Can My Mortgage Company Lock Me Out of My House?

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Recently, we’ve heard several stories of people being locked out of their homes by their mortgage servicer. Under normal circumstances, a mortgage lender does not have the right to prevent you from entering and living in your home – even if you are in the middle of a foreclosure. There are some mortgage companies who have found a way to side-step the rules, however.

If you have missed a few payments on your home mortgage loan but have not received notice of your lender’s intent to foreclose, you may be on the slippery slope, heading toward a foreclosure.

On the other hand, if your lender has already filed a Notice to Foreclose with the courts, you will soon be served with that notice. After you receive your lender or bank’s Notice to Foreclose, you’ll have to make a decision. Do you want to continue (are you able to afford) living in the home?

If you can afford the cost of your mortgage payment or would be able to afford it if you had it modified slightly to meet your income, your best next move is to contact your mortgage servicer in order to apply for a mortgage modification.

In the instance that you are not able to afford the mortgage payments, even with some modifications being made, your home will go into foreclosure in the next several weeks or months. It is important for you to know that you are allowed to continue living in the home throughout the entire foreclosure process.

Unfortunately, what has been happening in some foreclosure cases is that the mortgage company sends a representative to examine the home or property to determine if it is occupied or vacant. This is within their rights. However, upon a cursory glance at a property, many mortgage company reps deem homes as “vacant” when they are, in fact, occupied.

This can happen when you and your other family members are at work, school or otherwise engaged in activities outside of the home. Once the mortgage representative deems a home vacant, it is legal for the company to change the locks and to remove any personal items that they will say were “left behind.”

The result of this action is obviously devastating to home owners who were simply out of the house only to come home and discover that not only are they locked out, but all of their personal property has been taken.

Why are mortgage companies locking people out of their homes?

Homeowners who are behind on their mortgage payments are legally allowed to live in their home until the foreclosure process is completed. Mortgage companies cannot legally remove the homeowner until the end of the foreclosure case.

However, if the homeowner voluntarily relocates and leaves the home empty, the mortgage servicer can take control over the home. Unfortunately, some mortgage companies are attempting to falsely label properties as “vacant” when they are clearly still being lived-in.

In order to avoid this situation – if you’re behind on your mortgage, call your mortgage lender and write them a letter, stating that you intend to continue living in the home until the end of the foreclosure case. This will leave a paper trail of your intentions, should anything untoward happen in the future.

If you’ve found yourself locked out of your home currently and don’t know where to turn, call us today. We can (and want to) help!

Image credit: Luke Jones
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Can I Write My Own Will in New Jersey?

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A question we hear a lot is, “Can I write my will without an attorney?” In New Jersey, the answer is Yes. In order to draft your last will and testament on your own, you can download forms that will help you. There are even software programs designed to help people write their own wills.

In fact, you don’t even need a notary in order to make your will legal. It is necessary for you to have at least two witnesses when you sign your will. These witnesses will be contacted after your death to verify your will. Having your DIY last will and testament notarized will help your will move through the court system more quickly, however. A notarized will does not have to be verified by the witnesses who signed it.

So, yes, you can write your own will, as long as it is signed by you in your own handwriting and you have witnesses. Easy peasy, pumpkin pie!

Or, is it?

Did you know you can also represent yourself in court if you’re charged with a crime? That’s right – you aren’t actually required to hire an attorney – you can be your own attorney.

I could also go home tonight, take apart my computer, and attempt to put it back together again. The parts are all there, and no one said I can’t do it! However, in the end I would have lost many fruitless hours and I’d be without a working computer.

My point being, that yes, in all technicality and legality, in New Jersey you can absolutely draft your own will. You can even appoint an executor for your estate. New Jersey law says you can do this all on your own, and you can buy the forms online and even in some stores.

But SHOULD YOU write your own will?

Well that is an entirely different question, and one that I have given a lot of thought to. Many of my clients come to me thinking that they have a very straightforward estate and that setting up their estate plan is going to be very simple, even with my help.

What often transpires is that my clients and I spend a lot of time drafting what they originally thought would be just a “basic will.” Questions about legal terminology, probate, living wills, power of attorney, (and more) always arise, and I am glad that I’m there to help my clients fully understand the importance of the document(s) we are drafting.

Additionally, I frequently have clients come to see me after they’ve made an attempt at drawing up their own will documents. Having run into too many hurdles and questions they didn’t have the answers to, in the end they decided it was best to have an experienced attorney’s assistance. Writing your own will can save you a little bit of money, but you can make some mistakes that will cost your loved ones greatly.

Please don’t let the cost of hiring an attorney hold you back from asking for help with your will. Our rates are very reasonable for estate planning help. If needed, you can even set up a payment plan. At the very least, you should take advantage of our free consultation, to learn whether or not you’re making any mistakes with your DIY estate plan.

Image credit: Matthew Hutchinson

Bad Checks and NJ Bankruptcy Law

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Many people have bounced a check at some point in their lives. Life gets busy and plenty of Americans are living paycheck to paycheck. It’s all too easy to mistakenly pay a bill without significant money in your account. It happens. Most people, as soon as they discover their error, rush to fix the problem. Whether it means transferring money from your savings account or temporarily borrowing money from a friend, it’s in your best interest to make good on the bad check as soon as you possibly can.

Failure to fix an overdrawn bank account within ten days of being notified about the issue will lead authorities to believe that you knowingly wrote a check for more than was in your account. Writing a bad check in New Jersey is considered a misdemeanor. If the amount of the check was more than $200, you could even be charged with a felony.

Can filing for bankruptcy clear my bad check history?

The answer to this question is two-fold. In filing for bankruptcy, you will stop your creditors from being legally allowed to collect money from you. So, if you have written several bad checks and want to discharge the amount of the checks in your bankruptcy, you will almost certainly be able to do so.

However, given the fact that “bouncing” a check (especially while knowing you have no funds in your account) is punishable by NJ law – discharging the monetary value of your bad checks may be the least of your worries.

Many people file for bankruptcy for the protection offered by the automatic stay. The automatic stay prevents lenders from attempting to collect money from the debtor, and this includes any funds that were transferred via bad check.

That’s the good news.

The bad news is that filing for bankruptcy in New Jersey will never protect you regarding any criminal acts you have engaged in. The automatic stay was put into place to protect those people who were struggling financially. Anyone who has broken any laws will not be protected from prosecution by filing for bankruptcy.

Even if you are granted an automatic stay in your bankruptcy case, it will do nothing to halt or even slow down a criminal investigation against you for writing bad checks.

The bottom line is: If you have a history of writing checks that could not be paid, that debt is often considered dischargeable in a chapter 7 bankruptcy, depending on your answers to a set of questions about your intentions and financial situation at the time that you wrote the check(s).

However, you will never be able to discharge a criminal act. The bankruptcy system was set up to help people who are struggling financially, not to protect criminals. If you have written a bad check or even several bad checks by mistake or in poor judgement, you can still be charged with a crime and it is crucial that you seek legal counsel immediately.

 

Image credit: Michael

Judicial vs Non Judicial Foreclosure States

7953227784_d71b2d2c8a_zEvery state has different rules when it comes to foreclosures. Some states require that all foreclosures proceed through the court system, while others have foreclosure procedures to be followed outside of the court.

For those people who live in a nonjudicial state, lenders are not required to file anything with the court before they begin the foreclosure process. This type of foreclosure moves a lot faster than if proceeding through a court system, as you can imagine.

It’s important to know if you live in a nonjudicial state, because you may have very little time to save your home before it’s too late. In fact, many homeowners who live in nonjudicial states discover they are being foreclosed on when they receive a notice of the sale of their home. In some states, it doesn’t even have to be delivered to you, and you may find out by reading the newspaper.

If you signed a promissory note and a deed of trust when you purchased your home, you most likely reside in a nonjudicial state. Find out more about nonjudicial foreclosures and which states allow them here.

New Jersey is a judicial foreclosure state. This means that the entire foreclosure process is required to take place through the NJ court system. In recent years, New Jersey has experienced a high number of foreclosures, causing a court system back up. Even when the court system isn’t back logged, a judicial foreclosure will take longer than a nonjudicial foreclosure due to all of the legal steps lenders are required to follow.

New Jersey homeowners who start missing mortgage payments should be aware that lenders can begin the foreclosure process after just one single missed payment. Most lenders won’t begin the process until several (or many) payments go unpaid.

In judicial states, lenders have to send delinquent borrowers a warning letter of sorts, called “Notice of Intent to Foreclose.” At this point in the process, it is still very possible to stop the process before it even really begins by catching up on any payments you missed.

If, however, you fail to get current on your payments, your lender will proceed to court to open a case against you for failure to pay your mortgage. After they file an initial complaint, you will be served with (sent or delivered) a copy of the complaint along with a summons.

A summons essentially alerts you to the fact that there is a case against you, and also gives you time to respond to the complaint. Your choices are to either:

  1. Not respond, which will push the foreclosure through and your home will be sold at auction, meaning you will be evicted; or
  2. Respond, if you feel you are able to (and want to) keep your home. At this point in the process, a foreclosure defense attorney is key.

By working with an experienced foreclosure defense lawyer in New Jersey, your foreclosure can be slowed down significantly or even stopped altogether, if your defense is strong.

At the end of the judicial foreclosure process, the judge in charge of your case will decide either in your favor or in favor of the lender. If you “win,” you will still need to figure out how you’re going to pay your mortgage bill every month to get back on track, or you will end up back in foreclosure very quickly.

If the judge decides against you, your lender will notify you of their intent to sell your home. If you are unable to redeem your home, it will be sold at auction. Until the sale date, you can remain in the home. Your lender will send you a letter of eviction letting you know when you officially must find a new place to live.

Image credit: Stock Monkeys

Short Sales: How They Benefit the Seller

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There are many reasons why you might suddenly find it challenging to pay your mortgage every month. Perhaps you were injured and had to take an extended time off from work. You may have even become permanently disabled, or maybe you got divorced or experienced the death of a spouse. Regardless of the reason(s) for your newfound financial troubles, you are undoubtedly wondering what your options may be at this point.

If you want to keep your home, and think you may be able to afford it if your payment was just a little bit lower, you may benefit from a mortgage refinance. Maybe your overall debt level is sky high and you see no way out – you can file for bankruptcy and start fresh with a brand new blank slate.

If meeting your mortgage payment every month is your main struggle – it may be in your best interest to sell your house and move somewhere more affordable. However, the (often) lengthy time homes spend on the market may be longer than your finances will last.

In this situation, you may qualify to list your home as a short sale property. A short sale involves selling your home for less than the amount that you still owe on your mortgage. In order to qualify to sell your home in this manner, you’ll have to show your lender that you’ve suffered a hardship – like job loss, decreased income, divorce, spousal death or disability.

You’ll create an agreement with your lender about what will happen after the home sells. In many cases, your lender will agree to discharge the leftover debt that remains after the short sale. This means you will owe nothing, and you will no longer have any responsibility toward that mortgage – allowing you to move on.

One of the best things about short sales is that they offer distressed home owners a foreclosure alternative. Foreclosure is definitely the right choice for some people, but for others, a short sale can accomplish the same thing without the negatives that come along with a foreclosure being placed on your credit report.

Mortgage experts say that a foreclosure can cause your credit score to dip up to 250 points below its current number! On the other hand, a short sale appears on credit reports as a “pre-foreclosure in redemption,” and typically only lowers your score by around 100 points.

If you go through with a short sale, you will most likely be able to qualify for a new mortgage that is more affordable with a good interest rate in as few as 18 months.

An additional reason to consider a short sale: relocation incentives (read: ca$h!!!) are frequently offered by some lenders to short sellers. This will give you enough money to start over after your (too expensive) home is sold.

On top of the cash incentive, you should know that short sellers aren’t always required to pay their attorney’s fees or real estate broker’s fees. It is possible to negotiate these fees into the short sale agreement so that they will be paid for by your mortgage lender.

Although the new millennial home owners may typically associate short sales with the 1990s, the current market is once again seeing many short sales being approved. To learn more about your options, contact Veitengruber Law for a free consultation via telephone or in-office.

Image credit: Got Credit

Preparing Your Child for Financial Success in College

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If you blinked and that little baby of yours is suddenly a junior or senior in high school, chances are good that both of you have started giving some thought to whether or not college is in the cards. If it is, there are a wide variety of fun and exciting new experiences right around the corner. Even if college is a year away, now is an appropriate time to start thinking about how your child handles money.

While s/he will most likely still rely on you for a large percentage of any money needed, college will be the first time s/he will have to make independent spending decisions. So, even though it’ll be your money, your child will be using it to form (hopefully) good financial habits that will last a lifetime.

There are many things you can do at this time that will either help or hinder your child when it comes to being financially successful. Here are a few tips:

  • Be ready for mistakes – As with anything our children do, making poor money choices in college is yet another learning experience. As a parent, be prepared to watch (from afar) your child goof up a few times at first. S/he may very well over spend and come crying to you for more money. If this happens, don’t come rushing to the rescue. Let your child feel just a little bit of the struggle that comes from making bad money choices. It is from that struggle that s/he will learn to make the right choice the next time around.

 

  • Put limits on those mistakes – While it is most definitely a good learning experience for college students to (for the most part) handle their own finances, as parents who are funding that experience, you can help them avoid utter disaster. Help your child obtain a low spending limit credit card or a debit card attached to an account that you share with him/her. Sit down with your child and review his or her spending habits periodically to go over any good and/or poor decisions.

 

  • Don’t be too generous – Although your instincts may tell you to load your college student’s bank account with plenty of money so they never have to want for anything, doing so is actually a really bad idea. Faced with open access to a large (to them) sum of money for potentially the first time in their lives can lead to an overwhelming urge to spend too quickly. Learning how to spend modestly is a skill that comes with time. Come up with a plan that will have you depositing spending money into their account more frequently, and in smaller increments. You can increase the amount of time between deposits along with the dollar amount gradually, as your child progresses and shows that s/he can handle more financial responsibility.

It’s also a good idea for your child to take on a very part time job during college, as long as s/he is able to do so without interfering with classes. While s/he will still need financial help from you, having an income of his or her own will further aid in solidifying the overall lesson you want them to learn: Budgeting is a life long skill that is just as important as all of the other information they’ll learn throughout their entire college experience.

 

Image credit: College of DuPage

What is Bankruptcy Redemption?

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There are a myriad of myths and misconceptions when it comes to the matter of personal bankruptcy. One of the most commonly held beliefs is that, by filing for bankruptcy, you will lose everything that you currently own. This myth is enough to keep many people from even considering bankruptcy as a financial option, when it very well might be exactly what they need. Luckily, it isn’t true, and learning more about what you will be able to keep after a bankruptcy can help eradicate this and many other bankruptcy misconceptions.

Taking away everything you own, even if you’re still making payments on it, would negate the benefits of filing for bankruptcy. It doesn’t benefit anyone very much if all of their debts are erased but they’re left homeless and without a car or any other possessions.

The bankruptcy court recognizes this, and therefore have set out policies that state exactly how much home equity will be exempt from liquidation if a person or couple files for bankruptcy. This is known as the Homestead Exemption Policy, and it varies from state to state. New Jersey does not currently have a Homestead Exemption Policy, but if you file for bankruptcy in NJ, you’ll be permitted to use federal bankruptcy exemptions to protect at least some of the value of your home and everything inside it.

Aside from your house, there is, of course, other property that you may wish to keep. Today, we’ll talk about those debts that are secured, like your home, which means you are making payments on an item or property, and that item is collateral. In other words, if you fail to make payments, the creditor can take back the property and sell it. If the creditor is unable to sell the property for the amount you still owe, they can file for deficiency judgment in court, which would require you to pay the difference.

One option that will allow you to keep a piece of secured property during a bankruptcy filing is called Redemption. This practice is possible in Chapter 7 bankruptcies, and involves paying the creditor the current value (or replacement value) of the property as it is now. This value is often less than the amount you still owe, depending on the age and condition of, let’s say, your vehicle.

As long as you are current on your car payments when you file for bankruptcy, you should be able to ‘redeem’ your car for its replacement value. Although this amount is typically lower than what you owe, you’ll have to come up with the entire amount in a lump sum payment.

Additionally, you must come to an agreement with your creditor (the person or company you purchased the car from). If this is impossible, a valuation hearing can be held in court in order to determine an appropriate and fair value.

Property that qualifies for redemption must be personal property (other than real estate) that is not used for business purposes. It also must be tangible and exempt from liquidation. If you aren’t sure whether or not the property you’re interested in saving meets all of the qualifications, run it by your New Jersey bankruptcy attorney before making any decisions.

 

Image credit: Ana_Cotta

 

Secured Credit Cards: 101

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It’s easy to say that you’re done with credit cards, but much harder to follow through with that resolution when living in the real, modern world. While we remain firm that it is a much better decision for you to pay for day to day purchases with actual money that’s sitting in your bank account, there are times when only a credit card will do.

For example, making hotel reservations can be next to impossible if you don’t have a credit card. Renting a car or reserving plane tickets can also prove difficult without a credit card, even if you plan to pay for them in cash upon arrival. Add to this list that maintaining a credit card and responsibly paying the balance is a great way to raise your credit score.

So, what’s a person to do if they A) Have a tendency to go overboard when in possession of a credit card, or B) Have recently filed for bankruptcy or had some other financial struggles that are now making it challenging to get approved for a credit card?

It’s true that many credit card companies will not issue a card to borrowers with low credit scores. That’s where the Secured Credit Card comes in.

What is a Secured Credit Card, anyway?

A secured credit card will work just like any other credit card, so you’ll be able to make those hotel, plane and/or car reservations. However, in order for it to work, you must deposit cash into your account first. This makes lenders feel more comfortable issuing you a credit card, and if you prove that you are responsible, your lender may eventually increase your spending limit.

Using a secured credit card can improve your credit score, but it’s important that you choose a company that reports secured card payments to credit bureaus. If your secured credit card payments are going to go unrecognized, the card presents a lot less value to you.

A secured credit card can really help a person with little to no credit history (think recent college graduate) quickly gain a solid credit reputation. Secured cards can also help you if you’ve filed for bankruptcy and have a really rocky financial past; it’ll just take a little longer for you to see your credit score rise.

Now, before you rush out and apply for a secured credit card, there are some things to be on the look-out for. Firstly: outrageous fees. Some companies will take advantage of your desperate need for a credit card and will charge you so many fees it’ll make your head spin. Read the fine print closely, and look for maintenance fees, ATM withdrawal fees, late fees, insufficient funds fees, etc.

Many companies offer really good secured card deals, with reasonable fees. Do your research first, and you should easily be able to find a reputable credit card company willing to provide you with a secured card with terms that you can deal with. Remember: make your payments on time, and only use the card when you absolutely have no other option.

Image credit: Philip Taylor