Charlotte Attorney's Informative Blog

By Tom Quinn

Question: The value of my home has gone way down and is now worth less than what I owe. A friend is recommending I do a short sale saying it won’t hurt my credit score as much as a foreclosure. Is that true?

It’s not surprising this question comes up quite often considering that over 11 million households (23 percent of all mortgaged homes), were underwater in the Oct-Dec 2010 quarter according to a report released by Corelogic. With so many consumers evaluating their options, it’s important to understand the difference between a short sale and a foreclosure, and how each option may impact your credit scores.

So, what’s the difference between a short sale and a foreclosure? Simply put, a short sale occurs when the lender agrees to accept less than the total amount owed on the mortgage loan. A foreclosure on the other hand, is the legal termination of all rights of the borrower as the owner of the home and the lender in essence repossesses the home. In a foreclosure, the estate becomes the absolute property of the lending institution.

The presence of either a foreclosure or short sale on a credit report is considered negative by credit scores because it is predictive of future credit risk. Generally speaking, the impact on the score will be similar for both a foreclosure and a short sale.

The exact score impact of a foreclosure or a short sale will depend on several factors:

• Any additional information being reported on the mortgage account being included in a foreclosure or short sale. (For example, any late payments associated with said mortgage account prior to the foreclosure or short sale and how recently those past due payments took place.)

• The current credit profile of the consumer. How the consumer is managing all their other credit obligations (credit cards, car loans, student loan, etc.) Are these other bills being paid on time or have missed payment been reported on these as well? Are credit cards showing high balances?

The negative impact on a credit score appears more severe if a foreclosure or short sale is reported on a credit report that has little or no history of missed payments and/or derogatory information, and has low balances on active credit accounts. In these scenarios, the number of points lost can be 150 or greater. The impact may be less noticeable if there are any indications of high-risk behavior (missed payments, etc.) already being reported in the credit report. This is because the negative history is already impacting the credit score which will be lower as a result, reflecting that higher risk behavior.

The perception that a short sale will always have less impact on a credit score compared to a foreclosure is simply a credit score myth.

Bottom line, the score considers both items to be negative, high-risk behaviors, so both options will have a negative impact on the score.

Read more: http://www.credit.com/blog/2011/04/credit-qa-short-sales-foreclosures-and-your-credit-score/#ixzz1J9yhJtWE

If you are in danger of foreclosure, bankruptcy maybe the best option for you. It is a good idea discuss bankruptcy and all your options with an Attorney.  There is life after bankruptcy at most of the time its much more hopeful than before.

Maxwell Law Firm is a Bankruptcy Law Firm in Charlotte North Carolina

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Did you know that filing for bankruptcy could:

• Give you more bargaining power with creditors
• Keep creditors from Calling
• Stop you from being sued by creditors
• Stop you from loosing your home in foreclosure
• SAVE YOU A LOT OF MONEY (most debt settlement companies expensive and ineffective) You can file for bankruptcy for under $1,500.00 (filing fee included) and rid yourself up to 1 million dollars in debt!
• Actually repair your credit

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by homelessness law

February is Black History Month, and though the Law Center is mindful of how race intersects our work all year ‘round, I’d like to take the opportunity afforded by the holiday to blog about one particular aspect of race and housing law.

The foreclosure crisis has claimed nearly five million homes in the last four years, and almost no community has escaped unscathed.  From inner city Detroit to rural Idaho, homeowners to apartment-dwellers, foreclosures have affected Americans from every walk of life.  But there can be no denying that the crisis has had a disproportionately negative effect on communities of color.   According to the Center for Responsible Lending (CRL), about 8% of all African Americans and Latino homeowners lost their homes due to foreclosure compared to only 4.5% of whites, even though white homeowners account for 2/3 of the market.  These homeowners not only lost the place they lived, they most likely lost their greatest asset and sustained serious damage to their credit and financial stability, costs that only add to the wealth gap between the races.

The well-documented “spillover” effects of foreclosure—including vacancy and blight, plummeting real estate values for families able to remain in their homes, and increased crime rates—will continue to be felt more widely in African American and Latino neighborhoods, which CRL estimates will lose close to $200 billion in property values by 2012.  And 40% of Americans at risk of losing their homes due to foreclosure are renters, a group where low-income people of color have always been overrepresented.

What is behind these troubling numbers? African Americans and Latinos had less access to traditional “prime” loans, and turned to or were targeted by so-called “subprime” lenders.  The subprime loan market offers more complicated and riskier products,  is less transparent, and incentivizes the sale of risky loans. Subprime loan originators specifically targeted African American and Latino communities, stepping into a market that conventional lenders had ignored and aggressively marketing loans to borrowers who had little access to alternative options.  Regulators charged with the responsibility for enforcing the Fair Housing Act and Equal Opportunity Credit Act, the major federal laws outlawing racial discrimination in the housing and lending markets, essentially ignored complaints, investigating only a handful of cases from 2000 to 2009, despite ample evidence of lender misconduct.

While the direct impact of the foreclosure crisis continues to ravage minority populations, a brand new study from ComplianceTech shows that its indirect effect on the wealth opportunities available could continue to be damaging far into the future.  The study, based on Federal Reserve data, shows that the credit available to African American and Latino borrowers has plummeted over 60% from 2004 to 2009, compared to a 17 percent drop for whites.  Author Maurice Jourdain-Earl warns that a “dual mortgage market,” one where black and Hispanic borrowers have limited access to credit outside of the subprime market, is placing “the economic foundation of the African American and Latino communities…at risk of total collapse.”

Black History Month should be a time to celebrate the achievements of African Americans, but also to acknowledge that communities of color face ongoing challenges. These challenges will

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only be corrected if private industry and federal regulators work with local communities to identify and stamp out these predatory practices and systemic inequities.

-Geraldine Doetzer, Housing Attorney

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posted by Chapter 7 Lawyer

22.01.2011 | Author: Billy Edward | Posted in Business
Tagged Under : Bankruptcy Attorney, Business

If you are suffering from wage garnishment, foreclosure, repossession or debt collection harassment, speaking to a bankruptcy attorney can free you from debt. Bankruptcy attorneys can’t just give you useful information about bankruptcy but they could be useful in assisting you with financial planning to regain control over your debts. Bankruptcy isn’t always the best-suited answer for debt crisis. Credit counseling, payment plans through your creditor or expense reduction can all be methods of debt relief that does not involve bankruptcy.

A bankruptcy attorney can evaluate your financial situation and assist you in selecting the right path to free you from debt. If in fact bankruptcy is the best appropriate choice, your attorney can assist you with the file of your claim. Based on your situation will rely on the type of bankruptcy which you need. If you don’t have the ability to make payments to pay off your debts you can possibly file chapter 7. Your assets will be sold in order to pay of your debts and your debts will be discharged. If you have the ability to make payments and have a steady income-filing chapter 13 may be suitable. The court will create a transaction plan of who will be paid, the amount and the time frame (frequently 5 year period) to repay your debts in full. After the debts are paid in full, your debts will be discharged and your payment plan discontinued. By speaking to a bankruptcy attorney, you’ll be guided towards financial freedom in the best method for your financial situation.

Filing bankruptcy is done in federal courts. This means that regardless of what state you live in, the policy is fairly the same.

The majority of bankruptcy filings which were carried out in Las Vegas over the previous several years are chapter 13. This is the bankruptcy filing which permits for a consolidation and repayment of your debts. This indicates that you’re still responsible for paying your debts. When you file chapter 13, you’ll have between three and five years to repay those debts without taking on any extra charges due to interest on the amount owed. This is different than filing chapter 7 because with chapter 7 you’re absolved of your debts by selling off assets and having your debts paid for that way.

In Las Vegas it’s strongly suggested that before filing bankruptcy you seek the advice of a credit counseling service. Credit counseling can be a good alternative and can help you to resolve credit issues without having to file bankruptcy. This can save your credit and help you get on your feet faster than if you do file bankruptcy. An excellent credit counselor will also know when there is no other way then to file bankruptcy. It’s most often recommended that you file chapter 13 simply because it’s simpler to work with creditors if you plan to pay your debts. When seeking credit counseling, you often attend classes to help you learn better how to manage your money and how to produce a budget that you and your family can live with.

If you want more information on Bankruptcy Attorney, don’t read just rehashed articles online to avoid getting ripped off. Go here: Bankruptcy Attorneys

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posted by charlotte nc bankruptcy

Jan 6, 2011 by  Rebecca Lake

If you’re having difficulty repaying your debts, filing bankruptcy can be a last-resort option for getting out of your financial mess. If you owe credit card debts, medical bills or unsecured loans and have little or few assets, a Chapter 7 bankruptcy may be right for you. In a Chapter 7 bankruptcy, your liability for certain debts is eliminated and you agree to give up some of your assets to repay your creditors. In North Carolina, Chapter 7 bankruptcy petitions must be filed with the Eastern or Western district bankruptcy courts.

Determining Eligibility

Before you can file a Chapter 7 petition in North Carolina, you must first determine whether you’re eligible to do so. Eligibility is determined using the means test. The means test is based on your income for the previous six months and your family size. Your income is measured against median income levels to determine whether you have sufficient income to repay your debts. In North Carolina, the median income level for a single debtor $38,656 in 2010. For a family of four, the median income limit increased to $67,056. The U.S. Department of Justice Trustee Program maintains an updated list of median income limits by state.

Before You File

In addition to the means test, you’re also required to attend credit counseling in the six months before you file. This credit counseling must be completed with an agency or organization that is approved by one of the district bankruptcy courts in North Carolina. You must provide proof of credit counseling to the court at the time you file, unless your filing qualifies as an emergency situation that would not permit you to do so.

How to File

Your Chapter 7 petition should be filed with either the Eastern or Western district bankruptcy court, depending on where you live. You’re responsible for paying all filing fees at the time you file. As of 2010, the filing fee for Chapter 7 was $299. You can ask the court to waive these fees or let you pay them in installments. You aren’t required to have legal counsel to file, although it is generally recommended that you consult a bankruptcy attorney before doing so. In addition to your petition, you must give the court a list of all your creditors and their contact information, a list of all debts you wish to claim in your bankruptcy, a list of your assets, proof of income and your exemptions.

State vs. Federal Exemptions

A requirement of Chapter 7 bankruptcy is that you forfeit some of your assets in exchange for wiping the debt slate clean. Under federal law, you are allowed to exempt some of your property from seizure. Both the federal government and state governments offer exemption guidelines and it’s up to you to choose which ones you’ll use. As of 2010, the state of North Carolina allows debtors to exempt up to $18,500 worth of equity in their home. You can also exempt any motor vehicle up to $3,500, household goods up to $5,000 and up to $4,000 in personal property if you have dependents.

Discharging Your Case

Before your Chapter 7 case can be discharged, you must complete a second course in financial management within 45 days of filing. You also have to attend the meeting of creditors. The meeting of creditors is an opportunity for your creditors and the bankruptcy court to ask you questions about your financial situation. This meeting is usually very brief, typically lasting five to fifteen minutes. If there are no disputes about the information you’ve provided, your case will be discharged within three to six months. After you receive your discharge, you are no longer liable for those debts that were included in the bankruptcy.

Bankruptcy can sometimes by the only way out of a financial nightmare but it is not without its consequence. A Chapter 7 bankruptcy can stay on your credit for up to ten years, making it more difficult to obtain new loans or lines of credit. In some cases, Chapter 7 does not actually solve the financial issues that caused you to fall into debt in the first place. You should carefully consider the short and long-term consequences of bankruptcy before filing your Chapter 7 petition.

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Foreclosure Prevention

The Federal Housing Finance Agency (FHFA) released its Third Quarter 2010 Foreclosure Prevention Refinance Report on the status of loan modifications at both Freddie Mac and Fannie Mae. Loan modifications through the Home Affordable Modification Program (HAMP) reportedly increased 16 percent in the quarter, although the overall volume of loan modifications and the pace of HAMP modifications declined from previous periods.

In these cases, where federal or proprietary home loan modifications are unavailable or unhelpful, unemployed homeowners may be able to participate in foreclosure alternatives programs which allow homeowners to surrender or sell their home and essentially be forgiven of their remaining mortgage debt. Short sale options, which have typically been used by homeowners in an underwater mortgage situation, and deed in lieu of foreclosure plans may be available to homeowners who have shown a previous ability to make the mortgage payment but, due to factors like unemployment, are simply unable to continue making home loan payments.

HAMP

The Home Affordable Modification Program (HAMP) was started in 2009 by the Obama Administration to bring forth a program to bring back financial stability to homeowners all over the country. The program addresses the major housing hardships that have been hurting our country, but like with sponsored programs, it has its flaws. HAMP was supposed to be designed to help lower homeowner’s payments by lowering their interest rate, changing the loan’s terms, and/or extending the length of the loan. However, now a year and a half into the program, we have observed failure much beyond what many expected.

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posted by Charlotte Bankruptcy

by Roilee Mandeville

in Bankruptcy Basics, Recommended Reading

Filing bankruptcy is a legal option for those struggling with debts that they cannot afford to pay. While personal bankruptcy is often seen as a last resort, the truth is that bankruptcy laws offer legal protection that most other debt-relief options do not.

Deciding if bankruptcy is the right choice and determining if you are eligible to file depends on your unique situation. Let a local attorney assess your financial needs in a free case evaluation. Connect with a bankruptcy lawyer near you today – just fill out the form on this page to get started.

Bankruptcy Protections – What Are They?

Personal bankruptcy offers two key legal protections – one that begins the moment that you file bankruptcy and one that take effect when your case is finished.

The first is called the Automatic Stay. This is a court order that makes it illegal for your creditors to call you, send letters for payment, or garnish your wages during your case. It can also halt foreclosure and repossession efforts in their tracks. The automatic stay typically goes into effect once the bankruptcy court clerk receives your bankruptcy petition and last for the duration of your case.

The second protection is the Debt Discharge. Upon the successful completion of your bankruptcy case, the debt discharge will prevent all future collection efforts by creditors on the debts that were included in your filing and discharged by the court. The debt discharge ends your legal obligation to pay the creditors in your bankruptcy case.

Bankruptcy laws may also protect certain property and assets from creditors. In a Chapter 7 bankruptcy case, the court is allowed to seize certain assets to pay creditors a portion of the debt owed. The good news is that each state has exemptions that prohibit the courts from taking some things – such as homes, cars, and retirement accounts. These exemptions vary by state, so be sure to learn the laws with help from a local attorney and see how much of your property you might be able to keep in a Chapter 7 bankruptcy.

Chapter 7 vs Chapter 13

Chapter 7 bankruptcy is generally a relatively quick legal process designed to wipe out unsecured debt, like credit cards, payday loans and medical bills. The typical Chapter 7 case is over as quickly as 4 months. Not everyone is able to file Chapter 7, but if you have little or no monthly income, you’ll likely qualify.

Chapter 13 bankruptcy creates an affordable payment plan, with monthly payments made to the bankruptcy court over a period of three-to-five years. Chapter 13 allows you to catch up on payments for secured debts, like a home mortgage or car loan.

Deciding which type is right for you, if any, depends on a number of factors, such as your income, types of debt, and whether you own valuable property not covered by your state’s exemptions. Speak with an attorney to decide if bankruptcy could be right for you. Just fill out the free case review form on this page to arrange a no-obligation bankruptcy consultation with an attorney in your area

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