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 GreinerFeb 05, 2012
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 GreinerFeb 04, 2012
Financial Law Group- Bouncing Back From Bad Credit
Hi, I’m Mike Greiner. I’m a bankruptcy attorney with The Financial Law Group located in Warren, Michigan. Our website is financiallawgroup.com and our phone is 586-693-2000. I’m here to talk to you today about repairing your credit after bankruptcy. One of the biggest surprises most of my clients have is how fast their credit bounces back after they’ve filed bankruptcy. I just had one client actually tell me, right now, who’d only been out of his bankruptcy a few months, that he had a 726 credit score. And that’s somebody who really had fallen behind on a number of his debts for a period of time, and so had a credit score down to the low 500s at one point. It just shows how quickly things can bounce back. I had another client come in the other day and tell me that he was in the high 600s and had just financed a Ford Escape with 1.9% interest rate. It just shows how quickly your credit score can bounce back after bankruptcy.
Really this is a situation where the reports of your death are greatly exaggerated. People think that by filing bankruptcy you’re going to ruin your credit forever and that’s really not the case. The case is that bankruptcy does hit your credit at a certain point. But you start to recover relatively quickly. Most of my clients within a year they find their credit score’s bounced back to where they’re really in a very good situation like the high 600s low 700s, which is consider good credit by any stretch of the imagination. The irony is if you have good credit when you go into bankruptcy actually your credit score tends to bounce back faster. Because really what hurts your credit score the most would be the missed payments that you make over time, whether it be on a mortgage or on a credit card or any other bill that you’re paying. Missing those payments over time every month hits your credit just a little bit more and a little bit more, a little bit more and knocks it down much faster than even the one time hit of a bankruptcy. So in some respects it almost makes sense just file bankruptcy, get the pain over with and start rebuilding your credit from thereon out.
If you want to come to my office and find out more about filing bankruptcy, you can reach us at 586-693-2000. I offer free consultations and I’d be happy to meet with you personally.
Posted by Michigan Bankruptcy Attorney - Michael GreinerFeb 03, 2012
Chapter 13 Bankruptcy and Second Mortgages- With Finanical Law Group Attorney, Mike Greiner
Hi, I’m Mike Greiner, I’m an attorney with the Financial Law Group located here in Warren and I’m here today to talk to you about chapter 13 bankruptcy and how we’ve been able to take the second mortgage lean on people’s homes through chapter13 bankruptcy. You can contact us by the way at 586-693-2000 and our website is financiallawgroup.com. Now coming back to chapter 13 bankruptcy, something a lot of people have thought coming into my office is that they can get rid of a second mortgage through chapter 7 bankruptcy.
Mortgages actually include two elements. There is the note which is the personal liability that, that you have for the mortgage and there is the mortgage which is actually the lien that the mortgage company has on your home. The lien is the right, the property rights that the mortgage company has so that they can take back your home if you do not make your mortgage payments. The the note is just the personal liability you have. Just like a credit card. You have a note with a credit card and it’s that personal liability you have to pay that debt. The Chapter 7 bankruptcy does actually wipe out the personal liability.
So the mortgage company, although it used to not happen very often. It happened more and more frequently recently could sue you under the note, just like a credit card can to collect on that debt. They also, as a result of the mortgage, have foreclosure rights against your property. By filing Chapter 7 bankruptcy you get rid of the rights that the mortgage company has to sue you personally. They still have the rights to foreclose though. Those rights, in this day and age with the property values have declined, might be worthless because the fact that your home might be worth less than what you owe on the first mortgage, or what you owe on property taxes. If that’s the case, then once the foreclosure happens the second mortgage would get nothing. So there’s no reason for the second mortgage to foreclose. So I’ve had a lot of clients who’ve come in they’ve just filed chapter 7 bankruptcy. They’ve gotten rid of their personal liability for the second mortgage. They might not be planning on staying in the house for very long or at some point moving out, or might not know. But the bottom line is that they’re in a situation they just want to get rid of the personal liability and they don’t really care if there’s that lien sitting out there that could potentially foreclose on their house someday if the value of the first mortgage goes down base on the payments that you make. And the value of the property goes up, based upon the property value starting to bounce back. So if you’re in situation chapter 7 bankruptcy can certainly be helpful to you.
If not however then the other option is we can actually file a chapter 13 case. Now chapter 13 scares a lot of people because that’s the chapter where you pay certain payments that could go toward your creditors. A lot of my clients though actually pay nothing or very little toward their unsecured creditors, unsecured creditors would include things like credit cards and medical bills. The secured creditors would include things like your mortgages and car loans, those debts have to be paid unless you want to surrender the property.
So if you have a car loan that you want to that, that, that where you wanna keep the vehicle. You need to keep making those payments. That payment could potentially be included in chapter 13 bankruptcy. And there are certain circumstances where it can actually reduce the amount you owe on the car based upon chapter 13 bankruptcy. Although those opportunities have really been narrowed when law was changed a few years ago. Your first mortgage, either you’ll have to stay current on, or if you’re behind on it, we can get you caught up on that mortgage through chapter 13 bankruptcy. We can’t actually change the payment, on the first mortgage, but we can get you caught up on it, with no interest, over a period of time. Which often times is a better deal than you can get anywhere else. But the second mortgage, that’s the key if the property values of your home have declined, to the point where you owe more on the first mortgage then your home is worth, then there is no equity there.
In the house for a second mortgage, if that’s the case then through chapter 13 if you make all your payments on chapter 13 case, even if you pay nothing toward the second mortgage, then that second mortgage can be wiped off your home and you will never owe that second mortgage again. A lot of our clients have found that to be very helpful, and especially with the way that the mortgage companies really don’t work with people to do mortgage modifications. A lot of people have found that this is really the most effective mortgage modification out there. We have a unique opportunity now where so many people have second mortgages because of the way the mortgage industry was a few years before the crash.
Property values have declined so much because of the economic crisis we’re in. Although it’s a crisis it’s difficult for a lot of people. It’s also an opportunity. And the opportunity is that you can get rid of a second mortgage which you might not have been able to pay off for many years or ever. But you can get rid of it often with a very low payment through chapter 13 bankruptcy. If you want to find out if this will work for you give my office a call. I have free consultations. Number’s 586-693-2000 and our website is financiallawgroup.com. I’d be happy to discuss your options on this.
Posted by Michigan Bankruptcy Attorney - Michael GreinerSep 03, 2011
The Means Test for Bankruptcy- Warren Attorney, Mike Greiner
Hi. I’m Mike Greiner. I’m an attorney with the Financial Law Group here located in Warren and we specialize in bankruptcy law here at the financial law group. Our phone number is 586-693-2000. Our website is financiallawgroup.com. And I’m here to talk to you today about the means test for bankruptcy. A lot of people are concerned that since the change in the law a few years ago, that they might not be eligible for chapter 7 bankruptcy anymore. And what I’ve found is that most people that come into my office who are concerned about that, are actually eligible for chapter 7 bankruptcy. In fact, right before the law changed there was a big rush by people to file bankruptcy thinking that they wouldn’t be able to file bankruptcy after the law changed and really, for most of those people, they could have easily filed Chapter 7 bankruptcy.
The requirements for income for your household size are actually quite high and most people who would be eligible for chapter 7 bankruptcy because of the fact that they have a lot of debt would still be eligible for chapter 7 bankruptcy under the, under thee change in the law. The big change in the law was the means test. The means test only applies if most of your debts are related to your consumer affairs as opposed to business affairs. So if you’re a business person and you’ve accumulated a lot of debt related to your business affairs then to start with, the means test doesn’t even apply to you so you don’t even have to worry about it from that point.
Then what happens is the means test looks at the average household income for you. Your household is the total size of all the dependents that you’ve got living with you. Just because someone’s not a dependent for tax purposes doesn’t mean they’re not a dependent for bankruptcy purposes. So, say you’ve got a son or daughter who’s 25 years old, living with you. That person might not be someone you can claim on your taxes as a dependent, but may still for all practical purposes be a dependent of yours. And so, as a result, the courts have ruled that they could be dependent for bankruptcy purposes. So that also helps expand the size of your household.
Similar situation could be an elderly relative who’s living with you may only receive Social Security. Then what you do is you take a look at all the household sources of income and add them together for the last 6 months and divide that by 6. You come up with an average monthly income over the last 6 months and then that amount gets compared to the average household income for a family the size of your household in Michigan. And you should know in terms of income certain types of income are excluded from this. For example Social Security income, anything related to the Social Security Act and that includes for example unemployment compensation. Those are not considered income for the purposes of the means test. So again that could be something else that makes you eligible for the means test where you might not have thought you were eligible for it. Then if your higher than the average household income for family or size in Michigan, then you continue on. You can take certain deductions, to see if those deductions make it so your eligible. So say for example, if you have high child care costs. If you have to pay child support or alimony. If you have a higher mortgage payment, often times that can make it so you’re eligible for chapter 7 bankruptcy, where you might have been in the past. Also, you can take deductions for charitable contributions you make. If you make regular charitable contributions, to church. Say for example, a lot of my clients have tithed. And for them, that would be the type of thing that would be a deduction that you can take on the Means test.
I’ve also had clients who have union dues, or large deductions for insurance- health insurance, for example, or even disability insurance. Those would be deductions you can take. Life insurance, term life insurance would be a deduction you can take. So, you can see there are a lot of deductions that you can take that might be able to make you eligible for Chapter 7 bankruptcy, where you might not have been eligible for Chapter 7 bankruptcy in the first place.
My suggestion is come into my office. Give us a call 586-693-2000. I’ll be happy to sit down with you and look at all your sources of income. And talk with you about your situation and see if you are eligible for Chapter 7 bankruptcy. But don’t just assume. Because of the fact that if you look at the kind of income you have coming into your household that’s more than you thought would make you eligible for chapter 7 bankruptcy, don’t assume that your automatically ineligible, cause there could be ways working through the means test, that you would become eligible and certainly worth taking the time to look at.
Posted by Michigan Bankruptcy Attorney - Michael GreinerSep 02, 2011