Get Out Of Debt

Welcome back to part 3 in our series on Arizona short sales. In this section I want to discuss your options when entering an Arizona short sale and give you a few resources to consider when looking for Arizona short sale help.

At this point, you will have spoken to someone about your situation or at least have a good idea of whether or not an Arizona short sale is in your best interest or not. And, if after making a decision to move toward getting Arizona short sale help, you should now be looking at your options. So lets discuss what your options are prior to asking the bank to provide help.

The first step in determining your options is to reach out to your lender to discuss your specific hardship or situation. Find out what they would prefer or how willing they may be and hear some of the options they will want to move you toward. You may hear the following:

1. They may ask you to come up with the total amount owed by a set date, which is known as reinstatement.
2. If there is the possibility of you catching up or becoming more financially sound in the near future, forbearance may be considered. Which means the bank would suspend or reduce your payment for a period of time.
3. You may be able to work out a repayment plan in which you resume making monthly payments plus a portion of the past due payments each month and over time you catch up your payment.
4. Or, if your loan is insured, you may qualify for an interest free loan from your mortgage guarantor which can bring your account current. This is known as making a Claim Advance or Partial Claim

After working with your lender, if you have not attained your desired result there are several services available to residents of Arizona.

You can contact the Arizona Foreclosure Helpline at (877) 448-1211 or visit them online at houseingaz.com and discuss your options. Another great resource is the Arizona Foreclosure Prevention Task Force Workbook, which can provide insight to the specifics of the Arizona short sale process and how best to either evaluate or proceed with your short sale.

If, however, you want to get up to the minute information from a short sale specialist in the Valley of the Sun, contact Charlie Allred at Secure Real Estate. Charlie and her team are Arizona short sale help specialists and have programs in place which can address your specific situation and give good advice via phone. Charlie can be reached at (480) 389-6130.
Arizona Short Sale Help: Get Legal Counsel

Most real estate attorneys will be able to advise you in regard to your legal liability in terms of financial obligation. Be sure to get the facts and retain a good attorney. Poor legal advice will cost you more in the long run. Again, here are a few resources for you to explore in order to get the legal short sale help you may need.

Contact the Arizona Bar or AZ Law Help
to get some preliminary information. Then you may want to investigate the Maricopa County or Pima County websites to search for help specific to the county in which you live.

You absolutely must speak to a tax attorney or tax specialist and make sure that your legal advice is inline with your tax advice! This is good way to determine if you have received good Arizona short sale help advice. If there is any disagreement as to your liability you will need to explore that area further.

Tax implications of a short sale can be significant. Most are not aware that upon completion of a short sale, some tax issues can arise. Because of this, anyone considering an Arizona short must discuss these possible issues with the appropriate professional so as to get the facts and avoid any unnecessary monetary burden. If that professional is an attorneybe sure he or she is an Arizona State Bar Tax Law Certified Specialist.

It is my understanding that the debt forgiven by a bank or lender can be taxable to the borrower as what is known as debt discharge income. Initially, the proceeds you receive from a loan are not taxable because there is an offsetting loan you must repay. But, if the debt is cancelled, you may be held liable for debt discharge income.

Regardless of where you are in the process, you need to be adequately informed an counseled prior to entering a foreclosure help program.

Contact us today to get the most up to date information You will sleep better knowing you took the first step toward getting Arizona short sale help!

What is mediation?  The presence of neutral third party mediators who can help parties reach an alternative to foreclosure for example this could be in the form of a loan modification, special forbearance, repayment plan or even selling of the home in the form of a short sale or deed in lieu.

Many states and courts have enacted laws where it is necessary to go through mediation before the lender actually forecloses on the property.  This process will be very similar if you were to hire a foreclosure attorney, loan modification company or even calling the HOPE hotline.  If you are seeking a loan modification to assist you in keeping your home and reducing your monthly mortgage payment going to mediation maybe beneficial.  This third person will help you through the process and explain certain terms to you.

In Philadelphia they have a pre-mediation “conciliation conferences” where the parties are required to meet to discuss foreclosure alternatives.

However, this meeting will only take place if the parties cannot come to an agreement on their own.

Having mediation programs also helps the courts by reducing the need to see every foreclosure case in court.  The idea is to bring the lenders and homeowners together to resolve their issues and to come to an agreement that both parties are happy with.  In some states Judges are still called upon during the mediation process; however this is not the case in all states.  In some non judicial states like Nevada, the state requires lenders to participate in mediation before they actually foreclose on the property.  Rhode Island will impose a fine on lender servicers that proceed to foreclosure without attempting mediation.

If you do not know if you are in a non judicial or a judicial state you can visit Realtytrac.com or read previous postings on our blog.

In this age of living on credit cards it is not surprising to find that more and more people are filing for bankruptcy. In order to prevent the misuse of bankruptcy claim a new law called the “Bankruptcy Abuse and Consumer Protection Act,” was passed in 2005. If you are in a serious and genuine financial problem, the right thing to do is file for bankruptcy. But before you do that you would have to find yourself a cheap bankruptcy lawyer who can explain to you all the finer points of the new law and can get you a good deal.

Where to Find a Bankruptcy Lawyer

Your quest for finding cheap bankruptcy lawyers can start with your family and friends. Those who have gone through the bankruptcy experience can recommend some names. You will get an insight into how competent the lawyer is. If you know an attorney, he/she might be able to refer you to some good lawyer.

Bankruptcy is a complex legal process; therefore, it is essential to have a lawyer who can put forward legal methods to either wipe out the debt by liquidating your assets and distributing them amongst your creditors, or develop a repayment plan. Usually the first consultation with a bankruptcy lawyer is free, so make sure you put forward your real financial situation before him/her. Once you have hired a lawyer, provide him/her with a list of all the debts that you carry. This would include credit cards, medical bills, loans, cars, etc. Make sure you have your bankruptcy lawyer explain to you all the details of the new law. If you have any questions, do not hesitate to ask.

Choosing a Good Bankruptcy Lawyer

A good bankruptcy lawyer will give you expert advice on how to get your financial situation back on track. A good lawyer will help you with repayment plans and debt management. Before you finalize your choice make sure you share a comfort level with your bankruptcy lawyer.

You want a lawyer who understands the system and will do a good job to represent you. It may cost you a little more but you get what you pay for. Your local bar association can probably help you decide whether a proposed fee is fair with the local standard. You can also browse online to compare some services to get an idea how much it would cost you to hire a lawyer.

Bankruptcy assets

One of the biggest questions people often have regarding bankruptcy is what will happen to their assets. Sometimes a family can be reluctant to declare bankruptcy because of this fear, even though all other options have been exhausted and it seems clear that bankruptcy is necessary.

First of all, you need to know the difference between the two most common forms of personal bankruptcy. These are known as Chapter 7 and Chapter 13 bankruptcy. With Chapter 7, you are trying to discharge (which means completely eliminate) your debt, or as much of it as possible. In exchange for this, you may have to liquidate some of your assets. However, the truth is that most people who declare bankruptcy do not have any assets worth liquidating. The assets they do have, such as a house and a car, are often protected by state or federal laws.

If you declare Chapter 13 bankruptcy, you don’t have to worry about liquidation of any of your assets. However, Chapter 13 requires that you pay back at least part of what you owe. In order to help you achieve this chapter 13 creates a repayment plan to make things easier for you.

What about your house? Well, even in the case of Chapter 7 bankruptcy you are usually protected when it comes to your primary place of residence. Some states even have unlimited homestead exemption, which means that you would not have to sell your house to pay off your debt regardless of how much your house is worth.

Of course, you are still responsible for paying off your mortgage, and if you do not pay your house payments then the bank can still take away your house. When the state has a homestead exemption, it simply means that you will not be forced to sell your house to pay for unsecured debts like credit cards. However, these laws vary by state, and there is often a limit on how expensive a house you can keep. Therefore it’s important to discuss all the details with a bankruptcy lawyer.

For most homeowners, bankruptcy is certainly not their first choice to save their home from foreclosure. This is for a very good reason, as the credit effects can be quite serious and its results are generally poor, at best. Many of those who file bankruptcy to get out of foreclosure find themselves right back in the foreclosure process within in months of entering bankruptcy. Putting off losing the home is obviously not the reason most homeowners file, as they will then be stuck with both a bankruptcy and a foreclosure on their credit.

Chapter 7 Bankruptcy

In any event, homeowners facing foreclosure can not include the house in a Chapter 7 bankruptcy. Chapter 7 is only for unsecured debt, such as credit cards, store cards, personal loans, and the like. The mortgage is secured by the property, so it would not be dischargeable under Chapter 7. The clause in the mortgage paperwork that keeps it from being included in a Chapter 7 case is that it states the mortgage loan is secured by the underlying collateral, the property itself. Chapter 7 does not discharge secured debt, so this combination excludes the mortgage and this type of bankruptcy from having anything to do with each other.

Chapter 7 bankruptcy may, however, serve a purpose in freeing up income that the homeowners could use to keep on top of their mortgage payment. Keeping a roof on top of their heads is much more important than financing a new television or furniture, and credit card companies who are unwilling to work with homeowners in financial trouble will have to bear the costs of their poor lending decisions. Discharging most of these types of debts can significantly free up income, which can immediately be used to pay down the arrears on the mortgage or establish a repayment plan or other workout program. Homeowners with a debt-to-income ratio too high will not qualify for these bank workout programs, so discharging some of this high-interest, unsecured debt through Chapter 7 may be a reasonable path to getting the mortgage back on track.

Chapter 13 Bankruptcy

Homeowners who want to file bankruptcy to stop foreclosure can include the house in a Chapter 13 filing, which is a reorganization of the debt with a payment plan mandated by the courts. But if the house is already too expensive, then agreeing to an expensive payment plan would not make a whole lot of sense. In Chapter 13, the mortgage payments might very well go up, because the homeowners have to pay the regular monthly mortgage, as well as a portion of the amount that they are in default. Falling behind on this type of bankruptcy almost always results in the house going back into foreclosure and sold at a county sheriff sale.

Especially if the homeowners fall behind on the Chapter 13 plan, they will be in serious danger of losing the home very quickly. Bankruptcy does not actually stop foreclosure — it only puts the process on hold and gives the owners protection under the courts to pay back what they have fallen behind. Thus, if the payments are not made as agreed, the bank will request that the courts lift the stay and allow them to proceed with the foreclosure process. And the lender will be able to proceed as if the bankruptcy never occurred, starting up right from where they left off. This can often result in a sheriff sale being scheduled very quickly, within a matter of weeks.

Filing bankruptcy to stop foreclosure is a decision that homeowners need to consider very carefully, and even potentially consult with a lawyer for approved legal advice. The only real way to get rid of the mortgage and no longer worry about the property is find some way to sell the house, give a deed in lieu of foreclosure, or have it be foreclosed on by the bank. The county sheriff sale will eliminate the mortgage liens and transfer ownership of the property. The homeowners will have to deal with a foreclosure on their credit for 7-10 years, though. There are no easy decisions during the foreclosure process, of course, but the possibility of facing foreclosure and bankruptcy on the same house should be avoided.