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February 2020

mortgage after bankruptcy

How Will Filing Bankruptcy Affect My Mortgage?

1000 500 Sam Radbil

You are overwhelmed with debt and you have a mortgage to pay. 

What do you do?

The next step you take to resolve your financial difficulties (yes, you still have a life after bankruptcy) largely depends upon the type of debt you have, your income, and what you want to do and can do with your secured collateral.  

Remember, your mortgage is a secured debt, meaning that it is secured by your real property and that if you default on the mortgage, the mortgage lender can seize the property through a foreclosure action. Further, the mortgage lender can sue you for the account deficiency following the sale of the property at sheriff’s auction.

Here are five common scenarios that feature different treatment of your mortgage depending upon the rest of your financial situation. 

You have fallen behind on your mortgage and you do not have enough income to make your monthly mortgage payments, much less repay the mortgage arrears.

In this case, you have the option to file a Chapter 7 bankruptcy petition. Chapter 7 bankruptcy is a 4-6 month liquidation process by which you disclose your income, expenses, assets, and debts. The court determines that you are unable to repay your unsecured debt (like credit card or medical debt) and you receive a discharge of that debt – meaning, you are no longer personally liable for that debt.

When you file a bankruptcy case under Chapter 7, you have two options regarding your mortgage and your home:

You can Enroll in Your State’s Mortgage Modification Program

Most states offer Chapter 7 debtors the opportunity to request a mortgage modification through their bankruptcy filing. This brings the mortgage lender to the table in that the lender is required to participate. Be advised however that no lender is required to give you a modification if a feasible modification just cannot be reached, considering your past-due mortgage debt and your current income.

You Can Surrender Your Real Property

If you know that no matter what mortgage modification is offered you will be unable to afford to pay your monthly mortgage payment, you can “surrender” your property in your Chapter 7 filing and have the underlying debt, the mortgage, discharged as unsecured debt. 

“Surrendering” your property means you walk away free and clear, owing nothing. It also means that any foreclosure proceedings or scheduled sheriff’s sales are “stayed” or stopped by the bankruptcy filing’s “automatic stay,”, giving you a few months to live in the house without paying the mortgage and to save money for whatever future housing arrangements you are considering.

You have fallen behind on your mortgage but you have enough income to pay the monthly mortgage payment if your unsecured debts are discharged

In this case you might consider filing a Chapter 13 bankruptcy petition. Chapter 13 is a repayment plan over 3 or 5 years, and will allow you to repay your mortgage arrears over time as long as you can start making the monthly mortgage payment in full and on time as well.

At the end of your Chapter 13 plan you will be current on your mortgage and you will receive a discharge of any unsecured debt, like credit card debt and medical debt. Some past due income tax can also be discharged, under certain conditions.

You are current on your mortgage but have overwhelming credit card or medical debt, and do not have much equity in your home.

In this case, Chapter 7 will really help you.  If the equity in your home is less than the state or federal exemption (meaning, the Trustee cannot seize your home and sell it for the benefit of your creditors), then filing Chapter 7 will not affect your mortgage at all – simply keep making the monthly mortgage payment in full and on time throughout your Chapter 7 case.

What Chapter 7 can do for you is get that unsecured debt discharged, as long as you income-qualify to file Chapter 7. If you make too much income to qualify to file Chapter 7, you can file a Chapter 13 case and repay a small amount of unsecured debt to your creditors, and have the remainder discharged at the completion of your plan.

You are current on your mortgage, have overwhelming unsecured debt, and have a lot of equity in your home.

If you have equity in your home that exceeds the applicable exemptions, things get tricky. If you have overwhelming unsecured debt, the bankruptcy court will consider that equity the means by which you can repay your unsecured creditors. 

Considering this, how can bankruptcy help? You can still file a Chapter 13 case, and a calculation is made of the unexempt amount of equity in your property. That amount must be paid, proportionately, to your unsecured creditors, as the amount they would have gotten had you filed Chapter 7 and the Trustee seized and sold your home for the benefit of your creditors. 

The amount of nonexempt equity in your property will be divided by 36 or 60 months (your 3- or 5-year Chapter 13 plan), and with the addition of the Trustee fee, you will pay that amount to the Trustee every month and the Trustee will make proportional distributions to your unsecured creditors.

This way your home is protected, and you just pay your monthly Trustee payment and continue to pay your monthly mortgage payment in full and on time throughout your Chapter 13 case.

You are current on your first mortgage, have a second mortgage, and have some unsecured debt you are struggling to pay.

If your first mortgage is greater than the current market value of your home, then you can “strip off” that second mortgage as unsecured and have it discharged in a Chapter 13 case.

Yes, you read right.  Here is an example:

John and Mary own a home currently worth $225,000. They took out a second mortgage many years ago when the home was worth $280,000, but property values have fallen since then.  Their first mortgage balance is $212,000 and the second mortgage balance is $38,000.

John and Mary are “underwater” on their first mortgage in the amount of $13,000. For this reason, they can file a Chapter 13 bankruptcy petition and strip off their second mortgage as unsecured and have it discharged. As a bonus, they can also have their credit card and medical debt totaling $22,000 discharged. Filing Chapter 13 saved John and Mary $60,000!

Wrapping It Up

In conclusion, what happens to your mortgage after bankruptcy depends upon which Chapter you file under as well as your income and your goals in filing the case.

Speak with a bankruptcy attorney about the facts of your particular situation so that you can decide for yourself the best course of action.

first time homeowner checklist

An Essential Checklist for New Homeowners

1000 500 Sam Radbil

You are in! You have managed your finances; you have jumped through the hoops – and now you are living in your first home

It is exciting, maybe even daunting.

Here we take you through the essentials for your new home – what you will need versus what you desire. 

It doesn’t matter who you are, what age you’re making your first purchase, what your financial situation looks like, or anything else … this checklist can be helpful as a first-time owner.

Whoever you are, here is the list of essentials you should collect.

The Cleaning Collection

As dull as it sounds, before you move to your new place, you will need cleaning products and equipment. If this is one stress too many, you could always order the following items online and have them delivered to your new home on the day you move in.

First, you will need a vacuum cleaner – preferably a high-powered device.  Before you start to place your furniture in the home, you will want to make sure you have vacuumed everywhere. Your moving team will have tracked in dirt, and you will want to make sure you start your time in your home with it looking its best. There are some great deals on CraigsList and other online sites. If you have hard floors, you might want to get a broom and dustpan instead. You will undoubtedly need a mop and bucket.

Then, you will need a variety of sponge cloths, rags and squeegees.  You will want to wash down the counters and clean the bathroom. You will struggle to keep your mirrors; shower doors and windows clean without the right tool for the job.

Finally, pick up a range of cleaning fluids and sprays for the different parts of your home. You will need bleach, oven cleaner, washing up liquid, washing powder and many more. Check out the aisle at the supermarket to get a full idea of your cleaning needs.

Furniture Items

Rented accommodation often comes with some basic furniture. However, you will want to start adding to this furniture to help you make the place your own. 

Although you will have a bed, sofa, table and chairs and other such essentials, you may be missing some of the more comfortable and stylish items that will help you feel at home. You should add to these pieces over time and not think you need to interior design the whole space from the start. Once you have the essentials and a few pieces that make the home yours, the rest can come over time.

Small beginning points could be a lovely rug, or a favorite chair – maybe even a bookcase with some of your favorite books.

If you are moving into your bought home for the first time, these little luxuries may need to wait while you acquire the essentials such as a bed and a sofa.

Bathroom Details

Like your cleaning products for the house, some bathroom items will need to be available from the moment you move in. You will be embarrassed if you are caught short without loo roll – for instance. You also need to think about small things like a shower curtain, a bathmat, a storage rack for your toilet rolls – along with a toilet roll dispenser.  

You should also remember your towels and your soap and soap dish – you will be glad of these after a dirty day moving furniture. You will eventually want to stock up and have about three towels per person – along with a few extras for your guests.

The Electrics

You will need items you didn’t even realize you needed before. The most common problem facing new home movers is a lack of extension cables, lightbulbs and cables for TVs – such as your HDMI cable. The small things that magically appeared in your parents’ home that helped you charge your phone and your laptop – are now yours to buy.

Something small like a cord organizer could be a lifesaver when you are moving in. Neatly setting up your cables from the start will save you a lot of untangling.

Finally, and when you come to relax you will be glad we mentioned it, stock up on packs of AA and AAA batteries for the remote control for your TV and satellite box.

Overall, there are a ton of things you’ll have to do when you finally get into your first home. But this is a checklist that can set you on the path to enjoyment as soon as possible in your new digs!

Homeowners Guide to Using & Installing a Central Vacuum System

1000 500 Sam Radbil

Are you a homeowner thinking to purchase the best central vacuum? If you’re looking to upgrade the cleaning of dirt and debris in your home, this is for you.

Well, after this decision you need to dive into this guide for selecting the right central vacuum for your place.

You need to realize that there are several sorts of models and each of them owns different features for fulfilling a particular need thus you need to decide according to your requirement. This article covers some of the important information which is vital for you to take in before heading right away for the purchase. 

Getting the Right Installer

Many first time homeowners just focus on finding the correct central vacuum system and in that race, they always tend to ignore the right installer. There can be a high probability that you are confused about the type of installer which will fit your need, in that case never shy away and ask your family and friends. You need to ask around with your friends who already own the right installer.

In short, never ignore the potential of referral and their recommendations in a purchase decision. There can be a high probability that you are ignoring longevity but consider this factor when purchasing the central vacuum.

There can also be the case that the referral method just never works for you. Well, in that case, you need to dig deep into the local search and find the installer online. Read several reviews before making up your mind or settling for the perfect fit. 

Home Needs

You can not purchase a central vacuum without understanding the need for your house. You need to choose a perfect installer and after that ask the company to visit your place. You need to get the assessment from the company and ask that that which installer will be perfect for your house. 

System Fit

Certain things need to get considered before getting the actual central vacuum. You, along with the installer, must be able to figure out a method of hiding the tubings. The other locations which need your attention are inlet valves and dust canister. 

System Size

The next important and vital thing is the match. Your house together with the system must have perfect coordination. Bear in mind that your installer should take the size of your house, the floors and the number of rooms in the account as one needs to ensure that the central vacuum could work at an optimal level and reach every small space. The suction also needs to get determined according to the type of house you have. You might be aware that flooring also plays a huge role in the determination of the right central vacuum as there are different ones for carpet and different ones for tiles. 

Maintenance

If you are questioning the maintenance cost of a central vacuum cleaner then rest assured that it is much cheaper than alternatives, as you will have to get only certain parts replaced and that too once in about ten years. Make sure you do your research when looking at this method for your newly purchased home.

Key Benefits of Using Property Management Software

1000 500 Sam Radbil

If you think managing real estate is easy, then you have not met an agent yet. With so many properties to sell, their marketing, their management, and vacancy allocation, it gets tougher than.

If you would have joined the property management business a decade ago, all your hairs must have turned white due to the burden of work.. But with the advent of technology, it has become easy. As innovations have made every aspect of life mechanical similarly it has transformed real estate as well. With the introduction of this property management software, it is no longer a complex task to be a property manager.

Moreover, with the surge in the real estate business, this software has become a necessity. As you can see, in 2018 US homeowners bought existing homes of 5.34 million and 667,000 new houses.

Thus according to the Association of Real Estate License Law Officials approximately 2 million realtors facilitated these sales. So think for yourself how they managed it. Just imagine the number of homes per realtor! Do the math and you will understand why realtors require technology to help them? So this boom in the estate business led to realtors increasing their efficiency as workload expanded via property management software. From mobility and multi-tasking to versatility, security, and financial benefits, this software is changing the game for realtors. Here is why you should adopt them too:

1. Multi-Tasking Becomes Easy 

If you are a property manager or realtor, you must know how many things are there to handle. It might look like a desk job from far, just some selling and marketing, but apart from that, it has many hidden obligations as well.

Not only do you have to reduce vacancies promptly, but you also have to schedule maintenance, collect payments, comply with numerous regulations, and negotiate between parties, etc. moreover, if the properties they are dealing with are not in a centralized location, the workload is compounded and even more difficult to manage. In the past, all of this cannot be done single-handedly as managing everything at once led to blunders. Multi-tasking was not an option as even a slight mistake due to tasks getting muddled up could cost a lot. Well, previously the obvious solutions were to hire assistants or to contract out work. But all of these were costly and also lead to communication problems and dependency.

They also lead to dissatisfaction in many cases. But with free property management software you no longer need to delegate or contract out. You can manage all the work yourself with ease. The tasks that were all muddled up before, confusing can now be organized. They can be finished on your own promptly. Multi-tasking not only becomes feasible but also improves overall efficiency and quality as the realtor supervises the work him/herself.

You can use them to set up a portal where you will receive notifications of any request or pending task so that you can work on them competently. You will not miss out on anything as all data will be accumulated and organized on this software. You can even track everything by just clicking the right way round!

2. Economical

As we mentioned above, property management software removes middlemen. Realtors no longer need to hire assistants or pay to contractors to manage properties.

They can just purchase this inexpensive virtual assistant which eases the workload for them. Not only is the cost reduced in terms of money, but also errors are reduced as this technological innovation is extremely efficient. There are no time lags, miscommunication, or dissatisfaction. You can manage properties, anywhere and anytime which makes tasks easier and quicker to accomplish. This reduces costs thus increases profits by a large margin!

3. Mobility

Software these days does not require technical rooms. They can be used from anywhere. These features make it especially helpful in the real estate business as realtors are always on the run. So the mobility factor makes property management software and an ideal solution for working with various tasks off-site. Moreover, this mobility also saves time and reduces stress as problems can be highlighted at any time from any location can be resolved in an appropriate manner

4. Faster and Secure Transactions

Even if you manage the tasks on your own, and have no problems surviving the burden (which is quite unlikely); then even the time of payments will make you dive deep into stress. You may pass the work management but transaction management will definitely give you a headache without software. It is the payment receiving aspect where many realtors face problems. This is because both keeping track of rent payments and a money collection is a major hassle.

If manually done there are huge prospects of fraud as well as misappropriation. Contraction out money matters is also a risk. So the property management software comes to rescue here.

With it, transactions become both fast and more secure. This is so because the middle party is removed, and you have to directly deal with your clients. Moreover, the money is directly transferred through portals, such as credit cards, e-checks, PayPal, etc. Not only is it beneficial for you, but it also makes your clients happy as they have the convenience of paying you anytime from anywhere.

5. Maintaining Accounts

Realtors are professionals who deal with property. So they might not necessarily be good with numbers. Even if you are excellent at selling homes, and managing property, you will lose out if you do not match the numbers. Thus, if you are amongst those that struggling with Excel spreadsheets and accounts and people are robbing you off then a sigh of relief.

This software is a perfect solution for you as it eases all your financial complexities. You no longer have to update these mind-blogging accounts which you dread. This is because the property management software features an integrated system that gives you an advantage of automatic updating.

All you have to do is add the amount once and the rest of the changes are left upon this beautiful scientific discovery. So once in your life, you can thank those software geeks who have created this wonderful tool that makes your life hassle-free. Furthermore, the accounting benefits are not over yet. This software also helps in tracking and reporting thus you can keep a better hold over your performance and profits. Lastly, critical financial data is available at one click via this software too.

Conclusion

So the verdict is that those who have moved to it have been smart. They have heavily benefitted from this quick, economical, and effective creation. For those who are still in the thinking process, be quick as you are losing out a lot! This is because this property management software brings with it a plethora of benefits.

We have only highlighted a few major ones as we will need a whole book to compile them all! Thus getting it now will be the cleverest move you will make this year for both your peace and your business!