I am inspired to write this article today after a meeting I had this past week. I met with an individual to complete their estate planning documents (will, living will, powers of attorney for assets and health care) and as we were finishing up and thanking them for coming in they said the most wonderful thing- “This was my birthday present!”
When I asked what they meant, they explained that the costs associated with getting the documents prepared had been the birthday present of a close friend. I was struck by what an unusual gift this was. Certainly paying for the costs is a gift in and of itself, but the peace of mind that the individual can now have having their estate done is a gift as well.
We all worry about buying gifts- whether they are the right size, right color, or right for the persons’ tastes. But here is a gift that fits, and will continue to provide the best gift of all – peace of mind.
In estate planning- wills, trusts, living wills, etc. – we as attorneys often find that it is the most difficult to get our clients to start the discussion about estate planning. Once we have had the opportunity to sit down to discuss the process and execute the documents it becomes cathartic; that is, there is a sense of relief that their estate is in order. Most individuals I find want to have wills in place to protect their estate and to help their families through the probate process. They want to have their affairs in order.
Now, I am going to propose a new tradition to those that have prepared their estate- an annual review of your estate documents. I am going to suggest that it be April 15th. No, I am not trying to associate your estate planning, which should be a painless endeavour with the pains of tax preparation! What I am suggesting is that since you have your file cabinet open, and are filing your taxes away for safekeeping, you should pull out your will to see that it still protects your estate.
Many changes may have happened during the past year that you may cause you to need to or want to change your will – sale of your residence or vacation home, sale of specific items that were bequeathed to an individual, birth, adoption, or death of a family member, and the divorce of your spouse. All of these thing may have an effect on your estate and your intentions when you originally wrote the estate plan. You may want to read through your documents to make sure that the specific bequests still make sense. Has a family member had a life-changing event that no longer makes the specific bequest the best idea either from a emotional intent or tax consequence point of view?
Often, minor changes to a will can be completed through the use of a codicil. If you find that a change needs to be made, please visit with your attorney as to the best course of action. If multiple changes should be made, perhaps a new will is in order. Even though a new will may be advised, the process will be much simpler than the first time because you and your attorney have had the preliminary discussions about estate planning. Now, you are just correcting your estate.
People create wills for a variety of reasons. One of the biggest is to protect those that they care for. An annual review of those documents is the best way to make sure that your intentions are fulfilled in the most complete way. Mark your calendars now!
A lot of my bankruptcy clients do not have much money. Generally, that is a given, and it is the reason they are needing to file for bankruptcy. However, many of them do not know how they can afford a bankruptcy, and so instead of seeing a lawyer and trying to get some relief, they continue to live in a perpetual state of fear from their bill collectors. If you know that you are going to be filing for bankruptcy, it is advisable to stop paying credit cards and other similar bills. It is important to stay current on your house, car, insurance, and utility bills, but the other ones you can let go. Why? Isn’t this counter-intuitive? The answer has a couple of dimensions: (1) you need the money to live on (i.e. eat, keep a roof over your head, get to work); (2) the payments to creditors are usually so small that they only pay a small percentage of the interest; (3) a trustee can pull back payments made to creditors within 90 days of filing for bankruptcy as preferential payments, so the creditor could end up without a payment anyway; (4) you will need the money to pay the bankruptcy attorney. A wise Chapter 7 bankruptcy attorney knows to get paid in full before filing a bankruptcy case. This is because otherwise the debt will be discharged in the bankruptcy, and the attorney will not be able to collect on it afterwards. In addition, the automatic stay will bar any attempts during the bankruptcy of the attorney to collect on the debt. Always be wary of an attorney who says he or she will let a client pay later — they may not know the law as well as they should.
On a related note, it is very important for a debtor who wants to keep her house and car to be current on those payments. A secured creditor has no reason to enter into a reaffirmation agreement with the debtor to continue the debt through the bankruptcy for collateral such as a house or car unless the debtor has proven to be trustworthy and reliable with payments. It is also important to stay current on the insurance for a house and car because that is often a requirement by a creditor when extending credit. If a debtor lets the insurance lapse, a creditor may have the right to foreclose or repossess on the basis of breach of contract. Finally, it is important to keep your utilities current because otherwise they will be shut off, and they will only be turned on again when you are current.
What is a loan modification?
A loan modification is an adjustment to your existing loan in order to make it a more affordable loan- the goal is allow you to stay in your home and not lose your home to foreclosure. It is important to understand that loan modifications are not for everyone and they are not guaranteed. There are many different programs offered through banks and through the government through the American Recovery Act.
Since the enactment of the American Recovery Act, there have been several different versions, and consequently many different requirements and limitations on loan modifications. It is important to keep up to date on the changes. The best way to do that is to either visit with your credit counselor or your attorney.
Your attorney or counselor will be able to assist you with your application process. There are numerous forms that will need to be filled out and some will feel quite intrusive. Please keep in mind that you are providing the information (annual income, loss of employment, current value of home, etc.) so that your lender will be able to calculate a new monthly payment on your loan. Your lender may be able to write down the principal on your home in light of your loss of income and a depreciation in your home’s value as compared to the amount you owe.
Be patient- the application process will take time. It may take six months or more to finish the process. Once your loan modification is approved, you will be placed on a temporary payment plan. YOU MUST comply with the new terms for the required number of months in order to move into a new permanent payment structure. If you miss a payment during this time, you will lose the ability to have a loan modification.
If you are in a position that making payments is becoming a challenge, I would encourage you to visit with your attorney or counselor now and find out what options may be available to you. I know that it is difficult to talk about financial problems and most individuals would like to pretend that things will get better, but I encourage you to get guidance in preparation of changes in finances now rather than later.
Recently, you may have read in the newspaper or heard on the radio that because we are in a flood damaged area that has been declared a disaster area that there is a ninety day moratorium, or temporary pause, in the foreclosure process.
It is important that people understand that this applies only to houses that are directly affected by the flood and not to anyone within the affected county. This means that your house was damaged or destroyed by the flood.
If your house was not damaged by the flood and it is in the foreclosure process or about to enter the foreclosure process you still need to take immediate steps to resolve the issue with your mortgagee/lender either directly or through the use of an attorney or credit counselor.
If your home was not directly damaged by the flood, but you suffered economic loss that has an impact your ability to pay your mortgage you may be able to qualify for the same ninety day moratorium. This will be handled on a case by case basis and you will need to provide evidence of your economic loss and need for the moratorium to apply to your mortgage as well.
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|By V. Lamport
Prior to my case being turned over to John Clark, I was very dissatisfied with my attorney at Gordon Law Firm. I felt as if I were forgotten about after my initial payment for services was given. Afterwards, it was impossible to get a clear answer about any question I had regarding my case. I was even responsible for gathering information to prove I had a case. I did as the attorney requested even though the firm was to aquire a large amount of my settlement if I had a winning case. Approximately two years after my initial contact, I received word that I had been assigned a new attorney. Finally, I could actually feel relief just by the professionalism and the concern in the voice on the other end of the line. My immediate thought was, “Thank God, my prayer has been answered”! Since that day, I have been treated with the utmost respect from my attorney as well as his partners. My introduction with Attorney John Jay Clark, was to say the least, very pleasant.
|He apologized for the actions of the previous attorney and assured me that if I chose to allow him to handle my case he would do everything in his power to help me. I feel I am a good judge of character and I immediately felt that John Clark was the man for my case. Attorney John Clark has offered nothing but the greatest concern and help for not only one case, but several cases for me, with two being emergency situations. He is working to resolve a case for me now and has gone to great lengths to see that my best interest is satisfied. And thanks to Kelly, his very courteous and helpful receptionist, my messages and concerns are delivered accurately and I receive either a response from her or a call from my attorney in a timely fashion. I am confident that future legal matters I may have will be met as long as John Clark is serving others with his exceptional legal advice along with his partners. I highly recommend the staff at Gordon Law Group.
A mighty “to do” list awaits every client potentially filing for bankruptcy – gathering documents, creating expense budgets, and recording income.
Anyone who needs debt relief and considers bankruptcy as a proactive step towards attaining such relief should understand that even more important than the “to do” list is the “not to do” list.
- Not-To-Do Number 1: Do Not Give Anything Away
- A bankruptcy trustee could see you giving property away as a gift, even to family, as a fraudulent conveyance. The bankruptcy code allows the trustee to recover any property that you gave away or gifted within one year prior to filing bankruptcy.
- Not-To-Do Number 2: Do Not Repay Debt
- A bankruptcy trustee could see you repaying a debt as preferential payment, and recover the value of the property from you so that it may be divided among your creditors.
Transferring any property, cars, cash, or otherwise, may void an exemption or be considered preferential payment. Before filing bankruptcy you must prepare to file, and before preparing you must know what to do and especially, what not to do. To protect yourself, your assets, and your family, you should check with competent legal counsel before transferring property or making large payments when considering bankruptcy.