Atlanta Bankruptcy Attorney Blog

New changes to the government's Home Affordable Refinance Program could help more than 6 million homeowners in danger of losing their houses to foreclosure, according to CBS Atlanta. But is it enough?

HARP was introduced in 2009 to help troubled homeowners refinance mortgages, despite having little to no equity in their homes.

But though the program was well-meaning, it hasn't had much effect so far because lenders have their own sets of qualification guidelines. For underwater homeowners in Illinois, filing for bankruptcy in Atlanta has continued to offer the best solution.

However, recent updates to the program could change that.

Mortgage servicers are currently enacting HARP changes announced last fall, including the elimination of a limit on just how underwater a borrower can be to qualify. Previously, balances could not exceed 125 percent of a home's current value.

In addition to doing away with the limit, Uncle Sam is putting a lid on upfront fees known as loan level pricing adjustments. Until now, lenders have been slapping low-equity borrowers with fees as high as 2 percent of their loan's balance. A new limit keeps those fees to 0.75 percent or less.

Real estate data estimates that 6.7 million homeowners could now be eligible to use the program. However, it's unclear how many will actually be helped.

HARP is voluntary for lenders, so if your bank doesn't participate, you can't take part. Atlanta bankruptcy lawyers have also seen qualifying homeowners apply, only to be turned down at a lender's convenience.

To date, just 1 million borrowers have found mortgage relief under the program.

Unlike a refinance, qualifying for Chapter 13 bankruptcy does not depend on home equity. Furthermore, Atlanta bankruptcy has the ability to help borrowers who have fallen behind on payments (homeowners must be current on payments in order to qualify for HARP).

Atlanta bankruptcy offers another advantage - the ability to relieve unsecured debts.

Many homeowners run into trouble because credit card debt interferes with other bills, like the mortgage. Filing for bankruptcy in Atlanta can help.

Continue reading "Atlanta Bankruptcy Still a Solution for Homeowners Not Helped by HARP Changes" »

Lenders are beginning to market personal loans as a way for cash-strapped Atlanta consumers to consolidate debt, according to The Wall Street Journal.

While small loans all but died off during the recession, banks now see them as a way to make up for a reduction in home equity loans and other types of lending.

As a result, major lenders are ramping up their marketing efforts. Banks mailed 425 million personal loan offers to customers in 2011 - that's up from 290 million in 2010.

A personal loan can be used to finance a home remodel, pay for a wedding, or pay off debt over a fixed period of time. While personal loans don't come cheap - they're usually more expensive than secured loans like mortgages or car loans - they're almost always more affordable than credit cards.

A typical five-year personal loan for a borrower with good credit may have an interest rate between 8.5 percent and 14.5 percent, while a typical credit card could have a rate of 20 percent.

Some banks are offering even better deals. For instance, American Eagle Federal Credit Union will lower the interest rate on personal loans to 6.25 percent if consumers agree to have payments automatically deducted.

But Atlanta bankruptcy lawyers say there may be a catch.

Personal loans work best for borrowers with a small amount of existing debt. However, the loans can actually aggravate financial troubles for those attempting to consolidate large credit card debts.

Consumers who have routinely used credit cards to stay afloat during tough times may be tempted to pile on new charges after consolidating debt with a loan, further complicating an already complex situation.

Falling salaries and rising costs have led many Americans to rely on credit cards almost as supplemental income sources. Unless spending habits are changed, consumers are likely to continue using credit after taking out a personal loan.

The problem with consolidating debt when you are still using existing lines of credit is that debt is only spread around, not eliminated. Filing for bankruptcy in Atlanta can provide a better solution.

Bankruptcy was developed specifically to assist consumers in getting rid of debt. Depending on the type of Atlanta bankruptcy you file for, you will either be provided with an affordable payment plan or the ability to discharge debts in entirety.

Continue reading "Lenders Market Personal Loans for Debt Consolidation, But Atlanta Bankruptcy May Be More Realistic" »

A list of the top causes of debt confirms that financial troubles can often be attributed to factors we can't control, such as income loss and medical expenses.

However, as our Atlanta bankruptcy attorneys often point out, we can control the way we deal with these situations.

According to an article by Bankrate.com, the top causes of debt are money management issues, changes in income level, and unexpected costs like divorce or hospital bills.

Money Management

Sometimes debt accumulates as a result of our own financial behaviors. This is often the easiest type of debt to fix (though, when it comes to debt, "easy" is a relative term).

If you're spending without a budget or plan, you're missing out on the opportunity to spot patterns that may be causing your expenses to be out of line with income.

While organizing your finances can't make up the gap when you're spending more than you earn, it can offer the insight you need to make changes that can improve your situation.

For instance, if you expect to spend more in December due to holiday gifts, you'll know to save up in November and January. If you're trying to cut back on costs, you may be able to pick out unnecessary expenses that can be eliminated.

And if you discover that no amount of tweaking is going to keep debt from continuing to grow, getting organized may help you realize it's time to seek help.

Income Level

With rising costs and falling wages, many Americans are just barely able to make ends meet. When a reduction in hours suddenly lowers income, many people have no choice but to turn to credit cards to pay the bills.

But instead of reducing costs in line with a new income level, many of us continue spending as usual with the assumption that the income change will be temporary. Of course, thanks to interest, making the same purchases with credit actually requires spending more money.

It's far better to have a reserve of cash built up just for these types of emergency situations. Unfortunately, most Americans don't have enough savings to carry us through a few weeks of unemployment - let alone a few months.

If lost income has led to unmanageable credit card debt, Atlanta bankruptcy can offer relief. While some forms of bankruptcy require payment plans, Chapter 7 bankruptcy makes it possible for those with little to no income to have unsecured debts discharged. Because the last thing you want to worry about when you're trying to feed your family is a mountain of credit card debt.

Unexpected Costs

It may be smart to plan for a layoff in today's economy, but how do you plan for a divorce, lawsuit, or hospital stay?

Nobody likes to think these things may happen, but the sad truth is that they do. And because they blindside us, they can cause the most difficult-to-manage debt. To make matters worse, many hospitals and law firms are accepting credit cards, making it all too easy for consumers to be instantly stuck with thousands of dollars of unaffordable debt.

Ignoring the problem by making minimum payments won't make it go away. As debt grows, it can cut into your ability to pay other bills, damage your credit, and limit your opportunities.

Bankruptcy was created exactly for this situation. Filing for bankruptcy in Atlanta can help consumers recover from surprise expenses and find a fresh financial start. A professional Atlanta bankruptcy attorney can determine whether bankruptcy offers a solution for your debt situation.

Continue reading "Credit Card Debt in Atlanta Often Has the Same Root Causes " »

Atlanta home prices have fallen to the lowest level in 13 years thanks to a rush of recent foreclosures and short sales, according to the Atlanta Journal-Constitution.

The latest housing market data from Standard & Poor's Case-Shiller Home Price Indices shows that metro Atlanta real estate prices fell for the fourth month in a row this past November, dropping 2.5 percent from the previous month.

As of December 2011, the average sales price of a metro Atlanta house was around $178,000, a 12 percent decline from a year earlier.

While 19 of 20 major cities covered by the indices saw declines, Atlanta had the second-worst index among the group. Only Detroit fared worse.

Real estate experts say the region's high rate of foreclosure is to blame.

Last year, more than 60 percent of home sales in Atlanta involved foreclosed properties. And the problem is expected to get worse before it gets better.

With unemployment still high, wages low, and costs on the rise, many consumers who were previously able to squeak by paycheck-to-paycheck are finally finding themselves unable to juggle the mortgage payments with other bills.

Meanwhile, many banks that had halted their foreclosure processes last year in response to criticism about fraudulent practices such as robo-signing and document fabrication are beginning to handle foreclosure cases once again.

As Atlanta bankruptcy lawyers have reported, an increasing number of homeowners are turning to Chapter 13 bankruptcy to stop foreclosure and stay in their homes.

Also known as the "wage earners bankruptcy," Chapter 13 allows consumers to pay off unsecured debts like credit card balances over a period of 3 to 5 years. During this time, important assets such as homes and vehicles are protected from repossession. If payments are made on time, debt remaining after the payment period is up can be discharged for good.

Chapter 7, the most popular form of bankruptcy, doesn't require a payment period but may require some assets to be liquidated in order to cover debt. However, many people who qualify for Chapter 7 bankruptcy income requirements are able to eliminate debt without giving up their valuables.

On the other end of the spectrum, rock-bottom prices and a limited number of homes for sale make today an ideal buyer's market. If overwhelming debt and mediocre credit is preventing you from owning your own home, bankruptcy may offer yet another solution.

By helping consumers rid themselves of growing debt burdens, bankruptcy can help increase income and allow potential borrowers to start rebuilding credit so it's possible for them to qualify for loans with reasonable interest rates.

Continue reading "With Area Home Prices at New Lows, Atlanta Bankruptcy May Help Potential Homebuyers" »

A marriage-wrecking infidelity doesn't always involve another person. For many couples, it involves a credit card.

More than half of people who share finances with a partner admit to lying about a purchase, according to a survey by the National Endowment for Financial Education. And 31 percent surveyed cop to being downright deceptive about money.

Debt has a habit of spiraling out of control when untended. Living with too much debt is difficult enough when you're the only one affected - but when you share financial responsibilities with someone else, things really get complicated.

For many Georgia couples, filing for a bankruptcy in Atlanta is the best way to eliminate debt - and save their marriage.

Many times, Atlanta bankruptcy lawyers have watched marriages fall apart because one spouse or partner was keeping financial secrets for years.

The longer one person hides a purchase or debt, the more likely it is that the problem will become unmanageable. Often times, the spouse hiding financial troubles feels anxious, helpless, and depressed. And of course, when the cat is let out of the bag, the partner kept in the dark is likely to feel resentful and angry.

When people have different money priorities, it can be difficult to repair a relationship damaged by financial infidelity. But if you have the same money goals, it's possible to work together to overcome debt and get back on track. Bankruptcy can help.

This Valentine's Day, perhaps it's time to have a heart-to-heart with your husband/wife or boyfriend/girlfriend about the state of your finances. It might not sound romantic, but it may be the best thing you can do for your relationship.

Couples who work together are more likely to succeed financially - even if it takes hard work to get there. After all, two heads are better than one.

Even better, consider seeking advice from a financial expert such as an Atlanta bankruptcy attorney. Many couples are able to eliminate most or all of their unsecured debts with a Chapter 7 or Chapter 13 bankruptcy.

Meanwhile, here are some relationship tips from CNN Money.

Discuss Money Before Marriage

Once you're married, what's yours becomes ours. It's important that couples are honest with each other about their financial situations and priorities. A problem like student loans or credit card debt doesn't have to be a deal breaker - and it can be overcome if you work together. But if you're hoping to save up for a house while your significant other is a chronic over-spender with no plans to change, you may never be on the same page financially.

Know the Warning Signs of Debt Denial

People hiding their financial behaviors often exhibit red flags. For instance, they may hide credit card bills so that you can't see the balance. You may find shopping bags with recent purchases stashed in the closet. You might see more bills arriving more frequently. And often times, you'll notice that your partner becomes irritated when you bring up finances. All of these signs indicate it's time to talk about money. No matter how large the debt troubles, bankruptcy may provide a solution.

Go Over Your Finances Together

One of the best ways to prevent debt from spiraling out of control is to manage your money together. Sure, it's fine if one spouse handles the bill paying, but you should both have an idea of how much money is being spent and saved. Make a point to go over your bills, bank account, and credit report periodically so you're both on the same page. You can access one free annual credit report from each of the three credit bureaus from AnnualCreditReport.com.

Continue reading "Credit Card Debt Takes a Toll on Marriage for Many Atlanta Couples" »

It's bad enough that countless people are losing their homes because they can't pay the bills. But imagine the frustration of finding out you're losing a home you've paid off.

As banks rush to push through millions of foreclosures in 2012, errors are increasingly leading to foreclosures, lawsuits, and credit damage for consumers who are current on their loan payments.

With an estimated 12.5 percent of U.S. homes either in foreclosure or delinquent by at least a month, the problem is only expected to get worse.

Regardless of the reason for foreclosure, Chapter 13 bankruptcy may be the best way to legally stop the foreclosure process and allow homeowners to begin rebuilding their credit.

According to a recent Reuters story, a growing number of homeowners are reporting that they are being harassed by banks for mortgages that should have been recorded as paid in full.

In some cases, borrowers refinance a home loan but the original mortgage is never written off. In other cases, homeowners are sued for foreclosure on a house they sold years ago. And in some rare but worrisome cases, consumers are being pinned down for delinquencies when they never even had a mortgage to begin with.

It all comes down to the disorderly state of the lending industry.

During the peak of the housing boom in the mid-2000s, Wall Street encouraged mortgage servicers to quickly process loans so they could be sold around the world to thousands of investors. In the ensuing chaos, important legal procedures were brushed off.

Many times, Atlanta bankruptcy lawyers have seen homeowners have difficulty qualifying for a loan modification because the bank can't locate the owner of the original loan. Now homeowners are being held accountable for home loans that aren't even theirs. Because data has never been collected on wrongful foreclosures, there is no way to estimate the extent of the problem.

In one case, a Utah woman's accountant learned that the woman was being sued for foreclosure because a bank error had showed she was delinquent by a single dollar. As a result, her credit was ruined. In another instance, a Vietnam vet paid off his mortgage in full, only to have his bank continue sending notices in error.

It's an important reminder of how necessary it is to keep an eye on credit so that mistakes can be quickly corrected before they spiral out of control.

In the meantime, Atlanta bankruptcy is a helpful tool to have handy.

Errant fees and legal troubles can add up to cause serious financial hardship, whether deserved or not. And of course, many times foreclosure stems from a true inability to make payments, whether due to job loss, credit card debt, or medical bills.

Continue reading "Atlanta Bankruptcy May Help Consumers Plagued by Wave of Mortgage Errors " »