Archive for November, 2009
Wednesday, November 25th, 2009
Vivian asked:
The company is still trading on Over The Counter for under 20 cents a share.
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Posted in Investing | 5 Comments »
Tuesday, November 24th, 2009
Nearly one in four home mortgages are burdening borrowers with negative equity, an article by the Wall Street Journal reports.
Underwater mortgages find homeowners with declining home values to the point that they owe more on their mortgages than the home is worth.
The situation has hit new homeowners in the past few years, especially those who were paying interest-only mortgages as their home values declined.
However, this is no longer the case, as a whopping 23% of all home mortgages—10.7 million households— are underwater, according to real estate information company First American CoreLogic.
5.3 million of those homes are tied to mortgages worth least 20% more than the home's value.
The hardest hit states include Florida, Arizona and Nevada, where 65% of mortgages have negative equity—nearly three times the national average.
Negative equity can become a financial disaster for homeowners, especially if it means turning down a promotion or job transfer because they cannot sell their home.
The underwater crisis is intimately tied to foreclosures (a category also led by Nevada), as rising foreclosure rates can cause neighboring homes to lose value, and as some homeowners choose to simply stop paying on underwater mortgages, known as strategic default.
An estimated 588,000 borrowers defaulted on mortgages last year even though they could afford to pay, double the amount from 2007.
Posted in Foreclosure, Mortgage Foreclosure, Mortgages, Nevada, equity | Comments Off
Tuesday, November 24th, 2009
cecilia holmes asked: Are you finding yourself falling behind in your monthly credit card bills? Are you struggling to learn how to deal with debt collectors or how to consolidate credit card debt? Well, welcome to the club. Unfortunately, far too many Americans find themselves buried in excessive credit card debt, as well as other kinds of debt. Many times this is a result of uncontrolled spending and lack of discipline, but there are other cases which are difficult to prevent such as medical emergencies not covered by insurance.
In any case, if you find yourself unable to deal adequately with your current debt, you need to consider all of your options carefully together with a financial adviser and attorney. If your financial situation is so severe that you can’t afford either of these, you should at least read and learn as much as possible with articles like these and other resources. These should help you decide what the best course of action is in your specific circumstances, and you’ll learn things like how to declare yourself bankrupt as well as alternatives to bankruptcy.
If it looks like bankruptcy will be the best option for you, you’ll need to speak to a lawyer and get some good advice. For example, if you can’t see yourself paying off your bills within a few years even if you make some sacrifices in your budget, you need to look at bankruptcy as a serious option.
Getting a lawyer may sound like a significant expense, and it can be, but it is also a necessary one. The bankruptcy code can be pretty complex for a layperson to understand, and has only gotten got more difficult with the recent changes made by Congress. The good news is that if you are successful in wiping out your debts, this will make it more feasible for you to pay for legal fees in the future.
Also, as soon as you file a bankruptcy application, you receive what is called an automatic stay. This prevents your creditors from contacting you at all until your bankruptcy is resolved. This gives you some breathing room for you to get through the process. The new bankruptcy law requires that you take financial management classes, and it also has a more rigorous requirement when it comes to documenting your income and expenses.
Basically, you have to prove that you really can’t pay your bills with your current income. If your income is lower than the median income for your state, the process will be much easier for you because it’s obvious that you don’t have a lot of money.
You should also keep in mind that some kind of debts will not be eliminated by bankruptcy, and this includes (in most cases) federal income taxes and student loans. There are many more details that you should work out with your lawyer, but this should give you a basic understanding of the process.
Don’t let the fear of your debt take over your life. Get the facts about bankruptcy and learn how to get control of your debt. To learn more about how to declare yourself bankrupt visit us at http://personalbankruptcyquestions.org
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Posted in Personal Finance | No Comments »
Monday, November 23rd, 2009
vodad asked: We are not far from foreclosure because he lost 30gs a year less than he made before. How long does a foreclosure to happen and when is the best time to file bankruptcy on that and the other bills we owe.Any help please.
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Posted in Personal Finance | 2 Comments »
Monday, November 23rd, 2009
I received an email from a bankruptcy attorney with an interesting question about debtors’ interests in limited liability companies. The debtor and his non-filing spouse started a new business using a limited liability company. The debtor and his spouse do not have any joint debt. Here’s the question:
"The LLC is a new company and has yet to generate money, it is a project the client is working on and listed his spouse as the owner since her credit is excellent. The client has made no money in the last 8 months so qualifying for the means test should be simple enough, but the LLC is what raises the issue. Is the client being on the operating agreement enough to allow the Bankruptcy trustee to come after the LLC?"
LLC membership interest provide asset protection outside of bankruptcy court. Most new small businesses are formed as limited liability companies rather than S-corporations to take advantage of the asset protection features as well as certain cost efficiencies. A creditor cannot levy upon a LLC membership interest. Florida statutes limit the creditor’s collection remedies to a lien on LLC distributions, if any. When a debtor files bankruptcy, however, the LLC provides much less protection. The bankruptcy trustee is not limited to a charging lien, and the trustee may seize as part of the bankruptcy estate a debtor’s LLC interest which is not otherwise exempt. (There may be some bankruptcy protection when the LLC is an executory contract). What will happen to the LLC interest owned by this debtor?
Nothing. The debtor will list his LLC interest at its current fair market value. The value of the debtor’s membership interest is not what he hopes the LLC will be worth in the future after years of his own hard work and a little luck, but the amount its worth today to an arms length buyer. Although the question does not reveal the nature of the LLC business I assume that without the debtor and his spouse investing their sweat equity the value of the LLC today is 0. The trustee is very unlikely to pursue an LLC interest with no present value to anyone but the debtor.
In addition, the debtor’s LLC interest may be exempt. The question as asked stated that the married couple owns the LLC together. I will assume that the two spouses own 100% of the LLC interest jointly. Florida law provides that all property, including intangible personal property such as an LLC interest, owned jointly by husband and wife is tenants by entireties property. T by E property is exempt in bankruptcy filed by one spouse where the two spouses have no joint unsecured debt. Because this debtor and his spouse have no joint debt the debtor’s interest in the jointly owned LLC interest is exempt as tenants by entireties. If each of these spouses owed a separate 50% of the membership interest the entireties exemption would not apply.
Posted in Bankruptcy Questions | Comments Off
Monday, November 23rd, 2009
tobydoby asked: I just went to bankruptcy court; my house was foreclosed on and the irs sent me a 1099C form. Since I filed bankruptcy, and the mortgage was included in that bankruptcy, do I need to file the 1099C form when I file my taxes?
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Posted in United States | 2 Comments »
Sunday, November 22nd, 2009
I saw an interesting post by south Florida banrkuptcy attorney Jordan Bublick. I refer many people living in sourth Florida to Mr. Bublick for bankruptcy. The post, Homestead Held in Revocable Trust, discusses a court decision involing a Chapter 7 debtor who owned his primary residence in a living trust. Many courts in Florida previously held that a home owned by the debtor's living trust qualifies for homestead exemption in bankruptcy. Mr. Bublick reports that thisj judge implied that a Chapter 7 trustee can take over the debtor's rights to amend his living trust and by amending the trust agreement possibly strip homestead protection.
When a debtor files Chapter 7 the Chapter 7 trustee takes over all of the debtor's legal rights and powers. Most living trust agreement reserve to the debtor the right to take property out of trust and the right to amend the trust agreement. A court could find that the debtor's right to amend the trust is not protected by homestead exemptions even if the result of the amendment is to diminish the debtor's homestead rights. In my own opinion, I think this argument would fail because courts very liberally construe homestead protection for the benefit of a debtor's family dependents. In any event, Mr. Bublick makes an interesting point.
Posted in Chapter 7 | Comments Off
Sunday, November 22nd, 2009
harryh asked: I don’t understand why they would not jump on the opportunity to rid themselves of lopsided union contracts. To be able to have somewhat of a clean slate who seem rather beneficial to me. So why are they fighting this so much?
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Posted in Other - News & Events | 1 Comment »
Saturday, November 21st, 2009
Greg Smith asked: Most people don’t understand bankruptcy until they are faced with it. Even then, a lot of people still don’t understand what is really happening. In the most general terms, bankruptcy allows a person having financial difficulties to wipe out his or her debt and start fresh. People file bankruptcy for numerous reasons: divorce, unemployment, death in the family, lawsuits, illness, medical bills, foreclosures and credit card debt.
Bankruptcy allows the creditor to receive a fair share of the money that the debtor can pay back, while giving the debtor a fresh start. There are two types of bankruptcy to fulfill this need: Chapter 7 and Chapter 13.
Under a Chapter 7 bankruptcy, all unsecured debts are wiped out. These debts include medical bills, legal fees, utilities, deficiency balances and credit card debt. The debtor may lose property to the court that will be sold in order to pay creditors. There are certain debts that will remain. By law, they cannot be discharged through Chapter 7. These debts include alimony, child support, taxes, certain student loans and debts from fraud, larceny and fines.
Chapter 13 bankruptcy helps people with regular incomes that wish to pay their debts but are unable to do so at the current time. With court supervision, a repayment plan is established between the debtor and his creditors that will pay the debts under an extended period of time.
In 2005, a new law was established — the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. So many consumers were abusing bankruptcy. You may have heard of people simply filing for bankruptcy repeatedly. Some simply had their debts discharged and went out and bought until they were in the same situation again. Other consumers needed protection from unethical lenders. This law makes it more difficult for consumers to file for bankruptcy.
Before a bankruptcy can be filed, the debtor must enroll in a credit counseling session. Before the bankruptcy is complete, the debtor must complete a financial management seminar. The consumer will learn to budget, manage money, use credit wisely and the basics of consumer information. These classes aren’t always free, some come with a mandatory fee.
Means testing will also apply to bankruptcy filings. The means test is an effort to force more debtors into Chapter 13. Any debtor who is able to repay 25% of what they owe, or $10,000, to his or her creditors will not be allowed to file for Chapter 7 bankruptcy. Basically, if the debtor is proven to be able to pay back a significant portion of his debts in the next five years, then he should be required to.
Financial advisors will tell you that bankruptcy should be your absolute last option. It will ruin your credit history. It isn’t easy to be granted bankruptcy and it isn’t easy to get over it. You should consider every available option before you decide to file bankruptcy. Often, you can go ahead and attend a consumer financial management class. Learn how to get out of debt and avoid bankruptcy.
Bankruptcy Questions
Posted in Debt Consolidation | No Comments »
Saturday, November 21st, 2009
T J Madigan asked: If you incur bankruptcy, filed for one and you need to avail yourself of a vehicle loan then you can approach a lending specialist that can offer you bankruptcy auto loans. A bankruptcy auto loan is the loan you availed of after incurring bankruptcy. Specialist lenders and car dealers can extend bankruptcy loans for consumers after filing bankruptcy. There are specialist lenders who extend the bankruptcy auto loan to their customers on a daily basis. You can be assured that the lending specialists will exhaust every means to be able to approve the loan for you.
There are a number of reasons why people file for bankruptcy. But the most important one is as a debt management option. But you should be aware of what bankruptcy entails before you file for it. You must exhaust other options available. Filing for bankruptcy should be a last resort.
There are two different types of bankruptcy:
Chapter 7 (liquidation) which is where your non exempt asset are sold and the money generated are distributed to creditors to pay off debts.
Chapter 13 (restructuring) where you establish a repayment plan so you can repay your creditors within a period of 3 to 5 years. Properties, in this instance, are not sold. The court can decide how creditors get paid and what debt percentage you need to repay.
Dischargeable debts in cases of bankruptcy include credit cards, banks loans, unsecured debts, leases, real estate and personal properties. Non dischargeable debts include child support, alimony, student loans, legal debts owed to state, tax debts, divorce settlement, claims from driving under alcohol or drugs. Bankruptcy will stay on your credit report for up to 10 years.
Bankruptcy auto loans are one of the best ways to re-establish credit after bankruptcy. Since a car is necessary for people to be able to go to work and pay off their loans, dealers and lenders have created the auto financing loan special program to help people with bad credits or even those filing for bankruptcy avail of bankruptcy auto loan. Specialist lenders often have programs for people who file for bankruptcy and want to avail of bankruptcy auto loan. Specialist lenders help people who find it hard to secure auto loan because of bad credit or bankruptcy. They can provide bankruptcy auto loan regardless of your auto loan circumstances.
Bankruptcy auto loan financing could help you get rid of the bad credit and establish good credit standing again. If you file for bankruptcy you will pay higher interest rates on bankruptcy auto loans than what is normally charged because lenders consider you a higher credit risk. If you avail of bankruptcy auto loan, make sure that you make the most out of this second chance. Pay your monthly payments to the auto financing loan special promptly. And do not lapse on your payments.
The good credit standing you can establish is important because this could shave off several hundreds even thousands of dollars on your annual auto loan payments in the future. Since the interest rates are higher for bankruptcy auto loan, it would be wise to purchase a less expensive vehicle or a used one.
Bankruptcy Questions
Posted in Automotive | No Comments »
