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Bankruptcy: Which Is Best For Your Situation?

Apr 11

Posted by admin in Bankruptcy, Credit

When considering the very difficult option of bankruptcy, one of the first decisions to make is whether to file for Chapter 7 or Chapter 13. Although the rules differ from state to state, the basic differences between the two are the same everywhere, as filing always takes place in Federal Bankruptcy Court.

A little Internet research will give you the basic rules in your state, but in general, there are two major categories of bankruptcy: Chapter 7 and Chapter 13. The former is the more traditional type, usually referred to as “liquid” or “straight” bankruptcy. Filing for this ensures that all debts, except child support, student loans, alimony and taxes are forgiven.

One of the most common reasons for selecting this option is losing long-term employment. In the current economy, someone who has recently lost a job often struggles to obtain a comparable job and turns to credit cards and savings to pay bills – which leaves someone with little to no options. Other instances such as death of the family bread winner, divorce and high medical bills are also common reasons for someone to consider or follow through with Chapter 7. Needless to say, although it’s possible for a layman to deal successfully with the complicated paperwork and legalities involved in the process, consulting with a bankruptcy attorney is highly advisable before filing, if only to ensure not losing more than is absolutely necessary.

Chapter 7 involves the debtor selling their nonexempt assets and utilizing the proceeds from the sales to repay debts. It is important to note that in order to qualify for this option, you must calculate your “current monthly income,” which is actually the applicant’s average income over the last six months. If this number is higher than the median income for a family of your size in your state, you will not be eligible to file.

A Chapter 13 bankruptcy, on the other hand, does not require that you relinquish anything. Instead, you will be expected to repay your debts through use of a structured plan which must be approved at a bankruptcy court hearing, attended by your creditors. This option is advised if you’ve simply fallen behind and your debt has overwhelmed your available funds. This kind of bankruptcy is basically a promise to pay your creditors according to a schedule agreed upon at the hearing.

If you are employed and can depend on a regular income, Chapter 13 is probably the best way to go. In most states, if things take a turn for the worst down the road, you can always resort to Chapter 7 if you have been unable to meet the repayment schedule within five years after filing.

Again, keep in mind that your state may have more or less restrictive laws concerning the details of either type of filing, so although it’s possible to wend your own way through the maze of legalities, you are always much better served by consulting with an attorney rather than trying to do it yourself.

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Lennar Corporation: Buy Or Sell

Apr 10

Posted by admin in Stocks Mutual Funds

As many investors look into equity searches to diversify their portfolio, housing always comes up as an enigma especially with the so called bubble it has been put in. Coming off record sales and inventory numbers from a few years back, the housing market has struggled the past few months on increasing interest rates and a slowdown of the economy. As I type this, you may think I am foolish for even suggesting looking into housing venture as an equity investment, but on the contrary as an investor you should know to do the reversal of what everyone expects in this situation.

Looking at a specific stock in Lennar Corporation (LEN) as just an example can define why now is a good time to invest in the housing market. Over the previous five years, after incredible gains of near 300% from 2002 to 2005, Lennar has appeared to depreciate in 2006 posting capital losses for investors of nearly 33%. Such a fall can be attributed to the increasing interest rates which make consumers wary to buy new houses. When prices are inflated and mortgages are at all time highs, there is going to be a cornucopia of unsold houses in the market which does not bode well for corporations such as Lennar. However, now with interest rates looking to be hiked for the last time and possibly even cut in the near future, the housing market may see the thrills shown during the glory days of a few years back. While everyone supposes that the economy is going through a recession, I expect a soft landing situation which does not affect the economy too negatively. With interest rates having a strong probability to decrease in the following months, buying shares of a housing company like Lennar can be strongly advocated at such a low price.

While most any large capitalization equities will be adequate for potential investors, I chose Lennar for both its technical and fundamental aspects. Always having excellent margins in terms of growth in revenue and profit from year to year, I expect such earnings to continue to grow even higher. While the next few quarters may not be suitable to the envisions potential investors have, such news is already taken account of in this rational expectation market as the only indicators which should have any affect on the stock would be positive corporate news or a decrease of interest rates. With the probability of such statements higher than the negative sentiments turned into reality, Lennar should have now hit its low and continue its rise.

Already grown nearly 8000% in its near 20 year career, housing will continue to be a tremendous factors in the coming decades and should prove to be no problem in terms of future competition or structurally ousted fundamentals. Supporting positive surprises each quarterly update, investing in Lennar, while of course risky during this stage of the economy, can become a tremendous asset this time next year. Having already felt the effects of the ?housing bubble? sentiment, I can only see future growth in terms of shares for the company and capital gains for investors.

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Building Assets The Right Way

Mar 14

Posted by admin in Wealth Building

Anyone with a desire to be wealthy, rich, or comfortable needs to follow a few steps. The first step is to create a plan of attack. An attack on poverty, on risk and on conventional thinking. Then they actually need to follow through with their plan. The plans vary person to person. For instance, older people can’t take the same risks as young people. They don’t have the time to spare. Nor would it be easy for them to replace lost money. But anyone can choose an investment plan that will work for their situation.

To create wealth you clearly need assets. An asset is not only something with value, but something that will put money in your pocket on a regular or planned basis. The assets you acquire can be purchased, like a dividend bearing stock or an interest bearing bond. They can be created, like residual income producing assets such as a product, song, book or network marketing system or even an insurance agents list of clients. By creating an asset instead of purchasing an asset, you will be able to build wealth in the fastest possible way because there is no capital investment. The capital you save can be used to create more assets. That is how a person gets rich. By using assets to buy or create more assets. You can earn an income for years to come from the same asset. The more assets you can build or buy, the wealthier you become as long as you reinvest your income into more assets.

Most assets you create become the fundamental elements of a business. The finest businesses to build into assets are the ones where you don’t have to work every day. If you take the day off, your asset is still producing an income for you. Real Estate offers this characteristic in many different ways, through residential properties, industrial properties and commercial properties to name a few. Other vehicles exist as well, such as insurance products, books, videos, audio CD’s, DVD’s and electronic files. Network marketing systems can create millionaires with their downlines. Podcasts and audio casts and any website can be an asset that can throw off income straight into your pockets.

Assets such as these also have another advantage. They create income that is taxed at a lower rate than any paycheck. The income earned on a paycheck is taxed at the highest rates. Income earned through portfolio or passive income is taxed at the lowest rates. There are no social taxes removed either. Social Security or Medicare is not taken from either passive or portfolio income. Expenses are deducted first as well, lowering your overall tax basis.

If you believe that you are incapable of creating an asset of your own, then you will be incapable. If you believe you can build as many assets as you want and actually get to work on building and creating assets, then you will become rich as long as you never quit on yourself. This is not a get rich quick scheme. It takes some time, but after any asset is in your portfolio it will begin to earn money for you. When reinvested into more assets your income will grow. When your assets produce more income than your expenses, congratulations, you are wealthy.

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Are You In Search Of Bridging Home Loan?

Dec 14

Posted by admin in Loans

There are just so many home loan products out there at the moment. This a good thing because it gives you the chance to find one that completely suits your unique financial situation. The fact it is a good thing does not prevent it being very confusing at times. You may be looking to debt consolidate or you may need a home equity loan. It could even be that you are after a first home buyer loan. Whatever the situation you have got a lot of choices in front of you and it is vital that you understand each choice completely.

One of the unique situations you may find yourself in occurs when you are selling one property and buying another. In this situation we all try to order things as best we can but despite our best efforts things sometimes go wrong. It is then that you may need bridging finance. It is to fill in that tricky time when settlement on the second property is pending. What principally happens is that the lender agrees to temporarily fund both your loans, one on the property you are selling and one on the one you are buying. This allows you unbelievable flexibility. These loans usually last somewhere between a couple of weeks up to twelve months. Apparently to take out this kind of loan you must show you can afford the repayments on your existing mortgage as well as the interest costs on the new loan. If this is possible for you this may be the home loan product for you.

A subsequent option that you may want to consider when it comes time to refinance your home loan is the split rate home loan. This is the mortgage equivalent of sitting on the fence and now and again that is just the right place to be. If, when it comes time to re mortgage you find yourself in uncertain inexpensive time then this may be just the option for you. The bottom line is that it allows you to have both a fixed term mortgage and a variable one by splitting the loan into two separate portions. This could give you a lot of peace of mind.

The last option you might want to consider is the home equity loan, this is also known as a revolving line of credit or a line of credit home loan. This is the home loan that allows you the most amazing flexibility with your finances. It is essentially a credit facility secured against the equity in your home. It allows you to withdraw funds up to that limit at any time you like. This can be very useful if you have ongoing renovations on the house or you are self employed.
If all of this sounds very interesting but you still don’t feel you have a solid enough understanding to move forward on your home loan then you need to call in the experts. The people at DirectMoney Home loans are there to help you make a decision.

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Maintenance On A Rental Property

Nov 12

Posted by admin in Real Estate

Maintenance on a rental property can be a confusing issue. Renters may mistakenly assume all maintenance is the responsibility of the leasing agent and maintenance staff but this is usually not true. In many cases the leasing agent and maintenance staff are responsible for maintaining the common areas and performing major repairs on the apartments but the renters do typically have some responsibilities. These responsibilities are often defined in the rental agreement and the renter should familiarize himself with this document to verify his rights if a dispute arises.

Renter Responsibilities
Typically renters have the responsibility of maintaining their apartment and the surrounding area. This may include the interior of the apartment as well as deck or patio space. However, maintenance of these areas applies to generally cleanliness only and not issues such as painting or repairs to the exterior or the interior of the apartment structure or the appliances within the apartment.

Additionally, renters are responsible for small repairs in their home. This may include plunging a clogged toilet or changing a light bulb. However, if there are any duties a renter feels uncomfortable performing such as changing a light bulb in a high location, the renter should contact the maintenance staff for assistance.

Renters also have a responsibility to show common courtesy to other renters by not intentionally damaging or otherwise marring public areas. This includes vandalism, littering and even failure to pick up after dogs. Renters who fail to follow these rules of common courtesy may be subject to fines or other penalties according to the rental agreement.

Leasing Agent Responsibilities
The leasing agent and maintenance staff are generally held responsible for major items such as repairs to the exterior of the building, fixing appliances which are malfunctioning and dealing with plumbing issues such as leaky pipes. Additionally, the maintenance staff is responsible for intervening if the renter is having trouble with public utilities. Problem such as no hot water or heat to the apartment should be addressed by the maintenance staff in conjunction with the public utilities entity.

The leasing agent and maintenance staff is also responsible for maintaining the common areas. This may include keeping grassy areas manicured and other common areas looking clean and attractive.

When the Leasing Agent is Not Taking Responsibility
As previously discussed, the leasing agent has certain responsibilities to perform tasks and address concerns and complaints by the renters. However, when the leasing agent is not fulfilling these responsibilities it could create a harmful living environment for the renter. For example hot water is required to adequately clean dishes. This is why there should always be hot water to the apartment. Additionally, in severely cold weather the inability to heat the apartment due to faulty utilities or windows which are not properly sealed can create a hazardous condition for the renter.

Both of the examples mentioned above are situations in which the renter may put in a hazardous condition by the leasing agent’s negligence. In these situations the renter should contact the Department of Housing to determine the proper cause of action to take in this situation.

In some cases the renter may be informed the alleged transgression by the leasing agent is not actually his responsibility. However, in other situations the renter may be informed that the actions of the leasing agent are a serious violation of the rental agreement. In either case, the representative can provide information on how to proceed to achieve the desired results.

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Weighing The Pros And Cons Of Arm Mortgages

Nov 10

Posted by admin in Mortgage Refinance, Real Estate

When you decide to purchase a house, you will be faced with the important decision of securing a mortgage. One of the options you will be given at your financial institution is an adjustable rate mortgage, commonly known as ARM mortgages.

An ARM mortgage is just as its name implies-a term mortgage with a changing interest rate at intervals of time throughout the course of the loan. There are several advantages and disadvantages to ARM mortgages, and it is up to you whether the risk involved with an adjustable rate mortgage is worth it, or not.

In some cases, such as when interest rates are at an extremely high point, an ARM mortgage is the best solution for your mortgage needs. If the interest rate is at an extremely low point, then an ARM mortgage is not the best decision to make and you would go for a fixed rate mortgage. However, if the interest rate is floating somewhere between low and high, the decision becomes much more difficult. The risk is if the interest rate will end up higher in a few years or lower, and how it will impact the payments you are making.

Largely, your own financial situation may determine the suitability of an ARM mortgage. The biggest risk is landing a high interest rate in a few years that you will be stuck with for one or two years until the rate is reviewed again. However, if rates fall to a low when your interest rate is reviewed, you could save enough money on monthly payments to allot for a raise in later years.

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