Some may try to negotiate a settlement with the bank or lender that holds the second mortgage. The homeowner will offer a fraction of the amount that he or she owes to be released from the total debt. Since the mortgage holder is not likely to receive any money if the home goes into foreclosure, they may decide that something is better than nothing and agree to the deal.
These negotiations can be very delicate and challenging. If the homeowner is too forceful, they could find themselves without any options. A second mortgage owner does not need to agree to modify the mortgage. They may not be willing to negotiate, instead deciding to keep the homeowner to the terms of their original agreement.
One very important part of any settlement with a second mortgage holder concerns potential liability for the homeowner after the deal. Some lenders may try to hold the homeowner responsible for the difference between the amount paid in the settlement and the total value of the mortgage before release their claim on the home. Homeowners need to be released from the remaining debt to make these settlements truly effective.
Those considering entering into or proposing a second mortgage settlement should speak to an experienced attorney that has handled these matters in the past. A homeowner may agree to a deal without resolving his or her liability, making a bad situation worse.
]]>Their investigation has uncovered some alarming facts. Two of the city's water wells were found to be contaminated with perchlorate and trichloroethylene (TCE). Perchlorate is used to make rocket fuel and fireworks, and TCE is a commonly-used industrial solvent which has been linked to cancer.
]]> In some locations, perchlorate levels were 1,000 times higher than safe drinking water standards, while TCE levels were measured at amounts 300 times higher than safe levels. The presence of these chemicals is believed to have led to the adverse health effects, especially for those who grew up in the area during the 1980s.Perchlorate is known to be extremely harmful to children as well as pregnant women. The chemical severely interferes with a child's thyroid, which can cause growth or development problems. Additionally, perchlorate may also harm a child that is still in the womb. Expectant mothers have unfortunately experienced a rise in the number of still-births in the region, and there has also been an increase in children born with various types of birth defects.
The presence of perchlorate in the wells has been confirmed, and the damages that it can cause are very well known. But why is it affecting the people of Rialto? From the 1940s to 1980s, the city was home to many industries that released the chemical into the environment. Many munitions and fireworks plants in the region would conduct tests or destroy products which contained perchlorate.
Eventually, the chemical made its way into the water supply. In fact, in 2009, the area was labeled a Superfund site, a federal designation that means potentially hazardous substances are present which can be harmful to people and the environment.
If you have experienced health problems, and live or have lived in this region, it is possible that you may have been exposed to the contaminated drinking water. To learn more about the class action lawsuit services that we provide to the victims injured because of the exposure to toxic chemicals, contact our firm to understand the options that may be available to you.
To read more about the concerns in Rialto, please click here for a story from the Press Enterprise.
]]>Several for-profit colleges realize there are many frustrated people out there looking to start over. Since they have been out of work for a long time, they may not have the funding they need to sign up for classes. No matter - the schools promise them very lucrative careers once they graduate. All they need to do is take out a few loans to pay for their education, and then it is time to start making money.
]]> Unfortunately, some of these career or for-profit colleges are unable to meet the promises that they make to their prospective students. Poor facilities, the lack of accreditation and a poor reputation in the industry are just a few of the many problems that negatively impact a graduate's ability to find work. Not only are these students still unemployed, they are actually worse off because of the excessive loans they have to repay six months after graduating.The Obama administration recently implemented new regulations designed at holding career colleges accountable if their students are unable to repay their student loans. Schools must lead to gainful employment in order to be eligible to participate in the federal aid program, which is crucial to for-profit colleges as many of their students need this aid to pay for their courses.
Under the rule, a school will be considered to lead to gainful employment if: at least 35 percent of former students are repaying loans; the annual loan payment for former students does not exceed 30 percent of discretionary income; or the total annual loan repayment amounts do not exceed 12 percent of a past student's yearly income.
The administration has been focused on reducing the number of ineffective schools. Critics feel that instead of penalizing for-profit schools that are not in compliance, the new rules instead simply allow deficient schools to have ample time to meet these gainful employment standards. Educational institutions that do not meet the listed criteria will not be punished unless they fail to meet standards for three consecutive years. Only then will they be subject to financial aid restrictions.
For-profit colleges will still be allowed to prey on students who are simply unaware of the dangers of enrolling. Schools will still be allowed to conduct business as usual, meaning that more and more students will be taking out loans that they will never be able to repay.
Frustrated professors and administrators who work for schools that engage in this type of behavior are encouraged to speak out to warn others about the potential problems, as they may have a cause of action against the school if they are terminated.
]]>Television and newspapers are filled with ads from career colleges, promising a wealth of opportunities if you attend their institutions. Space is almost always limited, and many schools pledge that you will find work after you get your degree. Financial aid is available to those who qualify, so what do you really have to lose by waiting to take advantage of this wonderful opportunity in your new career as a surgical technician, medical billing specialist or other profession?
]]> Unfortunately, as many students of these trade schools have discovered, things are not as promising as they seem. Often for-profit schools are much more expensive than their public counterparts. Prospective students have to apply for financial aid in order to pay for their education, and this is how for-profit schools make their money. Students are often unaware that they will have to repay these loans six months after they graduate, whether they are employed or not.Critics of career colleges believe that the schools do not have a student's best interests in mind when they register a student for classes. Whether that person ever graduates or not is of little concern to the college - they have already achieved their goal simply by convincing the student to enroll in a class.
Students at these schools often discover that they are not getting their money's worth. Recruiters will say anything to get the student to sign up for classes, promising students high placement rates after graduation. Students have begun to file class action lawsuits against career colleges because of these broken promises.
Often, schools do not have the proper facilities to provide the education they promise. Programs end up not meeting state accreditation requirements, which will restrict employment options after graduation.
If you are considering attending one of these for-profit colleges, be sure to do your research before registering. Call some former students and ask them about their educational experiences, and if they were able to find work after graduating. Talk to employers in your potential field and discover the school's reputation in the industry. If the programs you are considering will require you to take out loans, check for more affordable options in your area.
Don't let an aggressive recruiter pressure you into taking classes that you cannot afford. It can be difficult to make ends meet while looking for work, but it will be even worse if you go in debt for a worthless education. Additionally, school officials should not be afraid to speak up about the unethical practices at for-profit colleges, as there may be options available to a professor or administrator that was wrongfully terminated.
]]>And if you've been a client of Sobti Law Group, you know first-hand the benefits of filing for bankruptcy. What you may not have been anticipating was Form 1099C, which is a document from a bank or other former creditor ("former" because you no longer owe the creditor any debt after bankruptcy) that, in effect, implies that you owe more on your taxes because you "gained" in income by being forgiven your debt.
]]> Use IRS Form 982We represent bankruptcy clients in the cities of Corona, Palm Springs, Beaumont, San Bernardino, Orange, Riverside, Chino, and Rancho Cucamonga - and the one thing in common with every bankruptcy client from these cities is that they think Form 1099C is the biggest thorn in their side, because they've already filed for bankruptcy and made it through the process. They thought they were done with everything.
These clients are done with most everything, except Form 1099C, as long as you let your accountant know about it, or you otherwise deal with it on your own by filing IRS Form 982. Now, as bankruptcy attorneys, we are not tax attorneys, tax consultants, or accountants. Our core area is bankruptcy law. As such, we could be wrong in downplaying Form 1099C. But we probably aren't.
Just know that the law allows you to avoid paying additional taxes because of Form 1099C - so deal with it promptly by telling your accountant about it or filing the form yourself if you routinely handle your taxes on your own.
Source: IRS Form 1099C after bankruptcy need not cause headaches
]]>If you're worried about the trustee, don't be. She won't make a pauper of you, force you out on the street, take everything you own and hand it over to your creditors. That's not what bankruptcy is. It's also not the Spanish Inquisition, the trustee peering down at you from on high.
In a conference room (generally not a courtroom) the bankruptcy trustee will ask you questions that are meant to clarify her understanding of your financial situation, based on the documents your bankruptcy attorney filed on your behalf. The typical hearing is 15 minutes or less. And your attorney will be by your side the entire time.
]]> Keep Your Things, Ditch Your DebtThere are many different types of bankruptcies. Every case and situation is different. But we'll assume for purposes of this article that you will file a "no-asset" case - which is the typical chapter 7 bankruptcy process for consumers overwhelmed by debt.
Keep in mind, a "no-asset" case does not mean you have nothing to your name. It just means that there are no assets to distribute to creditors that aren't protected under bankruptcy law (exempt vs. nonexempt assets). And that's important, because it relates to the fundamental purpose of bankruptcy: to give you a fresh start.
Unless your bankruptcy attorney says otherwise, you should plan on being able to keep things like furniture, appliances and clothes, as well as may other items. In fact, many bankruptcy clients find that they can keep most of what they want, while getting rid of most of their debt.
There are, of course, exceptions. In typical chapter 7 bankruptcy cases, you will not be able to keep your home unless you reaffirm the debt and continue to make payments. The same holds true for your car (unless, generally, you already own your car free and clear). Also, debt like taxes and child support are generally not dischargeable.
As the U.S. Courts website says, "The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors."
So the trustee liquidates nonexempt assets in asset cases. Again, we'll assume that you will file a no-asset case. So put your concerns to rest about the trustee: She's not a judge. Bankruptcy is not the Spanish Inquisition. Even in asset cases, you won't be made homeless.
Now that you know a bit more about the trustee's role in your bankruptcy case, you can worry a bit less.
]]>Stern's business was built on foreclosure practices that have now become infamous, at least for those whose homes were unjustly foreclosed upon, and among lawyers like us who routinely help distressed homeowners by filing for bankruptcy on their behalf.
If you're facing someone like Stern, or a bank or mortgage lender that is seeking to foreclose on your home, you have a right to defend yourself. Stern may have done anything and everything he could to keep the foreclosure machine going, but that does not mean there's no recourse for distressed homeowners.
Consumer bankruptcy - typically Chapter 7 and Chapter 13 in the bankruptcy code - is a way out, a fresh start, for those who find themselves behind on their mortgage. Your individual circumstances must be taken into account, but your home stands a reasonable chance of being saved from foreclosure through consumer bankruptcy.
Filing bankruptcy puts an immediate halt to all collection action, including pending lawsuits, temporarily stopping home foreclosure proceedings and giving your bankruptcy attorney a chance to save your home.
If you don't want to keep your home, or you have already been foreclosed upon, consumer bankruptcy can eliminate mortgage deficiency balances. The deficiency is typically the difference between what the bank obtained from the sheriff's sale of the house and what's still owed on the mortgage after default. Banks and mortgage lenders can attempt to collect on the deficiency from you-but not if you've discharged it through bankruptcy.
]]>Imagine making monthly mortgage payments and never missing a payment - not one, and never late - yet home foreclosure is nonetheless attempted by various mortgage lenders on three separate occasions.
That's what happened to Ohio couple Michael and Pamella Negrea.
The Negreas' mortgage took quite a journey, as have many other homeowners' mortgages, starting in 1998 after the Negreas refinanced their home. The mortgage was sold to Advanta Mortgage, then Nation's Credit, then Homecomings Financial.
Fairbanks Capital serviced the loan as it made its way through the now-notorious buying and selling process. Fairbanks went on to earn its share of infamy with foreclosure fraud when in 2003 the Federal Trade Commission and U.S. Department of Housing and Urban Development settled a lawsuit that charged Fairbanks with unfair and illegal practices.
]]> Fairbanks agreed to pay $40 million to settle the suit. (Fairbanks has since changed its name to Select Portfolio Processing-presumably in an effort to shed its less-than-stellar reputation.)One example of Fairbanks's unfair practices was failing to post mortgage payments-and homeowners wouldn't get credit for them. Fairbanks failed to post two of the Negreas' mortgage payments, leading to the first foreclosure attempt by Homecomings Financial in 2001.
As the Plain Dealer's Teresa Dixon Murray reports, Michael Negrea tried to speak with a Fairbanks representative, but his efforts went nowhere. "They'd never call you back," he said.
GMAC Mortgage was the next loan servicer after Fairbanks. Since the Negreas were in foreclosure, GMAC refused their mortgage payments, which only exacerbated the situation.
But the story is just heating up.
The facts and timeline get complicated, so try to keep up:
What do average consumers like Michael and Pamella Negrea do when caught in the crosshairs of a company like GMAC Mortgage?
We say seek justice. Homeowners should do all they can to prevent foreclosures.
Source: Eastlake couple foreclosed upon three times, despite never missing a payment
]]>As former California governor Jerry Brown takes office for the second time, he faces a state that is in rough financial shape - along with millions of its residents, many of whom are retired and wondering what to do about mounting credit card debt and harassing debt collectors.
]]> And for people like Salt, who provide financial advice to retirees and others on a daily basis, the situation is getting worse. From ongoing medical expenses to stagnant Social Security payments that do not match the increasing cost-of-living, Salt sees bankruptcy this way: "A tremendous burden is lifted from [retirees'] shoulders and it isn't as awful as many expect."That's the way we see it, too.
For starters, retirement accounts are generally exempt in bankruptcy. Put another way, these accounts are protected. When counseling clients, we advise not to spend down retirement accounts to pay bills or because the client heard that retirement accounts will be liquidated to pay creditors. That's not true.
Because of the tough economic times we are facing, many seniors are being asked to financially assist their unemployed, or underemployed, loved ones. This is in addition to the extremely high increases in medical expenses we are experiencing. The alternative to drawing down a retirement account is charging up the credit cards. As with any debt, the added monthly minimum payments gradually increase to the point where the payments are no longer affordable. Not to mention the long time it takes to pay back credit card debt when only making the minimum payments.
The reality of retirement is that you must live on a fixed income. Fixed incomes are not compatible with rising expenses. And use of credit cards is only a quick fix. Once you've maxed out your credit, you've left yourself vulnerable to persistent debt collectors when you find yourself unable to pay your bills.
And if you have already made withdrawals from savings and retirement accounts, then you will have depleted what you had to live on.
Don't wait until then to file for bankruptcy. Keep your retirement accounts. Keep the equity in your home. Prevent home foreclosure. Get a fresh start.
As USA Today reports, "If you get out from under the burden of debt now - your Golden Years have a real shot at being just that - golden."
Source: Filing bankruptcy in retirement may not be such a bad idea
]]>If you're making minimum payments on credit cards in a vain attempt to pay off your debt, every penny you put toward those endless minimum payments could instead be put toward retirement savings (which are generally protected assets). These are assets that you should build as early in life as possible.
]]> Unfortunately, many people do not know that retirement accounts are generally exempt in bankruptcy until it's too late. Do not spend down your retirement accounts in anticipation of bankruptcy. You can protect them, and the law provides for that protection.Beyond the retirement account exemption, if you are facing overwhelming debt and continue to make payments out of a sense of moral responsibility, then you're forgetting about the long list of famous people who filed for bankruptcy.
A decision to file bankruptcy is ultimately a business decision -- it is neither moral nor immoral.
And if you try to pay off your debt out of a sense of moral responsibility to your creditors, there are others who will be affected by your decision -- such as your children and other family members -- because they will have to care for you when you're older, can no longer work, and have no financial cushion for retirement.
As Cathy Moran writes on the Bankruptcy Law Network, "I often hear from clients who, I believe out of chagrin at the debt situation they find themselves in, resolve loudly that the debt is theirs and they intend to pay it. I cannot fault the sentiment. My question concerns whether that is the best choice at this point in their lives. The credit card companies are ageless; they don't have to retire. Real people do."
That is our position, too. Real people have to retire. You have to start saving at some point. Don't let debt be the reason you aren't prepared.
Source: Best Reason to File Bankruptcy
]]>In fact, our opinion is that you have nothing to lose through bankruptcy but your debt.
]]> When you file for bankruptcy, you are technically engaging in a legal proceeding (though, in most cases, you only have an informal hearing before the trustee-not a judge-and in a conference room rather than in a courtroom). The trustee hearing, also called the meeting of creditors, is public and anyone can attend. But don't be misled by the name "meeting of creditors," as few creditors actually show up, knowing that most debts in chapter 7 cases will be discharged and there is usually nothing they can do about it.Bankruptcy is filed in federal court and specific information about your finances and other personal information is generally limited to those people who are involved in the case, such as the trustee, your attorney, and your creditors and their attorneys. And most people can only access your actual bankruptcy file through Public Access to Court Electronic Records (PACER), a paid service used primarily by attorneys and court personnel.
Bankruptcies do appear on credit reports for up to ten years; lending institutions and others who have a reason to run a credit check will find out that you filed for bankruptcy. But unlike other legal proceedings, like many criminal and civil complaints, consumer bankruptcies are generally not major media events - unlike the Wall Street bailout.
Moreover, with the huge increase in bankruptcy filings over the past year (and those numbers are projected to increase significantly again), filing for bankruptcy is becoming more common and the stigma attached to those that file is lessening. Be sure to check out famous people who filed for bankruptcy in the past (just a partial list). You may be surprised to see who's on it.
]]>According to information released by the United States Courts' website, San Bernardino and Riverside counties had some of the highest numbers of bankruptcies by county in the nation, just behind Clark County in Nevada. As for the 21% increase in filings from 2009 to 2010, the Central District of California (of which Los Angeles is a part) was second only to the District of Arizona with 48% and 52% increases respectively.
In fact, every single federal bankruptcy court in California saw increases higher than the average 21% last year, with the Northern District of California showing a 39% increase, the Southern District of California showing a 32% increase and the Eastern District of California showing a 30% increase.
While the bankruptcy numbers are startling, with a bankruptcy filing comes a fresh start. The Great Recession has not been kind to many people, but many people will come out of bankruptcy in a better position, ready to take advantage of new opportunities as the economy starts to pick up again.
]]>Gasparyan was stopped in the median and waiting to turn when Longoria side-swiped him. As a result of the accident, Gasparyan has back and neck pain, as well as headaches, anxiety, and increased blood pressure.
One witness reports that Longoria's eyes were "red and bloodshot," yet Longoria has said there was no way to avoid hitting Gasparyan, who she claims stopped without warning. The car crash occurred near Longoria's restaurant, Beso.
Sobti Law Group plans on filing a civil lawsuit naming Eva Longoria as the defendant within days.
]]>More than three-quarters of workers in the U.S. with 401(k) plans can borrow against their accounts, and many, about 20 percent, do just that. In 2005, about one of every five workers with a 401(k) plan had an outstanding loan, with the average balance just under $7,000. The loan feature in what is supposed to be a retirement plan was supported by the financial services companies that provide and service the plans, with the idea that more people will participate.
]]> But taking away from your current plan is also taking away from your future. While most plans allow people to borrow and repay themselves with interest, the amount borrowed often reduces the value of your account, and thus you lose out on the returns that would have been earned and compounded, had the money stayed in the account during the period of the loan.In addition, if a worker loses a job while maintaining a 401(k) loan balance, then the loan must be paid in full and often within just a few weeks. Non-payment results in hefty taxes on the loan balance, usually 10 percent of the total as a penalty and up to 35 percent in federal taxes. And since that money is now gone, it can't be rolled over into another account, and the losses become even more noticeable.
A $7,000 loan, for example, could have earned 8 percent in returns and, by the time you retire, be worth more than $75,000.
Of course, real emergencies may require drastic decisions. But financial experts agree that unless there's an emergency and no other way to acquire additional cash, then leave your 401(k) fund alone. If necessary, you can declare bankruptcy on your other debts and your 401(k) retirement account will be protected in bankruptcy.
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]]>To understand personal finances, financial experts suggest checking debt loads, or your debt-to-income ratio. No more than 20 percent of your net pay should go to pay debt, including credit cards and auto loans. Add in housing expenses, which should not be more than 30 percent of your net, and your total debt should not exceed 50 percent of your net income.
If your debt load exceeds these recommendations, then you're most likely in financial trouble, or about to be. You'll know for sure if your credit cards are maxed, you're taking cash advances to pay bills, or you're using your credit card to buy basics like food and clothing.
Before you lose complete control of your finances, experts advise a visit with a credit counselor or financial solutions attorney to sort through your finances and see if there is sufficient income to not only get a grip on your credit balances but also pay them down. Paying the minimum each month will take you years - even decades - to pay it down, and what you are paying is mostly interest.
If your income doesn't cover the bills, then there could be more serious decisions to make, such as negotiating with your creditors to reduce your principal balance or lower the interest rate you pay.
Alternatives to the above include debt settlement, in which you and your creditor agree that you will pay a reduced amount to settle the debt, or even bankruptcy. If the help you need is from a professional, a debt solutions and/or bankruptcy attorney may be the best choice.
Often times, trying to fix a bad situation without the help from someone who specializes in financial solutions can lead to greater disaster. Let's face it, dealing directly with creditors who do not have your best interest at heart can seem a daunting task. If you're in any financial difficulty, the best idea is to recognize it sooner rather than later and sort out your debt relief options.
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