It’s always wise to carefully evaluate all of your options before making a financial decision. That’s especially true when it comes to bankruptcy because of the long-term consequences, and there are many options that people consider including reverse mortgages. What exactly is a reverse mortgage and is it a good idea for paying off your debt?

Reverse mortgages are loans that specifically target senior citizens and involve using their home equity. You must be at least 62 years old to receive a reverse mortgage.

Let’s say you own a $200,000 home, and you own it free and clear (which means you don’t owe the bank anything anymore). You can borrow a certain percentage of the equity in your home, and that amount will be paid to you at a specified time such as on a monthly basis. You won’t have to make any mortgage payments, and nothing has to be repaid until the senior citizens move or die. (You don’t necessarily have to own the home free and clear, as some lenders will simply use whatever equity you may have.)

This might sound like a fantastic bargain, but remember that the loans have to be repaid eventually. If you don’t repay them, then the lender can take over the house and leave your heirs with nothing. If you don’t have any children or grandchildren that will inherit your house, this may not be such a bad idea. You could use the money as income and not worry about what will happen to your house when you pass on.

Otherwise, you need to be very careful about this option. If you want to bequeath the house to someone you love, then that loan has to be repaid at some point. Also, you need to make sure that you’re dealing with a good lender and not someone who pushes or tricks the elderly into making decisions that are not in their best interest. A reverse mortgage may also change how the government views your benefits like Social Security and Medicaid. The rules change from time to time, so you should look into this as well.

If you want to keep your home but have a large amount of debt, bankruptcy may be the better option. We’re not saying this is always the best option, but the point is that you can wipe out debt while protecting your home (depending on the homestead exemption in your state and how much debt you owe). You shouldn’t be so quick to put up your house as collateral in order to pay unsecured debt like credit cards and other financial obligations.

Full Article

For more information please visit: http://www.floridalawattorney.com

Within the past couple of years, new bankruptcy laws have been put into place. These laws make some sweeping changes to the old laws, and in some places, certain regulations were completely revamped and almost rewritten. The reason for this change was because people were taking advantage of the old laws in a big way. For example, you used to be able to file bankruptcy almost on a whim, and you could do so frequently, which meant that many people would file, then get themselves into financial trouble again in very short order, then repeat the whole process.

This type of abuse is no longer possible with the new bankruptcy laws. But the laws were put into place for a reason, and for the person who has a legitimate need to file, these laws might seem cumbersome but they are actually to your advantage. Perhaps not in all cases, but learning to work within the laws can make the whole process much easier for you.

First of all, you need to know exactly where you are financially. Too many people think bankruptcy is their only way out of a tough financial situation and have not taken the time or put forth the effort to thoroughly check out their options and alternatives. You can do this easily and inexpensively (in many cases, free) via a bankruptcy evaluation from a qualified lawyer who understands the process and the laws in your state.

With the new bankruptcy laws, there is a time period during which if you have declared bankruptcy in the past, you cannot file again. This time period varies from state to state but it is definitely not whenever you want. There are also certain types of debts that cannot be eliminated by bankruptcy, like tax liens, child support, and previously filed judgments against you from an irritable creditor.

Bankruptcy does not necessarily mean that all your debts will be wiped out, although that is what most people hope will be the outcome. Rather, the courts take a detailed look at your finances and then decide which chapter of bankruptcy you may file for. If the decision is Chapter 13, then your debts are not wiped out but they are “reorganized” with lower monthly payments, but you are still required to pay them. If you are approved for Chapter 7, then your debts that are eligible are wiped out.

But again, this is not your decision. This is another reason that it is well worth your time and perhaps even expense to be represented by a qualified bankruptcy attorney who understands these issues and knows how to present your finances to the court in a light that may render the decision you wish to receive.

Bottom line: get a bankruptcy evaluation and fully understand what your options and alternatives are, and if bankruptcy is it, then you can also understand what to expect, which will enable you to make an intelligent decision as to whether or not you should proceed with it or not.

Full article

For more information please visit: http://www.floridalawattorney.com

A lender is required to file a foreclosure in a courthouse in judicial states. The process is similar to any other lawsuit where a summons and complaint are served to the homeowner. The foreclosure complaint will outline all the details of why you are being foreclosed on and will notify the homeowner when they need to file a response. Homeowners in judicial states have more rights than a homeowner who lives in a non-judicial state. In a judicial state, the foreclosure process can take a few months to a few years depending on how behind the courthouse is. The foreclosure process generally takes longer to complete than a non-judicial state. A homeowner who lives in a judicial state can stop foreclosure at any time by bringing their mortgage payments current.

Foreclosures usually progress more quickly in non-judicial states. For homeowners who live in the south foreclosure can progress even faster. In non-judicial states, a lender can foreclose on a homeowner without going to the courthouse and getting a judgment against them. North & South Foreclosure laws are governed by the local state statues. In non-judicial states, before a lender can auction of a homeowners’ home they must first:

1. Send a Notice Of Default.
2. Post a notice on the home stating that the property is being foreclosed on.
3. Publish a notice in your local newspaper or business journal stating that you are in default of your mortgage agreement.

Once your lender has completed the above steps in a non judicial state they are permitted to sell your home in a foreclosure auction (a.k.a. “Sheriff’s Sale”). After the auction the homeowner no longer owns the property. The foreclosure process in a Non-judicial state can be very cut and dry with little recourse for the homeowner once the property is sold in a foreclosure auction. A handful of non-judicial foreclosure states allow the homeowner a “redemption period” where they can buy back their homes. Sadly the redemption period in non-judicial states is usually a small window of time and most homeowners aren’t able to purchase their homes back in time. Once a homeowner’s financial situation continues to go south foreclosure is almost inevitable. Other than a redemption period, a non-judicial state offers no other foreclosure alternatives.

Full Article

For more information please visit: http://www.floridalawattorney.com