THE LEGAL PITFALLS OF FINANCIAL STRESS

2011-01-29T23:16:00.001-08:00

THE LEGAL PITFALLS OF FINANCIAL STRESS: Part II

Paralegals and others often offer to help individuals complete and file bankruptcy petitions at a much lower rate than a licensed attorney. The problem is that many of these “bankruptcy preparers” do not fully understand the Bankruptcy Code and make detrimental errors. There are intriquite rules and complex statutes, if your petition is not prepared correctly, your case could be dismissed and if the correct property exemptions are not utilized, you could lose property that you are otherwise entitled to keep. Unlike an attorney, there is no state regulation of paralegals or bankruptcy petition preparers in the State of Nevada, and there is no means of recourse when such errors are made. Additionally, only an attorney can appear with you at the Meeting of Creditors and represent you in Court, which is an intimidating process to endure without counsel. While a bankruptcy preparer may cost less up front, it could cost you a lot more if the work is not done properly. A licensed and qualified attorney will ensure that you keep the most amount of property permitted under the law, and ensure that your petition is properly completed to avoid dismissal.

Late night television and the internet is riddled with advertisements promising to eliminate debt through debt settlement. I have had clients come to my office after paying a debt settlement company thousands of dollars, only to find out that the company had kept the money, had not paid any of their creditors, leaving them with no choice but bankruptcy. Many times, had the client worked directly with their credit card company, they would have paid off their debt without filing for bankruptcy. Again, be careful, anyone, including an attorney who makes a guarantee that they can reduce your debt or modify your loan without filing bankruptcy is not being straightforward. Mortgages and credit cards are based on contract law, even if the terms are not favorable to you, unless a Court invalidates the contract or you have a valid legal claim to pursue in court to avoid the debt, you are liable for those obligations under the terms. Now it is true that many banks and lenders would rather resolve an account than litigate, but there are no guarantees and you should be weary of anyone that promises you otherwise.

The best way to verify the reputation of a company or an attorney is to check with the appropriate regulatory agency (State Bar of Nevada, Mortgage Lending Division, etc. ) or the better business bureau. An even better way to ensure you are hiring the right person for the job, is to get a referral from someone you know that can attest to their reputation. If all else fails, trust your instincts. With the present state of the economy and housing market, there are options available to help you with financial hardship, however there are many unscrupulous individuals looking to take advantage as well.

With regard to a home loan, the options range from loan modification, short sale, deed in lieu, mediation, bankruptcy and foreclosure. Each option presents possible negative consequences, so make sure you understand the legal implications, as well as tax implications of each before committing to a solution. With regard to credit card debt and medical bills, you have the option of debt settlement, payment plans, interest negotiation and bankruptcy. Again, any of the above options will likely have an impact on your credit score and some may expose you to future litigation or tax debt, so it is important that you consult with an attorney before making any decisions, so that you proceed in a manner that is in your total financial best interest. It is also important to know that settling any debt for less than what you owe (short sale, deed in-lieu, foreclosure, credit cards, etc.) could result in tax issues, so you should always consult with a qualified tax professional or CPA prior to making a decision. Most importantly, getting behind on bills is not the end of the world, don’t suffer in silence, just call for help.

The Legal Pitfalls of Financial Stress

2010-09-07T22:43:00.000-07:00

Part 1: If it sounds too good to be true…
Many families are experiencing financial strain in Las Vegas. With so many companies cutting salaries and laying off personnel, almost every family has endured a reduction in income over the past two years. For some, the loss of income has been so devastating that they can no longer make ends meet. Some have stopped making payments on their homes, others have stopped making payments on credit cards and other bills, and some have done nothing but know that they are running out of options.

As a result, unscrupulous individuals seek to exploit people in such desperate circumstances, so it is important that you carefully select anyone to help you with loan modification, foreclosure, bankruptcy or debt settlement. As the saying goes, if it sounds too good to be true, it probably is. The first wave of exploitation came with “Loan Modifications” in late 2007. Former loan officers, bankers, brokers and realtors started loan modification companies, promising to save your home in exchange for $3,000 or $4,000. Many home owners relied on their promises to save their home, only to find themselves foreclosed upon, evicted and out thousands of dollars that they could have used to start building again. For two years, the loan modification companies ran unchecked and unregulated.

In 2009, the Nevada legislature instituted strict guidelines to get the loan modification companies under control. The vast majority of companies were shut down, and while some home owners received modifications, most did not. During the same legislative session, the legislature created the Foreclosure Mediation Program to fight the foreclosure epidemic and give homeowners an opportunity to meet with their lender and negotiate resolution with specific rules and guidelines to structure the process. The Foreclosure Mediation Program has allowed many homeowners to negotiate a modification and stay in their home. However, there are still unscrupulous ploys to dupe home owners out of a significant amount of money to “represent” them during mediation.

It is important to note that only an attorney can give you legal advice, and in the event that the lender does not follow the rules during the mediation, only an attorney can file a petition for judicial review on your behalf and represent you in court. If you have received a notice of default, you only have 30 days to elect mediation so do not delay.

Las Vegas Bankruptcy Attorneys Law Blog

THE LEGAL PITFALLS OF FINANCIAL STRESS

The Legal Pitfalls of Financial Stress