Atlanta Bankruptcy Attorney Blog

At first glance, it looks like a good deal: Buy a new house and Uncle Sam gives you $6,500 back. But there's a pretty big catch, according to Atlanta bankruptcy attorneys.

When the federal government agreed to extend a tax credit originally intended for new homebuyers to existing homebuyers, they hoped it would encourage folks to upgrade to bigger houses - and that, in turn, would stimulate the real estate market.

Yet the market has stayed flat. Why? Because although we'd all love to have bigger, better houses, most of us are struggling to hold on to the ones we already have. Forget a new house - what we need is Chapter 13 bankruptcy.

Continue reading "Homebuyer Tax Credit Might Not Be Enough for Chicago Homeowners to Stop Foreclosure" »

What if you had two choices: Pay the mortgage each month, or pay your credit card bill?

In the past, choosing was a no-brainer - put the money towards the roof over your head. But increasingly, Americans are starting to prioritize credit cards, meaning the mortgage gets left by the wayside, according to Atlanta bankruptcy attorneys.

So what's changed? To start, the housing market. With one in every four homeowners underwater on their mortgage - and thus having no equity in their home - paying off a home loan can feel like throwing money away. On the other hand, paying the credit card bill allows us to keep using plastic to cover food, gas and clothes even when we aren't bringing home enough bacon to afford them.

But even though our new priorities make sense under the circumstances, it doesn't mean they're the best - or only - choice.

Continue reading "Atlanta Bankruptcy Attorneys See More Homeowners Default on House Than On Credit Card" »

Why put off until tomorrow what you can do today - especially when it involves more money in your pockets?

Technically your tax return isn't due until April 15, but you can actually file as early as February so long as you've received all of your necessary documents - like 1099s, W-2s, receipts from charitable donations, etc., according to Atlanta bankruptcy attorneys. Why would you want to torture yourself early, you may ask? Because you have to do your taxes anyway - and the earlier you do them, the earlier you can get your refund (especially helpful for those of us in debt). With the government looking to stimulate the economy, you might be eligible for some new credits and deductions.

Continue reading "Atlanta Bankruptcy Attorneys Say Early Tax Filing Means Early Refund" »

You wouldn't dream of turning in a sloppy resume or loan application full of misspellings and inappropriate answers, right?

But many of us are doing even worse when we apply for that loan, job or credit card - and we don't even realize it, according to Atlanta bankruptcy attorneys. It's all thanks to social networking sites like Facebook, MySpace or even our own personal blogs.

Even though it might not seem fair, employers and lenders are using our online presences to gauge our risk - to legally spy on us, so to speak. You know those crazy, slightly drunken photos you took with pals at a friend's bachelorette party? Or the dirty joke your cousin posted on your profile? Right or wrong, the behavior of you and your friends - rather than your debt - could theoretically affect whether you're able to buy a home.

Continue reading "Atlanta Bankruptcy Attorneys Caution That Social Networking Sites Could Harm Your Finances " »

Think those late payments are only hurting you? Think again.

Americans strapped for cash have been slow to pay their bills. And in turn, the people and businesses we're paying are slow to pay their own bills - slowing down the wheels of the entire economy, according to Atlanta bankruptcy attorneys. For example, a recent study showed that engineering and architectural businesses were paid an average of five days later in 2009 than in 2008, as mentioned in the New York Times. Tax preparers and accountants fared even worse, getting payments about 10 days later.

There's generally not much we can do as individuals to change the economy. But this might be the exception. By lowering debt so you can make on-time payments you not only help yourself, but you help the larger economic picture.

Continue reading "Atlanta Bankruptcy Attorney Advice For Avoiding Late Bill Payments" »

Contrary to homeowner hopes, Uncle Sam's $75 billion mortgage modification program may be causing more bad than good.

Created early last year, the program was supposed to encourage banks to modify loans of the millions of Americans facing foreclosure. Unfortunately, it's managed to permanently modify just 35,000 - a drop in a rather large bucket, when you consider that 15 million U.S. homeowners are underwater, meaning they owe more on their loan than their house is worth. And of the homeowners that did get help, many went into foreclosure anyway since the program only required banks to lower mortgage payments - not to restore any equity.

But the biggest problem isn't that the program is failing - it's that it's given folks a false sense of security. Many homeowners held out hope that the program would save their home, so they didn't take preventative measures that could have stopped foreclosure, such as Chapter 13 bankruptcy. Fortunately, there may still be time, according to Atlanta bankruptcy attorneys.

Continue reading "Atlanta Bankruptcy Attorneys Warn That Government Mortgage Program Is Increasing Foreclosures" »

Citibank is giving a few thousand Americans the ultimate Christmas gift this year. Problem is, there isn't enough to go around.

The megabank recently announced it would put foreclosures and evictions on hold for some 4,000 homeowners this holiday, according to MSNBC.com. The break applies to homeowners with Citibank-owned loans and lasts through the middle of January.

It's intended to reduce stress during this already crazy time of year, said a company spokesman. And I'm sure it will for those 4,000 people, temporarily anyway. But what about the millions of other Americans that are on the brink of losing their homes?

Continue reading "Bank Lets Some Homeowners Stop Foreclosure This Christmas" »

'Tis the season for giving, but if many of us don't curb our spending habits, the only thing we'll be giving is our home - back to the bank.

Just as the media was reporting in September that an economic recovery was underway, there were still roughly 4 million homeowners either in some stage of foreclosure or at least three months behind on mortgage payment, according to the Mortgage Bankers Association. Even worse, those foreclosures have been pushing down home values in the cities that are already struggling with the highest unemployment rates.

So why are things getting worse when they're supposed to be getting better? Maybe it's because, bad economy or not, consumers are plain out of cash. Many of us have gone without a raise for years - or worse, without a job for months. In the meantime, we're using credit cards to make ends meet, adding to our already bloated debt burdens. And now with the arrival of the holiday season we're struggling to put fancy meals on the table and gifts under the tree, adding even more financial stress. At some point, homeowners are throwing in the towel. But it doesn't have to be that way.

Continue reading "More Borrowers Default On Mortgages As Holidays Approach" »

If you're facing foreclosure, you're officially running out of excuses. But that's good, right?

Just this week, Congress decided to extend the tax credit for new homebuyers beyond its original Nov. 30 deadline. That means you could be eligible for $8,000 back on your taxes when you purchase a property. Better yet, the government has taken note of the thousands facing foreclosure by expanding the initiative to include people who have already owned their houses for five years or more - if that's you, there might be a $6,500 tax break in your future.

Along with the tax credits, Uncle Sam also agreed to extend unemployment benefits for 14 weeks (even longer in states where the unemployment rate has reached 8.5% or more). It's not ideal, but it's a start.

Financially, we've come a long way since the so-called "great recession" began -- and Americans might be more aware of opportunities for financial freedom than ever before.

Continue reading "New Credits, Extensions Available for Homebuyers and Unemployed" »

The most popular - yet elusive - Christmas gift this year is too big to wrap. In recent months, potential homebuyers have been scrambling to take advantage of the temporary homebuyer tax credit of up to $8,000 before it expires on Nov. 30.

But you don't have to rush into buying a house before you're ready (if you'll recall, it was too much debt that got us into this mess - and a house is about the biggest, albeit most important, debt you can take on). Nor do you have to feel that you missed the boat if your financial situation won't allow you to plunk down a down payment right now. Here's why.

First, Congress is currently debating whether to extend the credit through March 2010, then phase it out slowly. Second, mortgage rates are at record lows and affordable homes are at record highs. Third - and maybe most important - there's another way to save big bucks on that down payment. And you don't have to wait for government approval to get it.

Continue reading "Temporary Tax Credit Isn't the Only Way to Save on Your Mortgage" »

Too little, too late might be the best way to sum up the $75 billion government initiative to reduce foreclosures by encouraging lenders to modify loans.

Obama's plan certainly meant well - and to be fair, it did help some folks - just not everyone. The plan recently reached its goal of helping 500,000 troubled homeowners by Nov. 1. Sound like a success? Maybe not when you realize Uncle Sam had set out to help 4 million foreclosure-bound homeowners. That adds up to a success rate of just 12 percent. And there are a couple other things to consider. First, there are millions of other homeowners who face foreclosure, but wouldn't have qualified for the plan. And second, even the lucky 12 percent able to modify their mortgages aren't free and clear yet. About half of them will redefault on their loan - even after it's been modified.

See, loan modifications just address the most obvious part of a homeowner's financial problems. You can't afford to pay your mortgage, so your lender makes it a little lower. But that doesn't address the reasons behind your inability to pay the mortgage.

Continue reading "How Bankruptcy Can Stop Foreclosure, No Lender Approval Needed" »

Thousands of struggling homeowners were in for a shock when they received mortgage modifications this year - and their payments went up.

During 2008 and the first three months of 2009, more than a quarter of all modified mortgages went unchanged, according to a recent USA Today article. Even worse, another 27 percent got more expensive because banks rolled late fees, taxes and other costs into the principal.

Uncle Sam's $75 billion initiative to stop foreclosures by encouraging modifications means well, but it's missing the point. Most modifications involve banks reducing interest rates. But by lowering rates, there is no guarantee that payments will decrease - especially not when fees are factored in. With cash tight and unemployment on the rise, homeowners need lower payments - period.

Fortunately, there's a way to make it possible - and it doesn't require working with a lender.

Continue reading "Bankruptcy Can Be More Effective Than Mortgage Modifications" »

Move over, baseball. Watching home values seems to be the new American pastime - at least where I live.

Just like a sports fan knows all the scores and stats, my friends know every time a nearby house goes for sale - and for how much. They check Zillow.com constantly to see if their homes have dropped or gained value. They grab the real estate section of the paper first-thing every morning. If prices haven't changed, they're happy; if they've gone down, they're sad.

I can sympathize with their obsession. Home values in my state spent the last couple decades skyrocketing. And then the bottom fell out of the market a few years ago. People who bought at "the wrong time" got burned - some saw their homes' values fall to nearly half the price of their mortgage. But where they see a loss, I see potential.

You see, home values are a lot more like the stock market than a sports game. How? Because prices are meaningless until you sell.

Continue reading "Why Finances Are More Important Than Home Prices" »

Mortgage rates are falling again. Home values are ever so slowly edging higher. A growing number of buyers are trying (some successfully, some not) to get into the market.

The market is changing and homeowners stand to take advantage - but only if they act fast.

On average, the rate for a 30-year home loan is just over 5 percent (the record set this spring is 4.78 percent). So how did rates get so low? Earlier this year, the Federal Reserve began purchasing more than $1 trillion in mortgage-backed securities, driving interest rates down in the process. But here's the catch: the money is expected to run out by the end of the year. Rates will not remain this low forever.

Mortgage rates may rise and fall - debt, on the other hand, will only continue to rise unless you do something about it. It won't matter if you get a break on your home loan, if you get a raise at work, if you receive an inheritance - your debts will eat up your windfall eventually. If you want to take full advantage of today's rates, it's time to free yourself from the shackles of your debt.

Continue reading "Bankruptcy Is a Better Way to Take Advantage of Falling Mortgage Rates" »

Remember those Magic Eye pictures? On the surface, they looked like a bunch of colored dots. But once you let your eyes adjust, you could finally see the scene hidden inside. You could finally see the whole picture.

Well, the foreclosure crisis is turning out to be a lot like those images. On the most obvious level, the problem appears to be that people are losing their homes because their mortgage payments are too high. Fittingly, the government is handling the problem by encouraging banks to modify loan terms - in theory, this would make house payments more affordable.

But it's not working. Foreclosures are still on the rise. It doesn't make any sense - until you discover that the whole picture is a lot more complex. It's not just that homeowners are struggling to pay the mortgage. It's that they're struggling to pay the mortgage...and the credit card bills and the medical expenses and the tax debts.

Continue reading "Bankruptcy Can Stop Foreclosure By Addressing Other Debts" »