What Steps Do I Take to Obtain a Loan Modification?
It is possible to obtain a loan modification even if you have filed bankruptcy. At this time, most mortgage companies would rather work out a loan modification agreement, if viable, than to foreclose on your home. The last thing most mortgage companies want is another vacant house!
Steps to Follow:
Step #1: You should contact your mortgage company and express your interest in obtaining a loan modification. If you are in bankruptcy, they may indicate that your bankruptcy attorney must provide a release form before they will agree to speak with you. If that should occur, contact your bankruptcy attorney to obtain the authorization letter.
Step #2: After receipt of the authorization letter, the mortgage company will send a package of materials for you to complete as well as request that you provide income tax returns, paystubs, and other relevant information. You should complete the paperwork in its entirety and provide all the information the mortgage company requested. If you do not thoroughly complete the package or fail to provide additional information they requested, the mortgage company may reject your request for a modification or it may slow down the process.
Step #3: Before you submit the package to the mortgage company, Duncan Law recommends you make a copy of your completed package. This will come in handy if the mortgage company has specific questions or indicates they did not receive a document in your package.
Step #4: We also recommend you send your loan modification package to the mortgage company either overnight mail or certified mail so that you can track your package and be sure it was received by the mortgage company. Often the mortgage company will provide an overnight envelope for mailing the loan modification package. Be sure to keep your receipt so you can track the package.
Step #5: Now is the hardest part…waiting for a response. Each mortgage company is different when it comes to the timeline for responding on the loan modification. Some mortgage companies indicate they will respond in three to four months, others indicate it can be up to one year. It does not hurt to be the “squeaky wheel”. If you haven’t heard from the mortgage company, you may want to follow-up every two weeks. Do not be surprised if the mortgage company requests additional information.
Step #6: Once you are approved for a loan modification, you may need to contact your bankruptcy attorney.
If you are in an active Chapter 7 bankruptcy, you should contact your bankruptcy attorney to see if it is necessary to obtain the Court’s approval of the modification agreement.
If you were in a Chapter 7 bankruptcy and your case has been completed, a final decree has been issued, it is not necessary to contact your attorney. You do not need approval to can sign the documents with the mortgage company. However, you may find it helpful to retain a real estate attorney to review the modification agreement.
If you are in an active Chapter 13, you should contact your bankruptcy attorney. It will be necessary for the bankruptcy court to approve the loan modification agreement. Your bankruptcy attorney will need the terms of your modification agreement so they may file a Motion to Incur Debt. It takes approximately 30 days to obtain approval of the loan modification from the bankruptcy court. You should work closely with your bankruptcy attorney through this process.
If your Chapter 13 bankruptcy has been dismissed or discharged, it is not necessary to obtain the bankruptcy court’s approval. You may work directly with the mortgage company, but again, you may want to seek the advice of a real estate attorney.
Again, it is important to be thorough in completing your loan modification paperwork, and persistent in your follow-up and interactions with the mortgage company. Good luck in your efforts to obtain a loan modification with your mortgage company.
How to Write a Cease and Desist Letter
If you are currently suffering from some type of creditor harassment or dispute and you believe that if the matter went in front of a judge that you would win the dispute, writing a cease and desist letter may be a good option for you.
A cease and desist letter is a letter that may be written by anyone – not just a lawyer – in an attempt to stop some sort of harmful activity (usually harassment or a dispute by a bill collector). Cease and desist letters are usually used when the matter is not serious enough to spend money taking the other party to court. Although cease and desist letters are usually written by lawyers, they are not required to be and can certainly be written by an individual who is not a lawyer.
Usually, a cease and desist letter threatens further legal action if the harmful harassment or dispute does not end immediately. For example, if debt collectors are constantly harassing you, you can write a cease and desist letter. The information you include in your letter should be:
The name and address of the person you are contacting
The name and address of the party who is harassing you or against whom you have a dispute
A description of the harmful actions that the other party has taken against you (harassing phone calls, harassing letters, etc. – be as specific as possible, including dates, times, people’s names, etc.)
A specific demand that the actions stop immediately
A statement that if the actions do not stop immediately, further legal action will be taken (you can be as specific here as you would like – lawsuit filed in a certain court, certain damages will be sought, etc.)
It is also a good idea to send the letter via certified mail, return receipt requested, so that someone will have to sign off on receipt of the letter. That way, the other party cannot argue that they never received your letter. If you send the letter via regular mail, the other party may argue that they never received your letter or that it was lost in the mail.
Although some people do hire attorneys to write a cease and desist letter on their behalf, it can definitely be done by an individual who is not an attorney – just be sure to include all necessary information and be stern in your demands. Here is an example of a Sample Cease and Desist Letter.
How Do I Request Medical Records?
To review a possible medical malpractice case or nursing home injury or neglect case at Duncan Law we must have the injured person’s medical records reviewed by an expert witness. These are usually an expert nurse and/or a physician. For a medical expert to give a thorough review of your case it is important they have the opportunity to review the medical records.
To obtain a copy of the medical records you must request the records from the medical care provider. To provide these medical records to you, your health care provider must follow government privacy laws called HIPAA. HIPAA is the Health Insurance Portability and Accountability Act of 1996.
First, you must qualify to receive the medical records. If you are the patient requesting your medical records, you can sign a HIPAA release and receive your medical records. If you are not the patient, you must have a formal release signed by the patient or have the legal authority to obtain these records. The legal authority is usually granted by a power of attorney document properly executed by the patient (not just a hand written note signed by the patient). If the patient is incapacitated, you may have to obtain a legal guardianship or a court order to acquire the records. If the patient has died you must be the executor of their will or be appointed administrator of their estate by the clerk of the court or a judge.
Second, after qualifying to receive the medical records you should make a written request to the medical care provider to provide the medical records. The medical provider may have these records stored electronically offsite away from their physical location, so it may take several days to obtain these records. If the records are stored offsite, the medical care provider should provide the records to you within 10 calendar days.
If the records are available at the facility, they should be able to have a copy made for you within 24 hours of your request. Do not expect to walk into the medical facility and they make you copies while you wait.
When you request the records, the staff may ask you why do you want a copy of your medical records? First, you are not required to answer that question. It is your medical records and you do not have to answer that question. However, any time you ask for medical records, especially from a doctor’s office, it raises flags and alerts the doctor to a possible problem. The staff will usually inform the doctor or nursing home administrator of the request and they go into “defensive mode”. In the past, some medical providers have been known to illegally change the medical records to “cover up” a mistake they have made. Be aware this could happen. If the medical records are on site, you may ask the person in charge of medical records to pull the records so that you may look at the records on site before they are copied. Once you have reviewed the records, you may then ask for copies. After receiving the records, review the records and determine if any changes were made. If changes were made, notify your attorney immediately and dispute this with the medical facility.
Many medical providers will “discourage” you from obtaining the medicals by charging you an outrageous price per page to “copy” these medical records. Some providers will attempt to charge you a $1.00 per page. If you have 600 pages due to an extended hospital or nursing home stay that could become very expensive. Fortunately, in North Carolina, there is a state law that prohibits excessive copy fees. It is North Carolina General Statute 90?411, which states:
“A health care provider may charge a reasonable fee to cover the costs incurred in searching, handling, copying, and mailing medical records to the patient or the patient’s designated representative. The maximum fee for each request shall be seventy?five cents (75 cents) per page for the first 25 pages, fifty cents (50 cents) per page for pages 26 through 100, and twenty?five cents (25 cents) for each page in excess of 100 pages, provided that the health care provider may impose a minimum fee of up to ten dollars ($10.00), inclusive of copying costs.”
Once you’ve received your medical records contact your medical malpractice attorney or nursing home injury lawyer and provide them with the records so they can be appropriately reviewed.
Bankruptcy v. Deed In Lieu of Foreclosure
Clients have frequently asked us what is the difference between a deed in lieu of foreclosure and a bankruptcy?
First, a deed in lieu of foreclosure (DLF) is when the homeowner signs over and transfers the deed to the home to the mortgage company without the legal process of a foreclosure. Most people believe this will look better on the credit report than a bankruptcy or a foreclosure. This is possible, however a DLF does not wipe out the pre-existing debt on the home as a bankruptcy would do. In other words, you as the homeowner would still owe the deficiency debt on the mortgage, the DLF just saved the mortgage company the time and expense of foreclosing. It does not eliminate the debt you owe them! This is the same on a “short sale”.
The mortgage company will eventually sell the home, usually at a loss, and demand you pay them the difference in money unless you have agreed in writing to wipe out the debt still owed. This debt is usually several thousands of dollars and possibly tens of thousands of dollars. The difference in what you owe the mortgage company and the amount they sold the house for is called a “deficiency balance”.
If you do not pay the mortgage company the money they have demanded, they could sue you for the difference they lost from the sale of the home. The mortgage company will usually win the lawsuit because you do owe them the deficiency balance unless you have reached an agreement with them saying that you will not owe the deficiency balance.
In the alternative, the mortgage company could believe the debt is “uncollectable” from you and forgive the debt. You may think, “that’s great!” However, there’s a catch. The mortgage company will try to “write off” these thousands of dollars of loss on their taxes by filing a 1099(c) with the IRS eliminating your debt to them. The drawback is the IRS will consider this “forgiven” debt to be gross income if it totals more than $600. In other words, you don’t have to pay back the full amount of the debt but the IRS will tax you on that forgiven debt as gross income. For example, the mortgage company losses $50,000 on the sale of your home. The IRS will expect you to pay taxes on the $50,000. If you are in the 25% tax rate, you would have to pay $12,500 in taxes to the IRS. If you do not have the $12,500, the IRS could start assessing you penalties and interest. That could, in turn, lead to the garnishment of your paystubs!
In contrast, a bankruptcy will usually eliminate any deficiency balance you owe the mortgage company. Therefore they cannot sue you or attempt to collect the deficiency balance you owe them. The IRS usually cannot tax you for the deficiency balance you owe the mortgage if you file the bankruptcy. If you file bankruptcy, you are considered insolvent, and the IRS must waive the tax liability on the 1099 if you are deemed insolvent.
In conclusion, consider your options. However we believe surrendering the home in bankruptcy and wiping out any deficiency balance and eliminating your other unsecured debts, such as credit cards and medical bills, is usually a better alternative than a deed in lieu of foreclosure.
What To Look For In A Credit Card After Bankruptcy
Yes, credit cards are the evil culprit for many folks who have had to file bankruptcy, but credit cards are not entirely terrible. Having a credit card helps in many ways to help build your credit, you just need to get the right one that is tailored for you and your needs. For someone who is coming right out of a bankruptcy, all you wish to do is move forward and a credit card is one of your first steps in establishing good credit. There are a few things that you need to look for in one when you are ready to start establishing credit.
What are the start up fees? Are there hidden fees?
Many cards do not have an application fee, but will have annual fees that will be incurred in the future and in many cases, you must pay it when you first sign up for the card. You will want to do thorough research on this, because in some cases, the annual fee may be low, but the hidden fees may hit you hard!
What is your interest rate?
This is a given. Just like you would not want to buy a car with a high interest rate, you do not want a card with one either. Once you leave a balance (i.e.: you do not pay the card off immediately after using it) your credit card company is going to charge interest. Even if you are not using the card, they will still charge interest on the balance of the card.
Keep your balance low
Credit bureaus do not determine your score solely by whether or not you have made your payments on time. They also look into your balances. You do not want to have a high balance on a card because it will bring your score down. A high balance is how much you owe on the card. If you have a card that only has a $300 credit limit, you need to try to keep your balance owed on the card under $150.
Get a secured credit card
This is sometimes, but not always, a great way to start to establish credit. You will have to put money “down” on the card (which is what your credit limit is based upon, for example, you put $300 down, then your credit limit would be $300.) You will need to look into it whether these cards report to the credit bureau. If they don’t, the card won’t help you establish payment history.
The Basics of Understanding Financial Statements for Your Business
There are two financial statements that you must provide for your business when you file personal bankruptcy: the income statement or profit and loss and the balance sheet. We will look at the financial statements for a small plumbing business, ABC Plumbing. We encourage you to click on the blue links to open examples of a profit & loss statement and balance sheet. This is a simplified approach to the financial statements, so you should seek advice from your accountant should you have questions when preparing the financial statements for your business. We will also only be looking at Operating Income and will not consider interest income, interest expense or other non-operating items that most businesses incur.
