Chapter 13 Bankruptcy Definition
January 26, 2012 | 
Author Chapter 13 bankruptcy is a method employed by consumers who have debts and are not in a position to pay them back. It is a way for them to restore their financial status and get back to a zero balance.
Bankruptcy is a legal process whereby a creditor files for it in a court of law, expressing his inability to pay his debts. Chapter 13 bankruptcy is usually called the reorganization bankruptcy. It is a debt that is filed by consumers who wish to pay their debts within a period of three to five years. It is a strategy that helps individuals to keep some of their possessions such as their homes and at the same time have a means of financially meeting their usual living expenses.
A consumer presents a bankruptcy petition before a court, listing his schedule of assets and liabilities. After this, the person filing for bankruptcy presents a repayment plan, which is meticulously reviewed by the creditors to check whether it meets their needs. After taking stock of objections and making amendments, both the parties follow this reorganization plan.
However, there are other additional confirmation tests that remain before the reorganization of bankruptcy. A part of this is a test to compare amounts that the creditors would receive if they were to follow Chapter 7 bankruptcy. This test is meant to confirm that creditors should receive the same amount from both Chapter 7 and Chapter 13 bankruptcy. Another test requires the applicant to pay all their disposable income to the repayment plan as well.
Chapter 13 helps those people who are interested in keeping an important possession, such as one?s home. An example is a person who has missed many house payments and is scared of receiving a foreclosure. This individual can halt the same by filing for Chapter 13 bankruptcy. This is usually referred to as ?automatic stay? and allows time for a consumer to catch up on missed payments.
Chapter 13 bankruptcy is thus quite helpful. However, one important aspect one needs to keep in mind before filing is that a consumer?s credit record suffers a 10-year black listing where it becomes extremely difficult to secure a loan when one is needed.
Removing Second Mortgages Though Lien Stripping
In the present economic times many individuals are living with financial decisions causing them to hold assets, such as houses, automobiles and boats, whose values have plummeted. Individuals are living in properties whose values have dropped far below the mortgages or driving cars, which are valued at a third of the loans. Those individuals with financial difficulties are looking for assistance through the bankruptcy courts in an attempt to get out from underneath all of the debts and liens acquired, which now vastly exceed their current assets.
There are two types of liens, which can be attached to an individual’s property or assets. The first is a voluntary lien, which is basically a situation where you have agreed to use the asset as collateral for a debt, i.e. mortgages and auto loans. A non-voluntary lien is one that a creditor imposes on you and that gives them the right to force you to sell the asset so that they can be paid, for example: judgments against you or tax liens. These liens are either secured or unsecured as to the asset they are attached to.
The most common issue for an individual nowadays is the situation where a homeowner who has a first and second mortgage on a primary residence is facing bankruptcy and wondering if they have the ability to save the family home. As real estate markets fall and the fair market values of the homes fall, homeowners are left with mortgages that far exceed the current fair market value of their homes. There is a process which could be of help to many in this situation and it is called “lien stripping”.
“Lien stripping” refers to the process of reducing a secured claim to the value of the underlying collateral. It uses the combined effect of 11 U.S.C.A. § 506(a) and 11 U.S.C.A. § 506(d) to bifurcate the lien into secured and unsecured. The secured lien is allowed in the amount up to the fair market value of the property at the time of the stripping. The balance of the lien, which exceeds the fair market value of the property, is now deemed unsecured.
Liens can be stripped off of the debtor’s assets in Chapter 11 or Chapter 13 when there is not enough equity in the assets. Section 506(a) and 506(d) of the Bankruptcy Code acknowledges that a lien is only a secured claim to the extent there is value in the asset to which it attaches. To the extent that the claim exceeds the value of the collateral, that portion of the lien is now unsecured. The most common application of lien stripping is the reduction of car loan liens to the present value of the vehicle however it is currently used more often with home mortgages in bankruptcy situations. Lien stripping with car loans has been limited to vehicles purchased over 910 days.
The Bankruptcy Code does permit a bankruptcy plan to “modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence”. Section 1322 (b)(2). This section provides protection to the holder of a claim secured only by a lien on the debtor’s principal residence by prohibiting any modification of the terms, however the issue arose as to if this section precluded “lien stripping” of undersecured residential mortgages in the face of Bankruptcy Code section 506 which appears to permit bifurcation of undersecured mortgages and voiding of unsecured portions of the mortgage lien. At least two bankruptcy court judges sitting in Massachusetts have permitted such bifurcations.
In any event, there is an exception as to the lien on a principal residence lien and that is if there is a second or third lien on the same property. In this instance those liens, lien stripping is available to render them totally unsecured if the first mortgage balance equals or exceeds the value of the personal residence. The exception is only if there are two distinct mortgages on the property, not a refinancing situation. It should also be noted that the limitation of lien stripping of first mortgages only apply to personal residences, it will be allowed for a mortgage on a building used for business or renting.
As always, all situations relative to a strategy for bankruptcy and lien stripping should be discussed in detail with a bankruptcy attorney to understand all your avenues open to you.
Posted in Mortgage Lender Articles | 
Tags: Mortgages, Removing, Second, Stripping, Though | 
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5 Year Fixed Rate Mortgage Rates
5 year fixed rate mortgage is a mortgage loan where the interest rate on the note remains the same through the term of the loan, as different to loans where the interest rate may change. Other forms of mortgage loans include interest only mortgage, graduated payment mortgage, changeable rate including changeable rate mortgages and tracker mortgages, negative paying off mortgage, and balloon payment mortgage.
Remember that each of the loan categories above except for a direct changeable rate mortgage can have a period of the loan for which a fixed rate may apply.
A Balloon Payment mortgage, for example, can have a fixed rate for the term of the loan followed by the ending balloon payment. Terminology may differ from country to country: loans for which the rate is fixed for less than the life of the loan may be called hybrid changeable rate mortgages.
This payment amount is independent of the additional costs on a home some periods handled in escrow, such as property taxes and property insurance. Therefore, payments made by the lender may change more than period with the adjusting escrow amount, but the payments handling the principal and interest on the loan will remain the same. There are different categories of commercial mortgage is a loan made using real estate as guarantee to secure repayment. Such as 5 year fixed rate mortgage.
A commercial mortgage is related to a residential mortgage, except the guarantee is a commercial building or other business real estate, not residential property. In addition, commercial mortgages are normally taken on by businesses instead of personal lenders.
The lender may be a partnership, incorporated business, or limited company, so assessment of the creditworthiness of the business can be more complicated than is the case with residential mortgages. In 5 year fixed rate mortgage no recourse, that is, that in the event of default in repayment, the borrower can only seize the guarantee, but has no further claim against the lender for any remaining shortage.
The common reason for this is twofold many laws extensively avoid the borrower from going after the lender for any shortage, and mortgages structured for sale as bonds give a higher priority to always receiving some sort of income and therefore require a sentence which permits the lender to take the property instantly, regardless of bankruptcy proceedings that the lender might be going through.
The 5 year fixed rate Mortgage in the in the globe, require the lender to simply make a monthly payment small sufficient to pay off the loan more than a 10 year period, need a balloon payment a total sum after a lesser period.
The lender most likely wills effort at that period to refinance the loan or sell the property. Thus there are two elements usually to the term of a commercial mortgage loan, the length of period allowed until balloon payment known merely as the term, and the paying off.
The length of the loan can vary from a matter of days to 10 years. If a loan had a 10 year paying off schedule, but a 5 year term it would commonly be referred to as a 5 year balloon with a 5 year payment schedule.
Some Facts About Payday Loan Debt Consolidation
In case you find yourself unable to repay a payday cash advance on time, payday loan debt consolidation is an option to help you out. Many of you need to take cash advances from loan companies for various reasons. You may have some urgent financial payments to make. The payday loan is a short term cash advance which you can repay when you receive your next paycheck. If you are unable to repay the loan by the due date, you are able to extend the advance for another month. The problem with this is that the amount payable by you may accumulate to a very large sum. This makes it more difficult for you to repay the cash advance.
How Does Consolidation of Debt Help?
There is a way to help you out in such a situation. You can approach a debt management company to provide you with a payday loan debt service. Once you contact the debit consolidation company, they will communicate with the cash advance company on your behalf. Their job is to get the loan company to agree to a consolidated repayment amount which is advantageous to you. This amount will be lower than the amount you had to pay earlier. The consolidation loan amount will be calculated with a lower interest rate and will give you a lower monthly payment amount.
When To Contact A Debt Management Company
You should always keep in mind that a loan till pay day is a short term loan. It has to be repaid on your next payday which is usually after a month. If for any reason you cannot repay the amount on the due date, the cash advance can be extended with additional fees. This could lead to the payable amount to become very high. You should contact a debit management company as soon as you extend your advance. By doing so, you can prevent the debit amount from becoming too high and more difficult for you to pay. The sooner you use this service, the easier it will be for you to repay the cash advance.
When you take a debt reduction service, you do not need to communicate with the lending company any further. The company will contact them on your behalf. If the creditors want to get in touch with you, they will have to do so through the debt reduction company.
If you have taken multiple payday cash advances and cannot repay them on time, the payday loan debt consolidation service can help reduce the repayable amount. This would make it easier for you to repay the loan.
Cross Collateralization
Collateral, also called security, consists of assets offered by a borrower in order to obtain a loan. In the event of failure to repay the debt, the collateral is confiscated in lieu of the outstanding amount. Any item of economic value, especially which could be liquidated or converted to cash can be pledged as collateral.
When collateral for one loan serves as collateral for other loans as well, it is called cross collaterization. The most common example being the case when a person wants to buy a new residence when he already owns one house. The property being cross-collateralized needs to be appraised and indemnified.
How one property can serve as collateral to different loans? The reason is “Loan to Value,” or LTV. This is the relative amount of the sum loaned against a property with respect to its value. As for example, a house that is at present priced at $600,000 with $300,000 debt has an LTV of 50%. That is, the owner has borrowed an amount which is 50% of the cost of the property. Some or the entire remaining price can be utilized as collateral for a different mortgage or credit. Cross-collateralization can be used to counterbalance risk factors involved in a financial transaction, that is, to allow the lender to circumvent the possibility of incurring a loss in case of default.
It is mandatory that the location of the property being cross-collateralized be in the same state as the new property being acquired. Cross-collaterization is offered on portfolio loans like the Option ARMs and the Flex 3 and Flex 5 loans, in which initially the rate of interest and the amount to be paid remain fixed for 3 years and 5 years respectively.
For more information, please refer to the following website.
High Risk Home Mortgage Lenders Online
Online high risk home mortgage lenders specialize in offering loans to people with adverse credit due to bankruptcy or other financial problems. By analyzing online quotes, you can find a reasonable mortgage loan even with poor credit. Loan approval is then just a matter of filling out your online application and reviewing some final paperwork.
High Risk Home Mortgage Lenders
High risk home mortgage lenders, also called sub prime lenders, provide a service for people with poor credit. Through slightly higher mortgage rates and fees, lenders are able to offer mortgage loans to high risk lenders. There are predatory lenders who charge extremely high rates and fees, but you can avoid them with comparison shopping.
Finding Lenders
The internet makes finding high risk home mortgage lenders easy. Through mortgage comparison websites, you can request quotes from several lenders by answering a few basic questions. You commit to no obligations when you requests quotes online.
These generic quotes will help you narrow down your list of possible mortgage lenders. Once you have picked a few possible mortgage lenders, you will need to request a detailed quote from them to make real comparisons.
Comparing Financing
Many factors besides your credit score are used to determine a mortgage rate. You will need to fill out an application with detailed information in order to receive a real mortgage quote. These applications can be filled out online for speedy processing.
Once you receive your mortgage quote, compare both rates and fees. Fees often hide the true cost of a loan. The easiest way to compare mortgage loan costs is to add up fees and the interest you will pay over the course of the loan.
Online Application
After you pick the best mortgage financing offer, you can quickly finish the application process online. After your application has been reviewed by your mortgage lender, you will receive final paperwork in the mail for your approval.
Think About The Future
With a high risk mortgage loan, consider refinancing after establishing good credit history for three years. Making regular payments, building cash reserves, and lowering your debt will allow you to qualify for lower interest rates in the future.
To view our list of recommended high risk mortgage lenders online. Visit this page:
Recommended High Risk Mortgage
Lenders Online.
Financial Help For Single Mothers
Financial aid for single mothers is available either through federal welfare services or through private organizations.
Who is qualified?
Not all single mothers can take advantage of special financial help packages. Only those whose earnings fall below a certain level are considered low-income individuals and qualify for welfare benefits. To find out if you qualify for and may avail yourself of federal welfare services, you must complete the application form available at your local welfare office.
Each program has its own income limits. Whether or not your income falls within the limit depends on the type of income you have, your family’s expenses, and any other special circumstances your family may have. Each program also has resource limits. Things that can be converted to cash (bank accounts, stocks, and other properties) are considered to be resources. Only certain non-U.S. citizens may receive welfare benefits. Check with your local office for details.
What happens if you are not qualified?
If you do not qualify for welfare benefits, or if your needs are not covered by any specific welfare program, you may take advantage of grants offered by the U.S. government to single mothers. In exchange for the grant, you must perform some service or task required by the grant terms. There are 900 grant programs offered by 26 federal grant-making agencies. Some grant categories are agriculture, art, and education. You may visit http://www.grants.gov and http://www.neh.gov for details on grant application.
Other sources
Many schools offer scholarships specifically to single mothers. In order to find out about these, you may visit the financial aid office of the school you are currently attending or wish to attend.
There are also some private organizations that give grants and financial assistance to single mothers. Singlemom.com has a “financial gifting program.” It awards cash grants to deserving single mothers every month. Many other similar organizations have grant and financial aid information on the Internet.
Free Living Will and Free Living Will Forms Online
Looking for a free living will? If you are preparing your finances and other personal matters for your retirement and want to make sure that your family members are taken care of in the event of your death, you will need one. There are several useful sites online where you can download a free living will form to use for your needs. You can chose generic forms based on your state, as each state has different laws regarding living wills.
Many of the free living will sites online will recommend that you use their free will forms as something to cover general purposes, but not to act as a substitute for seeking the advise of an actual estate attorney or lawyer. If you have a lot of complicated estate needs, you might consider hiring an estate planner or lawyer to write up your will.
Another thing to consider as you write your free living will is to make sure that you assign a power of attorney and executor of your will. If you have an accident and are incapable of making health decisions (advance directives), you will need a health care advisor to carry out your requests in the event that you are in a coma or on life support machines. Something is better than nothing, so if you are unable to afford an attorney at this time, at least get started with your temporary free forms so that you have something legal in place for your future.
Did you know that if you cannot afford a lawyer to draw up certain estate papers, that you can find a free living will form online that you can print right at home? If you have a basic need for a living trust and you want to print a free living will form to have on hand in case of your illness or death, it is a good idea when you are preparing for your retirement. Using an online free living trust form should not replace seeking professional advice from a lawyer, but if you can’t afford a lawyer, it is the next best thing.
Once you print your free living will form and fill in your crucial information, you might be wise to have it signed and stamped by a notary public in your area. This notary signature will act as proof of your document’s existence and that the signatures on it are valid. You can also find a lot of other free estate planning forms online that you can use when planning your retirement.
In addition to a free living will form, look for durable power of attorney, advance directives (health care advisories) and any other special forms regarding the executor of your estate. Gather all of your important documents like car pink slips, mortgage loan documents, and anything else that can be useful in the event of your death or incapacity, and make sure that a family member or child, or a lawyer, knows of their location and existence. Planning ahead now will save your children from a headache later.
For more information on retirement planning and senior care visit us at:
http://www.best-senior-care-online.com
Advantages of Internet Banking
Banking around the clock is no longer a remote possibility. But the banks don’t have to keep their branches open 24 hours a day to provide this service. This is one of the biggest advantages of Internet banking.
One doesn’t have to go to the bank’s branch to request a financial statement. You can download it from your online bank account, which shows you up-to-the-minute updated figures.
Another advantage of Internet banking is that it is cost-effective. Thousands of customers can be dealt with at once. There is no need to have too many clerks and cashiers. The administrative work gets reduced drastically with Internet banking. Expenditures on paper slips, forms and even bank stationery have gone down, which helps raise the profit margin of the bank by a surprisingly large number.
As far as customers are concerned, their account information is available round the clock, regardless of their location. They can reschedule their future payments from their bank account while sitting thousands of miles away. They can electronically transfer money from their bank accounts or receive money in their bank accounts within seconds.
You can apply for a loan without visiting the local bank branch and get one easily. You can buy or sell stocks and other securities by using your bank accounts. Even new accounts can be opened; old accounts can be closed without doing tedious paperwork. Especially with the increasing acceptability of digital signatures around the world, Internet banking has made life much easier and banking much faster and more pleasant, for customers as well as bankers.
What is the Highest Credit Score You Can Have?
Having a good credit score is a very important thing to have. It will help you get better interest rates on important things like mortgages, auto loans, and many other things down the road. You are also looked at as more responsible to banks, simply because it takes discipline to have a good score in the first place.
Your credit score can range quite a bit. Although, the highest score you can have is an 800+. We’re not too sure on the exact number because certain people have certain limits usually around 800 or 850. Although, like I said, credit scores can range quite a bit, and each score means something different.
800+: This is the best score you can have! Feel proud if you have this score because it means you are very responsible and have a lot of discipline!
750-799: This is also a great range to be in! You’re almost to the top so keep up whatever you’re doing.
700-749: When you’re between these numbers it means you have a good score. It’s not the absolute best, but it’s still pretty good.
650-699: The closer you are to 700, the better. This score is still good but I wouldn’t want to drop below 650.
600-649: This score is now considered “ok”. It’s not good and it’s not bad. It could be better and it could be worse.
550-599: Now you’re starting to drop into the “bad” scores. You don’t want to go any farther down, but instead about 100 points up!
500-549: With this score range you most likely won’t get the best interest rates or even be considered for a loan.
499 and below: You need a lot of help with this score! Work on getting it up by paying your bills on time, paying off your debt and maybe even consider getting a secured credit card at this point!
Credit scores can range quite a bit! Do your best to stay above 650 and work on getting your score to 800+!