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What Does It Mean To Use My House As Collateral For A Loan?

Most loans are made possible by having some type of collateral to use as security. For instance, when you buy a new car the lender takes a security interest in the car and holds on to that interest until the loan is paid in full. This interest is what allows an auto lender to repossess a vehicle when payments are not made. The same is true when you purchase a house, and use the house as collateral for the mortgage loan. Very few of us can afford to buy our homes outright, so a mortgage on the property is given, to provide assurances to the lender that the loan will be repaid. If not, the lender will initiate foreclosure proceedings to recoup their losses by taking back and reselling the property.

But taking out a mortgage to buy a home is not the only way a house is used for collateral for a loan. Here are some other examples:

• Refinancing your home will require you to use the house as collateral for the refinanced note. If your home is paid off, you will now have a new mortgage on the house and if you are only using the equity in your home you might now have two mortgages.
• A second mortgage is the most common type of loan where your home is used as collateral, and that is the instance of taking a loan against the equity you have built up in your house. A lender will only agree to this type of lending arrangement if the value of the home is significantly more than the unpaid existing mortgage, and will place a second mortgage on the house to ensure repayment.

These types of loans can become problematic if you fall behind on payments. Because if you have two mortgages you also have two payments, and two lenders looking to enforce their security interest in their home. It is not uncommon for a second mortgage holder to attempt foreclosure for non payment, even if you are making the payments on the first mortgage. This is likely to happen if you have equity, because any foreclosure by a second mortgage holder is done subject to the first mortgage. This area of law and a potential foreclosure in this situation is complex, but we can help. Whether the answer is to file bankruptcy, ask for a modification of your mortgage, consolidate debt, or some other solution we can help.

For more information about how to get out of debt, contact us at We will help by coming up with solutions that work for you.

Should I Take A Payday Loan To Get Out Of Debt?

When you have more bills than you can pay, you start to look for any way to get out of debt and keep current on monthly obligations. Some people turn to friends or family, take out a consolidation loan, or try to refinance their home. But you have to be careful when looking for ways to transfer debt, so you don’t end up owing more and so that you actually make progress on getting your debts paid. A question that often arises is whether a consumer with overwhelming debt should take out a payday loan to get out of debt.

Taking a payday loan to get out of debt is not a good idea. Typical payday loans have characteristics that make getting out of debt impossible, such as:

• High interest rates, which are considered by some to be more than what the law allows
• Prepayment penalties, on the off chance you are able to pay off the loan before it is due you might end up paying more because a prepayment penalty could be added to the balance
• Payment due dates that come up quickly, there is usually a fast turn around time on repayment of a pay day loan and depending on your financial picture you may be unprepared to make the payment when it is due. If so, you will face more interest and penalties.
• Fees and costs that add to what you owe, which can make the payment beyond what is within your budget and cause you to rack up more fees and costs on top of the accumulating principal and interest amounts.

One alternative to a payday loan not mentioned above is to file for bankruptcy. Bankruptcy will not require you to pay exorbitant rates on the debts you do repay, and in fact you might even be entitled to lower interest rates rather than increases. Depending on the type of bankruptcy you file, you can reduce the rate on your auto loan and you can also reduce the total amount of unsecured debt you owe. Those are common components of a Chapter 13 case, and in a Chapter 7 you will be entitled to have your unsecured debt completely forgiven. Rather than spin your wheels and go nowhere fast by taking out pay day loans, consider bankruptcy to help get you out of debt. We have filed cases for people with all sorts of financial situations, and will work with you to file a case that meets your needs.

For more information about bankruptcy, contact us at

Will I Be Able To Get A Credit Card If I File Bankruptcy?

Having too much in credit card debt is the reason most people file bankruptcy, but the need for credit in an emergency still remains. So even if you need to file bankruptcy to get out of debt, you may still need access to credit from time to time in order to cover unexpected expenses like home repairs or medical bills. This paradox is puzzling to those that want to file bankruptcy to help improve their financial situation, so a quick run down on what to expect is in order.

Getting a credit card after you file bankruptcy is not only possible, but highly likely. Here are the most important things to know about bankruptcy and credit card debts:

• You can get rid of all of your credit card debt, or at least have the balances lowered to a fraction of what you owe, by filing for bankruptcy.
• When you no longer owe credit cards each month, you can use the money you were spending on minimum payments for other obligations. Elimination or reduction of credit card balances typically frees up a large chunk of disposable income for many consumers.
• Once your case is discharged, the credit card debts are no longer considered due and your card issuers cannot ask for repayment.
• Shortly after your bankruptcy case is discharged you may begin receiving offers from credit card companies, to take out a card and start rebuilding your credit. The interest rates on these cards will be higher than what you are used to, so be careful about accepting an offer and relying on a credit card after bankruptcy. After all, if credit card debt overwhelmed you prior to filing, you do not want to go down that road again in the near future.

Our best words of wisdom on getting a credit card and using it regularly after you have filed bankruptcy is to only do so if you are able to pay it off in full each month. Otherwise you will reenter the cycle of paying interest on top of interest, and racking up a balance that might become too much to bear. All of the hard work you do to get out of debt by filing bankruptcy should not be put at risk by jumping right back into a load of debt. Be careful about the new debt you acquire after filing bankruptcy, and work instead towards establishing an emergency fund so you do not have to resort to credit for large purchases or emergency situations.

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

The Top Two Ways To Change Your House Payment

Many Americans bought into the “American Dream” of home ownership only to be staring down large house payments years after signing on the dotted line. And for many, the monthly house payment is the single largest expense to pay every 30 days, leaving very little money left over for other necessities and bills. If your house payment is too high, there are things you can do to get some relief. Knowing where to look is the first step, and then deciding what will work for your family comes next.

The top two ways to change your house payment, and get on a more affordable repayment plan are to:

• Ask your lender to rewrite the note. This is done by modifying the mortgage, and the rewrite typically includes lowering the interest rate. Once the interest rate is lower, the payment will go down and become more manageable.
• Refinance your note with a new lender. If your current lender is not willing to help by modifying your mortgage, a different lender may be willing to refinance the note on your behalf.

This will require an approval for a new loan, which means you need to provide income verification and possibly have an appraisal of your home done. Most refinanced loans are only made if there is sufficient equity in the home to cover the refinance, as many lenders only offer refinance options for around 80% of the home’s value. So if your home has a lot of equity in it, meaning it is worth significantly more than you owe, you may be able to use that equity to your advantage by refinancing your existing mortgage.
When neither of these work, you can also consider filing for bankruptcy. While you still have to make your house payment if you want to keep your house, even if you file bankruptcy, what bankruptcy does is eliminate or reduce your other bills so your house payment is no longer out of reach. When you have fewer things on your plate to pay each month, a once unaffordable house payment suddenly becomes within your budget. Whatever your need or circumstances, we can help.

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

What You Can Do To Get Charged Off Accounts Off Your Credit Report

Your credit report sums up your creditworthiness, and is relied upon by lenders when you apply for new loans. If your credit report shows you pay late, have been foreclosed on, or had a car repossessed you are less likely to get a loan with a lower rate. But bad marks on your credit, even a bankruptcy, do not mean that you can never buy a house or get a loan. And while there are some things you are not able to control, when it comes to your credit you should question what is reported and make challenges when necessary. If you are successful, your credit score can go up, which helps you get better loan offers.

One of the most damaging items on your credit is a charged off account. A charged off account is one where you have not made payments for at least six months, so the creditor writes the balance off their books and asks that you pay the entire balance at once. Most people are not able to pay a large balance all at one time, and so the lender ends up going to Court to get a judgment for the balance. All of these things hurt your credit, and so you should do these things to have a charged off account removed from your report:

• Respond to any lawsuit filed against you, so you can assert any defenses you have to the nonpayment of the debt.
• Dispute that the debt is valid, and ask the lender to provide you with a pay history and current balance due.
• Challenge the balance, which will require you to show all payments made and show that the creditor’s records are not accurate.

It is important to remember that an account that is reported as charged off is not the same as an account being reported as paid off. You can also try to work with the lender directly, and ask that they remove the notation of charge off from your credit. If you decide to make this request, it is crucial to do it in writing and keep copies of all correspondence you receive from the lender. If the lender make an agreement with you but that agreement is not reflected on your credit report, you can send copies of all documentation to the credit reporting agencies and ask for an investigation. We can help with this process, and invite you to contact us today to learn your options and how we can help you achieve financial success.

For more information about how to get out of debt or what to do to make sure your credit report is accurate, contact us at We will help by coming up with solutions that work for you.

Five Ways To Manage Debt

Managing debt is no fun, but is a necessary part of life if you want to have financial success. The key to successful debt management is to come up with a plan that works for you, and stick to that plan. Once you have identified your financial needs, you are better prepared to come up with a debt management plan that makes sense. Regardless of whether you have a little debt, or are struggling to make ends meet, there is a plan that will help you.

The first step is to make a list of your expenses, and add up your total household income. Once you do that, here are five ways to manage the debt you have:

• Budget to spend only what you make, and no more. If you are spending more than you make, a budget will show you where you can cut out an expense, or at least cut back on the amount of that expense each month.
• Consolidate high rate debts into one loan with a lower interest rate, so you only have one payment each month at a lower rate. This will not only make it easier to pay the debt because you will only have to make one payment, but you will also pay off your debt faster because the interest rate will not be as high.
• Ask your mortgage lender to modify your mortgage. A mortgage modification lowers the interest rate on your house payment, which means a lower house payment. If you are able to pay less for your house each month, you can use the extra money to pay off other debts.
• Focus on one debt at a time, pay that debt off, and then use that monthly payment to work on the next debt.
• Call your credit card companies and ask for a lower rate, or for a lump sum payment of less than what is owed to settle the account in full.

You can also manage debt by seeking the relief offered by the bankruptcy laws. The biggest benefit of filing bankruptcy is that the instant you file a case your lenders are prohibited from contacting you, from maintaining pending collection actions, or from starting a new collection lawsuit against you. This means if you are in foreclosure or your wages are being garnished, these will stop the minute a bankruptcy case is filed.

For more information about bankruptcy, contact us at

Three Reasons Why You May Not Be Able To Save Any Money

We all know having a savings account can help you stay out of debt when an emergency or unexpected expense arises. But knowing that having a savings account is important does not always equate to being able to fund a savings account. For most people, money is tight, and people are having a hard time just paying the bills these days, let alone having any extra money left to set aside at the end of the day. But that does not have to be the case, and with a quick look at what is keeping you from saving, you can learn where a change in habits is needed so you can be more financially prepared for what life throws at you.

Three reasons why you may not be able to save any money are:

• You don’t have a budget, so you don’t know where your money is going each pay day. When you don’t know what expenses you have, you are not able to pinpoint areas of overspending and thus miss opportunities to cut back and save.
• Your check book isn’t balanced. A balanced check book is something that is hard to achieve, especially if you use your debit card or a phone app to make most of your purchases. Unless you write down these expenditures or keep every receipt you get, you may be overlooking a purchase. If you don’t have record of what you’ve spent, you will not be able to balance your check book and so won’t ever have a good picture of how much money is available to you for saving.
• You spend more than you make. If you routinely spend more money than you make, you will never have anything left to put into a savings account.

We know how hard it is to save money, especially when you have had a financial set back. It could be that you have been laid off, had a medical emergency, or been forced to work fewer hours at a lower rate of pay, and these circumstances make it hard to pay the bills let alone start a savings. If you have too much debt, think about how filing bankruptcy might help you. Bankruptcy can help you get out of debt, cab help you learn what types of spending behaviors lead to debt, and can give you instant relief from creditor harassment so you can stop and breathe.

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

What Happens In A Repossession Action?

A repossession case is a legal way for a lender to take your property away from you, when you don’t make the required payments. It is a type of action reserved for the taking of personal property, which is not the same as real estate. Commonly repossessed items of personal property includes cars, motorcycles, and boats. In some states a repossession agent can take a person’s car or other items of personal property without a lawsuit being filed, as long as there is not a breach of the peace during the taking. However, it is more likely that the lender will file a lawsuit to take your property, and this type of action is called a replevin.

In a replevin action the lender has to do the following:

• Identify the item sought to be repossessed, with enough description so that the item is easy to spot when the writ of possession is entered. It is critical that the Court has enough information to identify the property, so a wrongful repossession can be avoided.
• Sue for at least the value of the item.
• Seek an order from the Court allowing the property to be seized.
• Set forth information that shows why and how the lender is entitled to take possession of the property. This usually consists of allegations that the loan is in default and that the lender has an interest in the property, as a secured creditor for having made the loan used to purchase the item.

If you receive a replevin suit, you will need to file an answer or you risk losing your property. There may be circumstances that prevent the lender from taking your property, but if you fail to file an answer and set forth those reasons the Court will allow the repossession to take place. One option you have, aside from filing an answer and raising a valid defense to the request to replevin, is to file for bankruptcy. A bankruptcy action will stop a pending replevin request, and will also help you to get the rest of your finances in order. Bankruptcy filings also put an end to foreclosures and wage garnishments. For help deciding what is best for you, call us today.

For more information about repossessions, contact us at

Coming Up With A Budget That Works

We all know that having a budget is the best way to keep track of what you spend, and what you need to pay each month. The idea is great in theory, but can be very difficult to put in to practice in real life. This is because there always seem to be expenses that come up that have not been budgeted for and this causes a great many of us to resort to loans or credit cards to make ends meet. When you have to take out a loan or use a credit card to pay for an everyday expense because your budget was busted due to an emergency, debt can mount up quickly. Unless you make enough money to pay off a loan or credit card balance in a short amount of time, you are also going to be paying interest for these funds, and as the interest begins to add up so does the total balance due. This scheme makes the banks a lot of money, but does nothing to keep more of your hard-earned cash in your pocket. To combat this problem, it is critical to come up with a budget and stay on top of your spending.

Here are some tips for coming up with a budget that works:

• Don’t forget to include things you pay weekly, like insurance or gas, when coming up with a monthly budget. Remember, not all months have 4 weeks, there are some that are longer and you will need to take that into account when coming up with a monthly budget.
• Be honest about where your money goes, if you go to Starbucks or buy your lunch every day, you have to include those extras in your budget.
• Be reasonable about what you can eliminate, because if you try to make a budget that leaves you no room for a break now and then, you will be more tempted to stray from your plan.

Even with a budget it is still possible to experience a financial downturn. If so, think about turning to us for help with a bankruptcy as your answer. A bankruptcy case will give you immediate relief, and the idea is that you will also receive long term financial success. Our staff is prepared to give you the information you need to decide if bankruptcy is right for you.

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

What To Do If You Are Turned Down For A Mortgage Modification

Most family’s biggest monthly expense is their house, and when money gets tight it can be scary to think that you may not be able to keep your house. Fortunately, there are options for lowering your mortgage payment, and if you are able to take advantage of one of these options, you can enjoy a lower house payment. The most popular option is to modify your mortgage, which requires your lender’s agreement. In order to receive a modification of your mortgage loan, you have to apply with your lender and be approved for the new mortgage terms. Sadly, not all lenders are willing to agree to modified mortgages, and many homeowners are left still struggling.

If you are turned down for a mortgage modification, you are not out of luck. There are other things you can do to help make ends meet, including:

• Reducing luxury purchases.
• Refinancing a car.
• Shopping around for cheaper auto and life insurance.
• Coming up with a meal plan, and shopping only for the ingredients needed.
• Use coupons and buy things when they are on sale.
• Pay your electric bill on an averaged basis, so the amount is close to the same each month, which makes it easier to develop and stick to a budget.

If you have tried these things, and likely several others, and are still underwater financially, you should consider filing for bankruptcy. Bankruptcy is a legal way to eliminate debts, or have them greatly reduced. Depending on what type of case you are eligible to file, you will either get to wipe out all of your unsecured debts (like credit cards and medical bills), or pay only a small portion of the balances. When you have less debt, you have more freedom. Filing bankruptcy will also put a stop to a foreclosure, a repossession, and a wage garnishment. All of those things add to an already stressful situation, so having them exit your life will give you the emotional lift you need to figure out your bills. We have had experience filing bankruptcy for a countless number of client, and can take on your case too.

For more information about mortgage modifications, and to find out what you can keep and what you have to give back if you file a case, contact us at