Posts Tagged ‘debt’

IRA and 401K’s During Bankruptcy- The Financial Law Group

Hi, I’m Mike Greiner. I’m a bankruptcy attorney with The Financial Law Group here in Warren, Michigan. And I’m here to talk to you today about your IRAs and 401Ks as you go through bankruptcy.

One of the biggest concerns that my clients have is the fact that they might have accumulated some retirement funds in a IRA or 401K and their concerned about losing those funds, and rightfully so. That is most people’s retirement, these days so, protecting that is a very, very important part of the process. The good news is, is that IRAs and 401Ks, generally speaking, are totally protected as you go through the bankruptcy process. So, even if you have $1,000,000.00, sitting in 401K accounts, those funds are totally protected. They’re there for your retirement and your creditors cannot touch them.

The sad thing that I sometimes see is where people have taken a bunch of money out of a 401K account to pay back their creditors. Because what happens then it that you’ve essentially given your creditors access to funds that otherwise they would have no access to otherwise. I strongly urge people to think of 401K accounts as savings for retirement. It is a savings account. It is not something that you can dip into when an emergency comes up or when you need to pay a certain bill or when you need to take care of one issue. What it is, is it’s a savings for retirement. I will say that there’s one exception to my rule there and it is where people have sometimes been able to take money out of a 401K and actually buy a house.

There are some opportunities for buying houses that are very inexpensively in the current economy and I’ve had some clients that have been able to take money out of a 401K, buy a house and own it free and clear or darn near free and clear and that’s been a really good option for a lot of people. Point being, don’t take money out of your 401K to pay credit card debt. That’s a complete waste. And don’t worry about as you’re going through a bankruptcy case losing your 401K. If you want to find out more about bankruptcy or your 401K for that matter, please feel free to give me a call. My phone number is 586-693-2000. We offer free consultations and I’d be happy to meet with you personally.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Feb 11, 2012
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Michigan Attorney Discusses Taxes

Hi, I’m Mike Greiner, I’m a bankruptcy attorney here with The Financial Law Group here in Warren, Michigan. Our website is financiallawgroup.com, and our phone number is (586) 693-2000. And I’m here to talk to you today about taxes, an issue that none of us like to talk about. Taxes are actually dischargeable in some cases in bankruptcy, and that usually a big surprise to most people. Most people think that, if the, if the federal government or the state is coming after you, there’s nothing you can do about it, and that’s actually not the case.

If you have a tax debt that’s more than three years old and there’s a good chance that that tax debt would be dischargeable in bankruptcy. That’s as long as you’ve filed your tax return on time. The way that you calculate the amount of time that has to be is if you look at the date that the tax was accessed, for example the date that you filed the tax return or that the last date the tax return could have been filed. So, say, April fifteenth, and then go three years from that date. Any taxes that are more than three years old based on that calculation would be the type of thing that would be dischargeable in bankruptcy. Now, even if the tax that is newer than that, it is still something that could be handled in a bankruptcy. In those cases we might look at a chapter 13 case.

What we can do, we can file the case.  We will set up a payment arrangement, essentially, with the IRS that will allow you to pay back the taxes generally speaking interest free over 5 years. Usually, that’s a better deal than you’ll get working directly with the IRS, although, not always. That is an option for people who might have tried to do something with the IRS but wasn’t quite able to work something out or if the tax is a smaller amount of money such as, $10,000, where it would be the type of thing that would be a reasonable payment over time.  That has worked out quite well for a number of my clients as well. If you owe some tax liability and are interested in talking about some of your options please feel free to give me a call at my office. I’d be happy to meet with you personally. My phone number is 586-693-2000.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Feb 06, 2012
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Financial Law Group in Michgan Discusses Mortgages

Hi, I’m Mike Greiner. I’m a bankruptcy attorney here with The Financial Law Group, located here in Warren, Michigan. Our website is financiallawgroup.com and our phone number is (586) 693-2000. And I’m here to talk to you today about mortgage deficiency balances. What a mortgage deficiency balance is, is it’s the difference between what you owe on your mortgage payment, and what they sell the house for. So say, for example, you owed $100,000 on your house. Say that, and this is quite common in this economy, your house sells for $50,000 at the end of the day. The mortgage company can still come after you for that difference, that $50,000.

You may think, well I gave them my house, well I had spent all the money that I had, all the equity that I had in the house went away with it. That’s all true.  But it doesn’t matter. What matters is the difference between what you owed at the time that the house was foreclosed on and what they sold the house for at the sheriff’s sale. If there’s a difference there then that’s called the deficiency and you’re still liable for it. That’s particularly a big problem if you have a second mortgage because usually what happens when you have a second mortgage situation and that would be like a home equity loan of some type, or a home improvement loan or even just a second mortgage, what usually happens with the second mortgage situation is that the first mortgage might even get paid off in full as a result of the sheriff’s sale.

But if that happens then the second mortgage get wiped out entirely. And again even though, you get wiped out entirely as a result of foreclosure that doesn’t mean you’re not liable for that mortgage anymore. And they will come out at to you, I just had a client coming a little while ago is being sued for $70,000 for a mortgage. A first mortgage where there was a deficiency but he put everything in hand to his house and the house was foreclosed on and they’re still coming after him.

The good news is, is that this is a kind of debt that can be discharged in bankruptcy. So if you’re facing a situation like this where your house has been foreclosed and might be facing a deficiency, the difference between what you owe and what they sell the house for, um, and you’re concerned about them coming after you, I would strongly suggest you come in and see me.  I do offer free consultations.

My phone number’s 586-693-2000 and if you’re interested in meeting about this or any other issue.  I’ll be happy to meet with you personally.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Feb 05, 2012
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Michigan Attorney Explains How To Bring Credit Score Up Quickly

Hi. I’m Mike Greiner. I’m a bankruptcy attorney here with The Financial Law Group located in Warren, Michigan. Our website is financiallawgroup.com, and my phone number is 586-693-2000. And I’m here to talk to you today about steps you can take to repair your credit after filing bankruptcy. One of the biggest concerns a lot of my clients have is how they can rebuild their credit after filing bankruptcy and it’s really surprisingly easy. What improves your credit over time is making timely payment on debts. So people a lot of the time will have all kinds of theories about this will improve your credit or that will improve your credit or this will hurt your credit or that will hurt your credit and the truth is most of those ideas are just myths. What helps your credit is making payment on your debts on time. So what you’re going to want to do after you file bankruptcy is actually get a little bit of debt. I know that sounds crazy but that’s the way that you improve your credit score. You want to get a credit card or two.  Now if you say, I can’t get credit cards, you’ll be amazed how soon after filing bankruptcy you’ll start to get credit card offers in the mail. If for some reason you don’t get credit card offers in the mail, there are two other routes you can go. Some of my clients have found that gas stations are a great place to go where you can go apply for their local credit card and then just use that credit card to buy gas every month and pay it off on time each month.  Marathon in particular I’ve seen is a good one.

Another option would be to gets what’s called a secured credit card. If you Google secured credits cards you’ll see a bunch of options pop up. I believe Consumer Reports said that Orchard Bank had a particularly good one.  What a secured credit card is, is it’s a real credit card. It’s not a debit card, like you, what you got from your bank or a prepaid credit card. It’s a real credit card but it’s just that, they, you give the bank a certain amount of money for them to hold on to, to make sure you make your payments. So, for example, say, then, you give the bank $300, then they give you a credit limit up to $300. And, over time, as you start to establish your history of charging a little bit and paying it off on time each month they’ll start to increase that credit limit, and at some point they might not require you to have a deposit with them anymore.  Secure credit cards are actually excellent ways of rebuilding your credit. Ideally you’ll want to get two or three ongoing credit lines that you can pay on each month as you’re going forward.

Car payments would be included. Car payments are a good option. As long as you reaffirm the car as you’re going thru bankruptcy. If you continue to make those car payments, that would be something that would improve your credit. Again secured credit cards or other credits cards are great options as well.  Don’t count on your mortgage payment helping you. Making your mortgage payment each month will not actually help you improve your credit score. So again, the key thing will be get some credit, and charge a little bit each month, and pay it off on time each month. Doesn’t have to be a lot, twenty, thirty dollars a month will be enough on some of these credit cards. They just want to show that you have that history of charging a little bit and paying it off on time each month. That’s what’ll improve your credit over the long term.

If you want to find out more about filing bankruptcy or repairing your credit, give my office a call. Our phone number is 586-693-2000 and I’ll be happy to meet with you personally.

Posted by Michigan Bankruptcy Attorney - Michael Greiner Feb 04, 2012
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Filing Chapter 13 Bankruptcy to Remove a Second Mortgage

Hi I’m Mike Greiner and I’m an Bankruptcy Attorney here with the Financial Law Group located at 12 and Hoover at Warren, Michigan in Macomb County. We specialize in Chapter 7, Chapter 13 and Chapter 11 Bankruptcy here, and I’m here to talk to you today about second loans on your home — mortgages.

Something that has really been an important development over the past few years is that fact that we’ve actually been able to knock second mortgages off homes. Now, typically, in a bankruptcy, you’re not able to get rid of a second mortgage on a home because of the fact that they basically have a lien on your own. The lien on your home, the mortgage, is what we call it. It’s the lien on your home that survives bankruptcy. It’s basically a property interest that you’ve granted to the mortgage company in case you are unable to pay on your mortgage.

Now that being said, in Chapter 13 Bankruptcy what we’ve been able to find is that where the 2nd mortgage is completely unsecured so for example if your home is worth a current market value of $100, 000. And your first mortgage, you owe $110,000 on. And say you’ve got a second mortgage, an equity loan or loans for windows, or a roof, or something like that. If you’ve got that second mortgage for $20,000 or $30,000. Well, you can see, because of the fact that the second mortgage is completely unsecured because the first mortgage is worth $110,000. The home is worth $100,000 so there’s no equity there in the house to support the second mortgage. What we’ve been able to do in a Chapter 13 bankruptcy, we’ve been able to file that case and completely knock that second mortgage off your home. What that means is in 3 to 5 years, typically with a payment of somewhere between  $150 or less, we’ve been able to make it where you don’t owe your second mortgage anymore. And often times, that’s a very good deal for people.

If you want to find out more about your options with the second mortgages and Michigan bankruptcy, please feel free to call my office for your free consultation. My phone number is 586-693-2000 and my website is financiallawgroup.com.

Posted by Michigan Bankruptcy Attorney - Michael Greiner May 29, 2011
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