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Five Hidden Fees Your Lenders Charge, And How To Avoid Them

We all know that certain fees and charges go along with taking out a loan, or applying for a credit card. This is how lenders make their money, but it can be hard to figure out what all you are paying and just how your monthly payment is allocated. Knowing where your money goes is the first step on the road to financial recovery. So, when your monthly bills come in, take a closer look to see just what all you are being charged for the benefit of doing business with your creditors.

Five hidden fees your lenders charge, with tips on how to avoid these fees, include:

  • The cost of having a bad credit score will significantly increase what you pay in interest every month. In order to avoid paying a higher rate, take steps to repair your credit before taking out a loan.
  • The length of your loan may also be costing you more money than you need to spend. The longer you take to pay off a loan, the more you will pay in interest. If you are able to increase your payment a bit, think about shortening the loan term or paying extra to the principal balance. This will reduce the amount you owe much faster.
  • Costs for add-on’s or required insurance should be taken into consideration when applying for a loan. Shop around for the lowest rates beforehand so your total monthly obligation fits within your budget.
  • Origination and other fees are often tacked on to a loan. Before you sign on the dotted line, make sure you know the amount of these fees, and ask for them to be eliminated or reduced if possible.
  • Accumulated interest fees, most often associated with a deferred loan. While you do have the option on some types of loans (such as a student loan) to defer payment for a period of time, the interest will continue to accumulate when you are not paying. In order to avoid being shocked at the amount of accumulated interest, opt to make an interest only payment rather than defer the payment all together.

Knowing what to expect from your loan, and where you money goes when you make a payment will help you to budget your finances. If you find yourself in over your head financially even after exploring these fees and other options for repayment, you do have options. Call our office to learn more.

For more information about debt and debt management, contact us at  www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

What Happens If I Forgot To List A Lender In My Bankruptcy?

Some bankruptcy cases are so large that it is hard to gather all of the necessary documents for filing, and as a result there may be a lender or two that is not included on the filing. When this happens it leaves the debtor, and creditor, wondering the status of the debt. Is the debt still owed, or will the discharge cover that debt too and mean the debtor no longer has to make payments? Being able to eliminate date and the monthly payments that go along with it is the main goal of filing bankruptcy. So if you end up still owing some of your debts, it can be frustrating to say the least.

The answer as to what happens to debts that are left off of a bankruptcy depends on a couple of things; they are:

  • Did you file a Chapter 7 or a Chapter 13?
  • What would the creditor have received if they had been listed in the bankruptcy case and received notice of the proceeding?

The answers to these questions help determine what happens to forgotten (or unscheduled debt) debt. If the case was a Chapter 7 where no money was available to pay creditors, the creditor has suffered no real harm and the debt will likely be considered discharged. On the other hand, if there were assets (either in a Chapter 13 or a Chapter 7), the creditor may be able to argue they missed out on their share. If that is the case, it is possible that your case may be reopened to administer that debt. In order to avoid this from happening to you, take the time to gather all of your papers before having your case prepared. If your debt load is overwhelming large, obtaining a copy of your credit report can help. Your credit report will list out all of your creditors, and this will help you to double check that you have not forgotten to include any in your case. You can also keep copies of the monthly statements you receive, or take down creditor information from any collection calls you are receiving.

 

If you need help with your finances, call our office. We can offer solutions, legal and practical, that meet your needs. Call a Plantation, Florida debt relief attorney today for more information.

 

How To Challenge A Creditor’s Claim In Bankruptcy: Objecting To A POC

When you file bankruptcy your creditors are allowed to file claims, indicating the amount of debt you owe. This typically happens in a Chapter 13 case, where the Trustee is preparing to pay at least a portion of your unsecured debt and all of the secured debt you have that is provided for in your Chapter 13 Plan. Thus, it is common for creditors to file a proof of claim, which is a document that proves what you owe. The claim will set forth the type of debt (auto loan, mortgage loan, or other form of indebtedness) and will state how much is owed. In some instances the claim figure is different than what the debtor shows they owe. In that case, an objection to the proof of claim (POC) is in order.

In order to make a valid objection to a proof of claim, you must show that the payment amount requested will in some way impact you. The Bankruptcy Code  provides a procedure for objecting to a claim, and this is how it works:

  • The Trustee might object to the claim because if the amount claimed due is more than what the Chapter 13 Plan provides for, the Trustee would have to remit more to that particular creditor than planned. This can cause the payment calculations for your plan to become mathematically unfeasible, and might even cause your plan to be denied by the Court.
  • The debtor can object to the proof of claim, because it is the debtor that is making the Chapter 13 Plan payments. When a claim is filed that is much higher than expected, the debtor might be forced to increase his monthly payment to the Trustee. This may not be financially feasible, so objecting to the amount is a good idea.

It is unlikely that you will have a creditor file a proof of claim in a Chapter 7 case, but it does happen. If the Chapter 7 Trustee locates an asset, for example a piece of collateral that the debtor is not permitted to claim as exempt or a piece of collateral for which the lender failed to properly note their security interest, that collateral is subject to seizure by the Trustee. The Trustee then sells the collateral and uses the proceeds to pay unsecured creditors a portion of what they are owed. In these cases, a creditor would be required to file a proof of claim in the Chapter 7 case in order to get paid. If you have questions about when and how to object to a creditor’s claim, call our office.

If you need help with bankruptcy issues, contact our office. Call a Plantation, Florida debt relief attorney today.

 

 

Can A Creditor Sue Me In Bankruptcy Court?

Most people who seek the protection of bankruptcy are doing so to avoid harmful collection or foreclosure lawsuits, and to stop the creditors from making harassing collection calls. Bankruptcy does offer this refuge, and it is one of the main benefits of filing a case. However, there are instances where even filing bankruptcy does not stop your creditors from seeking repayment. In some instances a creditor may elect to file a case against you within your bankruptcy case, and you will be required to defend that case just the same as if bankruptcy had not been filed.

The process is referred to as an adversary proceeding, and the Bankruptcy Code sets forth certain circumstances that give a creditor the opportunity to file such a case. These include:

  • Debts that were obtained through fraudulent means. This type of case requires the creditor to show that when you acquired the debt, you did so by giving false or misleading information somewhere along the process of getting the loan. The most common argument made is that the information contained on your loan application is false, and that you knew it was false when it was provided. This is a difficult thing for a creditor to prove, but it is an instance where a creditor can sue you, seeking to have their debt excepted from the bankruptcy discharge. If the lender is successful, you will still owe the debt after the bankruptcy case is over.
  • Debts that arose due to the willful and malicious injury to property of another. This might be the case if you were involved in an accident and a finding was made that your actions were more than just negligent. If that is the finding of the State court and there is a judgment against you, the party entitled to receive payment on the judgment can seek to have that amount excepted from the bankruptcy discharge.
  • Most student loan debt is not debt that does not have to be repaid, but the student loan lender has to file an adversary proceeding in the bankruptcy to challenge your attempts to include their debt in the bankruptcy discharge.

If an adversary case is filed during your bankruptcy, it is vital that you file a response. If you fail to respond, the Court can rule against you and leave you holding the bag on the debt in question. Call our office for more information.

 

Call a Plantation, Florida debt relief attorney today for more information about what to expect during and after filing for bankruptcy. We have helped others, and are here to help you too.

 

 

What Are Bankruptcy Exemptions And How Do They Work?

Anyone who files bankruptcy is allowed to exempt certain property they own, and take steps to hang on to that property even though a bankruptcy case is pending. In order to take advantage of this law, you have to note what property you claim to be exempt. The Bankruptcy Code provides a list of standard exemptions, and so does state law. In some cases the state exemption may be larger, and in others the federal Bankruptcy Code provides for more. In Florida, the state exemptions are used when filing for the protection of bankruptcy, and you are required to have lived in the State for a certain time period prior to claiming the exemptions. For some, this might mean your bankruptcy case must be timed just right when filing.

Common exemptions under Florida law include the following:

  • Your primary residence.
  • Your car, up to a certain dollar value.
  • Clothing and other personal items.
  • Wages, up to a certain figure, for the filer with head of the household status.
  • Certain types of retirement plans and the balances in those accounts.
  • Insurance policy proceeds.
  • Child and spousal support payments.
  • Interests you have in a business or partnership.

But what does all of this mean? It means that the property defined as an exemption cannot be used to repay debts in your bankruptcy. You are free to keep these assets, subject to any applicable bankruptcy law or rule such as reaffirming the debt. It is important to keep in mind that just because property is exempt, you do not get it free and clear. You are still required to maintain payments for exempt property if you wish for it to remain in your possession. One thing to remember when claiming property as exempt is that the Trustee does have the ability to object to your exemption. You will want to be sure you have claimed only the amount allowed, where an amount is designated, and that you meet the residency requirements for claiming the exemptions. We can help you make these determinations, and help make sure you hang on to what is rightfully yours.

 

For assistance with bankruptcy issues, call our office today. Call a Plantation, Florida debt relief attorney today for more information.

 

 

Will A Short Sale Save My Home From Foreclosure?

Receiving notice that your home has gone into foreclosure is a frightening experience. Without a roof over your head it is hard to live a normal life, or to give your family the shelter they need. But, with a sluggish economy, the number of foreclosures is again beginning to rise and finding ways to stay in your home is becoming more important than ever. One answer is to try and work with the lender by offering to pay off the debt, but very few people are in a financial positon to make this happen. This leaves many homeowners searching for alternatives, such as bankruptcy or refinance. However, another popular option is to offer the lender a short sale.

A short sale is a transaction whereby the lender agrees to take less than what is owed on the home, and will release their lien. Going this route will not keep you in your home though, and should only be considered if you are prepared to find housing elsewhere. What you will accomplish is a resolution to your mortgage that does not include a foreclosure. Just be sure to watch out for these common missteps:

  • Do not do any damage to the home, as you will be responsible for the cost of repair and may even face charges of vandalism.
  • Be sure to get the terms of the sale in writing with your lender.
  • Be on the lookout for the possibility that the amount of debt that is forgiven will be considered income, and may be reported by your lender to the IRS as such. This means you will have to pay taxes on the amount of the loan that is forgiven.

Keep in mind your lender does not have to agree to a short sale, and the process can be long and tedious. If you are facing a short time frame, whereby your home is set for foreclosure sale quickly, a short sale may not be right for you. You do have other options, and should explore those options with a qualified debt management attorney. Call our office today to find out more about short sales, and how they impact a foreclosure proceeding.

Call a Plantation, Florida debt relief attorney today for more information on foreclosures and short sales, and what to do when your budget doesn’t work. Schedule an appointment to learn more.

 

 

Can The Bankruptcy Court Take My Personal Injury Settlement?

If you have been hurt on the job or in any other type of accident that wasn’t your fault, chances are you have made a claim against the negligent party. Most personal injury cases are settled out of court, but do take time. If you have filed for bankruptcy and have a pending personal injury case, you are smart to be concerned about what will happen to any settlement you receive.

The bankruptcy laws require certain things of the debtor, among those things are the following:

  • Full disclosure of all assets and all debts.
  • Listing any potential windfalls you might receive, such as an inheritance or settlement from a lawsuit. This includes a worker’s compensation case or a personal injury matter.
  • Claiming an exemption for assets that fall within the exemption rules.

If you fail to disclose any of the above, you run the risk of having your bankruptcy case dismissed. With regard to personal injury settlements, the ability to claim the any award as exempt lies within not only the bankruptcy laws but also applicable state laws. Sometimes the state law provides more favorable treatment to what can be exempted, and sometimes taking the standard federal bankruptcy exemptions is more advantageous. It is crucial to know which exemption is best for you, because personal injury settlements are considered an asset and a part of your bankruptcy. The role of the bankruptcy trustee is to administer the assets, and this includes locating any assets that are not exempt or encumbered by a lien. When the trustee finds such an asset, it is within the trustee’s power to seize that asset and use it for the benefit of repayment to your creditors. Depending on the severity of your injuries, and likely settlement amount, it could make more sense to try and hold your creditors at bay by negotiating repayment terms with them. We can help, by contacting your lenders and handling the negotiations. We know fielding those calls is time consuming and can cause added stress when you are injured. Let us help you by contacting us today for more information about how a personal injury lawsuit impacts your potential or pending bankruptcy case.

 

If you have questions about bankruptcy, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.

What Is Your “Debt Personality”?

Have you ever noticed how some people are more cheerful than others, or how there always seems to be that one person at work who keeps to themselves? Your personality type depends on what interests you, what activities you enjoy in your spare time, what type of people you feel most comfortable around, and a host of other characteristics that make you unique. People come in all shapes and sizes, as well as with all types of personalities. And, most people exhibit personality traits depending on the issue. For instance, your views on romance will vary from your views on what type of vacation to take. The same can be said for how you feel about debt, and your “debt personality” can determine the choices you make in not only incurring debt but also in how you become debt free.

An interesting article from Business Insider hints that the way you pay off your debt depends on your personality. The article highlights include:

  • People who tend to be savers will feel more comfortable with the avalanche method of debt repayment. This method requires paying off the highest interest rate debt first, and then taking the money that would normally be applied to that debt to the next highest rate debt. The avalanche method also allows the debtor to save, by making only the minimum payment on the lower rate debts while focusing on the debt with the highest rate.
  • People who like to track their results, and get a sense of personal satisfaction by seeing results quickly tend to use the snowball method of debt repayment. This method calls for paying off the smallest balance first, regardless of the interest rate. For some, seeing a balance of zero gives them the psychological and emotional boost needed to stay on track of their debt repayment plans.
  • Using a combination of repayment methods is used by people who tend to have personalities that value both saving, and fast results.

Who knew your personality might play a role in how you decide to pay off debt? A quick read of the above shows that who you can touch nearly every aspect of your life. If you are experiencing financial difficulty and need help determining what works best for you, we can help.

 

If you have questions about debt and debt management, call a knowledgeable attorney to discuss your options. We can help you understand your choices and make a decision that works for you. Call a Plantation, Florida debt relief attorney today for more information.

 

 

Is Taking A Loan From My 401(k) A Good Idea?

Sometimes life throws you a curveball, and events can leave you wondering which way is out. This is especially true in the world of personal finances, where the job market is such that it is hard to make enough to cover monthly obligations. You have several options if you are facing overwhelming debt, from seeking the protection bankruptcy has to offer to downsizing your home, and perhaps even taking on extra work in order to pay bills or establish an emergency fund. For some, looking at taking out a loan to roll multiple debts into one is an attractive option, but it can be hard to obtain credit when your pay history is less than perfect. One place some people look to take out money is their 401(k), but is this really a smart financial move?

Most financial industry professionals would advise against taking out a loan from your 401(k), but there are some instances where it might be your best option. For instance:

  • If the return on your investment is less than the interest you are paying on your debt, you can save more by taking a 401(k) loan to pay off high rate debt, and then putting those payments towards retirement.
  • The interest rate on a 401(k) loan is usually much lower than other types of loans, and if you have no other resources for funds it is a good idea to take a loan from the most cost effective option.
  • If you have job security, the chances of repaying your 401(k) loan are great. What this means is that you can save money in interest payments, pay down higher rate debt and free up disposable income, and still go to work every day and contribute to your retirement.

A word of caution though, if your plan prohibits you from contributing until the loan is repaid, you may want to rethink your decision to take a loan against the funds in your 401(k) account.  You should also look at the cost of the loan in terms of missing out on having that money in your account, making money for your future. Even when the return is lower than the interest you are paying, most experts say give it time. Retirement accounts fluctuate in value, and over time you might end up losing more than you’ve gained. In order to make a decision for your finances that works, call one of our knowledgeable debt management attorneys. We can help you decide what is best for you, and help come up with a plan for your financial future.

 

If you have questions about finances and if taking a loan from your 401(k) is the right answer, contact our office for help. We will explain your options, so you understand your choices and can make a decision that meets your needs. Call a Plantation, Florida debt relief attorney today for more information.

What Is The APR?

When you apply for loans it is important to know the terms of repayment, and how your payment will be calculated and applied each month. Knowing where your money goes helps you to keep better track of what you have, and to manage your finances each month. One of the most important loan terms is the interest rate, which is the “cost” of borrowing money. The higher the rate, the higher your payment. Having a basic understanding of how interest impacts the balance of your loan is beneficial, because it helps you to figure out how much of the amount borrowed you are actually repaying with each payment versus how much of your hard earned money is going towards interest.

The APR on a loan stands for the annual percentage rate. Here are a few facts about how an APR works:

  • Be wary of credit offers that have a different rate at the beginning of the loan versus 6 or 12 months later. Credit card companies are notorious for making offers with introductory rates that are low, only to increase that rate some time later. This is only worthwhile if you are able to pay the entire balance in full before the introductory rate expires. If there is a balance remaining upon expiration of the introductory rate, the balance is then subject to the higher rate and this can end up costing you more money than if you’d opted for the same rate over the life of the loan or extension of credit.
  • Those people with better credit scores tend to get offered lower interest rates. Keeping an eye on your credit report will help you to identify and correct errors, and knowing your credit score is a powerful tool when negotiating loan terms.
  • Fees are not included in APR’s, so be careful when transferring balances from one account to another and be sure you know up front the entire cost of the transaction.

Not all things in life are things you can control. But, maintaining control of your finances allows you to maintain a small portion of control over a very important aspect of your everyday living. We can help by working with you to develop debt management plans that fit your budget, including consolidation or bankruptcy.

 

If you have questions about money and bankruptcy, let an experienced attorney help you. Call a Plantation, Florida debt relief attorney today for more information.