Category Archives: Uncategorized

Spring?

Author: William A. Hamzy, Esq.
Published in The Plymouth Connection

According to the calendar, it’s spring time in Connecticut. However, it certainly doesn’t feel like spring based on the weather pattern we seem to be stuck in. Spring is usually the busiest time of the year when it comes to real estate. Most people prefer to buy and move in to a home in the summer. This is due to many factors but it’s primarily due to the school schedule. As might be expected, parents don’t like to move while their kids are still in school. They’d prefer to have their children start the year in a new school rather than moving them mid-year.

If people are looking to move in the summer then they are signing contracts to buy homes in the spring. That’s because buying a home is not like buying a car. The process is much more involved. When buying real estate, not only do you have to look at many houses in order to find one you like but finding it is only the first step. You have to contact a home inspector to have an inspection done. You have to find a mortgage company and apply for a mortgage. If you own your own home, most people will have to sell it before buying the new one. If you rent, you’ll have to give notice to your landlord. Finally when the time comes to actually close, you’ll have to pack all of your belongings and do a final walk-through inspection of the house you’re buying.

The list I just made is involved enough but obviously there is much more that goes in to each of these steps. However, the entire process starts with the contract. As I’ve written before, make sure you fully understand each and every part of the contract before you sign it. The contract outlines the entire agreement between the Seller and the Buyer. If you’d like a real estate attorney to review the ontract before you sign, feel free to contact us. We’d be happy to help.

The Hamzy Law Firm, LLC
860-589-6525

Fewer Americans Behind on Credit Card Debt, but Average Balance is High

The number of credit card holders who have not paid their bills in the last 90 days has decreased in 2012. For Q1, the total number of delinquent cardholders dropped to 0.73 percent, from 0.78 percent for the last quarter of 2011. In addition, The Wall Street Journal reported that consumers continued to pay throughout May, despite worries from some experts that delinquency would increase in part because of continued high unemployment.

However, while delinquency has decreased, nearly half of cardholders who haven’t been able to pay for the last three months are using their cards out of necessity, such as to pay rent or buy groceries. In addition, balances are still high, with average cardholders carrying just under $5,000 in their balances.

Credit Card Settlements

One of the reasons for the low number of delinquent cardholders is that credit card companies were issuing cards to only those with high credit scores in the wake of the recession. However, from January to March, approximately one in four new cardholders were considered non-prime, higher-risk consumers.

In addition, for those who have carried a balance for years, it can be difficult to even make interest payments on the balance. For consumers who are struggling, credit card companies have been more willing than in previous years to allow a more reasonable payment plan under a credit card settlement agreement.

Credit card debt negotiation can help a cardholder avoid paying too much in interest (or even any at all), stop paying late fees and most importantly, allow the cardholder to regain control of his or her unsecured debt.

If you have credit card debt and are struggling to pay bills, you should contact an experienced debt relief attorney to discuss your options. Credit card companies can take attorney-led negotiations more seriously, and having an experienced negotiator on your side can allow you the maximum benefit.

U.S. Mortgage Delinquency Rate Shows Modest Improvement

Recent statistics suggest a glimmer of hope for the still-struggling U.S. housing market: According to the latest reports, mortgage delinquencies dropped to 5.78 percent nationwide during the first three months of 2012, down from 6.01 percent at the end of 2011. A mortgage is considered delinquent if the homeowner is at least 60 days past due on his or her payments. Despite the recent improvements, however, the U.S. mortgage delinquency rate remains well above historical averages. In 2006, before the U.S. housing market bubble burst, the delinquency rate was approximately 2 percent nationwide. It peaked at 7 percent in 2009.

While the recent decline in mortgage delinquency rates is an encouraging sign for the national economy, the fact remains that near-record numbers of Americans are still struggling to make ends meet. Many distressed homeowners across the country owe more on their mortgages than their homes are worth, and foreclosure rates remain far above normal.

Fortunately, there are several options that may be available to help distressed homeowners prevent foreclosure. Depending on the circumstances, potential alternatives to foreclosure may include conducting a short sale, renegotiating the mortgage, or obtaining a deed in lieu of foreclosure.

Chapter 13 Bankruptcy and Second Mortgages

For some struggling homeowners, Chapter 13 bankruptcy offers another alternative to foreclosure. Also known as reorganization bankruptcy, Chapter 13 bankruptcy allows an individual to keep his or her home while paying off certain debts according to a three- or five-year payment plan approved by a bankruptcy judge. The payment plan focuses primarily on paying off high-priority debts like home mortgages, car loans and back taxes. At the end of the repayment period, any remaining unsecured debts, such as medical bills or credit card balances, will be discharged.

Chapter 13 bankruptcy can be particularly helpful for people with second mortgages, because – unlike a primary mortgage – a second mortgage may be treated as unsecured debt. Therefore, a second mortgage may be completely discharged through Chapter 13 bankruptcy, or may be paid off at the same rate as other unsecured debts.

If you have fallen behind on your mortgage payments and are facing the loss of your home to foreclosure, contact an attorney to discuss your options and plan a course of action that is right for you.

Benefits and Protections that Personal Bankruptcy can Provide

Connecticut residents know paying bills can be difficult in today’s economy. Filing for personal bankruptcy is an option that many people consider. Bankruptcy can eliminate certain debts and offer a fresh financial start.

When is bankruptcy the best option?

Bankruptcy is an option that can help many people who are struggling with debt. However, bankruptcy may not be the best solution for everyone. An individual may want to consider filing for bankruptcy if any of the following things occur:

  • Income decreases due to job loss, layoff or unforeseen illness
  • Assets substantially decrease in value
  • Stress levels escalate due to financial issues
  • Creditor harassment is no longer bearable
  • Creditors are garnishing wages or levying bank accounts

Benefits of a personal bankruptcy

Depending on a person’s circumstances, there may be several benefits to filing for personal bankruptcy. One advantage is an automatic stay of all collection activity. The automatic stay is a court order that goes into effect once a bankruptcy is filed. The automatic stay means that all creditor collection attempts must be stopped immediately.

The automatic stay can benefit people in a number of ways. For example, it means that creditors must stop garnishing wages or levying bank accounts. In certain circumstances it can also give people time to catch up on their mortgage payments and prevent a home foreclosure. Additionally, bankruptcy may be an ideal option for individuals facing debt from a motor vehicle accident because it can prevent suspension or revocation of a driver’s license.

The purpose of an automatic stay is to allow the bankruptcy to progress properly. Creditors who violate an automatic stay are subject to penalties such as fees and contempt of court charges. Utility companies are forbidden from turning off services and are required to turn any already shut off back on.

Another main benefit of filing bankruptcy is that most debts can be completely eliminated. This can give people a fresh start because any wages or property acquired after a bankruptcy is protected from creditors.

Which debts can be eliminated in bankruptcy?

Most types of unsecured debt can be eliminated by filing bankruptcy. However, a bankruptcy will not eliminate most secured debts, or debts for which a person pledged a specific piece of property as collateral if you want to keep that property. If there is nothing the creditor can take back or repossess, the debt is unsecured and can be discharged in bankruptcy. The following are types of debt that can usually be eliminated by filing for personal bankruptcy:

  • credit card debt
  • medical bills
  • personal loans
  • utility bills

The following are examples of debts that typically cannot be eliminated by bankruptcy:

  • student loans
  • income taxes which are less than three years old
  • child support and alimony

Secured debts such as car loans are dischargeable but if you want to keep the vehicle, you have to continue making your payments. Additionally, money owed for violations of the law such as criminal or traffic fines are not dischargeable. Any debts not listed in the bankruptcy petition, or any debts acquired after the bankruptcy filing also do not qualify for discharge.

A bankruptcy filing stays on a credit report for up to ten years. However, it is still possible to obtain credit cards, car loans or even a mortgage after bankruptcy in order to build better credit.

An individual considering filing for personal bankruptcy can benefit from consulting with an experienced bankruptcy attorney. The attorney can provide knowledge and guidance and assist with finding legal solutions for financial and emotional relief.

Bankruptcy is a Solution to those Struggling with Medical Debt

When you think of people with high amounts of medical debt, you may think of the uninsured. Although it is true that those without insurance often struggle to pay their medical bills, even those with comprehensive health coverage often find themselves in the same situation. Copayment, deductibles, prescriptions, out-of-pocket expenses and, not to mention, the ever-growing number of procedures that are not covered can cause an insured’s costs to skyrocket.

Although the passage of the Affordable Care Act will likely reduce the number of uninsured across the nation by half, experts say that it is likely to exacerbate the problem of underinsurance. Underinsurance occurs when people who are insured cannot afford to pay for their healthcare costs, because even after the insurer has paid its portion of the bills, the amount remaining is still too high to be affordable.

Bankruptcy can offer a solution

Unfortunately, medical debt is one of the top reasons why many people file for bankruptcy in the United States. For many, bankruptcy can offer the relief from unrelenting debt that they are seeking. In general, most individuals have two options when filing for bankruptcy protection: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy can offer many advantages for people who have few assets that are not exempt from liquidation, such as a second home or many motor vehicles. In this type of bankruptcy, a trustee is appointed by the court to sell assets that are not exempt from liquidation to pay the claims of creditors, in whole or in part.

As most people in a position to file for bankruptcy do not have many nonexempt assets, most Chapter 7 filers do not see any of their possessions sold during the bankruptcy process. Once the Chapter 7 bankruptcy process has been completed, filers receive a discharge excusing them from repaying most of their debt they owed when they filed for bankruptcy, including credit card and medical debt.

Conversely, Chapter 13 bankruptcy is better for those who either own nonexempt assets and wish to keep them or those who have a regular income and can repay a portion of their debts. Chapter 13 works by consolidating the filer’s debts into a payment plan. The debts are repaid in whole or in part by affordable monthly payments over a three to five-year period. At the end of the repayment period, the filer receives a discharge of most remaining debts that were unpaid by the payment plan.

A bankruptcy attorney is invaluable

The type of bankruptcy or debt-relief option that would be right for you depends heavily on your personal situation. If you are struggling with debt, it is helpful to consult with an experienced bankruptcy attorney to learn which debt-relief option will best protect your income and assets.

Hounded by Creditors? You have Rights under Federal Law

If you have fallen behind on paying your bills, in this economy you’re not alone. Like many in this position, you may start receiving calls from collection agencies regarding your debts. Although you may actually owe the debts, you have certain protections against creditor harassment under federal law.

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects you from abusive and misleading debt collection tactics. This law applies to all personal, household and family debts, such as credit cards, medical bills and other consumer-related bills. However, the act does not apply to debts that are incurred in the course of running a business.

The FDCPA applies whether or not the debtor had filed for bankruptcy. However, if the debtor files bankruptcy, he or she receives even more protection under the automatic stay.

What the FDCPA prohibits

The primary purpose of the FDCPA is to protect consumers against certain debt collection practices such as:

  • Calling debtors at times that are inconvenient (before 8 a.m. or after 9 p.m.) without the debtor’s permission
  • Intending to harass or annoy the debtor by calling them excessively
  • Contacting the debtor knowing that he or she is represented by an attorney
  • Using threats of imprisonment, violence or harm or obscene language when attempting to collect the debt
  • Making false or misleading statements
  • Threatening to attach, seize or sell the debtor’s property when there is no intention or legal basis to do so

Penalties for noncompliance

The FDCPA provides rather steep penalties for debt collectors that violate the law. Under the act, the debtor is entitled to file a lawsuit to recover any damages that he or she suffered as a result of the violations. In addition, the debtor can be awarded up to $1,000 for each violation of the act, even if there is no proof that he or she was damaged by the violations. Finally, the violator can be held liable for the debtor’s attorneys’ fees and court costs incurred because of the lawsuit.

Despite the act’s penalties, many debt collectors believe that the public is ignorant of their legal rights, leading them to think that they can get away with unlawful tactics. If you are being harassed by creditors, contact an experienced bankruptcy attorney to stop the harassing phone calls. In addition to addressing the issue of creditor harassment, an attorney can consider your debt situation and recommend a remedy that would be best for your circumstances.

Common Myths about Bankruptcy

There are two primary chapters of bankruptcy which individuals file; 7 & 13. Most people who file bankruptcy, file a Chapter 7. The goal in the Chapter 7 is to discharge your debts or relieve yourself of the obligation to pay those debts which are allowed to be discharged.

A lot of people, when considering bankruptcy, ask various questions about the process. Unfortunately the people they ask are often friends, family, co-workers, etc…

As a result, the answers they get to the questions which are posed are often wrong. So, I’m going to try to address some of the myths which surround bankruptcy.

  1. You’ll lose all of your property if you file bankruptcy. This is not true. Roughly 98% of the people who file a Chapter 7 bankruptcy can keep all of the property they own.
  2. If I own a house, I can’t file a Chapter 7. Again, not true. Most people who own a house have a mortgage on that property. Unfortunately, in this economy real estate has lost a significant amount of value so that there is little to no equity in most properties. Because of that, the vast majority of people who own a home can still file a Chapter 7 and keep their house if they choose. They’ll just have to continue making their mortgage payments.
  3. If I file bankruptcy, I’ll never be able to get credit again. This is also false. Different creditors have different policies with regard to how they lend money. The only thing which is certain is that the fact you filed bankruptcy will be on your credit report for 7 – 10 years. How creditors treat that information varies from lender to lender but as a general rule, most people can get another credit card six months from the date of their discharge. This is also the same for people looking to get a car loan.

Our office has even represented clients in the purchase of a home within 3 years of representing them in a bankruptcy.

Not all of these scenarios will apply to everyone but the point is that if you’re thinking about filing bankruptcy, contact an experienced attorney who will review your situation and provide you with accurate answers. We offer free initial consultations and would be happy to help you during a difficult time.