Will filing bankruptcy stop foreclosure?

Many homeowners simply do not know what to do when their property is going through foreclosure. One of the most common questions homeowners ask when they are in this stage is,will filing for bankruptcy stop the foreclosure process?

The answer to this is yes and no.

Often times homeowners will file for Chapter 13 bk just to specifically to stop the auction sale date of their property. Only to find out later, that their home loan is not included and now they may have both of these disasters on their credit reports. In most scenarios, when you file bankruptcy, there will be an automatic stay prohibiting your creditors from attempting to collect or contact you. However the stopping of the sale date is only temporary. (more…)

What happens during a foreclosure?

What happens during the foreclosure process varies from state to state. So, in order to understand exactly how much time you have, you need to locate your state’s laws and research the timelines and laws that pertain to your state.

While the process varies from one state to another, generally the home foreclosure process takes from 6-9 months. What is clear is that foreclosure is not a single event. In this process, the homeowner may have several opportunities to save their home by working on a loan modification with their lender or by performing a short sale and walking away legally.
There is a lot at stake and not only may you loose your home and credit history as well, but some of you are losing your marriages and sanity over this. Nobody wants to face a foreclosure, but knowing what to expect can help you see what options are available. (more…)

Can I be sued for not paying my credit card bills?

Millions of financially strapped consumers are figuring out ways to survive this massive recession and what may soon become the 2nd great depression. It’s not just about protecting credit scores anymore, it has now become survival 101 and food and shelter is what your cash can pay for. Everything and everyone else that you may owe money to can wait or take a hike.

But the question of the day is, Can I be sued for not paying my credit card bills?

The short answer is, yes!

Credit card companies and collection agencies are quite within their rights to take legal action against you if you have defaulted on debt that you owe. (more…)

How to Remove Your Name from a Cosigned Loan

Before attempting to answer the query on how to remove you name from a co-signed loan, let us first examine what the act of co-signing a loan means. A relative or friend may come to you and ask you to co-sign a loan for him or her and it may appear that it is just a simple matter of signing your name on the dotted line.

The borrower may even assure you that the loan will be promptly paid. What you must realize is that a co-signer is needed because the credit score or history of the borrower is not sufficient to convince the lender. 
If you co-sign a loan, the effect is that you are serving as a guarantor that the loan will be paid and in case the borrower defaults, the lender would be able to come after you for the missed payments. This means that from the point of view of the lender and the law, you are liable for the debt as much as the actual borrower. (more…)

How to Break a Car Loan

Before trying to answer the question on how to break a car loan, let us first examine the nature of a car loan. This is a kind of personal loan that permits you to pay for the car in installments instead of being required to pay the total selling price all at once. In effect, it would be the bank or lending institution who will pay the total price and in return you will be paying a monthly amount that includes an interest charge.

A car loan may either be a secured loan or an unsecured loan, but usually the lender will offer a secured loan because it is assured that it will be able to recover its money in case you are unable to come up with the monthly payments by simply repossessing your car. An unsecured loan will often have a much higher interest rate and the lender will require a much higher credit score. (more…)

How Big of a Home Loan Do I Qualify for?

The first question that you would like to be answered when you feel that it is time to buy a home is how big of a home loan will you qualify for.

Mortgage lenders estimate this by looking at your debt-to-income ratio.

This ratio looks at your total debt that you would have if you add your mortgage payments to your current loans, such as credit card debt, car loans, and other personal loans, and compares total debt to your total income. 
As a rule of thumb, lenders would not like you to take out a home loan that would result in your having a debt-to-income of ratio that is more than 36 percent. If they do allow you, they may charge a higher interest rate. (more…)

How Are Home Mortgage Rates Determined?

There are many factors that determine mortgage rates and the lender is only partly responsible for the interest rate that you will be charged for your home mortgage. In a free economy, mortgage rates are dictated by the market, which is made up of investors who purchase and sell what are known as mortgage-backed securities (MBS).

One factor that affects the mortgage rate is the inflation rate because investors naturally demand more interest when they expect the value of their money to decline in the near future. Another factor is the risk of a default. When there is a higher chance that borrowers may default on their payments, the mortgage rate will also be higher. Another important factor is the maturity or term of the investment. The longer the duration in which the money will be tied up, the higher the interest rate will be. (more…)

How Are 401k Loans Treated in Bankruptcy?

Before providing an answer to the issue on the treatment of 401k loans in a bankruptcy, it would be best to define bankruptcy and 401k loans. It would also be a great time to inform you that the best education and advice you can receive is from a licensed and experienced attorney in your state. I must disclose that I am not a lawyer and most of this information is easily obtainable on the internet.

For individual bankruptcy, the applicable laws are Chapter 7 and Chapter 13.

In Chapter 7, the non-exempt property of the debtor will be liquidated and the proceeds will be given to the unsecured creditors. However, it is often the case that the debtor who goes into bankruptcy will only have exempt (more…)

How to Get Out of a Mortgage in a Divorce

Divorce sucks! I know because I went through one in 2002 and it was one of the most stressful times of my life. I lost my wife, home, money, kids and my family life in one fell swoop of the judges gavel.

I didn’t loose everything because I was a bad husband and father.  I got the short end of the stick because I didn’t use my head and acted on emotions, instead of intelligence.

Please don’t repeat my emotional and immature mistakes. Believe when I say this because I am still recovering from my mistakes 7 years later…..
There are not many options when it comes to deciding who gets what and how you can legally divide your property and debts. Making things even more difficult will be an uncooperative spouse. If that is the case, then good luck getting anything done or signed. (more…)

Buy a New Home and Walk Away from Your Mortgage

Buying a new home and walking away from the mortgage is an option that is often considered by homeowners with an upside down mortgage, which is the result of the real estate bubble that has burst. This means that the homeowner bought the house when selling prices were high and took out a mortgage loan for it.

Now that the prices of homes have declined drastically, these homeowners now have a mortgage loan that is much higher than the value of their homes.
Thus, it is no longer encouraging to be paying a loan for an amount that is much higher than the property’s current price. With home prices dropping to very low levels, buying a new home would be a more attractive (more…)