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Three Smart Lending Choices

We all need access to money, and sometimes this means taking out a loan. Most loans are taken out for large purchases, such as homes and cars, but there are other times when a consumer needs money and does not have it on hand. When that happens, it is common to go to the bank and ask fill out a loan application. The process takes time and can be frustrating, but when done right you can get loans that are easy to repay and do not further drain your finances.

In order to get a loan that fits your budget, you need to do a little work before going to the bank. Making a smart lending choice requires you to know what you need the money for and know that you will be able to repay the loan without difficulty. If you are not able to make the payments, the lender does have the right to seek repayment through initiation of legal action, which could ultimately lead to garnishment of wages or other collection remedies when you are unable to pay. Three smart lending choices to avoid these harsh consequences include:

  • Take only the amount you need. While you may be approved for more than you requested and it might be tempting to have a bit of extra money on hand for a vacation or shopping trip, it is best to take just what you asked for and nothing more.
  • Make your payments on time, to avoid fees and penalties and also the buildup of interest.
  • Shop around for the best interest rate, the lower the rate you are able to obtain; the lower your payments will be each month. Also look at the length of repayment, and opt for the shortest time possible, that still allows you to pay back the loan. Shorter repayment terms equate to a savings in interest, and that means you save money in the long run.

A good place to start when looking for a loan is with one of your current lenders. But, be sure any current loan you have is in good standing before you ask for another loan. Working with a current lender also gives you familiarity, and may eliminate the need to provide certain documents again as current lenders have your data on file. If a loan is not possible and you need financial relief, you can also file bankruptcy. Bankruptcy will wipe out certain debts, leaving you with the responsibility to repay the loans on the things you need. When you file bankruptcy you get to pay less for your obligations each month, and the savings puts you in a position where you have enough money to pay what is due without struggling.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com.

When Is It OK To Take A Loan From My 401(k)?

A 401(k) is a benefit offered by many employers, whereby a certain amount of money is put aside each paycheck into a retirement account for the employee. Most plans are set up where the employee puts a part of their pay into the account each pay day, and the employer either matches what is put in or has a set amount deposited into the account. The funds are generally invested, so they grow over time, the end result being a nest egg for retirement. The money you designate for deposit is generally considered a tax deduction, so you also get the benefit of paying fewer taxes by making regular contributions to your company’s 401(k) plan. Withdrawals from a plan are permitted at retirement age, but can be taken earlier under certain circumstances.

One circumstance where an early withdrawal from a 401(k) is common is where the participant is experiencing financial hardship. Your plan administrator will be able to tell you the ramifications of taking an early withdrawal, which usually include tax consequences and the inability to participate in the plan for a certain time frame after taking money out for hardship purposes. Other instances where taking money out, either outright or in the form of a loan are:

  • First time home buyers.
  • Home repair.
  • Medical expenses.

If you do need extra cash and have it available from your 401(k), it is typically more advisable to take a loan than to take an outright distribution. A loan does not have the same tax implications as an early distribution, and in most cases you can still contribute while repaying the loan. However, if the relief you need is greater than what a loan can provide, you should consider filing bankruptcy instead. Bankruptcy offers long term relief rather than a short term fix, and does not require repayment of a loan, other than the loans you are currently repaying. Even then, you get to decide which loans to repay and which to eliminate, but that choice also requires you to pick which pieces of collateral you want to keep. Bankruptcy is a very viable solution for many distressed consumers, and we can give you all the details you need to decide if this is the right choice for your finances.

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

 

 

Should I Tap Into My Kids’ College Savings To Pay Bills?

Most children are not lucky enough to have a college savings when it comes time to apply to a school and decide where to spend the next four years while seeking a higher education. This is proven by taking a look at the growing amount of student loan debt in the United States, but this is not the case in every situation. If your kids are fortunate enough to have a college savings account, you might be wondering how to manage that money and if it is acceptable to draw on it early. While early withdrawals are allowed under most plans, there are consequences to taking money out of a college account before actually going to college.

If you are short on funds and considering tapping into your kids’ college savings to pay the bills, here are some things to know:

  • Any withdrawal not used for the purpose of the account is considered taxable income. This means you will receive a tax form at the end of the year, and have to pay taxes on the amount of money taken out for a non-college related expense.
  • On top of potential tax liability, you can also face payment of a penalty for withdrawing from a college savings account and using the funds to pay household bills.
  • The money you take out should ideally be redeposited in the same fiscal year. Doing so will not only keep your kids’ account at the same level, but it will also help the fund grow and provide you the tax benefit of making the deposit. This depends on the type of account, but many plans provide for at least a state related tax break for certain types of college savings plans.

If you are in such dire straits financially that you need to tap into your child’s college savings, it might be better for you to file a bankruptcy case. Bankruptcy is a legal way to eliminate or reduce debt, and it does not have the tax consequences associated with early college savings withdrawal. You will qualify for either a Chapter 7 or a Chapter 13 case, depending on your income and debt situation, and we will let you know which type of case you are eligible to file. Let us help you get out of debt, by calling our office today to discuss your options.

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

 

 

How To Recover From Holiday Debt

Now that the holidays are over and the New Year has begun, most of us have taken the time to sit down and come up with some resolutions on how we want our lives to change. Some of the most popular resolutions center around diet, exercise, and money. But in order for a resolution to be effective, the person making it also has to make a commitment to see the resolution through to the end. This is challenging, because habits are hard to break. And if your resolution was to get out of debt, or just get debt under control, it may seem impossible if you are struggling just to pay the bills. A good place to start is to write down what you make, and what you spend, and try to strike a balance. And, if you overspent during the holiday season, now is a good time to recover from your holiday debt as well.

Some tips on how you can recover from holiday debt and get your finances in shape for the year ahead include:

  • Gather the receipts from your holiday shopping so you can add up what you spent. Then sit down and make a budget for this year’s list and try to reduce it by a reasonable amount. You can also shop early and year round to help offset the pinch you feel every winter when it comes time to put a gift in the mail for a loved one.
  • Set reachable goals for your daily spending, by cutting out things like fast food and specialty coffee shop stops. If you take small steps it will be easier to stay on track.
  • Write down your financial goals for the year, and come up with ideas on how you can reach those goals. This requires you to have a budget, and to know where your money is going each pay day.

Sometimes it takes professional help to get out of debt, or even to get a good start on knowing where your money is spent each month. We can help you outline your income and expenses, and show you solutions to get out of debt. One of those solutions is to file for bankruptcy, which will eliminate some of your debt or at least reduce it so that the bills you do have to pay are manageable. Elimination or reduction of debt will help you to stick to a budget, and put you in the best position to stay the course with any changes you want to make in your financial health. The first step is easy, and starts with calling our office to find out what will work for you.

For help handling overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

 

 

Will My Spouse’s Unemployment Hurt Our Chances At Mortgage Modification

Mortgage modifications are a tricky thing to get done. There is a fine line you walk between financial hardship and being able to make the payments on a modified loan. This is why the banks typically require proof of hardship as well as proof of stable income. Most people are able to provide the information needed to show a financial hardship, and the need to change the payment terms of their mortgage. But it is a different story when it comes to being able to show you have the income to maintain payments, even at a reduced amount. If you are married you get the benefit of providing proof of income for both you and your spouse, if you are both on the note, but if your spouse is unemployed the matter becomes more complex.

Your spouse’s status as unemployed can affect an attempted mortgage modification in a couple of ways. Here are some examples:

• A lack of income goes a long way to showing you are experiencing a financial hardship, and in need of a modification. If there is only one income in a household where there were previously two paychecks coming in every two weeks, it does not take a rocket scientist to know you are experiencing a hardship.
• Being unemployed necessarily means you do not have an income, so when asked to show you are able to make payments, you will be required to prove the one income you do have is sufficient.

Lenders may initially shy away from a request to modify a mortgage where one spouse is no longer working. If this is your situation, you should not take this as a final answer. Many times the figures on paper, like pay stubs, do not tell the full story of a couple’s financial condition. It takes artful negotiation and consistent hard work to get lenders to take notice of intangibles and listen to the needs of their customers. This is where we come in, as we have a great deal of experience working with many of the major lenders. We have been successful in all sorts of cases with varying fact patterns, and can help you too.

For more information about how a mortgage modification can help you, contact us today at www.DsouzaLegalGroup.com. We will go over the facts of your case and let you you’re your next step.

The Three Biggest Benefits Of Mortgage Modification

Any time you engage in activity designed to help put you in a better financial position, it is always a good idea to have a basic understanding of the benefits available to you. With bankruptcy you will receive the benefits of eliminating or reducing debt, stopping a foreclosure or repossession, and putting and to garnishments and calls from angry creditors. A refinance of your home will let you start over with a new mortgage loan, hopefully at a lower rate. Debt consolidation is a way to wrap all of your obligations into one lump sum payment, making it easier to manage monthly expenses. Mortgage modification is no different, in that it also offers a distressed debtor huge financial benefits.

The three biggest benefits of mortgage modification are:

• Having your loan be considered current. When you modify your mortgage, any delinquency is typically wrapped into the newly modified loan, so you are no longer showing in a past due status.
• Adding any late fees and penalties to your new loan, so you do not have to come up with them right now or make a large payment in order to have the loan modified.
• Lowering your payment, permanently. The most important aspect of a mortgage modification is getting a lower interest rate. The lower the rate, the lower your payment. The money you save each month by having a lower payment makes it possible to maintain current payments, and to put extra money aside or pay other bills.

If you are struggling to pay your house payment, or other bills, consider these benefits from mortgage modification. The process requires you to fill out an application for modification, with your current lender, and provide documents and information on your need to modify. The paperwork can be daunting, but does not have to be so off-putting as to not complete an application. We can help! We have experience dealing with lenders, and giving them what they need to make a decision on modifications. We also have experience negotiating the best terms for your situation. Let us help you today by taking on your request to modify, and shouldering the burden of communicating with your lender for you.

If you are considering modifying your mortgage to help eliminate debt, or want information on other options, contact us at www.DsouzaLegalGroup.com.

The Three Most Common Hardships That Lead To Mortgage Modification

Financial hardship comes in many forms. Not everyone who is going through a tough financial time is there for the same reasons. But there are some common denominators, and any of them can lead to a fast financial downfall. When that happens the best thing to do is to take quick action to change the course of your finances, so you are able to keep up with bills without worry. A good way to take charge of your money problems is to modify your mortgage, because a modified mortgage loan means a lower house payment. Anytime you can make a permanent reduction to your monthly expenses, you can save money and have more flexibility in your spending.

Three of the most common hardships that lead to money trouble and the need to modify your mortgage are:

• Accumulation of large amounts of credit card debt: this can happen over time, or overnight. When credit cards are used as the primary source for payment of necessary expenses, but not paid back in full each month, the balances quickly spiral out of control. This is due to the revolving nature of the card, and the fact that interest is being added to the balance daily.
• Medical debts: sometimes an unexpected medical need arises, or there is an accident that results in high medical expenses. With medical expenses, the amount becomes quite large quite fast, because the cost of medical care is extraordinarily high. And if you do not have insurance, it is nearly impossible to pay medical bills.
• An unexpected life event: an unexpected death or illness leaves a family swallowed by debt, especially if the primary breadwinner is the one affected. When a two income household is reduced to only one income, it is difficult to maintain the same lifestyle and keep all of the bills paid on time.

Whatever has led to your need to modify your mortgage, know that we are here to help. We understand the process and have a proven track record of getting loans into a manageable state. Act today to take back control of your money and of your life, by letting us help you rework your mortgage loan.

For more information about mortgage modifications, contact us at www.DsouzaLegalGroup.com.

How A Mortgage Modification Can Help Plan For Retirement

Being able to retire comfortably takes a lot of stress and anxiety of a person. But not having enough money to live on, or having to go back to work at an older age are even more stressful. For these reasons, it is critical to adequately plan for retirement, and this means taking steps to ensure you have enough money in the bank to cover expenses for the remaining years of your life. This is a difficult task for many reasons, specifically the years left in a life are unknown and there is no guarantee that the expenses you have today will not continue to rise as you grow older. Aside from typical retirement plans like 401(k)’s and other investments, it is wise to look at other avenues for an income stream or ways to reduce expenses so you don’t run out of money during your retirement.

A mortgage modification may seem an unlikely place to look for retirement assistance, but when you add up the benefits offered from modifications, you can quickly see that applying for a modification can be a smart part of your retirement planning process. Here are a few things to consider in this regard:

• Modifying your mortgage now, before retirement age arrives, give you the chance to save money now and put it aside for later needs.
• Modifying your mortgage now can not only reduce the payment, but it might also be possible to shorten the repayment term. This means your home can be paid off before you hit retirement age, so you are not worried about making house payments when you do retire.
• Modifying your mortgage after retirement cuts back on expenses, making it easier to live on a fixed income.

If you are considering modifying your mortgage, it is beneficial to know all the ways in which a modification can give you a financial boost. Many people do not consider the longest term impact of a modification, that which occurs at retirement and beyond. In an uncertain economic climate, it is always best to plan for any contingency and be proactive about your future financial needs. Mortgage modification is a great way to take care of tight finances now, while planning for a bright financial future.

For more information about how to get out of debt and save for the future, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

How Does Having Equity In My House Help Me Get Out Of Debt?

If you have equity in your house then you have options available to you to get out of debt that those without equity lack. Equity in your home can be drawn on to pay down debt, or to pay it off in full. In order to get at the equity though, you do have to ask the lender to make it available. The first step in this process is to have an appraisal done so you know exactly how much your home is worth. The amount of value over and above what you owe on your mortgage is considered the equity, and is a valuable asset to have in your possession.
Once you know what your home is worth, you can ask your lender to make an equity line of credit loan. This type of loan acts as a second mortgage on your home and is required to be repaid.

Once you take out a second mortgage, you have two house payments to make each month, so it is imperative to determine if taking the equity is a financially prudent move to make. Here are a few ways you can tell if using equity to pay off debt is best for you:

• If the equity amount is significant compared to what you owe, you can save money by taking the equity and paying off all of your debt at once.
• The interest rate on the home equity loan should not be higher than the interest rates on the debt you intend to repay. If it is, you will not save money by using equity to pay off debt.
• The time it takes to repay an equity loan should not be longer than the amount of time it would take to pay off the debt you intend to use the equity loan for; if so you are not making any financial headway.

If you have already used the equity in your home to pay off debt and are still in financial distress, you can exercise other options to get out of debt. One of those options is to file for bankruptcy, which is a legal way to eliminate debts. In bankruptcy you have the ability to wipe out unsecured debts entirely, or at least reduce the amount you owe.

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

Four Shocking Celebrity Money Problems

Hollywood is full of surprises, sometimes films that seem like a total dud turn out to be a summer blockbuster and sometimes the public doesn’t agree with the Academy’s choice for an Oscar award. These surprises aside, there should not really be much about Tinseltown that causes too much shock and awe, because celebrities are always reinventing themselves, changing spouses, and making bold political statements. That said, it still does come as a huge shock to the movie going public when a major star suffers a financial set back. This may be because the average paycheck in Hollywood is enormously larger than the average worker’s take home pay and not being able to hang on to such a large paycheck is a hard concept to grasp. But, it does happen.

Four shocking celebrity money problems include:

● Bankruptcy: the list of celebrities that have filed for bankruptcy is nearly a mile long. Stars from Kim Basinger to 50 Cent have filed for bankruptcy protection, as has talk show host Larry King. Bankruptcy is not necessarily a shocking money problem, but it often does come as a surprise when a superstar needs to file a case.
● Working odd jobs: when times get tough most of us take on extra work or do an odd job or two to make extra cash. But this is not something we often think about a celebrity having to do, although it has happened. A good example is George Foreman, who turned in his boxing gloves for an apron and turned his financial situation around by promoting the George Foreman grill.
● Going back to work: we all dream of retiring one day, and waking up naturally instead of relying on an alarm clock. But when funds fall short, even the best of us have to go back to work. Again, George Foreman is a good example, because he returned to the ring when other ventures stopped paying what he needed.
● Living well outside your means: we are all tempted from time to time to splurge, but know that doing so can put a pinch on monthly finances. No one knows this better than the stars and musicians. Think Michael Jackson, and the outrageous cost of maintaining Neverland, which left the King of Pop’s estate in less than perfect financial straits.

We can all fall prey to making a financial misstep, but there are solutions. Bankruptcy will eliminate or reduce debt. Mortgage modifications can lower interest rate on your mortgage and give you a lower monthly payment, and other options like refinance and consolidation are at your disposal. Stop searching for answers, and let us guide you towards the right method of debt management for you.

For help with your questions about finances and how to get out of debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that help get you back on your feet.