Here are three common questions asked of my partner, Rick Mitchell, and me by homeowners considering defaulting on their mortgages. I can't afford to pay my mortgage and my other bills. The house is under water. I've asked for a modification. How long do I have to decide whether strategic default is an option? I don't want to come home and find the locks have been changed on my house. The lender … [Read more...]
Debunking Strategic Default Myths
April 2, 2010 By
Myth: strategic default is limited higher-income debtors. In our experience, clients across the income spectrum have considered and engaged in strategic default. Myth: strategic default is limited to investment properties. In our experience, clients have strategically defaulted on primary residences as well as investment/rental properties and commercial properties. Myth: lenders are eager … [Read more...]
Strategic Default: Part 2 of 3
March 29, 2010 By
The term "strategic default" has been in the news. With 25% of American homes valued at less than the balance of the mortgage, and some of those "underwater" mortgage holders out of work it's no wonder. For those who can't stay up late enough to watch Stephen Colbert, here's a video clip on this subject. After he talks about the bankers testifying on Capitol Hill, he gets to The Word: "Honor … [Read more...]
Strategic Default: Part 1 of 3
March 23, 2010 By
"Strategic default" is a conscious decision by a borrower to stop paying the mortgage(s) on a real property even though the borrower can afford the payment(s). It can happen for a number of reasons and is not a decision to be made lightly or without education about the legal, tax and credit consequences. We have counseled clients about strategic default in these common scenarios: [note]The … [Read more...]
Creditor Protection Without Bankruptcy
March 16, 2010 By
With so many people unwinding unprofitable businesses and adjusting their lifestyles after financial hardship, many are confused about assets a creditor can seize and if bankruptcy is the only way to protect themselves from the proverbial wolves at the door. While we offer general information here, it is not comprehensive and not intended as legal advice. Exempt property: hands off, … [Read more...]
Can a Creditor Take My 401k?
March 12, 2010 By
Although creditors have been known to claim that they can liquidate everything including the clothes on your back to settle your debts, each state provides guidance on what assets are safe from creditors. These are termed "exempt property." So what about life insurance and retirement plans? Are they at risk if a creditor takes you to court? IRAs and life insurance North Carolina includes two … [Read more...]
Primer for Distressed Homeowners: Part 1 of 3
November 30, 2009 By
With the jobless recovery hitting the Charlotte region particularly hard, we're getting a steady stream of calls asking for help preventing home foreclosures, forced sales and sheriff's sales, and facilitating short sales. The general news press has gotten sloppy in the language it uses for distressed real estate, so let's start there: Forced sale is not used often, but when it is it would … [Read more...]
Emerging Trend in Commercial Foreclosures
August 11, 2009 By
I was quoted in The Charlotte Observer regarding a $515 million luxury condo, office and retail project in Cornelius, NC that's being foreclosed on. Many people are surprised to learn that the developers hadn't missed payments. Then why the foreclosure? Because the project wasn't hitting agreed-upon milestones -- the developers hadn't leased enough of the space. I expect to see more of … [Read more...]
I don’t want to file, but should I?
August 4, 2009 By
Some people are not good candidates for bankruptcy, including: Those with too many non-exempt assets; for them, we develop asset planning & protection strategies Those who cannot afford to file bankruptcy Those with no income or who have so few non-exempt assets that they are essentially “judgment proof” Those with finances so complicated by trusts and tax shelters … [Read more...]
Asset Protection Basics
July 15, 2009 By
Many people want to come in and talk about asset protection are surprised to learn that they have no assets to protect. "How can this be? "I own a car and a house!" Asset protection comes in to play if you own non-exempt property -- property that creditors can reach; or if you anticipate that you may have non-exempt property in the future. Learn by example North Carolina residents are … [Read more...]