Debt Settlement and Your Rights

I have listened to the Dave Ramsey show just about every day for the last 2 years. Over those years I have heard many people call in asking questions about filing for bankruptcy. Its been very cool to listen to their situation get unpacked right there on the radio. Most of the time it all boils down to a few factors, cars houses, and credit cards.

A lot of times Dave will tell people, if you want to get rid of the credit cards just don't pay them! It always seems to shock and amaze the callers and they don't unusually understand why he says to do that. Today I am going to explain a little bit about how debt settlement works, hopefully none of my readers are in a bind but just in case!

I have had a LOT of experience dealing with creditors over the years and if any body knows about how nasty bill collectors can be its me. They know a great deal about the art of manipulation and how important it is to get under peoples skin. I actually had one bill collector tell me they were going to call the police on me, pretty scary right!

Truth told there are only a few things that collectors can do and most of the time it can be a while before they ever get around to doing anything with your file once its gone past due.

After a debt has gone past due say 30 days. You will first start to get phone calls. Yes they are a bit annoying but other than block the number and hang up on them is about all you can do.

You will get past due bills pretty much from 6 months to a year past due before they turn you over to a collection company that is not the original debtor. More phone calls come from that, but just different people with different scare tactics.

I recently settled a debt that was 2 years old. They had not been able to reach me to pay the debt since I moved with no new address. I was served with court papers and they did actually file a judgment. Now I don't suggest anyone wait 2 whole years to pay a debt but this is just an example of how long it can be before anything can happen to you.

If you do not respond to a court date they will receive what is called an automatic judgment and at that point they have the right to garnish wadges and bank accounts. However you ALWAYS ALWAYS ALWAYS, have a right to settle the account even after a lien has been placed on accounts and wadges begin to be garnished. Company's usually settle for 25 cents on the dollar just 6 months after a delinquency has taken place. I always encourage people to negotiate before you take any offer to settle.

Never set up a payment plan on delinquent accounts. If you can't settle in full in one lump sum don't do it. Always have the offer in writing and NEVER give anyone electronic access to your bank account.

Hopefully I have helped shed some light on how bill collectors work. Never let them bully you because most of them have little to no power to do anything at all. So if your afraid and thinking about filing bankruptcy because of credit card debt DON'T, just toss the bills in the trash and call em up when you are able to pay them!

No Debt Ever Again! No Seriously!!

I was talking to my girlfriend (yea i talk way to much sometimes) whom I love dearly about my plans to short sale my home. "You do know there are ramifications to this right?", she asked. "Of course I do, but see I never plan to borrow money again". She responded "never say never".

Now USUALLY I am one to never say never but I promise this is a special circumstance which I intend to adhere to for life. Even if im married and my husband wants to buy a house, I am going to tell him we must save up and pay cash or its no deal.

I know this is a hard concept for normal people to grasp but its also hard for people to grasp the idea of having no consumer debt which I am almost out of that too, so this isn't to far off. See I don't intend to be normal ever again. Debt is not something you just fall into you see typically "unless your dead" you have to sign up for debt. I personally don't ever want to voluntarily sign up for debt again. If I can't pay cash I just wont have it simple as that.

I was thinking especially if I am married and we have two incomes we SHOULD be able to save up for a house wouldn't you think? Its a crazy concept, to buy things you can afford but hey I think I am WEIRD!

No one is going to force me to buy a new car, if my car breaks down I will simply buy another beater just like the one I have now. No one is going to FORCE me to purchase a house with a mortgage especially not after all I have gone though and will continue to go through with this current house until it is sold.

I don't care about a fico score, I don't care If hertz never lets me rent a car from them again, I am swearing off of debt!!

If you come up with a VALID reason for me to be in debt VOLUNTARILY please let me know and I will certainly retract my statement. Until then this is what its gonna be!

All You Need To Know About Short Sales

I fell this is a good topic to cover since I recently have decided to short sale my current home. I have wrestled with the idea for a while now and I have finally decided to go ahead with the program. I purchased my home in August 2007 right when the market was turning. At the time I was under the assumption that I would relocate but it never happened. Two years later I am a landlord by default which is the worst kind to be.

Considering all the changes fell into my lap, I have done well over the 2 years managing the property and picking fairly good candidates as renters. I started thinking what It would be like to be completely debt free and not have to keep this house as a rental for the next 5-7 years until its paid off. I love the house but I do not like being a long distance landlord at all. Nor do I like having to discount the rent and take a loss to cover the mortgage. So I am meeting with a Realtor on Sunday to discuss the matter. I may get lucky and not need a short sale, or it may be funds I could come up with. Point is im ready to get out and start fresh.

Now there are ramifications on doing short sales which is while I am posting this article. While its not as bad as a foreclosure it still does damage to your credit. Lets take a look....

What is a Real Estate Short Sale?

Short sales are when a seller is behind in payments and instead of going through with a foreclosure, the lender accepts a lesser amount for the home. This allows the seller to avoid a completed foreclosure, the bank to cut their losses quickly, and the investor to buy a property for less than retail. Short sale negotiation of a home mortgage is something that can be made easier if you get a short sale negotiator involved. This allows you to continue to invest and not have to go through the hassle of the banks.

Short Sale Negotiation Saves Those Who May Otherwise Foreclose

A short sale in real estate is a way out of filing bankruptcy or foreclosing on a property a homeowner can no longer afford. Enter the process of short sale negotiation, in which a homeowner is able to sell the house at a lower price and pay off a smaller loan balance. This results in huge discounts on mortgages for real estate investors. When a lender forgives some portion of the debt left on a mortgage, you can hack that amount off the total cost of a home. Short sale negotiation of a home is tricky, but if you know the facts it is a whole new possibility that can be explored. It's probably not as hard as you think.

Short sale negotiation of a home mortgage is an alternative to foreclosure or bankruptcy used by those who have reached a point where they can no longer make monthly mortgage payments. Maybe the reason is job loss, loss of income, or increasing bills. The lender is then put into in a place where he can accept less than the total amount due on the mortgage, likely because the local real estate market is less than healthy. A market with falling home prices will be ripe for the short sales of homes.A lender who accepts a short sale is liable to pursue the borrower for the difference. That's where the lawyer comes in; only the lawyer can determine whether that difference can be treated as a claim or a deficiency judgment.

Another key thing to remember in short sale negotiation is that you're going to need some patience. Negotiating with the banks can take four to eight months. There are a few variables a short sale in real estate depends on:- The current real estate market- The financial situation of the individual borrowerLook for a negotiating firm to negotiate your short sale with the bank. You don't have to do it yourself.

There are negotiators who specialize in this so that you're spending your time investing and running your properties. The short sale negotiation process is much easier when experienced negotiators work with the banks for you.Opportunity exists for lenders because of the current economic downturn. People who can't afford their homes don't want to lower their credit scores by filing bankruptcy or having a foreclosure on their credit report. Lenders don't want to have to deal with delinquent borrowers. Investors want to buy a house through a discount, fix it up, and resell it for a profit. This can be done most efficiently through a short sale conducted by an experienced negotiator.

Will a short sale affect my credit score?
Yes, since it shows that you were unable to pay a mortgage according to the agreement you signed. It might take around 3 years to re-establish good credit. It will generally have far less negative effect on your credit than a foreclosure or a bankruptcy, which are last-resort measures if you cannot do a short sale. Check with your tax specialist or financial planner to be sure of the impact on you personally.

If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
Guess what - the mortgage insurance protects the lender, not you, the borrower!

How do I get my lender to approve of my Short Sale? I called and they didn’t return my calls .
This is not unusual. You need to notify your lender of your problem, but the approval process does not begin until after you receive an offer. You need to contact your Realtor ASAP. There are steps that I can help you take right now to speed up the process. I know how to approach the lender and I know what they need to make it happen.

I just missed a payment and I know I will miss more. Is there time to do a short sale so that I can avoid foreclosure? The foreclosure process can take up to a year. Generally speaking, a well-priced short sale by an educated short sale Realtor will sell within about 4-5 months provided the seller and lender cooperate. Complications can and do arise which can delay things, as always.

Will I still have to pay property taxes if I do a short sale?
Property taxes will always have to be paid as part of any accepted short sale. Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short

My home needs repairs and upgrading. Am I expected to take care of these items out-of-pocket before selling?
Short Sales are “As-Is” sales. In exchange for a low price, buyers will be asked to perform their own repairs after the purchase, and may also be expected to cover the cost of termite inspections, surveys, and association documents to name a few, which would otherwise be paid for by the seller. Bottom line: don’t spend your scarce funds, but any do-it-yourself painting, clean up and organization to make your property look better will help in the long run.

Do I have to pay income taxes as a result of the short sale?
This was once true. Very recently the tax law was modified and this may no longer be the case for some people. Always consult your Tax Attorney, CPA, or EA to find out what applies.

Who pays the real estate commissions and other selling expenses?
When a short sale is approved, your mortgage lender will add the real estate commissions along with all the other usual closing costs to the amount they will have to pay to close the sale.

Do I have to miss a payment to do a Short Sale?
No. Late in 2008 most major lenders started accepting short sale offers from sellers who have never missed a payment if they see a future hardship. New legislation is pending that could make things easier- only time will tell.

I want to do a short sale but I also have a 2nd mortgage. Does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. After your first lender is paid off or settled by the sale, then payment terms with the second lender must be handled. Many short sales do involve 1st and 2nd mortgage holders and will naturally take a bit more time and effort.

Why would my bank agree to accepting less than they are owed?
It's not because they want to make nice. Foreclosing on a homeowner is costly, time consuming, and they end up owning a property they don't want - and then having to hire someone to sell it. It is cheaper for them to accept a loss up front in most cases.

As a buyer, are short sales a good way for me to get a below-market price for a home?
Short sales offer good values for buyers who are willing to wait! Many homes sold through a Short Sale sell for around 90% more or less than other similar homes. Make sure your expectations are realistic. It is nearly impossible to close in the usual 30 – 60 days so. Also, remember that your purchase must be approved by the lender, and they will not agree to performing repairs or paying for some of the closing costs that sellers pay in a typical home sale. Make sure you are using an experienced Buyers Agent who understands the short sale process.

Dave Ramsey Killed My Dating Life!

Over the past few years my dating life has been pretty stagnant, I have had a few relationships here and there but nothing that seemed to pan out the way I pictured in my head. The most recent endeavor caused me to think about how "Strict" I will be when it comes to buying into what I believe about money. The guy I was seeing, based everything on credit scores and spoke the words I hate to hear " you need credit to live" Of course you do when you have over 100k in student loans, seems like you "lived" pretty high on the hog there eh? Don't get me wrong I know law school is expensive but I still don't buy the fact that you must go knee deep into debt to get an education.

The guy had a few other money issues that caused red flags to go up all over the place like gambling, and telling me he was going to buy a 200k house in Michigan. Crazy right? Needless to say he got the boot, not because of his money sense but because of his character over all.

Truth told I am hoping when I go to the live event this month that I can meet some people "aka men" that have a bit of money sense. Its hard dating having all these "stipulations" but I do believe that all my requirements do line up with the word of God and I am not to be accepting any thing less than what God has planned for me.

So when it comes down to it Dave didn't kill my dating life, he gave me a few extra tools to make sure I am wise about deciding who I want to spend the rest of my life with. I am willing to wait it out for the right guy, and I truly believe he is coming and he will be all I ask for and more.

Is there any rules you have in place that kills your dating life?

Plan For Retirement Sooner Than Later!

There has been recent suggestions that our governor of Michigan is attempting to force some folks into retirement by cutting benefit plans for retirees if the don't leave now. First of all this is NOT a shock to me personally. There have been talks of this since the day I became a State employee, did it come in the form of pay cuts? heck no it looked more like hefty buyouts. But nobody predicted we would be in the mess that we are in either.

At any rate people are freaking out over no dental and vision. I have been pondering this all day and asking questions and I still don't see the big deal. If your budget breaks down over those two things I think your problem is much bigger, YOU DIDN'T PLAN.

I feel sorry for all those people that don't have much savings after 30 years of working, that could have even been me in 20 years had it not been for getting on a game plan.

So I say all this to say start saving NOW, you don't want to be working at walmart let alone be working because you are forced to after 30 years of service just to pay bills. Even if you aren't on the dave plan aka the baby steps, PLEASE start saving at least 15% of your income in retirement. You will be glad you did later on in life!

First Day on The Schedule Update

So this morning my plan didn't work out to well as far as being on schedule. I went to bed late, talking to mom and trying to get some bible study.

This morning I didn't actually get out of bed until about 6:30, I did eat breakfast and pray so thats good but no working out taking place AT ALL.

Now according to my schedule I should be eating and messing around on the computer. Ms 80's baby suggest I should move my bible study up and turn off the tv and computer for an hour. Hmmmm ok???

I guess I gotta go!! lol

Time Management Challenge GET READY!!

Let me start by saying this is one of the hardest challenges I have ever taken part in. I personally can't stand structure and try to eliminate it as much as possible, but this year is all about change.

My schedule is very tight these days and the more I work the more I lack organization, which at times often cause great frustration. I haven't cooked in weeks, my clothes are scattered all over the floor and it seems like I'm running from one extreme to the next. This go go life style has caused me to be unhealthy and semi depressed because it can be overwhelming. You add trying to get out of debt to all the madness and you have complete and utter chaos!!!

Well let me tell you I'm here to put an end to all the madness (at least for a month). This month I will be making use of every hour of my day (outside of work) and attempt to be productive. This will include making sure my meals are prepared in advance, exercising, and having bible study time. The point in all this is to hopefully make me feel better knowing I can get things done and not waste away. I mean honestly when you are trying to get out of debt the last thing you really want to do is pile on more stress. But this will be more of a destresser (is that a word?) hopefully.

So each day I will post what I did, in efforts to keep me accountable lets pray I can stick to it!!

here is what my day should look like starting today:

5:00am-5:30 - prayer and bible study

5:30am-6:00 - work out

6:00am - 6:30 eat breakfast

6:30am - 7:30- get dressed and off to work

8:00am-4:30 - work

Between 5 and 10 I will be at the salon wednesday through friday

Monday and Tuesday evenings are free (excluding my FPU class 2 hours)

5:00pm - dinner

6:00pm computer time

7:00 bible study

8:00 exercise

9:00 set clothing out for next day and prepare for bed

soon after this I should be sleep. I am trying to get to bed every evening before 10pm. Can't really be productive if you aren't getting enough rest right?

From this challenge I hope to be come physically fit, less stressed, organized, and happy!! Anyone care to join in the challenge let me know and we can work together!

read set go!!!