy. But what about some of your other needs, such as electricity and insurance? There are a lot of questions about how every day expenses are handled when a bankruptcy gets filed, and it is important to know the answers because no one wants to have the air conditioning turned off or get caught driving without auto insurance. The good news is that if you file for bankruptcy, you get to eliminate some debts, which makes it easier to pay others. For instance, if you no longer had to pay all of your credit card debt, you might be in a better position to pay your utilities and buy groceries every week.

Another expense that people are happy to continue paying when they file bankruptcy is their life insurance premiums. But since this is not a daily need, you might be wondering if you will lose your life insurance if you file for bankruptcy. You will not, and here is why:

•         Your debt load will decrease when you file bankruptcy.

•         When you owe less, you have more disposable income to work with each month.

•         When you have more disposable income to work with each month, you can allocate the funds on hand to the things you need.

•         Life insurance is a necessity for most families, and when you have enough money to pay the premiums each month, the provider will not cancel your policy.

Bankruptcy can also be helpful in other ways. For example, you can reduce the amount of debt on your car if you file a Chapter 13, and you can also lower the interest rate on an auto loan by filing a Chapter 13 bankruptcy case. If you file a Chapter 7 case you will be allowed to get rid of all of your unsecured debt, which is the appeal to this type of case for many consumers. High interest rate credit card debt is one of the most difficult types of debt to keep up with, but when you file a Chapter 7 case you no longer have to worry about how to pay off those card balances.

For more information 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.

How To Afford Investments

It would be nice to have enough money to pay all of your bills, have some extra each month for emergencies, and even put some back for the future. A good way to plan for the future is to start some investments, but this can be hard when you are living paycheck to paycheck. It can also be difficult to know what types of investments to make, because you will want to make sure that not only will the money you put in not be lost, but that over time it grows. The whole point to finding a good investment is to make money, so you have enough to live on as you age or become unable to continue working. Doing this on a tight budget might sound impossible, but there are some things you can do to start an investment portfolio even if you are short on funds.

Here are a few tips on how to afford making investments:

•         Pay off smaller accounts and then put those monthly payments towards your 401(k) at work, if one is offered. Any time you can put money into an account that is added to, even in a small portion, by someone else (like your employer); you should take advantage of this plan. This gives you the money you put in, and also the money your employer offers. Turning down participation in a profit sharing plan is the same as giving away free money. If you are lucky enough to work at a place where the employer puts money into an account for you, even if you do not contribute, do not turn down that opportunity!

•         Look for a checking account that rounds up to the nearest dollar spent and transfers the change to a savings account. This might not seem like an investment, but over time your savings can grow to a substantial sum, and those funds can be used to make other investments or may even be accruing interest and growing within the savings account itself.

•         Try to keep a balance in your checking account if your bank offers interest payments on that balance. A good option here is to bank at a credit union, which typically offers more benefits than traditional banking.

If you think you just do not have the money left over each month to do these things because your bills are too high, talk to us. We can give you ideas on how to reduce or eliminate some of your debts, either through bankruptcy or debt consolidation. We can also help you negotiate more favorable house payment terms, or get lower interest rates on your credit cards.

If you have more questions about money, 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.

Can I Vacate My Home To Avoid Foreclosure?

If you are behind on house payments you may be at risk for foreclosure. A foreclosure is when your lender tries to take back your home, and the affects can be devastating. You face loss of your house and may still even owe the lender once you have been forced to vacate! A foreclosure is a serious legal action against you, and should be met with a serious defense. The first thing you should do if you have received notice of a foreclosure is consult with a skilled attorney, to make sure the party seeking foreclosure even has the right to try and take your home. All too often the party initiating a foreclosure action does not have the legal right to start and maintain a foreclosure action, and it is worth checking into to see if that is the case in your situation.

But, if you have decided to allow your house to go back to the bank and not fight the foreclosure, you may be wondering if you can just turn over the keys and vacate the premises to avoid the action? The answer is no, and here is why:

•         The lender has to complete the action to get title to the property.

•         Vacating the property makes the case go faster, but does not give the lender the same legal remedy as a finished foreclosure case.

•         Most lenders will want to proceed with the action, so a judgment can be obtained that allows the lender to come after you for any amount still owed on the loan after the house sells at foreclosure sale.

So, your best bet to avoid a foreclosure is to find another option aside from moving. Fortunately, other options do exist. For example, you can stop a foreclosure and possibly even save your home by filing for bankruptcy. Filing a bankruptcy case automatically puts a stop to any pending legal action for collection or foreclosure that has been filed against you. So the benefit to filing bankruptcy when you are not able to make your house payments is that you stop a foreclosure, but also stop potential wage garnishments and car repossessions. For more information, let a qualified debt management and bankruptcy attorney explain your options to you.

If you have more questions about bankruptcy and foreclosure, 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.

Can I Buy My Home Back After Foreclosure?

A foreclosure is an action by the lender to take back your home when the mortgage payments fall behind. Some states conduct foreclosures by filing a lawsuit with the Courts, but in Rhode Island the more common practice is to send noticed to the borrower without resorting to filing a case. This type of foreclosure is called a non-judicial foreclosure and it moves pretty quickly. So if you have received a notice of foreclosure, it is important to understand what happens next and what you can do to try and save your home.

One option that is always available, and will put a stop to any type of foreclosure action, is to file bankruptcy. But if your case has already progressed to a foreclosure sale, you might have other concerns. One of those concerns could be whether you are allowed to buy your home back from the lender after the foreclosure is completed. Here is how it works:

•         Notice of the foreclosure must be mailed to the homeowner by the mortgage company, or other foreclosing party and information on foreclosure mediation must be included in this notice.

•         Notice of the foreclosure sale has to be published in the paper, with the homeowner being provided notice at least 30 days prior to the date of first publication.

•         You are not allowed to reinstate your mortgage before the sale, unless there are provisions for doing so in your mortgage. A reinstatement is not a buy back of the property, but is a payment of the past due amount so that the loan is no longer in default.

•         You are not permitted to redeem the property after the sale, which is not necessarily a buying back of your home but has nearly the same effect.

So if you are being foreclosed on and think you can buy back your home, you should talk it over with a qualified professional. Depending on the terms of your mortgage, your rights may be limited. Let us help you stay in your home, and get your other debts in line at the same time. This can be accomplished by bankruptcy, a refinance, a detailed negotiation with your creditors, a refinance, or some other remedy.

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.

Three Ways To Stop A Foreclosure

Being involved in any type of lawsuit can be confusing, but when the action is one to take your home, you need to act fast. If your house payments are not being made, your mortgage company will start a foreclosure, with the ultimate aim of taking back your house. This will leave you without a place to live, and can cause serious upheaval to your family. If you are facing a foreclosure, let us go over your options with you so you can save your home or end the process quickly.

Three ways to stop a foreclosure are:

•         Asking your mortgage company to modify the terms of your mortgage. When successful, a mortgage modification will result in a lower house payment, letting you stay in your house and pay off the debt at a lower rate of interest. This option has to be approved by your current home loan lender, and does require you to fill out an application and follow up for approval. Sometimes the banks can drag their feet making a decision on whether to offer a modification, but we can help speed up the process and handle the transaction for you.

•         Refinance your mortgage with a new lender, which pays off your existing mortgage and lets you start fresh with a new mortgage company.

•         Offer to give the lender a deed in lieu of the foreclosure, or see if the mortgage company will accept a short sale. These options will not keep you in your house, but they will get you out of the foreclosure so you can make other living arrangements and begin to move forward at a new place.

Filing for bankruptcy is also an option, and not only will doing so allow you to keep your home but it will also take care of your other debts. A bankruptcy case will lower your balances, or wipe them out completely so you no longer have to make payments on all of your loans. Freeing up money in this way allows you to keep more of your paycheck, and this will make it easier for you to make your house payments. There are two different types of consumer bankruptcies, and we can tell you which one you qualify to file.

For more information about how to stop a foreclosure, call us today or reach us online at www.law-ri.com.

Is It Too Late To File Bankruptcy If I Am Being Sued?

When debts spiral out of control and not even the minimum payments are being made, it does not take long for your lenders to start collection efforts. This might begin and end with phone calls and letters, but can also include legal action. If you are sued for a past due debt you have several options. First and foremost you will need to file an answer to the lawsuit, because if you do not the lender will obtain a judgment against you. Once a judgment has been entered, the lender is free to pursue whatever collection remedies are legally available, up to and including garnishment of wages or bank accounts. This result might be the case even if you did file an answer, because the Court may have found that your answer did not raise a valid defense and the creditor was entitled to judgment. In either instance you are probably wondering what can be done to put an end to the collection efforts, so your hard earned wages are not taken from you.

At this stage of the game you should consider filing for bankruptcy. It is not too late! In fact, filing for bankruptcy is a good idea at this very juncture in the matter because:

•         You get the benefit of the automatic stay the instant you file, which will put an immediate end to garnishments.

•         The automatic stay will also prohibit a creditor from starting a new lawsuit against you.

•         If a lawsuit is pending, meaning judgment has not yet been entered, filing for bankruptcy will prevent a creditor from asking the Court to enter judgment.

If you are being sued for debts you are not able to pay, let us help. We will let you know your bankruptcy options, and help you to understand how filing a bankruptcy case can eliminate or reduce your debts. Once a bankruptcy case is filed, you will have the time needed to take a breath and get back on track. Bankruptcy is designed to give you a fresh start, which is just what you need if you have been sued and are unable to pay the judgment amount.

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.

Can I Move Assets Before I File Bankruptcy?

Not everyone who files for bankruptcy relief is penniless, in fact many consumer filers have a significant amount of assets and it is just that their debt load far outweighs what they have on hand to pay those obligations. So filing bankruptcy might seem scary, because of the possibility that nonexempt assets could be seized and sold to pay off debt. When that is the case the question sometimes arises as to what protective actions can be taken before you file a case, in order to preserve your assets.

Moving assets before filing a bankruptcy case is prohibited. The types of movements that are not allowed include:

•         Transferring title to a car, boat, recreational vehicle, or other motorized auto to a friend or family member. The prohibition in this regard is so strict that if you make a transaction of this type within you family in the one year prior to filing a case, the entire transaction can be undone.

•         Moving funds from a domestic account to an international account.

•         Selling property in order to avoid repayment through a bankruptcy plan is not allowed, especially when the sales proceeds were not applied to the account balance and you still have ready access to the item or items sold.

The type of pre-bankruptcy planning you engage in, and whether it is allowed, depends on the type of transaction and they type of property involved. The best rule of thumb to follow is to simply avoid any transfers or sales of assets before filing bankruptcy. However, if you have engaged in this type of activity, all is not lost. You can still file a case, but your case will be heavily scrutinized by the Court and Trustee. This is all the more reason to have a qualified bankruptcy and debt management attorney by your side and handling your case. We know what types of actions raise red flags, and can help you with getting your case filed if these flags arise in your situation. For more information about bankruptcy and what is prohibited prior to filing, call us today.

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.