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debt consolidation

March 6, 2014 by Todd Murphy

Get My Life Back

Get Your Life BackFinancial trauma be devastating, affecting your quality of life.

Medical emergency is the most common cause of financial trauma
Source: CNBC

Last year, there were 1,107,699 bankruptcy filings in the United States.
Source: uscourts.gov

Job loss is the second most common cause. As of the end of 2013, over 10 Million people were unemployed in the United States.
Source: Bureau of Labor Statistics

Credit scores are widely used for loans, insurance and employment applications.
Source: banking.about.com

Recovering from financial trauma takes time and effort – but it’s possible.

Step one – Communicate with your creditors

As long as it’s possible to continue to make payments, creditors are usually willing to renegotiate loans and maintain a constructive relationship with you.

Step two – Restructure your finances

Through debt consolidation, refinance of real property, loan or mortgage modification, debts can be restructured within a payment plan and paid off at a pace you can afford.

Step three – Stop all payments

What if you’ve lost your income, been unemployed for an extended period or become disabled? What if you’re unable to make payments, unable to qualify for loan modification or other creditor accommodation?

Bankruptcy is a legal means of wiping your debt while possibly keeping your home or other assets. Your debts can be discharged on the completion of bankruptcy.

Bankruptcy is not the end – it’s a new beginning.

Bankruptcy can have the unexpected effect of improving your credit score. Even after financial difficulty, there are many steps you can take to improve it.

Although some kinds of debt such as tax liabilities and student loans can’t be wiped completely in bankruptcy, terms can be modified and accommodations made with creditors in a manner consistent with your new circumstances. Even if you’ve become disabled, financial recovery is possible by obtaining disability assistance and restructuring your finances.

Never give up hope! Get to work on solutions to all of these problems.

Let us help.

Filed Under: Financial Healing Tagged With: debt consolidation, financial recovery

February 7, 2014 by Todd Murphy

Home Loan Modification | New Jersey

loan modification application

How To Get A Home Loan Modification To Save Your Home From Foreclosure

  • Are you getting the run-around from the bank?   
  • Have you entered into one or more trial modifications but still not offered a permanent loan modification?
  • Are you more than 4 or 5 months behind in your mortgage payments?
  • Are you worried the bank is going to sell your home and force your family to move?

 

Loan Modifications Are Frustrating

  • Is your bank asking for the same paperwork over and over?
  • Getting no response from your lender?
  • Faxing documents again and again?
  • Spending hours on hold?
  • Getting the Runaround?
  • Getting conflicting information every time you call?
  • Always speaking to a different agent?
  • Are you waiting and waiting and waiting for answers?

Want to find out more about why getting a loan modification can be such a hassle? Read our post: Why Are Loan Modifications Frustrating?

What Makes The Process Difficult?

The banks give homeowners a hard time when they try to modify their mortgage. Bank representatives shuffle homeowners between departments giving different answers to basic questions. You have to fill out applications and provide documents over and over. They might lose the documents, or say the application has expired and tell you to do it all over again. This process can be costly and can drag on for months—or years! Sometimes the application gets wrongly denied, or denied without you being given any reason whatsoever. While this is happening, you’ve gotten further behind in your mortgage payments.

 

Loan Modification Is THE Best Tool

If you are facing the risk of losing your home to foreclosure, a loan modification is the #1 option. If you qualify, then a load modification will give you the most desirable outcome, as opposed to a bankruptcy. A loan mod will roll all of your missed payments into the principal and the loan payments will be recalculated based on an interest rate of not usually more than 4% and a term of 30 years. Interested in learning more about why loan modification is the #1 tool to save your home, read our post: Why Is Loan Modification The Best Tool? 

 

Do I Qualify For a Loan Modification?

You must have the correct debt to income ratio. Your income must be enough to pay the loan and other expenses. Therefore, it starts with income. Then, look at your expenses: your expenses plus your mortgage payments can’t leave you in the negative for the month. Find out more about qualifying for a loan modification, read our post: Do I Qualify For A Home Loan Modification?

How To Get A Loan Modification

You must complete your bank’s forms for getting a loan modification; they can be found on your bank’s website. You must complete all of them and submit them to your bank. Find out more on how to get a loan modification, read our post: How To Get A Loan Modification. 

 

Will I Qualify If I’m Self- Employed?

If you are self-employed, there are certain stipulations to getting a loan modification that exist. There is a slightly different process on must follow; you must organize your finances in such a way that the bank approves of. To find out how to qualify for a loan modification, even if you are self-employed, read our post: Will I Qualify For A Modification If I am Self-Employed?

 

What Should I Do If I Can’t Qualify For A Loan Modification?

If it turns out that you can’t qualify for a loan modification or your bank has denied you countless times, then a bankruptcy may be a good alternative. A bankruptcy can help you get into a repayment plan and help eradicate debts. If you are interested in learning more about bankruptcy as an option, read our post: How Does Bankruptcy Help Save My Home In Foreclosure In New Jersey?

Why Should I Act Fast On Getting A Loan Modification?

The sooner you take action and begin the process of applying for a loan modification, the better your chances are of obtaining one. The longer you wait, the more mortgage payments are being missed. If you wait too long, the higher the new calculated monthly payments will be, and it becomes more difficult to be accepted for a loan modification. To learn more about why it is crucial to apply for a loan modification ASAP, read our post: Why Should I act Fast In Applying For A Loan Modification?

 

 

Filed Under: Home Loan Modification Tagged With: debt consolidation, foreclosure

January 1, 2014 by Todd Murphy

About Car Loans

Financial stress can result in difficulty making car payments. There are several options for the car owner confronting financial difficulty, including loan extension or modification, sale of the vehicle, repossession of the vehicle, surrendering the vehicle, a “cramdown” of the car loan in Chapter 13 bankruptcy, or reaffirmation or redemption of the loan in Chapter 7 bankruptcy.

Auto loans are secured debt, with the car itself used as collateral for the loan. Lenders can repossess vehicles as loan collateral without a court order, soon after default on a loan. The loan is in default the next day after a missed payment, and the car can show up in the collection queue as soon as ten days after default.

Time is of the essence, for both lender and borrower. For the lender, it’s the rapid decline in the value of the car, and for the borrower, it’s the lender’s haste that forces timely action to avoid or address a possible default.

Failure to maintain insurance on a vehicle can also cause the loan to go into default, even if the payments are current.

If you’re going to be late on a payment, call the lender ahead of the due date and try to arrange an extension, change the payment date, or get the loan rewritten for lower payments over a longer term (resulting in more interest paid). If you’ve missed the deadline, try to catch up on payments as soon as possible. Hiding the vehicle or otherwise thwarting repossession will only add more to your liability when the car is repossessed, or a judgment is obtained. Buyers are responsible for collection, towing, storage and auction fees if a car is repossessed.

When a repossessed car is sold, the proceeds may not cover the outstanding loan balance and fees. In this case, a deficiency will exist for which the holder of the loan will be held responsible. (A deficiency is the difference between the outstanding loan balance and the proceeds collected by sale or liquidation of the asset.) This deficiency is unsecured debt, and can be discharged in a bankruptcy.

Another option is a “cramdown” of the loan in Chapter 13 bankruptcy. The loan balance can be marked down to the market value of the vehicle, and pooled with other debt in the debtor’s Chapter 13 repayment plan. The total paid may be less than the balance on the loan, and on completion of the payment plan under Chapter 13, the buyer will own the car free and clear.

In the event of a Chapter 7 bankruptcy, the option to reaffirm the loan exists, if the car payment is judged to be affordable by the court. In the event of a default after reaffirmation, the buyer is responsible for the debt, including a deficiency in the event of repossession and sale. If a vehicle is surrendered (that is, returned to the dealer) a deficiency will be wiped by the Chapter 7 filing.

722 Redemption

Another option in Chapter 7 for the car owner is a “722 Redemption,” in which the car loan is marked down to the market value of the vehicle and the dealer paid the reduced amount arbitrated by the bankruptcy court. The lien is released with no deficiency. It can be difficult for an owner to come up with a lump sum, but there are lenders who specialize in making loans in these circumstances. The loan is not discharged in the bankruptcy, and can enable the owner to keep the car.

Todd Murphy Law is experienced in dealing with issues related to auto loans in financial difficulty. Get help choosing your best course of action. Call Todd Murphy Law today for a free evaluation.

Filed Under: Collection Defense, Learn About Loans Tagged With: Auto Loans, Bankruptcy as an Option, debt consolidation

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